EPA grants California waiver for vehicle greenhouse gas standards

Wednesday,
July 8, 2009
Part III
Environmental
Protection Agency
California State Motor Vehicle Pollution
Control Standards; Notice of Decision
Granting a Waiver of Clean Air Act
Preemption for California’s 2009 and
Subsequent Model Year Greenhouse Gas
Emission Standards for New Motor
Vehicles; Notice
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32744 Federal Register / Vol. 74, No. 129 / Wednesday, July 8, 2009 / Notice
ENVIRONMENTAL PROTECTION A. California’s Greenhouse Gas Program for B. CARB’s Assessment of the State of
AGENCY New Motor Vehicles Development of GHG Reduction
B. EPA’s Consideration of CARB’s Request Technology and Comments Supporting
III. Analysis of Preemption Under Section CARB’s Assessment
[FRL–8927–2] 209(a) of the Clean Air Act 1. Development of GHG Reduction
A. Clean Air Act Preemption Provisions Technology
California State Motor Vehicle B. Deference to California 2. Overview of Technologies and Their
Pollution Control Standards; Notice of C. Burden of Proof Projected Applications
Decision Granting a Waiver of Clean IV. California’s Protectiveness Determination 3. CARB’s Update on Technological
Air Act Preemption for California’s A. What Are ‘‘Applicable Federal Development
2009 and Subsequent Model Year Standards’’? 4. Manufacturers’ Comments on the
1. Are ‘‘Applicable Federal Standards’’ Technological Feasibility of the GHG
Greenhouse Gas Emission Standards
Limited to Clean Air Act Emission Standards
for New Motor Vehicles Standards or Do They Include NHTSA’s C. Technological Feasibility and the Cost of
SUMMARY: The Environmental Protection
Fuel Economy Standards? Compliance
2. If EPA Did Consider CAFE Standards as 1. Historical Approach
Agency (EPA) is granting the California ‘‘Applicable Federal Standards,’’ Are the
Air Resources Board’s (CARB’s) request 2. Technology Cost Information in This
CAFE Standards More Stringent Than Proceeding
for a waiver of Clean Air Act California’s Greenhouse Gas Emission 3. Consistency of Certification Test
preemption to enforce its greenhouse Standards? Procedures
gas emission standards for model year B. How Does EPA Evaluate Impacts on
4. Safety Implications of the CARB GHG
2009 and later new motor vehicles. This Other States?
Standards
decision is under section 209(b) of the C. Is California’s Protectiveness
E. Conclusion on Technological Feasibility
Determination Arbitrary and Capricious?
Clean Air Act (the ‘‘Act’’), as amended. 1. Based on EPA’s Traditional Analysis, Is
F. Other Issues Related to Consistency
This decision withdraws and replaces With Section 202(a)
California’s Protectiveness
EPA’s prior denial of the CARB’s Determination Arbitrary and Capricious? 1. Impacts of EPA’s March 6, 2008 Denial
December 21, 2005 waiver request, 2. Is California’s Protectiveness on Lead Time
which was published in the Federal Determination Arbitrary and Capricious 2. Endangerment of Public Health or
Based on the Real-World In-Use Effects Welfare
Register on March 6, 2008. a. Is it Appropriate To Review
of California’s Greenhouse Gas
DATES: Petitions for review must be filed Endangerment of Public Health or
Standards?
by September 8, 2009. a. Fleet Turnover/Delayed Scrappage Welfare Under the ‘‘Consistency With
ADDRESSES: EPA has established a b. The ‘‘Rebound Effect’’ Section 202(a)’’ Criterion?
docket for this action under Docket ID c. Upstream Emissions Impacts b. Parties Opposing the Waiver Have Not
D. Section 209(b)(1)(A) Conclusion Met Their Burden of Showing Lack of
No. EPA–HQ–OAR–2006–0173. All Endangerment to Public Health or
documents and public comments in the V. Does California Need Its Standards To
Meet Compelling and Extraordinary Welfare
docket are listed on the Conditions? G. Section 209(b)(1)(C) Conclusion
www.regulations.gov Web site. Publicly A. Basis of March 6, 2008 Denial VII. Additional Issues Raised
available docket materials are available B. Should EPA Review This Criterion A. EPA’s Administrative Process for
either electronically through Based on the Need for California’s Motor Evaluating California’s Waiver Request
www.regulations.gov or in hard copy at Vehicle Program or the Need for the GHG 1. Public Comment Process
the Air and Radiation Docket in the EPA Standards? 2. EPA’s Reconsideration Process
Headquarters Library, EPA West 1. Comments Supporting a Review of the 3. Is a Waiver Required Before California
Entire Program or Section 177 States Adopt California’s
Building, Room 3334, 1301 Constitution Motor Vehicle Emission Standards?
2. Comments Supporting a Review of the
Ave., NW., Washington, DC. The Public GHG Standards Separately B. Scope of EPA’s Waiver Review
Reading Room is open from 8:30 a.m. to 3. Decision 1. Relevance of the Energy Policy and
4:30 p.m., Monday through Friday, C. Does California Need Its Motor Vehicle Conservation Act (EPCA) to the Waiver
excluding holidays. The telephone Program To Meet Compelling and Decision
number for the Reading Room is (202) Extraordinary Conditions? 2. Do California’s GHG Emission Standards
566–1744. The Air and Radiation D. Does California Need Its Motor Vehicle Create an Impermissible ‘‘Patchwork’’?
Docket and Information Center’s Web GHG Standards To Meet Compelling and 3. What Impact Does Granting California a
site is http://www.epa.gov/oar/ Extraordinary Conditions? Waiver for Its GHG Emission Standards
1. Are California’s GHG Standards Have on PSD Requirements for GHGs?
docket.html. The electronic mail (e- Designed in Part To Address an Air VIII. Decision
mail) address for the Air and Radiation Pollution Problem That is Local or
Docket is: a-and-r-Docket@epa.gov, the Regional in Nature? I. Executive Summary
telephone number is (202) 566–1742 2. Do the Impacts of Climate Change in Today, I, as Administrator of the
and the fax number is (202) 566–9744. California Support a Denial of the Environmental Protection Agency, am
FOR FURTHER INFORMATION CONTACT: Waiver? granting California’s request for a waiver
a. What Test Applies Under This
Specific questions may be addressed to Alternative Approach? of Clean Air Act preemption for
David Dickinson, Office of b. Would a Waiver Be Denied Under This California’s greenhouse gas emission
Transportation and Air Quality, Alternative Approach? standards for 2009 and later model years
Compliance and Innovative Strategies 3. Must California’s GHG Standards of new motor vehicles, adopted by the
Division (6405J–NLD), EPA, 1200 Achieve a Demonstrated Reduction in California Air Resources Board on
Pennsylvania Ave., NW., Washington, GHG Atmospheric Concentrations or September 24, 2004. This decision
DC 20460, telephone: (202) 343–9256, Impacts Under Section 209(b)(1)(B)? withdraws and replaces EPA’s previous
e-mail: Dickinson.David@epa.gov. E. Section 209(b)(1)(B) Conclusion March 6, 2008 Denial of California’s
VI. Are the California GHG Standards
SUPPLEMENTARY INFORMATION: Consistent With Section 202(a) of the waiver request.
Clean Air Act? In the March 6, 2008 Denial, EPA
Table of Contents determined that one of the three criteria
A. Historical Approach: The Standard of
I. Executive Summary Review for Consistency With Section for denial of a waiver had been met,
II. Background 202(a) namely, that California did not need its
Federal Register / Vol. 74, No. 129 / Wednesday, July 8, 2009 / Notice 32745
State standards to meet compelling and under the Clean Air Act (including need its greenhouse gas standards to
extraordinary conditions. I have whether California’s ‘‘protectiveness meet compelling and extraordinary
reconsidered that determination, which finding’’ noted above is arbitrary and conditions. EPA did not address the
was based on an interpretation of capricious). Therefore, EPA’s role upon other two waiver criteria.
section 209(b)(1) of the Clean Air Act receiving a request for waiver of The reconsideration process started
that I now reject. Based on a review of preemption from California is to early this year. On January 21, 2009,
the statutory language, legislative determine whether it is appropriate to California Governor Schwarzenegger
history, and the comments received, I make any of the three findings specified sent a letter to President Obama, and the
am returning to EPA’s traditional by the Clean Air Act and if the Agency California Air Resources Board sent a
interpretation of this provision. cannot make at least one of the three letter to Administrator-designee
Applying EPA’s traditional findings then the waiver must be Jackson, requesting the Agency
interpretation I have determined that granted. The three waiver criteria are reconsider the prior denial. After
the waiver should not be denied under properly seen as criteria for a denial— reviewing CARB’s reconsideration
this criterion. Since the March 6, 2008 EPA must grant the waiver unless at request and the concerns raised by
Denial did not evaluate or make any least one of three criteria for a denial is many different parties, EPA found that
determinations concerning either of the met. This is different from most waiver there were significant issues regarding
other two waiver criteria, I have situations before the Agency, where the Agency’s denial of the waiver. The
evaluated those criteria and determined EPA typically determines whether it is denial was a substantial departure from
that the waiver should not be denied appropriate to make certain findings EPA’s longstanding interpretation of the
under either of them. This includes necessary for granting a waiver, and if Clean Air Act’s waiver provision and
careful consideration of all of the the findings are not made then a waiver EPA’s history of granting waivers to
evidence presented concerning is denied. This reversal of the normal California for its new motor vehicle
technological feasibility of the model statutory structure embodies and is emissions program. Many different
year 2009 and later model year consistent with the congressional intent parties, including California, states that
standards, considering lead time and the of providing deference to California to have adopted or are interested in
cost of implementation. maintain its own new motor vehicle adopting California’s standards,
emissions program. members of Congress, scientists, and
The legal framework for this decision
The three criteria for denial of a other stakeholders, had expressed
stems from the waiver provision first waiver are: First, whether California’s similar concerns about the denial of the
adopted by Congress in 1967, and later determination that its standards are, in waiver. Based on this, EPA believed
modified in 1977. Congress established the aggregate, at least as protective as there was merit to reconsidering its
that there would be only two programs applicable Federal standards is arbitrary decision denying California’s waiver
for control of emissions from new motor and capricious (Section 209(b)(1)(A)); request and on February 12, 2009, EPA
vehicles—EPA emission standards second, whether California has a need published a Federal Register notice
adopted under the Clean Air Act and for such standards to meet compelling announcing its reconsideration of
California emission standards adopted and extraordinary conditions (Section California’s greenhouse gas waiver
under its state law. Congress 209(b)(1)(B)); and third, whether request. EPA held a public hearing on
accomplished this by preempting all California’s standards are consistent March 5, 2009, and received written
state and local governments from with Section 202(a) of the Act (Section comments through April 6, 2009.
adopting or enforcing emission 209(b)(1)(C)). EPA has consistently EPA received substantial comment on
standards for new motor vehicles, while interpreted the waiver provision as each of the three waiver criteria. The
at the same time providing that placing the burden on the opponents of entire administrative process in
California could receive a waiver of a waiver to demonstrate that one of the consideration of California’s request
preemption for its emission standards criteria for a denial has been met. In this provided the Agency with extensive
and enforcement procedures. This context, since 1970, EPA has recognized legal argument and evidence, including
struck an important balance that its limited discretion in reviewing oral testimony from three public
protected manufacturers from multiple California waiver requests. EPA has hearings and nearly 500,000 written
and different state emission standards, granted over 50 waivers of preemption comments. This material has been
and preserved a pivotal role for and has only fully denied one waiver substantive and invaluable in the
California in the control of emissions request, the decision under Agency’s review. EPA has received
from new motor vehicles. Congress reconsideration here. extensive comments from many states;
recognized that California could serve as In this case, California first requested federal, state and local officials;
a pioneer and a laboratory for the nation that EPA waive preemption for its new industry; environmental groups;
in setting new motor vehicle emission motor vehicle greenhouse gas emission scientists; and other stakeholders. The
standards. Congress intentionally standards on December 21, 2005. EPA vast majority of comments EPA received
structured this waiver provision to did not begin its formal consideration of were in support of the waiver.
restrict and limit EPA’s ability to deny the waiver request until after the After a thorough evaluation of the
a waiver, and did this to ensure that Massachusetts v. EPA decision in April record, I am withdrawing EPA’s March
California had broad discretion in 2007, in which the Supreme Court 6, 2008 Denial and have determined that
selecting the means it determined best determined that greenhouse gases are air the most appropriate action in response
to protect the health and welfare of its pollutants within that term’s meaning in to California’s greenhouse gas waiver
citizens. Section 209(b) specifies that the Clean Air Act. On March 6, 2008, request is to grant that request. I have
EPA must grant California a waiver if after an administrative process that determined that the waiver opponents
California determines that its standards included two public hearings and a have not met their burden of proof in
are, in the aggregate, at least as written comment period, EPA published order for me to deny the waiver under
protective of the public health and its final decision denying California’s any of the three criteria in section
welfare as applicable Federal standards. request. EPA’s waiver denial was based 209(b)(1). The findings I have made
EPA may deny a waiver only if it makes on the second waiver criterion, with concerning each of the criteria are
at least one of three findings specified EPA determining that California did not summarized below.
Concerning the criterion with respect need its state standards to meet of demonstrating that California’s
to the protectiveness of California’s compelling and extraordinary regulations do not satisfy the statutory
standards in the aggregate, I find that conditions. The opponents of the waiver criteria of section 209(b). For this
the opponents of the waiver have not have not adequately demonstrated that reason, I am granting California’s waiver
met their burden to demonstrate that California no longer has a need for its request to enforce its greenhouse gas
California’s determination was arbitrary motor vehicle emissions program. I have motor vehicle emission regulations.
and capricious. This evaluation can also determined that even under the
II. Background
properly by made in situations where interpretation announced in the March
EPA has not issued its own standards, 6, 2008 Denial, opponents of the waiver A. California’s Greenhouse Gas Program
and this finding is appropriate whether have not demonstrated that California for New Motor Vehicles
or not comparison is made to EPA’s does not need its greenhouse gas As further explained below, CARB
current emissions standards or the emission standards to meet compelling has adopted amendments to title 13,
National Highway Transportation Safety and extraordinary conditions. In California Code of Regulations (CCR),
Administration’s (NHTSA’s) fuel addition, I have interpreted the sections 1900 and 1961, and established
economy standards, and whether or not ‘‘compelling and extraordinary standards to regulate greenhouse gas
it includes an evaluation of the real- conditions’’ criterion to not properly (GHG) emissions from new passenger
world in-use effect of California’s include a consideration of whether the cars, light-duty trucks and medium-duty
greenhouse gas standards on its broader impacts from climate change are vehicles in a new section 1961.1.
motor vehicle program. compelling and extraordinary in California’s GHG standards are
With respect to the criterion California. Nevertheless, I have included as part of its second generation
concerning the need for California’s evaluated the comments received and low-emission vehicle program known as
state standards to meet compelling and evidence in the record and have LEV II. EPA previously issued a waiver
extraordinary conditions, I have found determined that the opponents of the for the LEV II program and also issued
that the March 6, 2008 Denial was based waiver have not met their burden in a waiver for CARB’s zero-emission
on an inappropriate interpretation of the demonstrating why evidence such as the vehicle program (known as ZEV)
waiver provision. The March 6, 2008 impacts of climate change on existing through the 2011 model year (MY).1 By
Denial determined that Congress ozone conditions in California along Resolution 04–28, CARB approved the
intended to allow California to with the cumulative impacts identified GHG standards for motor vehicles on
promulgate only those state standards by proponents of the waiver (e.g., September 24, 2004, and California’s
that address pollution problems that are impacts on snow melt and water Office of Administrative Law approved
local or regional, and this provision was resources and agricultural water supply, the regulations on September 15, 2005.2
not intended to allow California to wildfires, coastal habitats, ecosystems, CARB’s regulation covers large-
promulgate state standards designed to etc.) is not compelling and volume motor vehicle manufacturers
address global climate change problems. extraordinary. beginning in the 2009 model year, and
In the alternative, EPA found that the Concerning the criterion with respect intermediate and small manufacturers
effects of climate change in California to consistency of the greenhouse gas beginning in the 2016 model year and
are not compelling and extraordinary emission standards with section 202(a), controls greenhouse gas emissions from
compared to the effects in the rest of the EPA has reviewed extensive comments two categories of new motor vehicles—
country. and records received from California passenger cars and the lightest trucks
The text of section 209(b) and the and from the regulated community (PC and LDT1) and heavier light-duty
legislative history, when viewed concerning the kinds of technology trucks and medium-duty passenger
together, lead me to reject the needed to comply with California’s vehicles (LDT2 and MDPV). The
interpretation adopted in the March 6, standards, including costs and lead regulations add four new greenhouse
2008 Denial, and to apply the traditional time, as well as evidence concerning the gas air contaminants (carbon dioxide
interpretation to the evaluation of current compliance status of (CO2), methane (CH4), nitrous oxide
California’s greenhouse gas standards manufacturers. In light of the previous (N2O), and hydrofluorocarbons (HFCs))
for motor vehicles. If California needs a waiver denial, EPA specifically asked to California’s existing regulations for
separate motor vehicle program to for comment on how lead time should criteria and criteria-precursor pollutants
address the kinds of compelling and be evaluated as part of the Agency’s and air toxic contaminants. There are
extraordinary conditions discussed in reconsideration. Based on all of that separate fleet average emission
the traditional interpretation, then information, I cannot find that standards for the two vehicle size
Congress intended that California could opponents of the waiver have categories and within each category the
have such a program. Congress also demonstrated that the greenhouse gas sales-weighted average of a
intentionally provided California the emission standards are inconsistent manufacturer’s vehicles is required to
broadest possible discretion in adopting with section 202(a). While I believe that comply with the standard. The
the kind of standards in its motor a grant of the waiver for model year regulations establish a manufacturer
vehicle program that California 2009 would not be a retroactive change declining fleet average emission
determines are appropriate to address in the law, to limit any potential standard for these gases (expressed as
air pollution problems and protect the concerns that have been raised by the grams of carbon dioxide equivalent per
health and welfare of its citizens. The manufacturers over their potential mile (‘‘gpm’’)), with separate standards
better interpretation of the text and reliance upon EPA’s previous waiver for each of the two categories of
legislative history of this provision is denial, my decision provides that CARB passenger vehicles noted above. CARB
that Congress did not use this criterion may not hold a manufacturer liable or places the declining standards into two
to limit California’s discretion to a responsible for any noncompliance civil
phases: near-term standards phased in
certain category of air pollution penalty action caused by emission
problems, to the exclusion of others. debits generated by a manufacturer for 1 68 FR 19811 (April 22, 2003) and 71 FR 78190
Under that interpretation, I cannot the 2009 model year. (December 26, 2006).
find that opponents of the waiver have EPA finds that those opposing the 2 California Air Resources Board, EPA–HQ–OAR–
demonstrated that California does not waiver request have not met the burden 2006–0173–0004.2.
from the 2009 through 2012 model the comment period; however, the reconsider its March 6, 2008 Denial.9
years, and mid-term standards, phased Agency did not extend the June 15, 2007 The February 12, 2009 notice
in from the 2013 through 2016 model deadline. The Agency instead indicated specifically sought comment on: any
years. Manufacturers may receive that consistent with past waiver practice new or additional information regarding
credits for meeting the standards before it would continue, as appropriate, to the three section 209(b) waiver criteria;
model year 2009, for surpassing the communicate with stakeholders and whether EPA’s interpretation and
standards in later model years, and for evaluate any comments submitted after application of section 209(b)(1)(B) in the
selling alternative fuel vehicles. These the close of the comment period to the March 6, 2008 Denial was appropriate;
credits may be banked for later use, extent practicable. By letter dated and, the effect of the waiver denial on
transferred between vehicle categories, December 19, 2007, EPA notified whether CARB’s GHG standards are
or sold to another manufacturer. If a California Governor Schwarzenegger consistent with section 202(a),
manufacturer fails to meet the standard that EPA would be denying the waiver. including lead time. After holding a
in a particular model year, it will begin On March 6, 2008, EPA published its public hearing on March 5, 2009, the
to accrue debits. At that point it will decision denying California’s waiver written comment period closed on April
have five years to make up for the request (March 6, 2008 Denial).6 6, 2009.
debits, either by generating credits, or EPA’s March 6, 2008 Denial was
by purchasing credits from another based on a finding that California did III. Analysis of Preemption Under
manufacturer. not need its GHG standards for new Section 209(a) of the Clean Air Act
motor vehicles to meet compelling and A. Clean Air Act Preemption Provisions
B. EPA’s Consideration of CARB’s extraordinary conditions. Because this
Request finding was sufficient to deny Section 209(a) of the Act provides:
By letter dated December 21, 2005, California’s waiver request, the No State or any political subdivision
CARB submitted a request (‘‘Waiver Administrator found it unnecessary to thereof shall adopt or attempt to enforce any
Request’’) seeking a waiver of Section determine whether the criteria for standard relating to the control of emissions
209(a)’s prohibition for its motor vehicle denial of a waiver under sections from new motor vehicles or new motor
GHG standards.3 On February 21, 2007, 209(b)(1)(A) and (C) had been met. vehicle engines subject to this part. No State
EPA notified the Executive Officer of On January 21, 2009, CARB submitted shall require certification, inspection or any
CARB that the timing of EPA’s a request for EPA to reconsider its other approval relating to the control of
consideration of the GHG waiver request March 6, 2008 Denial (‘‘Reconsideration emissions from any new motor vehicle or
Request’’).7 CARB’s Reconsideration new motor vehicle engine as condition
was related to the then-pending
precedent to the initial retail sale, titling (if
Massachusetts v. EPA case before the Request stated its belief that EPA has
any), or registration of such motor vehicle,
United States Supreme Court. EPA the inherent authority to reconsider its motor vehicle engine, or equipment.10
stated that the decision in that case previous waiver denial and EPA should
could potentially be relevant to issues do so in order to restore the Agency’s Section 209(b)(1) of the Act requires
EPA might address in the context of the interpretations and applications of the the Administrator, after an opportunity
GHG waiver proceeding. The Supreme Clean Air Act to continue California’s for public hearing, to waive application
Court issued its Massachusetts v. EPA longstanding leadership role in setting of the prohibitions of section 209(a) for
decision on April 2, 2007, finding that emission standards. Specifically, CARB any State that has adopted standards
greenhouse gases are air pollutants noted several bases for the (other than crankcase emission
under the Clean Air Act, and that EPA reconsideration centered on EPA’s standards) for the control of emissions
is required to decide the pending misinterpretation of the Clean Air Act to from new motor vehicles or new motor
rulemaking petition under section set new flawed tests and misapplication engines prior to March 30, 1966, if the
202(a) of the Act, based on the statutory of facts to those tests. State determines that its State standards
criteria of whether, in the President Obama issued a Presidential will be, in the aggregate, at least as
Administrator’s judgment, emissions of Memorandum to the Administrator of protective of public health and welfare
greenhouse gases from new motor the Environmental Protection Agency as applicable Federal standards.11
vehicles cause or contribute to air on January 26, 2009, stating that ‘‘In However, no such waiver shall be
pollution that may reasonably be order to ensure that the EPA carries out granted by the Administrator if she
anticipated to endanger public health or its responsibilities for improving air finds that: (A) The protectiveness
welfare.4 quality, you are hereby requested to determination of the State is arbitrary
On April 30, 2007, a Federal Register assess whether the EPA’s decision to and capricious; (B) the State does not
notice was published announcing an deny a waiver based on California’s need such State standards to meet
opportunity for hearing and comment application was appropriate in light of compelling and extraordinary
on CARB’s request.5 EPA subsequently the Clean Air Act. I further request that, conditions; or (C) such State standards
held two public hearings on May 22, based on that assessment, the EPA and accompanying enforcement
2007, in Washington, DC, and on May initiate any appropriate action.’’ 8 procedures are not consistent with
30, 2007, in Sacramento, CA. The Subsequently, EPA published a section 202(a) of the Act. In previous
written comment period closed on June Federal Register notice on February 12, waiver decisions, EPA has stated that
15, 2007. On several occasions, EPA 2009, which responded to CARB’s Congress intended EPA’s review of
received requests to extend or re-open reconsideration request and announced California’s decision-making be narrow.
that EPA would fully review and This has led EPA to reject arguments
3 California Air Resources Board, EPA–HQ–OAR–

