California's Greenhouse Gas Laws

In Sep. 2004, California regulators approved a plan to drastically reduce vehicle emissions related to global warming over the next 11 years. “It’s the most challenging regulation that’s ever been proposed by the California Air Resources Board, or even the E.P.A.” said Thomas C. Austin, a top research consultant on the regulation. The new regulation, which could affect as much as 30 percent of the U.S. market (not just California), would phase in from 2009 to 2016. It would require the auto industry to cut greenhouse gas emissions from its new fleets by approximately 30 percent.

The response from automakers, Honda included, is that they don’t have the technology to make this happen. Auto lobbyists also object on the basis that they can’t manufacture vehicles based on two or more different emissions standards, and that a single fuel economy standard must be set at the federal level for all 50 states. The issue gets more complicated because standards for other tailpipe emissions, such as carbon monoxide and particulate matter, are indeed set at the state level. Can greenhouse gas pollution be regulated like a tailpipe emission or is it a surrogate for fuel economy, as the automakers contend?

As expected, in early Dec. 2004, a lawsuit was filed in U.S. District Court in Fresno by 13 California car dealerships and the Alliance of Automobile Manufacturers, seeking an injunction to halt California from enacting the plan. The alliance includes G.M., DaimlerChrysler, BMW, Volkswagen, and even hybrid-makers Ford and Toyota. The Alliance of International Automobile Manufacturers, which includes Honda, Toyota, and 16 other carmakers and suppliers, also joined the lawsuit.

Honda is the only car company advocating for increases in Corporate Average Fuel Economy (CAFE) standards, which would set a single standard for fuel economy more in line with the California proposals, as a resolution to the standoff.

Don’t Mess with New York
On Nov. 24, 2005, the New York Times reported that New York’s State Environmental Board unanimously approved adopting the tighter restrictions regarding global warming. New York joins nine other states— Maine, New Jersey, Vermont, Massachusetts, Oregon, Washington, Rhode Island, Connecticut and Pennsylvania—that have either already signed on, or are in the process of adopting the California standards.

With New York joining the fray, people who don’t want to see the world flooded by melting polar icecaps or who like to breathe fresh air, got a strong new ally: New York State Attorney General Eliot Spitzer. Judith Enck, a policy adviser to Spitzer, said she expected automakers to battle New York every step of the way. “We’re ready for them to file a lawsuit if the state sneezes,” she said. Spitzer’s record on protecting the environment includes the filing of a lawsuit in 2002 to prevent the Bush Administration from weakening the Clean Air Act by exempting power plants from installing pollution-control devices.

If California and the other states are able to form a powerful alternative regulatory bloc, then the car companies will have to raise the fuel efficiency standards of their products, or face being blocked from approximately one-third of the nation’s auto market. The auto companies will certainly put up a bitter fight. This raises the prospect of a dramatic courtroom battle over global climate change, pitting Big Auto against Spitzer, perhaps our country’s strongest crusader against corporate corruption.