By Phillip Washburn*
States have two available options when it comes to regulating vehicle emissions. The default option is to follow the federal standards promulgated under the Clean Air Act (CAA). The second option is to adopt the standards enacted by California, the only state allowed to draft their own unique standards that differ from the federal standards. The existence of an exception for California is a good thing, because their stricter standards encourage innovation in the vehicle market, and also gives an option to the rest of the states, which were not granted an exception in the CAA. There is a simple reason only California was granted an exception; the government did not want to create a “third-car” system, in which manufacturers would make three models for every car to comply with multiple regulatory systems. However, I believe the CAA could be expanded in a way that would not create a “third-car” system; set California’s standards as an upper limit, and the federal standards as a lower limit, and allow states to enact their own intermediary regulations.
The federal government exercises control over new automobiles through the interstate commerce clause.[i]The policy rationale which supports the CAA giving an exemption to only California is simple; if every state could enact their own unique standards, there would be instability in the automobile market. Currently, auto manufactures build two models of any particular car — one model for sale in California and other states following the California standards, and another for the rest of the country.[ii]Imagine that instead of two models, there were fifty. However, I would argue that allowing states to enact their own standards would have one of two effects.
(1) Manufacturers would build many models of every car, leading to: restrictions on market competition due to an enormous barrier to new vehicle companies; disparity in inventory shortages or surpluses depending on the vehicle market of the state; increased production, manufacturing, and marketing expenses to auto manufacturers which would be passed to consumers in the form of higher prices. Or,
(2) the manufactures would default to two models; one that conforms to the standards of the largest car market (i.e. in compliance with the standards of the median state), and another for the strictest market.
I believe the second option would be defaulted to over time, with perhaps some deviation from large manufacturers that can afford to diversify their product lines to accommodate different emissions specifications. The result would be the same two car system we are currently in, but with a higher floor; one model that conforms to the regulations of the largest market (currently the federal regulations) and one model that conforms to the strictest market (currently California). Simply put, manufacturers would have one car model that meets the strictest regulations to act as a “catch-all,” and a second model that conforms to the largest vehicle market, just strict enough to be applicable in the lowest 50thpercentile of the market, in order to capture the market for all states with emissions standards below the “middle of the road” standards.
On June 19, 2018, Colorado Governor John Hickenlooper signed an executive order directing the Colorado Department of Public Health and Environment to develop an emissions program based on California’s emissions standards.[iii]The announcement was in part a response to the April 13, 2018 announcement by the federal government that it will roll back vehicle emissions gas standards starting in 2022.[iv]If implemented, Colorado will be the 13thstate to deviate from the federal emissions standards in favor of the California standards.[v]Colorado with enact California’s standards through a long and arduous executive agency process, and will bypass the legislature all together, to the chagrin of many citizens.[vi]The underlying difficulties of administrative enactment, the total bypass of the legislature, and the enactment of another states regulations begs the question — Why exactly is every state not allowed to enact their own vehicle emission standards again?
The circumstances surrounding the enactment of the Clean Air Act provides some clarity. In the 1960s, the federal government was making amendments to federal air regulations in the form of the Air Quality Act of 1965. At the time, California was grappling with rampant smog problems[vii]and had passed regulations attempting to tackle air quality issues.[viii]Accommodating these efforts already underway, Congress granted an exception for California in the Clean Air Act section 209, giving the state authority to enact emissions regulations stricter than the federal standards.[ix]California remains the only state with that authority today.[x]
By mandating that only California can create alternative standards, a potentially huge burden on auto manufacturers and consumers is relaxed, creating (relative) stability in the market. Manufactures do not need to remain up-to-date on the actions of 50 state legislatures, and the prospect of new stricter regulations is not a looming threat every year. However, given that it is likely that car manufacturers would default to the two-car system described above, with slight deviations, the practical reasons for not allowing all states to set their own emissions standards are redundant to how the market would react.
Given the likelihood of manufacturers defaulting to a two-car system, it is possible to once again amend the CAA to allow states to adopt their own emissions standards, provided they are not stricter than California’s standards, nor less strict than the federal standards. This would maintain the stability of the market by allowing manufacturers to make two models, one for the California markets (and less strict markets) and one that meets the median market, as described above. While this would require a change to Section 177 of the Clean Air Act which gives other states the authority to adopt the California standards, the language is readily adoptable from Section 202. It would merely need to impose an additional requirement that the standards cannot be stricter than the California standards.
The result would be production of more cars that meet the California standard sold in states that wish to adopt stricter-than-federal standards, without creating the need for a third-car requirement. Car manufacturers would not need to develop a new car model to meet these intermediary standards, as the California models would already be marketable in these other states. This would enable states to go further in preventing vehicle emissions within their borders, without placing a potentially difficult burden on car manufacturers. It would also allow states that desire stricter standards than the federal standards, but not as strict as California’s, to make a sort of half-step.
*Phillip Washburn is a Junior Editor on MJEAL. He can be reached at firstname.lastname@example.org.
The views and opinions expressed in this blog are those of the authors only and do not reflect the official policy or position of the Michigan Journal of Environmental and Administrative Law or the University of Michigan.
[i]1 Frank P. Grad, Treatise on Environmental Law§ 2.03.2.a (2018)
[ii]Colorado Air Quality Control Commission, Regulation No. 20: Colorado Low Emission Vehicle Program, (Proposed August 16, 2018) at 30.
[iii]Faith Miller, Colorado will adopt California’s vehicle emissions standards, Colorado Springs Independent (Jun. 20, 2018), https://www.csindy.com/TheWire/archives/2018/06/20/hickenlooper-colorado-will-adopt-californias-vehicle-emissions-standards.
[iv]Colo. Exec. Order No. 2018-006 (Jun. 19, 2018), https://www.colorado.gov/pacific/sites/default/files/ExecutiveOrder_B-2018-006.pdf.
[v]Connecticut, Maine, Maryland, Massachusetts, New Jersey, New York, Oregon, Rhode Island, and Vermont have all adopted California’s ZEV standards. Delaware, Pennsylvania, and Washington have all adopted California’s LEV standards.
[vi]Colorado Air Quality Control Commission, Comment Letter on Proposed Regulation No. 20: Colorado Low Emission Vehicle Program, Chad Vorthmann (Oct. 19, 2018), at 126 https://www.colorado.gov/pacific/sites/default/files/R20_101418-102018_rcvd_201.pdf.
[vii]Fred E. Littman & P.L. Magill, Some Unique Aspects of Air Pollution in Los Angeles, Air Repair, 29-34 (1953).
[viii]See 1 Frank P. Grad, Treatise on Environmental Law § 2.03.2.a (2018)
[x]Clean Air Act, 42 U.S.C. § 7543(b)(1) (2012)