that are not specified in the statute as
2006–0173–0004. 6 73 FR 12156 (March 6, 2008). The State of
grounds for denying a waiver:
4 Massachusetts v. EPA, 549 U.S. 497, 127 S. Ct. California brought litigation against EPA in the
1438 (2007). On April 24, 2009, EPA issued United States Court of Appeals, DC Circuit. This
‘‘Proposed Endangerment and Cause or Contribute litigation is held in abeyance pending further order 9 74 FR 7040 (February 12, 2009).
Findings for Greenhouse Gases under Section of the court. (February 25, 2009). 10 Clean Air Act section 209(a).
202(a) of the Clean Air Act’’ at 74 FR 18885 (April 7 California Air Resources Board, EPA–HQ–OAR– 11 California is the only State which meets section
24, 2009). 2006–0173–7044. 209(b)(1)’s requirement for obtaining a waiver. See
5 72 FR 21260 (April 30, 2007). 8 74 FR 4905 (January 28, 2009). S. Rep. No. 90–403 at 632 (1967).
The law makes it clear that the waiver amendments to the Clean Air Act, standard were a mere preponderance of
requests cannot be denied unless the specific where Congress had the opportunity to the evidence. Although MEMA I did not
findings designated in the statute can restrict the waiver provision, it elected explicitly consider the standards of
properly be made. The issue of whether a
instead to explain California’s flexibility proof under section 209 concerning a
proposed California requirement is likely to
result in only marginal improvement in air to adopt a complete program of motor waiver request for ‘‘standards,’’ as
quality not commensurate with its cost or is vehicle emission controls. The compared to accompanying enforcement
otherwise an arguably unwise exercise of amendment is intended to ratify and procedures, there is nothing in the
regulatory power is not legally pertinent to strengthen the California waiver opinion to suggest that the court’s
my decision under section 209, so long as the provision and to affirm the underlying analysis would not apply with equal
California requirement is consistent with intent of that provision, i.e., to afford force to such determinations. EPA’s past
section 202(a) and is more stringent than California the broadest possible waiver decisions have consistently
applicable Federal requirements in the sense
discretion in selecting the best means to made clear that: ‘‘[E]ven in the two areas
that it may result in some further reduction
in air pollution in California.12 protect the health of its citizens and the concededly reserved for Federal
public welfare.15 judgment by this legislation—the
Thus, my consideration of all the existence of compelling and
evidence submitted concerning a waiver C. Burden of Proof
extraordinary’ conditions and whether
decision is circumscribed by its In Motor and Equip. Mfrs Assoc. v. the standards are technologically
relevance to those questions that I may EPA, 627 F.2d 1095 (DC Cir. 1979) feasible—Congress intended that the
consider under section 209(b). (MEMA I), the U.S. Court of Appeals standards of EPA review of the State
B. Deference to California stated that the Administrator’s role in a decision to be a narrow one.’’ 20
section 209 proceeding is to: Finally, opponents of the waiver bear
In previous waiver decisions, EPA has the burden of showing that the criteria
recognized that the intent of Congress in consider all evidence that passes the
threshold test of materiality and * * * for a denial of California’s waiver
creating a limited review based on the request has been met. As found in
thereafter assess such material evidence
section 209(b)(1) criteria was to ensure against a standard of proof to determine MEMA I, this obligation rests firmly
that the federal government did not whether the parties favoring a denial of the with opponents of the waiver in a
second-guess the wisdom of state waiver have shown that the factual section 209 proceeding, holding that:
policy. This has led EPA to state: circumstances exist in which Congress ‘‘[t]he language of the statute and it’s
It is worth noting * * * I would feel intended a denial of the waiver.16
legislative history indicate that
constrained to approve a California approach The court in MEMA I considered the California’s regulations, and California’s
to the problem which I might also feel unable standards of proof under section 209 for determinations that they must comply
to adopt at the federal level in my own the two findings necessary to grant a with the statute, when presented to the
capacity as a regulator. The whole approach
of the Clean Air Act is to force the
waiver for an ‘‘accompanying Administrator are presumed to satisfy
development of new types of emission enforcement procedure’’ (as opposed to the waiver requirements and that the
control technology where that is needed by the standards themselves): (1) burden of proving otherwise is on
compelling the industry to ‘‘catch up’’ to Protectiveness in the aggregate and (2) whoever attacks them. California must
some degree with newly promulgated consistency with section 202(a) present its regulations and findings at
standards. Such an approach * * * may be findings. The court instructed that ‘‘the the hearing and thereafter the parties
attended with costs, in the shaped of reduced standard of proof must take account of opposing the waiver request bear the
product offering, or price or fuel economy the nature of the risk of error involved burden of persuading the Administrator
penalties, and by risks that a wider number in any given decision, and it therefore that the waiver request should be
of vehicle classes may not be able to
complete their development work in time.
varies with the finding involved. We denied.’’ 21
Since a balancing of these risks and costs need not decide how this standard The Administrator’s burden, on the
against the potential benefits from reduced operates in every waiver decision.’’ 17 other hand, is to make a reasonable
emissions is a central policy decision for any The court upheld the Administrator’s evaluation of the information in the
regulatory agency under the statutory scheme position that, to deny a waiver, there record in coming to the waiver decision.
outlined above, I believe I am required to must be ‘clear and compelling evidence’ As the court in MEMA I stated, ‘‘Here,
give very substantial deference to California’s to show that proposed procedures too, if the Administrator ignores
judgments on this score.13 undermine the protectiveness of evidence demonstrating that the waiver
EPA has stated that the text, structure, California’s standards.18 The court should not be granted, or if he seeks to
and history of the California waiver noted that this standard of proof also overcome that evidence with
provision clearly indicate both a accords with the congressional intent to unsupported assumptions of his own,
congressional intent and appropriate provide California with the broadest he runs the risk of having his waiver
EPA practice of leaving the decision on possible discretion in setting regulations decision set aside as ‘arbitrary and
‘‘ambiguous and controversial matters of it finds protective of the public health capricious.’ ’’ 22 Therefore, the
public policy’’ to California’s and welfare.19 Administrator’s burden is to act
judgment.14 With respect to the consistency ‘‘reasonably.’’ 23
The House Committee Report finding, the court did not articulate a EPA received comment suggesting
explained as part of the 1977 standard of proof applicable to all that the burden of proof upon
proceedings, but found that the reconsideration of EPA’s March 6, 2008
Denial should be reversed and placed
12 36 FR 17458 (Aug. 31, 1971). Note that the

opponents of the waiver were unable to
more stringent standard expressed here, in 1971, meet their burden of proof even if the on California.24 It is not clear whether
was superseded by the 1977 amendments to section
209, which established that California must
15 MEMA I, 627 F.2d at 1110 (citing H.R. Rep. No. 20 See, e.g., 40 FR 21102–103 (May 28, 1975).
determine that its standards are, in the aggregate,
at least as protective of public health and welfare 294, 95 Cong., 1st Sess. 301–02 (1977). 21 MEMA I, 627 F.2d at 1121.
16 MEMA I, 627 F.2d at 1122.
as applicable Federal standards. 22 Id. at 1126.
13 40 FR 23103–23104; see also LEV I Decision 17 Id. 23 Id. at 1126.
Document at 64. 18 Id. 24 Alliance of Automobile Manufacturers, EPA–

14 40 FR 23104; 58 FR 4166. 19 Id. HQ–OAR–2006–0173–8994 at 6–7.
the commenter is also suggesting that burden of proof under section such Federal standards for purposes of
the entire burden of proof now shifts to 209(b)(1)(B) still falls on those who wish [209(b)(1)].’’
California in that ‘‘[s]uch an allocation EPA to deny the waiver, based on the To review California’s protectiveness
of the burden of proof ensures that statutory structure of section 209(b)(1) determination in light of section
decisions in which EPA has invested and the legislative history. This 209(b)(2), EPA conducts its own
time and resources are not lightly requirement is not disturbed by EPA’s analysis of the newly adopted California
overturned, and that those decisions initial denial. standards to comparable applicable
enjoy the finality to which they are Federal standards. Reviewing that
entitled.’’ Moreover, the commenter IV. California’s Protectiveness comparison quantitatively answers
suggests that EPA carries a separate Determination whether the new standards are more or
responsibility, in order to reverse its less protective than the Federal
Section 209(b)(1)(A) of the Act
prior decision, to explain why its first standards. That comparison of the
requires EPA to deny a waiver if the
decision on the waiver request is no newly adopted California standards to
Administrator finds that California was
longer the correct one. The commenter the comparable applicable Federal
cites several cases for the proposition arbitrary and capricious in its
determination that its State standards standards is conducted in light of prior
that ‘‘[A]n agency changing its course waiver determinations. That is, the
* * * is obligated to supply a reasoned will be, in the aggregate, at least as
protective of public health and welfare California-to-Federal analysis is
analysis for the change beyond that undertaken within the broader context
which may be required when an agency as applicable Federal standards. EPA
of the previously waived California
does not act in the first instance’’ and recognizes that the phrase ‘‘States
program, which relies upon
that an agency must offer sufficient standards’’ means the entire California
protectiveness determinations that EPA
explanation to ensure the court that it is new motor vehicle emissions program.
has not found arbitrary and
not ‘‘repudiating precedent to conform Therefore, as explained below, when
capricious.31
with shifting political mood.’’ 25 evaluating California’s protectiveness
A finding that California’s
EPA believes that, regardless of the determination, EPA compares the
determination was arbitrary and
previous waiver denial, once California California-to-Federal standards. That
capricious under section 209(b)(1)(A)
makes its protectiveness determination comparison is undertaken within the
must be based upon ‘‘‘clear and
the burden of proof falls on the broader context of the previously
compelling evidence’ to show that
opponents of the waiver. This burden is waived California program, which relies proposed [standards] undermine the
inherent in the statutory requirement upon protectiveness determinations that protectiveness of California’s
that EPA grant the waiver unless it EPA have previously found were not standards.’’ 32 Even if EPA’s own
makes one of the specific negative arbitrary and capricious.29 analysis of comparable protectiveness or
findings in section 209(b)(1).26 This is Traditionally, EPA has evaluated the that suggested by a commenter might
consistent with the legislative history, stringency of California’s standards diverge from California’s protectiveness
which indicates that Congress intended relative to comparable EPA emission finding, that is not a sufficient basis on
a narrow review by EPA and to preserve standards.30 That evaluation follows the its own for EPA to make a section
the broadest possible discretion for instruction of section 209(b)(2), which 209(b)(1)(A) finding that California’s
California.27 states: ‘‘If each State standard is at least protectiveness finding is arbitrary and
As EPA explained in the previous
as stringent as the comparable capricious.33
waiver denial, the Agency did not
applicable Federal standard, such State California made a protectiveness
address the section 209(b)(1)(A) and (C)
standard shall be deemed to be at least determination with regard to its
criteria in its decision; therefore EPA is
not in a position of reversing any as protective of health and welfare as greenhouse gas regulations in
interpretations or evidentiary findings. Resolution 04–28, adopted by the
As further discussed in section VI,
29 In situations where there are no Federal California Air Resources Board on
although commenters argue various
standards directly comparable to the specific September 23, 2004.34 Included in that
California standards under review, the analysis then Resolution were several bases to support
adverse effects of the prior waiver occurs against the backdrop of previous waivers
denial on lead time, the burden remains which determined that the California program was
31 In situations where there are no Federal
on the opponents of the waiver to at least as protective of the federal program ((LEV
II + ZEV) + GHG). See 71 FR 78190 (December 28, standards directly comparable to the specific
demonstrate why California’s GHG 2006), Decision Document for Waiver of Federal California standards under review, the analysis then
standards are not consistent with Preemption for California Zero Emission Vehicle occurs against the backdrop of previous waivers
section 202(a). With regard to section (ZEV) Standards (December 21, 2006). which determined that the California program was
at least as protective of the federal program ((LEV
209(b)(1)(B) and EPA’s prior waiver 30 36 FR 17458 (Aug. 31, 1971). (‘‘The law makes
II + ZEV) + GHG). See 71 FR 78190 (December 28,
denial, EPA has provided a reasoned it clear that the waiver requests cannot be denied
unless the specific finding designated in the statute 2006), Decision Document for Waiver of Federal
analysis and explanation for any can properly be made. The issue of whether a Preemption for California Zero Emission Vehicle
reversal of positions taken in this new proposed California requirement is likely to result (ZEV) Standards (December 21, 2006).
32 MEMA I, 627 F.2d at 1122.
decision. In the context of this reasoned in only marginal improvement in air quality not
33 ‘‘Once California has come forward with a
explanation, EPA believes it is only commensurate with its cost or is otherwise an
arguably unwise exercise of regulatory power is not finding that the procedures it seeks to adopt will
required to demonstrate that it is aware legally pertinent to my decision under section 209, not undermine the protectiveness of its standards,
that it is changing positions and that so long as the California requirement is consistent parties opposing the waiver request must show that
there are good reasons for the change in with section 202(a) and is more stringent than this finding is unreasonable.’’ MEMA I, 627 F.2d at
applicable Federal requirements in the sense that it 1124.

position.28 As discussed above, the
may result in some further reduction in air 34 California Air Resources Board, EPA–HQ–
pollution in California.’’). The ‘‘more stringent’’ OAR–2006–0173–0010.107, ‘‘Resolution 04–28,

25 Id.
standard expressed here in 1971 was superseded by State of California, Air Resources Board, September
26 MEMA I, 627 F.2d at 1121. the 1977 amendments to section 209, which 23, 2004’’ (‘‘BE IT FURTHER RESOLVED that the
27 MEMA I, 627 F.2d at 1110–11, citing H.R. Rep. established that California’s standards must be, in Board hereby determines that the regulations
No. 294, 95th Cong., 1st Sess. 301–02 (1977). the aggregate, at least as protective of public health approved herein will not cause California motor
28 Federal Communications Commission v. Fox and welfare as applicable Federal standards. The vehicle emission standards, in the aggregate, to be
Television Stations, Inc., 129 S.Ct. 1800, 1809 stringency standard remains, though, in section less protective of public health and welfare than
(2009). 209(b)(2). applicable federal standards.’’).
California’s protectiveness CARB found that the addition of its determined that it should continue to
determination. Most generally, CARB greenhouse gas emission standards to its interpret ‘‘applicable Federal standards’’
made a broad finding that observed and larger motor vehicle emissions program to mean motor vehicle emission
projected changes in California’s climate (LEV II), which generally aligns with the standards established by EPA under the
are likely to have a significant adverse federal motor vehicle emissions Clean Air Act that apply to the same
impact on public health and welfare in program (Tier II), renders the whole cars and the same air pollutants or
California, and that California is program to be more protective of public group of air pollutants as considered in
attempting to address those impacts by health and welfare. CARB noted that California’s aggregate protectiveness
regulating in a field for which there are EPA has already determined that finding. Additionally, EPA has
no comparable federal regulations.35 California was not arbitrary and determined that even if it were
CARB also found that its greenhouse gas capricious in its determination that the appropriate to take NHTSA’s fuel
standards will increase the health and pre-existing California standards for economy standards into account as
welfare benefits from its broader motor light-duty vehicles and trucks, known as ‘‘applicable Federal standards,’’ the
vehicle emissions program by directly LEV II, is at least as protective as waiver opponents have not met their
reducing upstream emissions of criteria comparable Federal standards, the Tier burden of proof to demonstrate that
pollutants from decreased fuel II standards.39 Implicit in California’s California’s protectiveness
consumption.36 Beyond that analysis of greenhouse gas protectiveness determination was arbitrary and
the new regulations’ impact on its determination, then, is that the capricious. No waiver opponent has
broader program, CARB projected inclusion of greenhouse gas standards demonstrated that existing or proposed
consumer response to the greenhouse into California’s existing motor vehicle fuel economy standards are more
gas regulations. With respect to emissions program will not cause stringent or more protective of the
consumer shifts due to a potential California’s program to be less public health and welfare than
‘‘scrappage effect’’ (the impact of protective than the federal program. California’s greenhouse gas emission
increased vehicle price on fleet age) and standards.
A. What Are ‘‘Applicable Federal
‘‘rebound effect’’ (the impact of lower Standards’’? 1. Are ‘‘Applicable Federal Standards’’
operating costs on vehicle miles Limited to Clean Air Act Emission
travelled), CARB found minor impacts— EPA has received comments
suggesting that the section 209(b)(1)(A) Standards or Do They Include NHTSA’s
but net reductions—on criteria pollutant Fuel Economy Standards?
emissions.37 Further, even assuming comparison to ‘‘applicable Federal
larger shifts in consumer demand standards’’ should include corporate Section 209(b)(1)(A) requires EPA to
attributable to the greenhouse gas average fuel economy (CAFE) standards evaluate whether California’s
emission standards, CARB found that promulgated, or that in the future may determination regarding the
the result remains a net reduction in be promulgated, by the National comparative level of protectiveness of
both greenhouse gas emissions and Highway Traffic Safety Administration its standards of the public health and
criteria pollutant emissions.38 That is, under the Energy Policy and welfare was ‘‘arbitrary and capricious.’’
Conservation Act of 1975 (EPCA), as California’s standards act to improve air
35 California Air Resources Board, EPA–HQ– amended by the Energy Independence quality, and thus benefit the public
OAR–2006–0173–0010.107 at 9 (‘‘Over the last and Security Act of 2007 (EISA).40 That health and welfare, by establishing
hundred years, average temperatures in California suggestion departs from EPA’s limits for emissions of air pollutants
have increased 0.7% F, sea levels have risen by traditional analysis. EPA has always from new motor vehicles and new motor
three to eight inches, and spring run-off has
decreased 12 percent. These observed and future interpreted ‘‘applicable Federal vehicle engines. California is then
changes are likely to have significant adverse effects standards’’ as limiting EPA’s inquiry to required to compare these new motor
on California’s water resources, many ecological motor vehicle emission standards vehicle standards in the aggregate to
systems, as well as on human health and the established by EPA under the Clean Air ‘‘applicable Federal standards’’ to
economy. The signs of a global warming trend
continue to become more evident and much of the Act. After a thorough examination of the determine the relative protectiveness of
scientific debate is now focused on expected rates text and legislative history of the section California’s standards. Depending on
at which future changes will occur.’’); California Air 209(b) waiver provision, EPA has whether the waiver is granted or denied,
Resources Board, EPA–HQ–OAR–2006–0173– vehicle manufacturers will either have
0010.107 at 13 (‘‘There are no comparable federal
regulations that specifically require the control of
tons per day statewide in 2020 and by 155,200 CO2- to meet California standards for those
equivelent tons per day in 2030. This translates into new vehicles subject to its standards
greenhouse gas emissions from motor vehicles.’’).
an 18 percent overall reduction in greenhouse gas
36 ‘‘The establishment of greenhouse gas emission
emissions from the light duty fleet in 2020 and a and EPA standards for others, or EPA
standards will result in a reduction in upstream 27 percent overall reduction in 2030; Taking into standards for all of the new vehicles.
emissions (emission due to the production and account the penetration of 2009 and later vehicles The most straightforward reading of
transportation of the fuel used by the vehicle) of meeting the new standard, the proposed regulation
greenhouse gas, criteria and toxic pollutants due to
the comparison called for by the statute,
will reduce upstream emissions of non-methane
reduced fuel usage.’’ EPA–HQ–OAR–2006–0173– organic gases (NMOG) by 4.6 tons per day statewide between California and Federal
0010.107 at 8. in 2020 and 7.9 tons per day statewide in 2030, and standards, is an ‘‘apples to apples’’
37 ‘‘Supplemental analysis of the potential
will reduce upstream emissions of NOX by 1.4 tons comparison. California has standards
response of consumers (consumer response) to the per day statewide in 2020 and 2.3 tons per day that apply to new motor vehicles and
regulations was performed as part of the staff statewide in 2030. The regulation will provide a
evaluation. The evaluation of consumer response criteria pollutant benefit even taking into account the standards set limits for emissions of
indicates that the impact of vehicle price increases possible pollutant increases due to consumer air pollutants. California would then
on fleet turnover (changes to the average age of the response.’’ EPA–HQ–OAR–2006–0173–0010.107 at compare its standards to the same kind
motor vehicle fleet) as well as the impacts of lower 15. of Federal standard—Federal standards
operating costs on vehicle miles traveled (rebound 39 68 FR 19811 (April 22, 2003), Decision
effect) by consumers have minor impacts (less than Document for Waiver of Federal Preemption for
that apply to the same new motor
one percent of the passenger vehicle emissions Low Emission Vehicle Amendments (LEV II) (April vehicles and also set limits for
inventory) on criteria pollutant emissions.’’ EPA– 11, 2003). emissions of air pollutants. The term
HQ–OAR–2006–0173–0010.107 at 12. 40 Association of International Automobile
‘‘applicable’’ has to refer to what the
38 ‘‘Taking into account the penetration of 2009 Manufacturers, Inc., EPA–HQ–OAR–2006–1073–
and later vehicles meeting the new standard, the 9005 at 13–14; Alliance of Automobile
Federal standards apply to, and the
proposed regulation will reduce greenhouse gas Manufacturers, EPA–HQ–OAR–2006–0173–8994 at most straightforward meaning is that
emission by an estimated 87,700 CO2-equivelent 16–23. they apply in the same way that the
California standards apply, by setting what was taken away by section clearly reasonable for EPA to limit its
limits on emissions of air pollutants 209(a)—the ability to adopt and enforce review under this criterion to those
from specified new motor vehicles. its own state emission standards. This federal standards that likewise set limits
‘‘[A]pplicable Federal standards’’ would interaction between sections 209(a) and for the same air pollutant emissions
be standards that impose a requirement 209(b) supports interpreting the from the same motor vehicles. This is
on new motor vehicles and that directly ‘‘applicable Federal standards’’ consistent with Congress’ intent to
establishes limits on emissions of air mentioned in section 209(b)(1)(A) to provide California the broadest
pollutants, as do the California mean the same types of emission discretion and avoids limiting
standards. The ‘‘applicable’’ Federal standards as the emission standards that California’s authority and frustrating
standards are those set by EPA that are actually set by California are this congressional intent.43 EPA, thus,
directly apply by regulation to the same preempted under section 209(a), and are has determined it is reasonable to
vehicles and, like the California the subject of a waiver request under interpret ‘‘applicable Federal standards’’
regulations, set limits for the same air section 209(b). to mean those EPA standards under the
pollutants. Additionally, EPA’s construction of Clean Air Act that apply in the same
This is a straightforward and logical ‘‘applicable Federal standards’’ provides manner as the California emission
approach that provides clear guidance a single, consistent usage of that phrase standards, regulating emissions of air
for California on what standards to in the context of the section 209(b) pollutants from new motor vehicles.44
compare. It avoids an open-ended waiver provision. In section 209(b), the Under this approach, any EPA standard
inquiry into what other potential phrase ‘‘applicable Federal standards’’ that, like California’s standards, sets
Federal standards might regulate appears three times. The first two limits for motor vehicle emissions could
different vehicles or regulate different instances appear in sections 209(b)(1) be considered an ‘‘applicable Federal
aspects of the vehicles than emissions, and 209(b)(2) and pertain to EPA’s standard’’ for the purpose of California’s
and instead focuses the comparison on review of California’s protectiveness protectiveness determination.45
a clearly-defined and identifiable set of determination and the relative Applying this interpretation, Federal
Federal standards that are parallel to the stringency of California’s standards, as fuel economy standards issued by
California standards at issue. has been discussed above. The third NHTSA would not be considered
This interpretation also ties the instance occurs in section 209(b)(3) and ‘‘applicable Federal standards’’ for
comparison to the only Federal specifically contemplates treatment of purposes of this waiver criterion. In
standards that are affected by the results waived California standards for the contrast to standards set limits for
of the comparison. If the California purpose of Clean Air Act compliance. emissions from new motor vehicles,
comparison shows it is more protective Section 209(b)(3) states: ‘‘in the case of corporate average fuel economy (CAFE)
and the waiver is granted, the California any new motor vehicle or new motor standards set limits on fuel efficiency, to
standards would apply to the vehicles vehicle engine to which State standards reduce fuel consumption. In contrast to
under section 209(b) and compliance apply pursuant to a waiver granted EPA’s and California’s emission
with the California’s standards will be under paragraph (1), compliance with standards, which typically establish
deemed to mean compliance with the such State standards shall be treated as grams per mile (‘‘gpm’’) levels of
EPA standards under section 209(b)(3). compliance with applicable Federal acceptable pollutant emissions, CAFE
If the California comparison is arbitrary standards for purposes of this title.’’ standards establish ‘‘miles per gallon’’
and capricious and a waiver is denied, (Emphasis added) The reference to Title (‘‘mpg’’) levels of acceptable fuel
then EPA’s Federal emission standards II of the Clean Air Act in section efficiency. Standards that set limits for
apply to those vehicles and California’s 209(b)(3) is further reason to limit the emission levels and standards that set
standards do not. The applicability of construction of ‘‘applicable Federal limits for fuel efficiency apply different
emission standards under section 209(b) standards’’ to comparable Clean Air Act legal requirements. The two kinds of
that results from the waiver decision is emission standards in sections 209(b)(1) standards can overlap significantly, in
parallel to and fully consistent with the and 209(b)(2). All three occurrences of that the technology used to increase fuel
comparison made between the ‘‘applicable Federal standards’’ in efficiency will also lead to reductions in
California and applicable Federal section 209(b) are then given the same emissions of one of the GHGs—CO2—
standards. meaning, in a context where all three
EPA has always limited its occurrences function interactively to 43 See MEMA I, 627 F. 2d at 1111.
interpretation of the section 209(b) allow California to enforce its own 44 Entergy Corp. v. Riverkeeper, Inc., 129 S.Ct.
waiver provision to the scope of section emission standards. 1498 (2009) (‘‘That view governs if it is a reasonable
209(a)’s preemption.41 Section 209(a) The textual structure and legislative interpretation of the statute—not necessarily the
only possible interpretation, nor even the
creates the explicit preemption of state history of the waiver provision also interpretation deemed most reasonable by the
emission standards, and at the same support EPA’s interpretation of courts. Chevron U.S.A. Inc. v. Natural Resources
time leaves EPA to set federal emission ‘‘applicable Federal standards.’’ The Defense Council, Inc., 467 U.S. 837, 8430844
standards, under the authority of section structure of section 209(b) is notable in (1984).’’).
45 In this waiver there are no EPA or other Federal
202(a). Within the context of section its focus on limiting the ability of EPA
standards that have been identified that explicitly
209, and the preemption of 209(a), to deny a waiver and preserving ‘‘the and directly regulate emissions of GHGs from new
section 209(b)’s waiver provision allows broadest possible discretion’’ for motor vehicles. While emission standards
California the ability to set its own California to construct its motor vehicle promulgated by EPA have always been treated as
emission standards. Notably, section program as it deems appropriate to applicable Federal standards because they
explicitly regulate the same vehicles and air

209(b) merely gives back to California protect its public health and welfare.42 pollutants, there is the possibility that another
Where, as in this case, California’s Federal agency could have a standard that also
41 ‘‘The legislative history of section 209 supports
emission standards are specified in directly and explicitly regulates emissions from
the Administrator’s interpretation that the waiver terms of direct regulation of emissions some new motor vehicles. EPA is not aware of any
provision is coextensive with the preemption such circumstances at this time, but reserves the
provision, thereby permitting the Administrator to from new motor vehicles, it is most right to consider in the future whether such a non-
consider waiving preemption of California’s entire EPA Federal standard would be considered an
program of emissions control.’’ MEMA I, 627 F.2d 42 H.R. Rep. No. 294, 95th Cong., 1st Sess. 301– ‘‘applicable Federal standards’’ for the purpose of
1095, 1108. 302 (1977); MEMA I, 627 F. 2d at 1110–11. a CAA waiver determination.
but they are not the same legal in effect between a CAFE standard and at the time of the waiver decision.
requirements and the regulations do not a GHG emission standard with respect Although NHTSA is required by the
apply in the same manner.46 Fuel to emissions of CO2, the CAFE standards EISA to promulgate more stringent fuel
economy standards do impact the levels do not set limits on emissions of CO2 or economy standards in the future, the
of one GHG—CO2—that is emitted from any other GHG. There also remain only final fuel economy standard under
motor vehicles. But fuel economy important areas where there is no EISA that is currently in existence is
standards do not set limits on emission overlap at all with the California that for the 2011 model year.48
levels of CO2 or any other air pollutant, standards, including the regulation of Additionally, although EPA and the
as do California’s standards. Lacking greenhouse gas pollutants other than Department of Transportation (DOT)
that kind of regulation of emissions of CO2. Instead of making an exception to have issued a notice of intent to engage
an air pollutant, fuel economy standards its interpretation of ‘‘applicable Federal in a joint rulemaking, with NHTSA
are not ‘‘applicable Federal standards.’’ standards’’ for NHTSA’s CAFE fuel issuing fuel economy standards under
The difference between emission economy standards, EPA believes it is the EISA for the 2012 through 2016
standards and fuel economy standards more appropriate to apply its traditional model years and EPA issuing
is highlighted by comparing the two sets interpretation, for all of the reasons greenhouse gas standards under the
of standards at issue here. California’s discussed above. Therefore, EPA has CAA for those same model years, those
greenhouse gas emission standards determined that NHTSA’s CAFE standards are neither proposed nor final
establish allowable grams per mile standards are not ‘‘applicable Federal at this time.49 To consider CAFE
(‘‘gpm’’) levels for greenhouse gas standards’’ for purposes of this waiver standards that have been proposed or
emissions, including tailpipe emissions criterion. those standards that may be proposed
of carbon dioxide (CO2), nitrous oxide 2. If EPA Did Consider CAFE Standards would be speculative about what
(N2O), and methane (CH4) as well as as ‘‘Applicable Federal Standards,’’ Are standards will be adopted, and EPA has
emissions of CO2 and the CAFE Standards More Stringent consistently found it inappropriate to
hydrofluorocarbons (HFCs) related to Than California’s Greenhouse Gas engage in that speculation with respect
operation of the air conditioning system. Emission Standards? to either EPA’s or California’s future
By regulating emissions of four different standards in prior waiver decisions.
greenhouse gas pollutants, the standards Even if EPA were to take fuel
do more than reduce tailpipe CO2 economy standards into consideration Further, it is reasonable to limit our
emissions resulting from fuel as ‘‘applicable Federal standards,’’ consideration of ‘‘applicable Federal
combustion. They do not directly equate opponents of the waiver have not met standards’’ to those final standards that
to miles per gallon fuel economy their burden of proof to demonstrate are in existence, in light of the range of
reductions. Fuel economy standards, on that California’s protectiveness options that remain for California and
the other hand, directly control miles determination was arbitrary and EPA after a decision on this waiver. If
per gallon (‘‘mpg’’) fuel economy levels. capricious. No waiver opponent has federal greenhouse gas standards are
CO2 reductions will occur, but they are demonstrated that existing CAFE promulgated in the future, and if such
an expected indirect effect of improved standards are more stringent or more standards bring this determination into
fuel economy standards because the protective of the public health and question, then EPA can revisit this
same technology that improves fuel welfare than California’s greenhouse gas decision at that time. The legislative
economy effectively reduces CO2 emission standards. history of section 209(b) makes clear
emissions. EPA has consistently stated in prior that Congress considered section 209(b)
There is no doubt that a CAFE waiver determinations that California’s as including the authority for EPA to
standard would clearly produce protectiveness determination must withdraw a waiver if circumstances
companion reductions in CO2 as fuel consider the ‘‘applicable Federal occur in the future that would make this
economy improves, given the standards’’ in existence at the time of appropriate: ‘‘Implicit in this provision
technology used to improve fuel EPA’s waiver decision.47 Standards in is the right of the [Administrator] to
economy. However, for the reasons existence at the time of a waiver withdraw the waiver at any time [if]
described above EPA believes the better decision have only included finalized after notice and an opportunity for
interpretation of section 209(b)(1)(A) is emission standards that EPA has public hearing he finds that the State of
to look at whether the Federal standard promulgated through its rulemaking California no longer complies with the
is applicable to the same vehicles and process and pursuant to its Clean Air conditions of the waiver.50 EPA need
air pollutants as the California Act authority. not decide now what action might be
standards, by considering whether they Applying that approach here, if EPA authorized or appropriate under section
directly regulate the same vehicles and were to take NHTSA’s fuel economy 209(b) if EPA adopts greenhouse gas
air pollutants. It is clear that a CAFE standards into account when reviewing emission standards in the future, as that
standard does not meet this test. While California’s protectiveness is best decided when EPA takes such
there is a large but non-identical overlap determination, our inquiry would be action. Additionally, the possibility that
limited to those final fuel economy CARB may revise its standards is always
46 The Supreme Court acknowledged this standards that are currently in existence present. Such a revision would be
‘‘overlap’’ between fuel economy and emission considered by EPA in a future waiver
standards in Massachusetts v. EPA, 127 S. Ct. at 47 See e.g., Authorization of California’s Under 25
proceeding. EPA would then determine
1438. (‘‘[T]hat DOT sets mileage standards in no Horsepower Utility Lawn and Garden Equipment whether those changes are within-the-
way licenses EPA to shirk its environmental Engine Exhaust Emission Standards (ULGE) (July 5,
responsibilities. EPA has been charged with 1995) at 18. (‘‘CARB’s protectiveness determination scope of its prior waiver or if a new, full
protecting the public’s ‘health’ and ‘welfare.’ 42 must be judged on the standards that are in waiver determination would need to be
U.S.C. 7521(a)(1), a statutory obligation wholly existence at the time EPA makes it authorization made, as would be required if California
independent of DOT’s mandate to promote energy determination. However, as CARB correctly states,
efficiency. See Energy Policy and Conservation Act, until EPA’s rules become final no changed
48 74 FR 14196 (March 30, 2009).
section 2(5), 89 Stat. 874, 42 U.S.C. 6201(5). The circumstances exist that affect CARB’s
49 74 FR 24007 (May 22, 2009).
two obligations may overlap, but there is no reason protectiveness determination, and that it would be
to think the two agencies cannot both administer premature to make a protectiveness comparison 50 S. Rep. No. 403, 90th Cong. 1st Sess. (1967), at
their obligations and yet avoid inconsistency.’’) with non-finalized federal standards.’’) 33–34.
decided to increase the stringency of its greenhouse gas emission standards to 2011 model year, and the preexisting
greenhouse gas standards. the corresponding range of years of standards for the 2009–2010 model
California’s greenhouse gas emission EISA fuel economy standards, CARB years. This highlights that the
standards begin with the 2009 model translated the miles per gallon standards appropriate approach is to compare
year and increase in stringency through from EISA into greenhouse gas emission standards that are final as of the time of
the 2016 model year. For that same time rates. The rates of greenhouse gas the waiver decision. However,
period, fuel economy standards only emission reduction from each set of California’s approach indicates that its
exist for the 2009 through 2011 model standards were then compared from standards are more stringent than
years. An appropriate comparison 2009 through 2020.52 CARB found that federal CAFE standards even if CAFE
between California’s greenhouse gas in California in 2016, its greenhouse gas standards increased in the 2012 through
standards and NHTSA’s fuel economy emission standards would achieve 51.9 2016 model years. Therefore, this
standards, then, would compare million metric tons of greenhouse gas approach also would indicate that
California’s standards for the 2009 and emission reductions compared to 23.7 California’s standards, reviewing only
later model years to NHTSA’s fuel million metric tons from federal fuel those standards that are final at this
economy standards for the 2009 through economy standards. By 2020, CARB time, are more stringent in the aggregate.
2011 model years. found 100.5 million metric tons of No commenter has presented
In his December 19, 2007 letter greenhouse gas emission reductions evidence that questions CARB’s claim
notifying California Governor from its standards compared to 59.5 that its greenhouse gas emission
Schwarzenegger that California’s waiver million metric tons of greenhouse gas standards are more stringent than EISA.
request would be denied, former EPA emission reductions from the federal Most commenters opposing the waiver
Administrator Johnson stated that the fuel economy standards.53 Both sets of do not focus on the comparative
EISA ‘‘establishes an aggressive reductions follow a similar pattern stringency of the two sets of standards,
standard of 35 miles per gallon for all because both sets of standards are but instead focus on EISA’s mandate for
50 states, as opposed to the 33.8 miles relatively similar in stringency in the more stringent fuel economy standards
per gallon in California and a patchwork near-term (2009–2011), with California’s as undermining the currency of
of other states.’’ California prepared and standards ramping up in the mid-term California’s protectiveness
documented a technical evaluation (2012–2016), just as the proposed EISA determination or California’s ‘‘need’’ for
comparing federal fuel economy standards begin to increase their its greenhouse gas emission standards.
standards to its own standards.51 stringency. While both sets of standards For example, AIAM has argued that the
Accounting for the differences between gain stringency in the long-term (2016 increased stringency of CAFE standards
the two sets of standards, CARB and beyond), California found that its due to the EISA removes the basis for
attempted an ‘‘apples to apples’’ standards are more stringent sooner and California’s protectiveness
comparison of the standards and made in the long-term and, furthermore, that determination.54 Similarly, the Alliance
several assumptions to that end. For its its standards are more protective of its argues that ‘‘CARB erred in a
own standards, CARB assumed its public health and welfare because they fundamental way when it chose to
current greenhouse gas regulations—at achieve greater greenhouse gas ignore the impact of the federal CAFE
issue here—were in effect for the 2009 reductions. standards generally and EISA’s passage
through 2016 model years and that EPA notes that this comparison in specific on California’s outdated
those standards increased in stringency requires speculation regarding what protectiveness determination.’’ 55 These
for the 2016 through 2020 model years final CAFE standards will be arguments assume that CAFE standards
(its ‘‘Pavley 2’’ standards that are not at promulgated by NHTSA for the 2012– are ‘‘applicable Federal standards’’ and
issue in this waiver proceeding). 2020 model years, and what final GHG that non-final standards may be taken
Because EISA does not set standards, standards may be promulgated by CARB into consideration at the time of a
but directs NHTSA to issue standards for the 2017–2020 model years. If the waiver determination. As explained in
that increase fuel economy to a comparison were truly between final, detail above, those assumptions are not
minimum of 35 miles per gallon by the promulgated standards of California consistent with EPA’s interpretation of
2020 model year, CARB projected that GHG-to-CAFE, it would compare the section 209(b)(1)(A) criterion.
the new CAFE standards would California standards for the 2009 Notably though, neither argument
proportionally increase by 3.44 percent through 2016 model years to the lone presents a factually-based analysis of
each year after the 2011 model year. NHTSA fuel economy standard for the the stringency of California’s
Also, because EISA allows a fuel greenhouse gas emission standards as
economy credit up to 1.2 miles per 52 The 2009 through 2020 model year standards compared to existing fuel economy
gallon for use of flexible fuel vehicles are not a straightforward comparison of California’s standards that undermines California’s
greenhouse gas standards to EISA standards
(FFVs) that can operate on high-blend because the years do not align. The California
protectiveness determination.56 Such an
ethanol, such as E85, based on greenhouse gas standards at issue, here, are for the
manufacturer statements that they 2009 and later model years, whereas EISA was 54 Association of International Automobile
would produce large numbers of FFVs, enacted in 2007 and mandates standards to reach Manufacturers, Inc., EPA–HQ–OAR–2006–0173–
35 miles per gallon by the 2020 mode year, but as 9005 at 13–14.
CARB assumed maximum use of that of yet have only been promulgated for the 2011 55 Alliance of Automobile Manufacturers, EPA,
credit. CARB also took into account model year. The 2009 and 2010 MY federal fuel HQ–OAR–2006–0173–8994 at 20.
differences in fleet mix in California and economy standards were pre-EISA standards. 56 The Alliance’s comments received April 6,
Neither California nor NHTSA has yet promulgated 2009 state: ‘‘It should be noted that * * * it is also
the other 49 states. To compare this
standards for the 2017–2020 model years: California true that the fuel economy improvements required
range of years of the California greenhouse gas standards for those years are by the California GHG standards are more stringent,
currently proposed in California (as ‘‘Pavley 2’’ overall, for the industry than the CAFE standards
51 California Air Resources Board, Comparison of standards), as are all the EISA standards from the in many jurisdictions in which the state GHG
Greenhouse Gas Reductions for the United States 2012 through 2015 model years. standards would apply compared to the CAFE
and Canada under U.S. CAFE Standards and 53 California Air Resources Board, Comparison of standards. CARB does not disagree with this point.
California Air Resources Board Greenhouse Gas Greenhouse Gas Reductions for the United States See CARB, Comparison of Greenhouse Gas
Regulations, February 25, 2008, available at and Canada under U.S. CAFE Standards and Reductions for the United States and Canada Under
http://www.arb.ca.gov/cc/ccms/reports/pavleycafe_ California Air Resources Board Greenhouse Gas U.S. CAFE Standards and California’s Air Resources
reportfeb25_08.pdf. Regulations, (February 25, 2008), at 13–14. Continued
analysis would be necessary for EPA to These comments raise two objections pre-existing California standards for
make a section 209(b)(1)(A) finding, if concerning other states adoption of light-duty vehicles and trucks, known as
EPA were to depart from its traditional California’s greenhouse gas emission LEV II, is at least as protective as
review of California’s protectiveness standards. First, these comments suggest comparable Federal standards, known
determination and interpret ‘‘applicable that state-by-state compliance with each as the Tier II standards.64 In the context
Federal standards’’ to include NHTSA’s state’s adopted set of California of the ZEV proceeding, EPA conducted
fuel economy standards. As noted standards presents an unworkable its traditional analysis to compare
below, the Alliance points to an analysis compliance ‘‘patchwork’’ for automobile California’s newly enacted ZEV
of the relative stringency of the two sets manufacturers.60 Second, and related, standards to a similar lack of applicable
of standards to find that: ‘‘the combined the comments suggest that enforcement Federal standards. At that time,
vehicle-fuel program created by the of California’s greenhouse gas standards California found, and EPA deemed
EISA would result in greater life-cycle in other states will lead to reasonable, that the addition of the ZEV
GHG reductions than the state standards ‘‘environmental disbenefits’’ in those standards did not render California’s
that are the subject of this proceeding by states.61 EPA takes no position on the LEV II program, for which a waiver had
the end of the decade.’’ That analysis, merits of either argument because these previously been granted, less protective
however, is flawed for the purpose of arguments are outside the scope of our than the Federal Tier II program. In
this waiver consideration because it section 209(b)(1) waiver criteria. EPA’s addressing the Alliance’s petition for
speculates as to NHTSA standards that evaluation of California’s waiver request reconsideration with respect to this
are not yet finalized, or even proposed. is limited to the State of California.62 To issue, EPA stated that ‘‘the words
Additionally, it infers that California’s the extent that these comments raise ‘standards’ and ‘in the aggregate’ in
standards are more protective until issues regarding the environmental section 209(b)(1)(A) * * * . at
2017.57 impacts of consumer shifts within minimum, include all the standards
Based on the above, and recognizing California they are evaluated below. relating to the control of emissions for
that federal fuel economy standards are a category of vehicles (e.g. passenger
C. Is California’s Protectiveness
not ‘‘applicable Federal standards,’’ EPA cars, etc.) subject to CARB regulation,
Determination Arbitrary and
notes that even if the stringency of particularly where the standards are
Capricious?
CAFE standards are considered in designed to respond to the same type of
context of the section 209(b)(1)(A) 1. Based on EPA’s Traditional Analysis, pollution.’’ 65
waiver criterion, the opponents of the Is California’s Protectiveness California’s greenhouse gas standards
waiver have not presented sufficient Determination Arbitrary and are also an addition to its existing LEV
evidence to show that California’s Capricious? II program. Since the greenhouse gas
protectiveness determination is arbitrary As described above, EPA’s traditional standards add onto California standards
and capricious. No commenter has analysis has been to evaluate that have already been determined to be
shown that California’s determination California’s protectiveness as least as protective, and since there are
was arbitrary and capricious in finding determination by comparing the new no applicable federal greenhouse gas
that NHTSA’s fuel economy standards California standards to applicable EPA emission standards, the point of
are not in the aggregate more protective emission standards for the same comparison, here, is between
of human health and welfare than pollutants.63 In the context of California’s greenhouse gas standards
California’s greenhouse gas standards, greenhouse gas emissions this analysis and an absence of EPA greenhouse gas
whether one considers just the CARB is simple. EPA has already determined emission standards. Comparing an
and NHTSA standards that are currently that California was not arbitrary and absence of EPA greenhouse gas emission
finalized, or one considers possible capricious in its determination that the standards to the enacted set of
future standards that either agency California greenhouse gas emission
might adopt. § 26.11.34), Vermont (Vt Air Poll. Ctrl Regs.,
standards provides a clearly rational
Subchapter XI, 5–1106(a)(5)), Maine (06 Code of basis for California’s determination that
B. How Does EPA Evaluate Impacts on Maine Rules § 127), Connecticut (Conn. Admin. the California greenhouse gas emission
Other States? Code § 22a–174–36b), Arizona (18 A.A.C. 2), New program will be more protective of
Jersey (NJ Admin. Code §§ 7:27–29.13), New
Several comments have suggested that Mexico (20 NM Admin. Code, Chapter 2, Part 88), human health and welfare than non-
EPA should consider the impacts of Oregon (Or. Admin. Rules § 340–257), Pennsylvania existent applicable federal standards.
California’s greenhouse gas standards on (36 Pa.B. 7424), Rhode Island (RI Air Poll. Ctrl Reg. California directly addressed this
37.2.3), Washington (Wash. Admin. Code traditional analysis in its finding that
other states.58 At present time, thirteen § 173.423–090(2), and Washington, DC (DC Law 17–
other states and the District of Columbia 0151) have adopted California’s greenhouse gas
‘‘[t]here are no comparable federal
have already adopted California’s emission standards. See also http:// regulations that specifically require the
greenhouse gas emission standards www.pewclimate.org/what_s_being_done/in_the_ control of greenhouse gas emissions
states/vehicle_ghg_standard.cfm. Four more states, from motor vehicles.’’ 66
pursuant to section 177 of the Act.59 including Florida, Colorado, Utah, and Montana are EPA received comments suggesting
poised to adopt the standards.
Board Greenhouse Gas Regulations: An Enhanced 60 National Automobile Dealers Association, that this type of traditional comparison
Assessment, at 8 (February 25, 2008).’’ Alliance of EPA–HQ–OAR–2006–0173–7176.1, EPA–HQ– is inappropriate, even ‘‘impossible,’’ in
Automobile Manufacturers, EPA–HQ–OAR–2006– OAR–2006–0173–8956.
0173–8994 at 20, note 4. 61 Alliance of Automobile Manufacturers, EPA– 64 71 FR 78190 (December 28, 2006) and Decision
57 Id. HQ–OAR–2006–0173–8994 at 22. Document for Waiver of Federal Preemption for
58 Association of International Automobile 62 These states and the District of Columbia have California Zero Emission Vehicle (ZEV) Standards
Manufacturers, EPA–HQ–OAR–2006–0173– acted pursuant to section 177 of the Clean Air Act, (December 21, 2006); 68 FR 19811 (April 22, 2003)
7176.11, p. 1–2, 24–25; National Automobile which is not relevant to this proceeding, and that and Decision Document for Waiver of Federal
Dealers Association, EPA–HQ–OAR–2006–0173– any issues commenters have regarding section 177 Preemption for Low Emission Vehicle Amendments
7176.1, EPA–HQ–OAR–2006–0173–8956; NERA and state compliance with that statutory provision, (LEV II)(April 11, 2003).
Economic Consulting and Sierra Research, EPA– is not appropriate for this proceeding. EPA notes 65 EPA’s August 13, 2008 Response to Petition for
HQ–OAR–2006–0173–9053.1. that the language of section 209(b(1) refers to the Administrative Reconsideration of EPA’s ZEV
59 New York (6 NY Code, Rules & Regs., Part 218– ‘‘State’’ in several instances but in no instance does Waiver Decision (through the 2011 Model Year)
8.3), Massachusetts (310 Code of Mass. Regs. it refer to ‘‘states’’ or other areas of the country. published on December 28, 2006, at 3.
7.40(2)(a)(6)), Maryland (Code of Md. Regs. 63 See CAA section 209(b)(2). 66 Id. at 13.
the absence of Federal greenhouse gas compared its standards to the absence of that matter because to the extent that the
emission standards.67 Such an argument federal emission standards. Since that in-use effects of the greenhouse gas
is contrary to legislative intent and time, there has been no relevant standards are considered, the waiver
EPA’s practice.68 This is not the first intervening ‘‘applicable Federal opponents do not meet their burden to
time that California has enacted standard.’’ 72 Although AIAM points to show that CARB’s analysis of the effects
emission standards in the absence of the Massachusetts v. EPA decision and is unreasonable.
Federal standards; in fact, California’s Executive Order 13,432, neither of those These comments suggest that
pioneering role in setting mobile source documents, nor any subsequent actions consumer effects will cause California’s
emission standards is one reason the by the Federal government,73 constitute broader LEV II motor vehicle emissions
waiver provision exists.69 Given that final EPA regulation of greenhouse gas program to be less protective than the
section 209(b)(1) is designed to allow emissions for new motor vehicles that Federal Tier II emissions program.76 In
California to have standards more could be used as a comparable standard support of this analysis, the Alliance
stringent than Federal standards, it in this waiver proceeding.74 The current commissioned a study from Sierra
would make little sense to use this lack of federal greenhouse gas emission Research, NERA Economic Consulting,
provision to prevent California from standards maintains the factual basis for and Air Improvement Resource, Inc.
having such standards where the CARB’s September 23, 2004 entitled ‘‘Effectiveness of the California
Federal government has not yet acted. protectiveness determination. As noted Light Duty Vehicle Regulations as
Moreover, in prior decisions EPA has above, if and when greenhouse gas Compared to Federal Regulations,’’
found that such protectiveness standards are promulgated by EPA in which was submitted to EPA on June
determinations by California in the the future, and if such standards bring 15, 2007 (‘‘June 2007 AIR/NERA/Sierra
absence of Federal standards were this determination into question, then Study’’).77 CARB specifically responded
reasonable.70 Indeed, California EPA can revisit this waiver decision at to the June 2007 Study in comments it
standards may be most clearly ‘‘at least that time. Accordingly, applying its submitted to the docket on July 24, 2007
as protective’’ when they are compared traditional comparative analysis, (‘‘CARB’s July Comments’’).78 Next, the
to the absence of Federal emission opponents of the waiver have not shown Alliance submitted a response to
standards. This commenter further flaw or lack of reason in California’s California’s response prepared by NERA
points to the ‘‘tremendous level of protectiveness determination; and we Economic Consulting and Sierra
current federal activity’’ as the primary cannot find that California’s Research (‘‘October 2007 NERA/Sierra
reason why ‘‘it is impossible for EPA to protectiveness determination is arbitrary Study’’).79 Most recently, the Alliance
evaluate how the GHG Regulations will and capricious. submitted another study produced by
compare with federal regulation in this NERA Economic Consulting and Sierra
2. Is California’s Protectiveness
field.’’ While EPA has announced its Research entitled ‘‘Impacts of the
Determination Arbitrary and Capricious
intention to propose greenhouse gas California Greenhouse Gas Emission
Based on the Real-World In-Use Effects
emission standards, EPA has Standards on Motor Vehicle Sales’’
of California’s Greenhouse Gas
consistently stated that CARB’s (‘‘April 2009 NERA/Sierra Study’’).80
Standards?
protectiveness determination must On this issue, the Alliance also refers to
consider the Federal standards in EPA received comments suggesting a study published by the Society of
existence at the time of EPA’s waiver the need for and appropriateness of
Automotive Engineers entitled
decision.71 applying an alternative interpretation of
‘‘Evaluation of California Greenhouse
Furthermore, waiting for future section 209(b)(1)(A), based on an
Gas Standards and Federal
federal regulation would be contrary to inquiry into the in-use effect of
Independence and Security Act—Part 2:
the purpose of the section 209(b) waiver inclusion of greenhouse gas standards
CO2 and GHG Impacts’’ (‘‘SAE
provision—effectively stalling upon the broader motor vehicle
Study’’).81 At the same time, Air
California’s ability to enforce its own emissions program.75 EPA does not take
Improvement Resource, Inc. has
program. CARB’s protectiveness a position as to the validity of the
independently submitted comments
determination was made on September suggestion that the type of numerical
which include its ‘‘Evaluation of
23, 2004, at which time there were no analysis discussed above is insufficient.
Noting the legislative history and text of California Greenhouse Gas Standards
federal greenhouse gas standards.
section 209(b)(2), EPA would need a and Federal Energy Independence and
CARB’s determination, then, correctly
concrete factual basis to examine the in- Security Act’’ (‘‘March 2009 AIR
67 Alliance of International Automobile use effect of California’s greenhouse gas Study’’).82
The Alliance has raised this issue
Manufacturers, EPA–HQ–OAR–2006–0173–1455 at standards on its broader LEV II program
3; Alliance of Automobile Manufacturers, EPA– before, in its request for reconsideration
as compared to the Federal Tier II
HQ–OAR–2006–0173–1297 at 2, 5–7, 11–12; of EPA’s waiver for California’s ZEV
National Automobile Dealers Association, EPA– program. We need not take a position on
HQ–OAR–0173–1671 at 3. 76 Id.
68 The waiver provision allows California to ‘‘act 72 See
section IV.A., regarding ‘‘applicable 77 Sierra Research, Inc., EPA–HQ–OAR–2006–
as a testing agent for various types of control and Federal standards.’’
the country as a whole will be a beneficiary of this 73 The Alliance similarly argues that EISA’s
0173–1447, 1447.1–.5.
78 California Air Resources Board, EPA–HQ–
research’’ (113 Cong. Rec. 32478 [1967]); ‘‘act as a mandate for reformed CAFE standards renders
laboratory for innovation’’ (MEMA I at 1095). See California’s protectiveness determination OAR–2006–0173–3601.
79 NERA Economic Consulting, Inc. and Sierra
Decision Document for Authorization of State ‘‘obsolete’’ or ‘‘stale.’’ Alliance of Automobile
Standards for Utility Lawn and Garden Equipment Manufacturers, EPA–HQ–OAR–2006–0173–8994 at Research, EPA–HQ–OAR–2006–0173–3651.
(ULGE) (July 5, 1995). 21. 80 NERA Economic Consulting and Sierra

69 California first began regulating motor vehicle 74 Likewise, EPA and DOT’s ‘‘Notice of Upcoming Research, EPA–HQ–OAR–2006–0173–9053.
emissions in 1957, nearly a decade before Congress Joint Rulemaking To Establish Vehicle GHG 81 Thomas L. Darlington and Dennis F. Kahlbaum,
enacted the Motor Vehicle Air Pollution Control Emissions and CAFE Standards’’ does not include Evaluation of California Greenhouse Gas Standards
Act of 1965, which enabled a federal program. any final standards which EPA can take into and Federal Independence and Security Act—Part
70 See e.g., Authorization of California’s Under 25 account as an ‘‘applicable Federal standards.’’74 FR 2: CO2 and GHG Impacts, SAE Paper No. 2008–01–
Horsepower Utility Lawn and Garden Equipment 24007 (May 22, 2009). 1853 (2008), Alliance of Automobile Manufacturers,
Engine Exhaust Emission Standards (ULGE) (July 5, 75 Alliance of Automobile Manufacturers, EPA– EPA–HQ–OAR–2006–0173–8994 at 20, note 44.
1995). HQ–OAR–2006–0173–1297 at 5–12, and EPA–HQ– 82 Air Improvement Resources, Inc., EPA–HQ–
71 Id. at 18. OAR–2006–0173–8994 at 22. OAR–2006–0173–13662.
standards.83 In that reconsideration, the based upon its own analysis of the and not later during EPA’s
Alliance referred to the same June 2007 impact of its greenhouse gas standards consideration of California’s waiver
AIR/NERA/Sierra Study, saying that the on its larger program. California found request. Second, CARB substantively
California program, as a whole, was not that its new greenhouse gas standards responded to the June 2007 AIR/NERA/
at least as protective of public health would yield not only reductions in Sierra Study and claimed that its
and welfare as comparable federal greenhouse gas emissions but also a net protectiveness determination was
standards. EPA denied the Alliance’s reduction in criteria pollutant proper. In sum, CARB objected that the
request, in particular because the June emissions.85 Therefore, to the extent this June 2007 AIR/NERA/Sierra Study is
2007 AIR/NERA/Sierra Study was analysis is even relevant for an EPA inappropriate because it is not focused
produced under the assumption that waiver review opponents must present on the relative stringency of emission
California’s ZEV standards would be in ‘‘clear and compelling’’ evidence standards, but instead presents ‘‘a series
effect until at least 2020 and that challenging the reasonableness of this of speculative events driven by disputed
California’s greenhouse gas standards determination and California’s analysis. and unsupported compliance costs that
would also be in effect. As EPA had The June 2007 AIR/NERA/Sierra would supposedly result—contrary to
only granted the ZEV waiver through Study prepared for the Alliance presents experience with previous reduction and
the 2011 model year and had not a finding that its results ‘‘indicate that automotive regulatory measures—in a
granted the greenhouse gas waiver, EPA the California Program, in the aggregate, substantial reduction in new motor
found that the study was not based is less protective of public health than vehicle sales (fleet turnover); and * * *
upon the proper assumptions for the Federal Program with respect to Californians’ theoretical desire to drive
comparing California’s standards to emissions of ozone precursors and even more miles than already projected
federal standards. EPA stated at that several other criteria pollutants.’’ The to reach increasingly distant
time: ‘‘[T]o the extent that the real- study undertook consumer choice destinations in the face of increasing
world emission effects of CARB’s ZEV modeling to evaluate the effect of the traffic congestion (rebound effect).’’ 87
program (aggregated with its LEV II California greenhouse gas emission CARB further critiqued several points of
standards) are relevant, if at all, the standards on the new motor vehicle AIR/NERA/Sierra’s analysis, including
Alliance fails to submit sufficiently fleet and vehicle miles travelled (VMT) what it viewed as ‘‘grossly overstated
focused information regarding these and compare those effects with fleet and * * * highly speculative cost
programs and their associated effect on VMT conditions were the Federal estimates,’’ modeling errors, lack of
emissions. Thus, no basis exists to Program in effect in California. Its methodological detail, and faulty
reconsider EPA’s December 2006 waiver results showed that compliance with the assumptions. CARB asserted that its
decision based on the NERA/Sierra/Air California greenhouse gas standards staff reviewed similar analyses and had
report.’’ 84 would raise the cost of new motor provided its own analyses that are
In evaluating its greenhouse gas vehicles in California, which would ‘‘more reasonable and historically
standards, California’s protectiveness then lead to higher new vehicle prices, reliable’’ and ‘‘lead to dramatically
determination went beyond a simple decreased new vehicle sales, increased different outputs.’’
numerical comparison of its greenhouse retention of used vehicles (‘‘scrappage NERA/Sierra responded to that
gas standards to non-existent federal effect’’), increased fuel economy which critique on October 29, 2007.88 That
greenhouse gas standards. Its would lead to increased VMT (‘‘rebound document includes specific responses to
protectiveness determination was also effect’’), and, finally, increased criticisms raised by CARB and generally
emissions of ozone precursors and defends the integrity of its analyses.
83 Decision Document for Waiver of Federal
Preemption for California Zero Emission Vehicle

several other criteria air pollutants. NERA/Sierra affirmed its conclusions
(ZEV) Standards (December 21, 2006) and EPA’s On July 24, 2007, CARB submitted a that CARB’s protectiveness
August 13, 2008 Response to Petition for response to comments received by EPA determination is not fully supported
Administrative Reconsideration of EPA’s ZEV which specifically addressed the June because it understates or ignores costs,
Waiver Decision (through the 2011 Model Year)
published on December 28, 2006.
2007 AIR/NERA/Sierra Study.86 First, does not consider the combined effects
84 EPA’s August 13, 2008 Response to Petition for CARB insisted that such a study should of the ZEV mandate and GHG
Administrative Reconsideration of EPA’s ZEV have been presented for consideration requirements, and does not assure
Waiver Decision (through the 2011 Model Year) during California’s rulemaking process compliance through technological
published on December 28, 2006, at 17–18. That
denial further opined: ‘‘In light of the language of
implementation. As to the specific
section 209(b)(1)(A) and associated legislative
modeling issues raised by CARB, NERA/
history, it may only be necessary to examine the OAR–2006–0173–0010.107 at 15 (‘‘Taking into Sierra maintained the correctness of its
applicable emission limits in determining account the penetration of 2009 and later vehicles
meeting the new standard, the proposed regulation modeling assumptions and estimations
California’s ability to set more stringent standards
and pursue pioneering efforts (which may or may will reduce greenhouse gas emission by an with regard to technology cost, fleet
not lead to higher costs and associated fleet estimated 87,700 CO2-equivelent tons per day turnover, rebound effect, and pollutant
turnover concerns) under section 209(b)(1)(A). statewide in 2020 and by 155,200 CO2-equivelent emission effect.
Given the legislative history * * * . EPA would tons per day in 2030. This translates into an 18
percent overall reduction in greenhouse gas NERA/Sierra also submitted an
need a concrete basis to examine the ‘‘real world’’
or in-use effect of California’s standards in emissions from the light duty fleet in 2020 and a additional study on April 6, 2009,
comparison to applicable federal standards (in this 27 percent overall reduction in 2030; Taking into presenting many of the same
case, a comparison of LEV II + ZEV versus Tier 2). account the penetration of 2009 and later vehicles methodological assertions noted above.
To require CARB to justify its standards and policy meeting the new standard, the proposed regulation
will reduce upstream emissions of non-methane Notably, though, this study is less
goals within the context of the protectiveness
methodologically clear: It does not
criteria based on waiver opponents’ complicated organic gases (NMOG) by 4.6 tons per day statewide
and controversial models that apply assumptions in 2020 and 7.9 tons per day statewide in 2030, and quantify scrappage or its effects on
that are themselves controversial, and where there will reduce upstream emissions of NOX by 1.4 tons emissions, assumes technology is
are no corresponding federal standards, raises per day statewide in 2020 and 2.3 tons per day
statewide in 2030. The regulation will provide a applied only to meet federal CAFE
questions about whether demanding this type of
review conflicts with Congress’ intent to allow criteria pollutant benefit even taking into account
California ‘the broadest possible discretion’ in possible pollutant increases due to consumer 87 California Air Resources Board, EPA–HQ–
fashioning its own motor vehicle program without response.’’). OAR–2006–0173–3601 at 8.

EPA second-guessing California’s policy choices.’’ 86 California Air Resources Board, EPA–HQ– 88 NERA Economic Consulting, Inc. and Sierra
Id. at 12. OAR–2006–0173–3601. Research, EPA–HQ–OAR–2006–0173–3651.
standards (and not beyond that level of based on inconsistent assumptions that cost per vehicle over various model
stringency), and assumes that further California’s greenhouse gas standards years of the greenhouse gas versus the
compliance is achieved through fleet will not become more stringent after the ZEV portion of the rules and, therefore,
mix changes combined with restrictions 2016 model year, (because this waiver determine how much of the consumer
on vehicle availability. It is not clear request ends with the 2016 model year behavior impacts are appropriately
whether and how ZEV program standards) but the federal fuel economy attributable to the greenhouse gas
requirements are included in this study. standards will become more stringent standards. Thus, it is difficult to
Most importantly, though, the April even though there are not yet any undertake a direct comparison of the
2009 NERA/Sierra Study is outside the federal fuel economy standards past the NERA/Sierra/Air and CARB studies.
scope of this proceeding; it presents 2011 model year. As stated above, EPA According to NERA/Sierra/AIR, as a
‘‘the effects on motor vehicle sales of the is not including fuel economy standards result of price increases associated with
California Standards, assuming that they in its consideration of ‘‘applicable the greenhouse gas and ZEV rules in
are implemented in the 13 states that Federal standards.’’ But, even if EPA 2020, they project that new vehicle sales
have adopted California’s standards.’’ 89 were to engage in that analysis, it can in California will fall by approximately
That is, the April 2009 NERA/Sierra only consider standards in existence at 130,000 vehicles. In addition, the
Study seeks to present the effect of the time of a waiver decision, as stated number of vehicles in the fleet prior to
California’s greenhouse gas standards on above. Since no federal fuel economy the effective date of the ZEV and GHG
new motor vehicle sales in those 13 standards exist yet beyond the 2011 regulations (i.e., pre-2009 model year
states. This is inappropriate because the model year, EPA will not make vehicles) is more than 250,000 greater in
waiver inquiry is limited to the State of predictions about later year fuel 2020 than would otherwise be the case
California (as noted above) and, even if economy standards in order to take under a federal program.
this study had been limited to them into account here. CARB, on the other hand, only looks
California, it would still be inadequate As discussed below, EPA has at the economic impacts of the
because it does not connect its findings evaluated both sets of analyses (from California greenhouse gas standards,
with regard to depressed vehicle sales to CARB and NERA/Sierra) and makes independent of the ZEV requirements.
increased criteria pollutant emissions. note of the following with regard to (1) Without the ZEV requirements, CARB
Air Improvement Resources, Inc. fleet turnover/delayed scrappage, (2) the estimates that California’s greenhouse
(‘‘AIR’’), who had originally participated rebound effect, and (3) upstream gas standards will result in an increase
in the June 2007 AIR/NERA/Sierra emissions impacts.92 in new vehicle prices of approximately
Study but submitted comment $1,000 per vehicle (i.e., $1,064 for
a. Fleet Turnover/Delayed Scrappage
independently on April 6, 2009, passenger vehicles, small trucks and
evaluated California’s greenhouse gas The Alliance argues that California’s sport utility vehicles (SUVs) and $1,029
standards as compared to EISA greenhouse gas standards will cause for certain medium-duty trucks/
‘‘standards.’’ As noted above, this delayed fleet turnover and, thus, SUVs).93 Using a consumer choice
evaluation is not relevant to EPA’s increase criteria air pollutant emissions. model, CARBITS, CARB estimated new
section 209(b)(1)(A) inquiry because Delayed fleet turnover results when the vehicle sales from California standards
EISA ‘‘standards’’ are not ‘‘applicable prices of new vehicles increase, causing would increase in the near-term,
Federal standards’’ for the purpose of prices of existing vehicles to increase as resulting in accelerated fleet turnover,
our waiver inquiry. Nor have any fuel well. A consumer’s decision to scrap an but see declines in fleet turnover in the
economy standards been promulgated existing vehicle depends upon the longer-term, with a loss of vehicle sales
beyond the 2011 model year. Those trade-off between the value of existing of roughly 97,000 in 2020. By 2020,
underlying inadequacies render this vehicle in its working condition and its CARB estimates that lost vehicle sales
study unpersuasive, if not entirely scrappage value. Rising prices of would lead to delayed fleet turnover.
irrelevant. However, it is interesting to existing vehicles lead some consumers The potential increase in ozone
note that the primary finding of this to decide to delay scrapping their precursor emission in California in out
study is that ‘‘the California program vehicles. An older vehicle stock on the years (i.e., 2020) from delayed fleet
has lower GHG emissions until about road results in an increase in criteria air turnover is about 2.5 tons/day. CARB
2016–2018.’’ 90 AIR also included as an pollution. estimates that those ‘‘disbenefits’’ of
attachment an SAE Paper evaluating In conducting its analysis on fleet turnover delay are more than offset
impacts on new vehicle fuel economy consumer behavior impacts in its June by faster turnover in the early years of
from California’s greenhouse gas 2007 study, NERA/Sierra/AIR evaluated the California standard and reductions
standards and EISA ‘‘standards.’’ The the combined impacts of the California in emissions associated with fuel
finding of this paper is that California’s greenhouse gas emission standards and production. The more recent April 2009
greenhouse gas standards will lead to the Zero Emission Vehicle (‘‘ZEV’’) NERA/Sierra study projects the impacts
higher fuel economy than EISA rules. It is difficult to discern the total of the California GHG standards on new
‘‘standards’’ until the 2017 model motor vehicle sales in the thirteen states
92 EPA’s role in reviewing California’s waiver
year.91 The findings of both reports are that have adopted the California
request is limited to finding whether opponents
have shown that California’s protectiveness standards. Since the study only
89 NERA Economic Consulting and Sierra
determination is arbitrary and capricious. In making examines the impacts on new vehicle
Research, EPA–HQ–OAR–2006–0173–9053 at E–1. its protectiveness determination, CARB included
90 Air Improvement Resources, Inc., EPA–HQ–
sales, it does not provide estimates of
these analyses and the studies noted above have
ozone precursor impacts of California
OAR–2006–0173–13662 at 2. Yet this analysis included similar analyses based on diverging

presumes the promulgation of fuel economy assumptions. EPA has evaluated these analyses to standards.
standards that have not yet been promulgated and demonstrate that CARB’s protectiveness
does not accordingly presume the promulgation of determination was not arbitrary and capricious. b. The ‘‘Rebound Effect’’
further greenhouse gas standards by California, This evaluation is separate and distinct from any
despite the fact that the Pavley law in California
The Alliance contends that criteria air
analysis that EPA would conduct in promulgating
makes such further standards a significant its own regulation. Nothing in this evaluation pollutant emissions will increase due to
possibility. should be construed as an endorsement of CARB’s
91 Air Improvement Resources, Inc., EPA–HQ– or any other analysis or any particular assumption 93 California Air Resources Board, EPA–HQ–
OAR–2006–0173–13662. they rely upon. OAR–2006–0173.0010.116.
the so-called vehicle ‘‘rebound effect.’’ of higher vehicle costs on VMT. Based of changes in both the amount and the
The rebound effect for vehicle fuel on the econometric modeling, projected speed of motor vehicle travel, relative to
economy is defined as the increase in California incomes and transportation the cost of gasoline per mile traveled.
vehicle travel resulting from a decrease conditions, Small and Van Dender Based on the vehicle classes affected by
in the fuel cost per vehicle miles as a estimated a dynamic rebound effect of the proposed GHG regulation, the
consequence of an increase in fuel approximately 3% for the State of results from SCAG indicate an elasticity
economy. It is projected that increasing California in 2020. A major difference of VMT to fuel cost (i.e., a rebound
fuel efficiency lowers the effective cost between the NERA and Small and Van effect) of roughly 4 percent in 2020.
of driving to the consumer, which Dender study was the way nominal
c. Upstream Emissions Impacts
results in an increase in vehicle usage income was converted to real income.
(holding all other factors constant). NERA tried to approximate state cost of California’s greenhouse gas standards
NERA developed their own econometric living adjustments, but had to modify also will influence the amount of fuel
estimate of the California rebound metropolitan cost of living adjustments; going through the petroleum marketing
effect—17%—based on California Small and Van Dender used the national and distribution infrastructure in
vehicle inspection data from 1983–2003. consumer price index. Based on the California. This, in turn, will reduce the
In addition, NERA re-estimated a CARB- difference in income calculation, NERA ‘‘upstream’’ criteria air pollutants from
sponsored study on the rebound effect found that income was no longer transportation, spills, and other events
by Small & Van Dender and NERA statistically significant in explaining associated with the infrastructure. There
found the long-run rebound effect in changes in the rebound effect. were large differences between the
California to be roughly 13%. Therefore, they removed this term from CARB and NERA/Sierra estimates of
In contrast, CARB used two types of their model. California also used the upstream emissions. NERA, focusing on
analysis to evaluate the impact of the Southern California Association of fuel delivery trucks and transit
proposed regulations on changes in Governor’s (SCAG) travel demand distances, characterized CARB’s
vehicle miles traveled: Econometric model to project changes in demand estimates as significantly flawed.
work by Small and Van Dender and travel based on declining vehicle However, both estimated upstream
travel demand modeling (Southern operating costs in the context of the emission reductions of ROG and NOX,
California Association of Governor’s transportation system in the L.A. South with CARB estimating a 6 ton per day
(SCAG)). The study by Small & Van Coast Air Basin. In contrast to the reduction and NERA estimating a 1.1–
Dender allowed the rebound effect to econometric study, the travel demand 1.5 ton per day reduction. The table
vary based on changes in income and modeling takes into account the below presents the rivaling estimates
congestion. In addition, the Small & Van available transportation infrastructure. presented by the CARB and NERA/
Dender study also analyzed the impact CARB examined the emission impacts Sierra analyses.
CARB NERA
Fleet Turnover/Scrappage Accelerated fleet turnover in near-term; smaller delayed Delayed fleet turnover in near term; larger delayed fleet
Effect. fleet turnover in out years (e.g., 2020). turnover in out years (e.g., 2020).
Rebound Effect .................... 3% in 2020 ...................................................................... 17% in 2003, 13% in 2007.
Upstream Emissions ............ 6 tons/day reduction in ROG+NOx ................................. 1.1–1.5 tons/day reduction in ROG+NOx.
Additionally, as with our analysis of California’s protectiveness analysis is insufficient and that EPA
the AIR/NERA/Sierra analysis in the determination was arbitrary and must also consider the in-use effects of
context of the ZEV waiver capricious. CARB maintains that the the standards. Given the legislative
reconsideration, we note that the study Alliance has made no attempt to show history and text of section 209(b)(2),
included a presumption that the ZEV that CARB’s analyses are irrational, EPA would need a concrete factual basis
standards would be in effect until at which CARB states waiver opponents to examine the in-use effect of
least 2020, and that this assumption must make given the ‘‘arbitrary and California’s greenhouse gas standards on
appears to have a significant effect on capricious’’ standard. its broader LEV II program as compared
other assumptions in the analysis. EPA agrees that to make a section to the Federal Tier II program. We need
However, EPA explicitly declined to 209(b)(1)(A) finding, it is not enough for not take a position on that matter
approve its waiver for California’s ZEV waiver opponents to provide competing because the waiver opponents do not
standards beyond the 2011 model year, analyses that they claim are based on a meet their burden to show that CARB’s
based in part on concerns that echoed rational set of assumptions. Rather, they analysis of the in-use effects is arbitrary
comments from the Alliance. This must show that California’s analysis, or and capricious.95 Rather, they present
makes the AIR/NERA/Sierra analysis an the assumptions California relied on to
95 To the extent that an analysis of the in-use
insufficient analysis to base a denial of support its protectiveness determination
effects of California’s greenhouse gas standards may
California’s waiver request. were arbitrary and capricious. be appropriate, then such analysis properly
Competing analyses, each based on includes consideration of the upstream emission
In evaluating the studies prepared by
rational assumptions, are not sufficient reduction impacts identified and linked to the
AIR/NERA/Sierra in light of California’s standards. A holistic examination of the in-use
to deny a waiver.94
protectiveness determination, EPA takes effects of a regulation should naturally include

important note of CARB’s response. As As previously stated, EPA does not those effects that have a plausible connection to the
stated above, while CARB disagrees that need to decide the validity of the standards, including such consequences as indirect
suggestion that the traditional numerical upstream emission reductions. The March 6, 2008
these studies are properly before EPA in Denial stated that California may otherwise have
the waiver proceeding, it points out that 94 EPA’s August 13, 2008 Response to Petition for
independent authority to regulate stationary sources
and therefore there was no basis to include
even if it is proper for EPA to consider Administrative Reconsideration of EPA’s ZEV emission reductions from such sources as part of a
the AIR/NERA/Sierra studies, they do Waiver Decision (through the 2011 Model Year) mobile source rulemaking. However, EPA believes
not provide a basis for finding that published on December 28, 2006, at 17, note 25. that the issue under section 209(b)(1)(A) is whether
rivaling analyses—each making interpretation adopted in the March 6, ninety percent of the air pollution in certain
different assumptions so that the 2008 Denial is now before me for parts of California.’’ 97 EPA reasoned that the
differences in findings can be reduced reconsideration. term compelling and extraordinary
to differences in assumptions. EPA finds conditions ‘‘do not refer to the levels of
A. Basis of March 6, 2008 Denial pollution directly.’’ Instead, the term refers
that the Alliance has not met its burden primarily to the factors that tend to produce
of proof that the greenhouse gas In the March 6, 2008 Denial, EPA
higher levels of pollution—‘‘geographical and
regulations undermine California’s provided its reasoning for changing its climatic conditions (like thermal inversions)
previous LEV II and ZEV protectiveness long-standing interpretation of this that, when combined with large numbers and
determinations or that California was provision, as it pertains to California high concentrations of automobiles, create
arbitrary and capricious in its standards designed to address global air serious air pollution problems.’’ 98
greenhouse gas protectiveness pollution. EPA described its long- The Administrator summarized that
determination. standing interpretation in some detail, under this interpretation the question to
EPA, therefore, finds that opponents stating that: be addressed in the second criterion is
of the waiver have not presented clear Under this approach EPA does not look at whether these ‘‘fundamental
and compelling evidence that CARB whether the specific standards at issue are conditions’’ (i.e. the geographical and
was arbitrary and capricious in finding needed to meet compelling and extraordinary climate conditions and large motor
that the real-world effect of its standards conditions related to that air pollutant. For
vehicle population) that cause air
‘‘in the aggregate’’ would not lead to example, EPA reviewed this issue in detail
with regard to particulate matter in a 1984 pollution continued to exist, not
greater emissions of pollutants than the
waiver decision.96 In that waiver proceeding, whether the air pollution levels for PM
federal program.
California argued that EPA is restricted to were compelling and extraordinary, or
D. Section 209(b)(1)(A) Conclusion considering whether California needs its own the extent to which these specific PM
Based on the record before me, I motor vehicle program to meet compelling standards will address the PM air
and extraordinary conditions, and not pollution problem.99
cannot find that CARB was arbitrary and whether any given standard is necessary to
capricious in its finding that the However in the March 6, 2008 Denial,
meet such conditions. Opponents of the EPA limited this interpretation to
California motor vehicle emission waiver in that proceeding argued that EPA
standards including the greenhouse gas California’s motor vehicle standards that
was to consider whether California needed
standards are, in the aggregate, at least these PM standards to meet compelling and
are designed to address local or regional
as protective of public health and extraordinary conditions related to PM air air pollution problems. EPA determined
welfare as applicable Federal standards. pollution. that the traditional interpretation was
The Administrator agreed with California not appropriate for standards designed
V. Does California Need Its Standards that it was appropriate to look at the program to address a global air pollution problem
To Meet Compelling and Extraordinary as a whole in determining compliance with and its effects.100
Conditions? section 209(b)(1)(B). One justification of the With respect to a global air pollution
Administrator was that many of the concerns problem like elevated concentrations of
Under section 209(b)(1)(B) of the Act,
with regard to having separate state standards greenhouse gases, EPA’s March 6, 2008
I cannot grant a waiver if I find that were based on the manufacturers’ worries
California ‘‘does not need such State Denial found that the text of section
about having to meet more than one motor
standards to meet compelling and vehicle program in the country, but that once
209(b)(1)(B) was ambiguous and does
extraordinary conditions.’’ EPA has a separate California program was permitted, not limit EPA to this prior
traditionally interpreted this provision it should not be a greater administrative interpretation. In addition, EPA noted
as considering whether California needs hindrance to have to meet further standards that the legislative history supported a
a separate motor vehicle program to in California. The Administrator also decision to ‘‘examine the second
meet compelling and extraordinary justified this decision by noting that the criterion specifically in the context of
conditions. However in the March 6, language of the statute referred to ‘‘such state global climate change.’’ The legislative
standards,’’ which referred back to the use of history:
2008 Denial, EPA limited this the same phrase in the criterion looking at
interpretation to California’s motor the protectiveness of the standards in the [I]ndicates that Congress was moved to
vehicle standards that are designed to aggregate. He also noted that the phrase allow waivers of preemption for California
address local or regional air pollution referred to standards in the plural, not motor vehicle standards based on the
problems. EPA determined that the individual standards. He considered this particular effects of local conditions in
traditional interpretation was not interpretation to be consistent with the California on the air pollution problems in
appropriate for standards designed to ability of California to have some standards California. Congress discussed ‘‘the unique
that are less stringent than the federal problems faced in California as a result of its
address a global air pollution problem climate and topography.’’ H.R. Rep. No. 728,
and its effects and that it was standards, as long as, per section
209(b)(1)(A), in the aggregate its standards 90th Cong. 1st Sess., at 21 (1967). See also
appropriate to address such standards were at least as protective as the federal Statement of Cong. Holifield (CA), 113 Cong.
separately from the remainder of the standards. Rec. 30942–43 (1967). Congress also noted
program. EPA then proceeded to find The Administrator further stated that in the the large effect of local vehicle pollution on
that California did not need such legislative history of section 209, the phrase such local problems. See, e.g., Statement of
standards to meet compelling and ‘‘compelling and extraordinary Cong. Bell (CA) 113 Cong. Rec. 30946. In
extraordinary conditions. The circumstances’’ refers to ‘‘certain general particular, Congress focused on California’s
circumstances, unique to California,
the indirect reductions of ozone pollutants from primarily responsible for causing its air 97 Id.at 18890.
stationary sources created by the greenhouse gas pollution problem,’’ like the numerous 98 73 FR 12156, 12159–60 (March 6, 2008).
emission standards for motor vehicles, can thermal inversions caused by its local 99 73 FR at 12159–60.
reasonably be considered by California in its geography and wind patterns. The 100 EPA recently reaffirmed that the traditional
determination that its standards are as protective of Administrator also noted that Congress interpretation still applied for motor vehicle
public health and welfare as applicable federal recognized ‘‘the presence and growth of standards designed to address air pollution
standards. Given that the effects are reasonably problems that are local or regional in nature. 71 FR
California’s vehicle population, whose
related to the regulations, if it is appropriate to 78190, 78192 (December 28, 2008); see also 71 FR
consider in-use effects then it was not arbitrary and emissions were thought to be responsible for 78190 and Decision Document for Waiver of
capricious for California to include such effects in Federal Preemption for California Zero Emission
this analysis. 96 49 FR 18887 (May 3, 1984). Vehicle Standards, at 34.
smog problem, which is especially affected global climate change in California were on showing why California no longer
by local conditions and local pollution. See significant enough and different enough has a compelling need, informed by its
Statement of Cong. Smith (CA) 113 Cong. from the rest of the country such that own circumstances and benefits that
Rec. 30940–41 (1967); Statement of Cong. California could be considered to need would accrue to it and other states.
Holifield (CA), id. at 30942. See also, MEMA
its greenhouse gas standards to meet EPA also received comment that the
I, 627 F. 2d 1095, 1109 (DC Cir., 1979)
(noting the discussion of California’s compelling and extraordinary Massachusetts v. EPA holding suggests
‘‘peculiar local conditions’’ in the legislative conditions. EPA determined that the that EPA should treat greenhouse gases
history). Congress did not justify this waiver should be denied under this just like all other air pollutants when
provision based on pollution problems of a alternative interpretation as well. evaluating a section 209(b) waiver
more national or global nature in justifying request for greenhouse gases. These
this provision.101 B. Should EPA Review This Criterion comments suggest that once the
Based on the Need for California’s Supreme Court clarified that greenhouse
Relying on this, and without any Motor Vehicle Program or the Need for
further significant discussion of either gases are Clean Air Act air pollutants,
the GHG Standards? there was no room left to distinguish
congressional intent or how this new
approach properly furthered the goals of The essential first question to resolve greenhouse gases from other air
section 209(b), EPA determined that it in addressing whether California needs pollutants when evaluating waiver
was appropriate to: ‘‘such State standards to meet requests under section 209(b). These
compelling and extraordinary comments suggest that EPA ought not to
[R]eview California’s GHG standards conditions’’ is whether it is appropriate treat elevated concentrations of
separately from the remainder of its motor
for EPA to evaluate this criterion based greenhouse gases as an air pollution
vehicle emission control program for
purposes of section 209(b)(1)(B). In this on California’s need for its motor problem different from California’s
context it is appropriate to give meaning to vehicle program as a whole, or to traditional air pollution problems.
this criterion by looking at whether the evaluate only the particular standards Likewise, the comments suggest,
emissions from California motor vehicles, as being addressed in this waiver greenhouse gas pollutants should be
well as the local climate and topography in proceeding. treated just like other air pollutants
California, are the fundamental causal factors which give rise to the need for
for the air pollution problem—elevated 1. Comments Supporting a Review of
the Entire Program California’s motor vehicle emission
concentrations of greenhouse gases—apart program, and, therefore, be subject to
from the other parts of California’s motor In its initial waiver request, CARB EPA’s traditional section 209(b)(1)(B)
vehicle program, which are intended to restates its need for its own engine and
remediate different air pollution concerns. analysis.
vehicle programs to meet serious air Several commenters suggest that
EPA then proceeded to apply this pollution problems. It notes that the review of California’s need for its motor
interpretation to the GHG standards at relevant inquiry is whether California vehicle emissions program as a whole is
issue in this waiver proceeding, and needs its own emission control program not only appropriate but is mandated by
found that California did not need the as opposed to the need for any given the statute.
GHG standards under this standard as necessary to meet
interpretation. Having limited the compelling and extraordinary 2. Comments Supporting a Review of
meaning of this provision to situations conditions. CARB notes that in prior the GHG Standards Separately
where the air pollution problem was waivers the Administrator has Several commenters opposing the
local or regional in nature, EPA found determined that: GHG waiver request have advocated that
that California’s greenhouse gas ‘‘[C]ompelling and extraordinary
EPA should review California’s GHG
standards do not meet this criterion. conditions’’ does not refer to levels of standards separately under the
EPA found that the elevated pollution directly, but primarily to the factors ‘‘compelling and extraordinary
concentrations of greenhouse gases in that tend to produce them: geographical and conditions’’ criterion. Essentially, this
California are similar to concentrations climatic conditions that, when combined would require that EPA’s determination
elsewhere in the world, and that local with large numbers and high concentrations be based on California’s need for GHG
conditions in California such as the of automobiles create serious air pollution standards in isolation of its need for its
problems.’’
local topography and climate and the own motor vehicle emissions program.
In its initial waiver request letter, CARB
number of motor vehicles in California stated:
These commenters state that the
are not the determinant factors causing statute requires a linkage between the
California, the South Coast and San
the elevated GHG concentrations found Joaquin Air basins in particular, continues to compelling and extraordinary
in California and elsewhere. Thus, the experience some of the worst air quality in conditions and the particular standards
March 6, 2008 Denial found that the nation. California’s ongoing need for that California wishes to enforce, and
California did not need its GHG dramatic emission reductions generally and that a set of standards that cannot be
standards to meet compelling and from passenger vehicles specifically is linked to the compelling and
extraordinary conditions, and the abundantly clear from its recent adoption of extraordinary conditions cannot be said
state implementation plans for the South to be needed to meet such conditions.
waiver was denied. Coast and other California air basins. The
EPA also considered an alternative unique geographical and climatic conditions,
The commenters note that the statute
interpretation, where EPA would and the tremendous growth in the vehicle refers to ‘‘standards’’—not to a
consider ‘‘the effects in California of this population and use which moved Congress to ‘‘program’’—and that such an approach
global air pollution problem in authorize California to establish separate would shield regulations that would not
California in comparison to the rest of vehicle standards in 1967, still exist today.102 meet the criterion from any review
the country, again addressing the GHG CARB notes that these conditions simply by referring to other regulations
standards separately from the rest of have not changed to warrant a change in that do meet the criterion. Moreover,
California’s motor vehicle program.’’ confirmation by EPA and that the they state that the need for such
Under this alternative interpretation, opponents of the waiver bear the burden standards must be based on the
EPA considered whether the impacts of particular characteristics (topography,
102 California Air Resources Board, EPA–HQ– photochemistry) that make California’s
101 73 FR at 12161. OAR–2006–0173–0004.1 at 27. conditions compelling and
extraordinary, whereas global climate March 6, 2008 Denial should be rejected standards aimed at global air pollution
change (and, thus, control of GHGs) is and no longer be followed. problems.
not related to such conditions. This traditional interpretation is the This ignores the main thrust of the
Included among the comments most straightforward reading of the text text and legislative history of section
suggesting that section 209(b) was and legislative history of section 209(b). 209(b), and improperly reads too much
intended to allow California to address Congress decided in 1977 to allow into an absence of discussion of global
local air pollution problems and not California to promulgate individual air pollution problems in the legislative
global environmental issues like climate standards that are not as stringent as history. The structure of section 209,
change was an argument that the phrase comparable federal standards, as long as both as adopted in 1967 and as
‘‘need for such State standards to meet the standards are ‘‘in the aggregate, at amended in 1977, is notable in its focus
compelling and extraordinary least as protective of public health and on limiting the ability of EPA to deny
conditions’’ is unambiguous.103 That welfare as applicable federal standards.’’ a waiver, and thereby preserves
lack of ambiguity, according to these This decision by Congress requires EPA discretion for California to construct its
comments, compels the conclusion that to allow California to promulgate motor vehicle program as it deems
global warming is not the type of individual standards that, in and of appropriate to protect the health and
condition California was meant to themselves, might not be considered welfare of its citizens. The legislative
address with its motor vehicle needed to meet compelling and history indicates Congress quite
emissions program. These commenters extraordinary circumstances, but are intentionally restricted and limited
further suggest that the intent of part of California’s overall approach to EPA’s review of California’s standards,
Congress was to allow California the reducing vehicle emissions to address and its express legislative intent was to
ability to set its own standards to air pollution problems. ‘‘provide the broadest possible
address the state’s unique local air EPA is to determine whether discretion [to California] in selecting the
pollution problems and ‘‘scientific California’s determination is arbitrary best means to protect the health of its
evidence confirms that California’s and capricious under section citizens and the public welfare.’’ 105 The
temperature trends are neither unique 209(b)(1)(A), and is to determine DC Circuit recognized that ‘‘[t]he history
nor particularly distinct from those of at whether California does not need ‘‘such of the congressional consideration of the
least a dozen other States.’’ State standards’’ to meet compelling and California waiver provision, from its
extraordinary conditions. The natural original enactment up through 1977,
3. Decision reading of these provisions leads EPA to indicates that Congress intended the
After reviewing the comments and the consider the same group of standards State to continue and expand its
March 6, 2008 Denial, I believe the that California considered in making its pioneering efforts at adopting and
better approach is to review California’s protectiveness determination. While the enforcing motor vehicle emission
need for its new motor vehicle words ‘‘in the aggregate’’ are not
standards different from and in large
emissions program as a whole to meet specifically applicable to section
measure more advanced than the
compelling and extraordinary 209(b)(1)(B), it does refer to the need for
corresponding federal program. In short,
conditions, and not to apply this ‘‘such State standards,’’ rather than
to act as a kind of laboratory for
criterion to specific standards, or to ‘‘each State standard’’ or otherwise
innovation. * * * For a court [to limit
limit it to standards designed to address indicate a standard-by-standard
California’s authority] despite the
only local or regional air pollution analysis.
In addition, EPA’s March 6, 2008 absence of such an indication would
problems. The traditional approach to only frustrate the congressional
Denial determined that this provision
interpreting this provision is the best intent.’’ 106
was appropriately interpreted to
approach for considering a waiver for In this context, it is fully consistent
consider California’s standards as a
greenhouse standards, as well as a with the expressed intention of
group for standards designed to address
waiver for standards designed to Congress to interpret section
local or regional air pollution problems,
address local or regional air pollution but should be interpreted in the 209(b)(1)(B) the same way both for
problems.104 Therefore, I believe the opposite fashion for standards designed standards designed to address local and
interpretation that was applied in the to address global air pollution problems. regional air pollution problems, and
The text of the provision, however, standards designed to address global air
103 This comment, suggesting that the ‘‘need for
draws no such distinction, and provides pollution problems. Congress intended
such State standards to meet compelling and to provide California the broadest
extraordinary conditions,’’ is made under Step 1 of no indication other than Congress
the test established under Chevron, USA., Inc. v. intended a single interpretation for this possible discretion to develop its motor
NRDC. provision, not one that varied based on vehicle emissions program. Neither the
104 The traditional interpretation of section
the kind of air pollution problem at text nor the legislative history of section
209(b)(1)(B) is certainly not ‘‘unambiguous 209(b) indicates that Congress intended
precluded’’ by the language of the statute. See issue.
Entergy Corp. v. Riverkeeper, Inc., 129 S.Ct. 1498 The March 6, 2008 Denial considered to limit this broad discretion to a certain
(2009)(‘‘That view governs if it is a reasonable the legislative history, and determined kind of air pollution problem, or to take
interpretation of the statute—not necessarily the that Congress was motivated by concern away all discretion with respect to
only possible interpretation, nor even the global air pollution problems.107 In
interpretation deemed most reasonable by the
over local conditions in California that
courts. Chevron U.S.A. Inc. v. Natural Resources lead to local or regional air pollution
105 H.R. Rep. No. 294, 95th Cong., 1st Sess. 301–
Defense Council, Inc., 467 U.S. 837, 843–844 problems. From this, EPA determined
(1984).’’) (‘‘It seems to us, therefore, that the phrase 302 (1977). See MEMA, 627 F. 2d at 1110–11.
that Congress intended to allow 106 MEMA, 627 F. 2d at 1111.
‘‘best available,’’ even with the added specification
‘‘for minimizing adverse environmental impact,’’
California to address these kinds of local 107 This broad interpretation of section 209(b) is
does not unambiguously preclude cost-benefit or regional air pollution problems, but similar to the broad reading the Court provided to
analysis.’’). Carrow v. Merit Systems Protection no others. In effect, EPA inferred from section 302(g) of the Clean Air Act when it held that
Board, 564 F.3d 1359 (Fed. Cir. 2009) (‘‘[W]e are the discussion in the legislative history the term ‘‘air pollutant’’ included greenhouse gases,
obligated to give controlling effect to [agency’s] rejecting among other things the argument that
interpretation if it is reasonable and is not contrary
that Congress intended to limit Congress limited the term to apply only to certain
to the unambiguously expressed intent of California’s authority in this way, and to kinds of air pollution. Massachusetts v. EPA, 549
Congress’’, citing Entergy Corp.) . prohibit a waiver for California U.S. 497, 532 footnote 26.
addition, applying the traditional criterion to limit California’s discretion Congress, however, provided EPA a
interpretation to greenhouse gas to a certain category of air pollution much more limited role under section
standards does not change the basic problems, to the exclusion of others. In 209(b) in considering objections raised
nature of the compromise established by this context it is important to note that by opponents of a waiver.
Congress—California could act as the air pollution problems, including local For these reasons, I believe that the
laboratory for the nation with respect to or regional air pollution problems, do better approach for analyzing the need
motor vehicle emission control, and not occur in isolation. Ozone and PM air for ‘‘such State standards’’ to meet
manufacturers would continue to face pollution, traditionally seen as local or ‘‘compelling and extraordinary
just two sets of emissions standards— regional air pollution problems, occur in conditions’’ is to review California’s
California’s and EPA’s. a context that to some extent can need for its program, as a whole, for the
This interpretation is directly in line involve long range transport of this air class or category of vehicles being
with the purpose of Congress, as pollution or its precursors. This long- regulated, as opposed to its need for
compared to the interpretation adopted range or global aspect of ozone and PM individual standards.
in the March 6, 2008 Denial. The 2008 can have an impact on local or regional
interpretation relied on the discussion levels, as part of the background in Having adopted this interpretation of
in the legislative history of local which the local or regional air pollution section 209(b)(1)(B), I apply it below to
conditions in California leading to air problem occurs. As discussed later, the determine whether EPA can find that
pollution problems like ozone. While effects of global concentrations of California does not need its motor
this was properly read to support the greenhouse gases can have an impact on vehicle program to meet compelling and
view that this provision should be local ozone levels. This context for air extraordinary conditions. Given the
interpreted to address California’s need pollution problems supports the view basis for EPA’s March 6, 2008 Denial
for a motor vehicle program as a whole, that Congress did not draw such a line and the considerable debate regarding
the March 6, 2008 Denial went further between the types of air pollution the permissible interpretations of this
and inferred that by discussing such problems under this criterion, and that provision, EPA has also evaluated this
local conditions, Congress also intended EPA should not implement this criterion reviewing the greenhouse gas
to limit California’s discretion to only criterion in a narrow way restricting standards separately—using the two
these kinds of local or regional air how California determines it should interpretations discussed in the March
pollution problems. The March 6, 2008 develop its motor vehicle program to 6, 2008 Denial. In either case, EPA also
Denial pointed to no particular language protect the health and welfare of its cannot deny California’s request for a
in the legislative history or the text of citizens.108 waiver based on a finding that
section 209(b) indicating such, instead, This approach does not make section California does not need such standards
congressional intent to limit California’s 209(b)(1)(B) a nullity, as some have to meet compelling and extraordinary
discretion was inferred from the suggested. EPA must still determine circumstances.
discussion of local conditions. However, whether California does not need its
basing a limitation on such an inference motor vehicle program to meet the C. Does California Need Its Motor
is not appropriate given the express compelling and extraordinary Vehicle Program To Meet Compelling
indication that Congress intended to conditions discussed in the legislative and Extraordinary Conditions?
provide California the ‘‘broadest history. If that is the case, then a waiver As discussed above, the better
possible discretion’’ in selecting the best would be denied on those grounds. As interpretation of this criterion, adopted
means to protect the health of its discussed below, that is not the case at herein, is the traditional approach of
citizens and the public welfare. this point, even though conditions in evaluating California’s need for a
The text of section 209(b) and the California may one day improve such separate program to meet compelling
legislative history, when viewed as a that it no longer has the need for a and extraordinary conditions. Applying
whole, leads me to conclude that the separate motor vehicle program. The this approach, with due deference to
interpretation adopted in the March 6, statute contemplates that such California, I cannot deny the waiver.
2008 Denial should be rejected. The improvement is possible. In addition,
better way to interpret this provision is the opponents of a waiver always have CARB has repeatedly demonstrated
to apply the traditional interpretation to the ability to raise their legal, policy, the need for its motor vehicle program
the evaluation of California’s and other concerns in the State to address compelling and extraordinary
greenhouse gas standards for motor administrative process, or through conditions in California. In its Waiver
vehicles. If California needs a separate judicial review in State courts. Request letter, CARB stated:
motor vehicle program to address the California—the South Coast and San
kinds of compelling and extraordinary 108 See
Massachusetts v. EPA, ‘‘While the Joaquin Air basins in particular—continues
conditions discussed in the traditional Congresses that drafted section 202(a)(1) might not
to experience some of the worst air quality
have appreciated the possibility that burning fossil
interpretation, then Congress intended fuels could lead to global warming, they did in the nation. California’s ongoing need for
that California could have such a understand that without regulatory flexibility, dramatic emission reductions generally and
program. Congress also intentionally changing circumstances and scientific from passenger vehicles specifically is
provided California the broadest developments would soon render the Clean Air Act abundantly clear from its recent adoption of
obsolete. The broad language of section 202(a)(1)
possible discretion in adopting the kind reflects an intentional effort to confer the flexibility
state implementation plans for the South
of standards in its motor vehicle necessary to forestall such obsolescence. See Coast and other California air basins.109 The
program that California determines are Pennsylvania Dept. of Corrections v. Yeskey, unique geographical and climatic conditions,
appropriate to address air pollution 524 U.S. 206, 212 (1998) (‘‘[T]he fact that a statute and the tremendous growth in the vehicle
can be applied in situations not expressly population and use which moved Congress to
problems that exist in California, anticipated by Congress does not demonstrate
whether or not those problems are local ambiguity. It demonstrates breadth’’ (internal
or regional in nature, and to protect the quotation marks omitted)). Because greenhouse 109 See e.g. Approval and Promulgation of State
health and welfare of its citizens. The gases fit well within the Clean Air Act’s capacious Implementation Plans; California—South Coast, 64
definition of ‘‘air pollutant,’’ we hold that EPA has FR 1770, 1771 (January 12, 1999). See also 69 FR
better interpretation of the text and the statutory authority to regulate the emission of 23858, 23881–90 (April 30, 2004) (designating 15
legislative history of this provision is such gases from new motor vehicles.’’ 549 U.S. 497 areas in California as nonattainment for the federal
that Congress did not intend this at 532. 8-hour ozone national ambient air quality standard).
authorize California to establish separate motor vehicle emission control program. there is general consensus that
vehicle standards in 1967, still exist today.110 In that context, it was determined temperature increases from climate
CARB notes in its July 14, 2007 appropriate to look at whether the change will exacerbate the historic
comments that it testified at EPA’s emissions from California motor climate, topography, and population
earlier hearings on this waiver request vehicles, as well as the local climate and factors conducive to smog formation in
that ‘‘since nothing has changed in the topography in California, are the California, which were the driving
few months since EPA last easily made fundamental causal factors for the air forces behind Congress’ inclusion of the
this determination [regarding the need pollution problem of greenhouse gases. waiver provision in the Clean Air
for the motor vehicle emission program] This interpretation limited the meaning Act.113 There is a logical link between
on December 28, 2006 (71 FR 78190), of this provision to situations where the the local air pollution problem of ozone
and since California still has the motor vehicle standards at issue were and California’s desire to reduce GHGs
‘‘geographical and climatic conditions designed to address an air pollution as one way to address the adverse
that, when combined with the large problem that was local or regional in impact that climate change may have on
numbers and high concentrations of nature, such that the local conditions in local ozone conditions.114 Given the
automobiles, create serious pollution California were the fundamental causes clear deference that Congress intended
problems,’’ (49 FR at 18890 (citing of the air pollution problem. to provide California on the
legislative history)), this is the end of a The March 6, 2008 Denial applied this mechanisms it chooses to use to address
proper and legal EPA analysis of the interpretation by focusing on elevated its air pollution problems, it would be
extraordinary and compelling concentrations of greenhouse gases as appropriate to consider its GHG
conditions waiver prong.’’ 111 the air pollution—a global air pollution standards as designed in part to help
EPA has not received any adverse problem. The March 6, 2008 Denial address a local air pollution problem,
comments suggesting that California no rejected arguments that the GHG and, thus, a waiver should not be
longer needs a separate motor vehicle standards should also been seen as an denied even under the narrow
emissions program to address the ozone control strategy, on the grounds interpretation employed in the March 6,
various conditions that lead to serious that even if elevated concentrations of 2008 Denial.
and unique air pollution problems in greenhouse gases lead to climate
changes that exacerbate ozone, the 2. Do the Impacts of Climate Change in
California. California Support a Denial of the
Based on the record, I am unable to causes of elevated concentrations of
greenhouse gases are not solely local to Waiver?
identify any change in circumstances or
any evidence to suggest that the California but are global in nature. As part of EPA’s March 6, 2008
conditions that Congress identified as This overly narrow view fails to
Denial, EPA also considered an
giving rise to serious air quality consider that although the factors that
alternative interpretation for this
problems in California no longer exist. cause ozone are primarily local in
criterion, where EPA would consider
Therefore, using the traditional nature and that ozone is a local or
‘‘the effects in California of this global
approach of reviewing the need for a regional air pollution problem, the
air pollution problem * * * in
separate California program to meet impacts of global climate change can
comparison to the rest of the country,
compelling and extraordinary nevertheless exacerbate this local air
again addressing the GHG standards
conditions, I cannot deny the waiver pollution problem. Whether or not local
separately from the rest of California’s
based on this criterion. conditions are the primary cause of
motor vehicle program.’’ EPA
elevated concentrations of greenhouse
D. Does California Need Its Motor considered evidence and arguments
gases and climate change, California has
Vehicle GHG Standards To Meet submitted by commenters concerning
made a case that its greenhouse gas
Compelling and Extraordinary whether the impacts of global climate
standards are linked to amelioration of
Conditions? change in California were significant
California’s smog problems. Reducing
enough and different enough from the
As discussed above, EPA has also ozone levels in California cities and
rest of the country such that California
evaluated this criterion under two agricultural areas is expected to become
could be considered to need its
alternative approaches, reviewing the harder with advancing climate change.
greenhouse gas standards to meet
greenhouse gas standards separately California and many other commenters
compelling and extraordinary
using the two interpretations discussed note that ‘‘California’s high ozone
conditions.115 EPA determined in the
in the March 6, 2008 Denial. While levels—clearly a condition Congress
March 6, 2008 Denial that the waiver
recognizing that they are not the considered—will be exacerbated by
should be denied under this approach
interpretations adopted here by EPA, higher temperatures from global
as well.
this section discusses the Agency’s warming.’’ 112 California also notes that
consideration of these alternative areas throughout the nation. See also EPA’s final
112 California submits evidence that at the
interpretations. April 2009 ‘‘Assessment of the Impacts of Global
national scale, using global to regional air quality
models, various papers demonstrate that climate Climate Change on Regional U.S. Air Quality: A
1. Are California’s GHG Standards Synthesis of Climate Change Impacts on Ground-
change alone can worsen summertime surface
Designed in Part To Address an Air ozone pollution in polluted regions of the United Level Ozone’’ which states as one of its general
Pollution Problem That Is Local or States including one finding that ‘‘climate change findings: ‘‘[W]hile these modeling studies cannot
Regional in Nature? alone will increase summertime ozone in polluted tell us what the future will hold, they demonstrate
regions by 1–10 ppb over the coming decades, with the potential for global climate change to make U.S.
In the March 6, 2008 Denial, EPA air quality management more difficult, and
the largest effects in urban areas and during

interpreted this criterion as calling for a pollution episodes’’ and therefore ‘‘climate change therefore future air quality management decisions
will partly offset the benefit of the emissions should begin to account for the impacts of climate
review of California’s GHG standards change.’’ EPA–HQ–OAR–2006–0173–9006 at 7–9.
reductions.’’ See Jacob and Winner (2009), EPA–
separately from the remainder of its HQ–OAR–2006–0173–9010.4. CARB also cites the
113 Id.
114 California also submits evidence that its GHG
2007 Interim Report of the U.S. EPA Global Change
110 California Air Resources Board, EPA–HQ– emission regulations would result in a slight
Research Program Assessment of the Impacts of
OAR–2006–0173–0004.1, at 16. Global Change on Regional U.S. Air Quality, a draft reduction of ozone precursors. EPA–HQ–OAR–
111 California Air Resources Board, EPA–HQ– EPA study which concludes that climate change 2006–0173–9006 at 10.
OAR–2006–0173–1686 at 7. may significantly increase ground-level ozone in 115 73 FR 12156, 12164.
As discussed above, this is not the the rest of the nation.116 These Commenters supporting the waiver,
interpretation that EPA now adopts. commenters point to the record and the including California, have submitted an
However, even if EPA were to examine many submissions from other states, extensive array of reports and data
the impacts of climate change in which recount the variety of impacts outlining the risks and impacts of
California under this interpretation, and risks of climate change in their climate change on California. EPA
based on a review of all the evidence in respective states and claim that received comment restating EPA’s own
the record, I cannot deny the waiver. California is no different than any other statements from its March 6, 2008
state. Denial, including the following:
a. What Test Applies Under This EPA does not need to resolve this California has the largest agricultural based
Alternative Approach? issue. As discussed below, EPA has economy (13% of the U.S. market value of
evaluated the evidence submitted agricultural products sold) which is heavily
In the March 6, 2008 Denial, EPA
concerning the observed and projected dependent on irrigation, has the nation’s
found that legislative intent called for highest crop value and is the nation’s leading
impacts of global climate change in
particular circumstances in California dairy producer. There is improved
California and other states and
that are ‘‘sufficiently different’’ from the information on how livestock productivity
determined that even under the
nation as a whole that justify separate may be affected by thermal stress and
alternative approach used in the March through nutritional changes in forage caused
standards in California. 6, 2008 Denial, EPA cannot deny a by elevated CO2 concentrations. In addition,
EPA received comment stating that waiver. wine is California’s highest value agricultural
there is no statutory foundation for a product, and wine grapes are very sensitive
‘‘sufficiently different’’ test. b. Would a Waiver Be Denied Under to temperature changes. California has the
This Alternative Approach? largest state coast population, representing
Commenters noted there is nothing in
the term ‘‘compelling and extraordinary Commenters supporting the waiver 25% of the U.S. oceanic coastal population.
maintain that California has clearly The conditions which create California’s
conditions’’ that requires a comparison tropospheric ozone problems remain (e.g.,
to the rest of the country. Similarly, demonstrated that the impacts in topography, regional meteorology, number of
commenters point to EPA’s 1984 PM California of global warming are vehicles) and climate change is expected to
waiver where EPA’s Administrator ‘‘compelling and extraordinary.’’ exacerbate tropospheric ozone levels.
found that ‘‘there is no indication in the Several commenters point to the California’s water resources are already
language of section 209 or the legislative impacts of global warming recited in stressed due to demands from agricultural,
EPA’s March 6, 2008 initial denial as industrial and municipal uses, and climate
history that California’s pollution change is expected to introduce an additional
problem must be the worst in the evidence that EPA committed an error
in judgment by not finding that the stress to an already over-allocate system by
country for a waiver to be granted.’’ EPA increasing temperatures and by decreasing
also received comment that it was not extreme and various impacts of climate snowpack which is an important water
reasonable for EPA to conclude that change in California are compelling and source in spring and summer. California has
California does not face global warming extraordinary in nature and that, the greatest variety of ecosystems in the U.S.,
impacts, including water supply, further, California clearly satisfied the and the second most threatened and
section 209(b)(1)(B) requirements.117 endangered species (of plants and animals
agricultural production, and wildfire combined) and the most threatened and
seasonal impacts that present 116 Association of International Automobile endangered animal species, representing
compelling and extraordinary Manufacturers, EPA–HQ–OAR–2006–0173–9005. about 21% of the U.S. total.
conditions, since other states will face This comment notes the finding in Massachusetts
In addition, one commenter suggests
similar impacts. Under this rationale, v. EPA that the impacts of global warming are
‘‘widely shared’’ among the states. that this summary of findings about
since states other than California are 117 EPA has not received any comment suggesting California’s special characteristics that
also experiencing serious global EPA’s prior inventory of evidentiary information is differentiate the magnitude, intensity
warming impacts, California could incorrect as set forth in its discussion of the and range of impacts of climate change
never receive a waiver to combat ‘‘Relationship of Impacts of Global Climate Change
in California to the Rest of the Country’’ at 73 FR supports that assessment. Dr. Stephen
climate change. Commenters find flaw 12156, 12163–12168. In addition, several new Schneider of Stanford University stated
in this rationale: similar impacts in studies have been submitted to EPA, including: a that ‘‘not only are California’s
other states have never before prevented recent report from the Pacific Institute examining conditions ‘unique and arguably more
California from receiving a waiver. Even the impacts that sea level rise would have on
population, infrastructure, and property in severe’ (e.g. temperature impacts from
though many states are faced with non- California (this report uses projections of medium global warming are more certain for
attainment ozone areas and smog to medium-high greenhouse gas emissions scenarios states like California) but also that no
problems similar to California, indicating a 1.4 meter rise in the seal level by 2100 other state faces the combination of
California has never had a waiver with 480,000 people at risk and $100 million in
property at risk from a 100 year flood event); ozone exacerbation, wildfire emission’s
denied based on a finding under section California’s Climate Action Team Reports that contributions, water system and coast
209(b)(1)(B) that it did not need its emphasizes many of the points made in California’s system impacts and other impacts faced
standards to meet compelling and waiver request including the air quality impacts by California.’’ 118 Conversely,
(‘‘Climate change could slow progress toward
extraordinary conditions. As such, EPA attainment of health-based air quality standards and opponents of the waiver do not contest
also received comment suggesting that increase pollution control costs by increasing the California’s claims that the impacts of
the impacts of climate change should be potential for high ozone and high particulate days.’’ climate change in California and
reviewed within the State of California The report itself synthesizes 37 recent reports that elsewhere are substantial.119 Instead,
address a wide body of information on the range
to determine their severity, and that
and gravity of the risks that climate change poses

such impacts need not be compared to to California’s citizens, natural resources, and 2006–0173–9025 at 15–18; See also California Air
impacts experienced or projected to economy); and the Public Policy Institute of Resources Board, EPA–HQ–OAR–2006–0173–9006
California assessment of climate change on public at 7–16.
occur elsewhere in the country. 118 Environmental Defense Fund, EPA–HQ–OAR–
health in California and cites number impacts
Several commenters maintain that including ‘‘an increase in the frequency and 2006–0173–9025 at 11–12.
although the impacts of climate change severity of air pollution episodes’’ and ‘‘an increase 119 The Association of International Automobile
in extreme heat events and associated increases in Manufacturers notes that although in the March 6,
in California may be compelling, they heat related morbidity and mortality.’’ See 2008 Denial, ‘‘EPA found that there is ample
are not extraordinary when compared to Environmental Defense Fund, EPA–HQ–OAR– evidence that global warming is ‘compelling’ in the
opponents of the waiver claim that the EPA notes that under this alternative wide variety of vulnerabilities, impacts
impacts in California are not unique or approach the opponents of the waiver and potential impacts within California,
extraordinary. EPA received comment continue to bear the burden of proof to while the opponents have not
suggesting that the impacts of climate demonstrate their claims. Commenters demonstrated that any other state, group
change in California are not sufficiently opposing the waiver primarily focus and of states, or area within the United
different from the nation as a whole to argue on one issue: Whether the effects States would face a similar or wider-
warrant a waiver.120 Commenters note of climate change in California are range of vulnerabilities and risks.
that the ‘‘need’’ requirement in section sufficiently different from the nation as Therefore, EPA believes that those
209(b)(1)(B) authorizes the creation of a whole. Opponents of the waiver opposing the waiver have not met their
regulatory standards specific to identify singular or multiple impacts in burden of proof to demonstrate that the
California only in cases where it is some other states but they largely conditions in California are not
necessary to meet conditions unique to submit conclusions—not factual sufficiently different and that a waiver
California. Commenters claim that evidence—as to why such adverse should be denied under this alternative
California cannot meet this standard impacts demonstrate that California is approach.
with respect to a global problem that not sufficiently different. On the other It is important to note that nothing in
does not affect California in a unique hand, California has identified a wide this decision or this document should
way as compared to other states. The variety of impacts and potential impacts be construed as reflecting a judgment
commenters claim the impacts to within California, which include concerning the issues pending before
coastline, ozone levels, and other exacerbation of tropospheric ozone, heat EPA under section 202(a) of the Act—
impacts are not unique to California as waves, sea level rise and salt water whether emissions of GHGs from new
they affect many other states as well.121 intrusion, an intensification of wildfires, motor vehicles or engines cause or
disruption of water resources by, among contribute to air pollution which may
sense that it presents serious environmental issues, other things, decreased snowpack reasonably be anticipated to endanger
the agency correctly determined that it does not levels, harm to high value agricultural
present an extraordinary condition in California.’’ public health or welfare. EPA recently
EPA–HQ–OAR–2006–0173–9005 at 9. EPA did
production, harm to livestock proposed to make an affirmative finding
receive comment from Air Improvement Resources production, and additional stresses to under that statutory provision.122 The
(AIR) suggesting that it might be contesting whether sensitive and endangered species and issues involved in that proposal are
positive feedback from CO2 concentrations on ecosystems. Opponents have not
temperature increases (as seen in the models and separate and different from those
data submitted to EPA by proponents of the waiver) demonstrated that any other state, group involved in this decision on California’s
will be seen in certain geographic areas due to an of states, or area within the United request for a waiver under section
increase in cloudiness. EPA–HQ–OAR–2006–0173– States would face a similar or wider- 209(b). Nothing in this decision should
13662 at 5–6. However, in its same submission it range of vulnerabilities and risks. In
also states that while it may be true that California’s be construed as reflecting the Agency’s
cities will be disproportionately affected by addition, California has submitted judgment regarding any issue relevant to
increased temperatures it is by no means clear that information that climate change can the determinations in the pending
this will be true in the future. (See p. 7). As noted impact ozone levels in California due to proposal under section 202(a). The
in the text, the burden of proof is on the opponents temperature exacerbation effects.
of the waiver to demonstrate that the effects of statutory provisions and criteria are
climate change are not compelling or serious. Such Although other areas of the country are different, and the judgments called for
opponents have not clearly stated the basis for also projected to experience increases in under these provisions are very different
making such a determination nor countered the temperatures which may also exacerbate in nature. For example, in evaluating
many studies and data submitted by California and local ozone levels, opponents of the
other proponents of the waiver. For purposes of this the alternative section 209(b)(1)(B)
waiver proceeding, EPA is not making its own waiver have not demonstrated that interpretation, I am not evaluating how
judgment with regard to the issues under section California’s ozone levels should not be serious the impacts or potential impacts
202(a). considered compelling and of global climate change are, either in
120 Association of International Automobile
extraordinary conditions. California or the rest of the country, as
Manufacturers, EPA–HQ–OAR–2006–0173–9005 at Under this alternative interpretation,
9, citing 73 FR 12168—‘‘As the discussion above the opponents of the waiver have not
indicates, global climate change has affected, and is the burden of proof is on the opponents
focused on that issue. My finding under
expected to affect, the nation, indeed the world, in of the waiver to demonstrate that the
this alternative interpretation is a
ways very similar to the conditions noted in impacts of global climate change in
California * * * These identified impacts are found narrow one, and is limited to finding
California are either not significant
to affect other parts of the United States and
enough or are not different enough from that the opponents of the waiver have
therefore these effects are not sufficiently different not met their burden of proof under this
compared to the nation as a whole. California’s the rest of the country to be considered
precipitation increases are not qualitatively compelling and extraordinary alternative interpretation of section
different from changes in other areas. Rise in sea conditions. The opponents of the waiver 209(b) concerning how the impacts in
level in the coastal parts of the United States are
have focused their argument on the California might differ from the rest of
projected to be severe, or more severe, particularly the country.
in consequences, in the Atlantic and Gulf Regions latter part of this interpretation, whether
than in the Pacific regions, which includes the impacts in California are sufficiently 3. Must California’s GHG Standards
California. Temperature increases have occurred in different from the rest of the country.
most parts of the United States, and while
Achieve a Demonstrated Reduction in
California’s temperatures have increased by more Limiting evaluation to this issue, GHG Atmospheric Concentrations or
than the national average, there are other places in California has presented evidence of a Impacts Under Section 209(b)(1)(B)?
the United States with higher or similar increases
in temperature.’’ to climate change, such as heat wave, increased fire
Regardless of whether EPA examines
121 Id. at 9–10. The Association of International

frequency, increased storm intensity resulting in the need for California’s motor vehicle
Automobile Manufacturers notes that comments beach erosion, loss of property, and loss of life— emissions program or conversely the
submitted from States supporting the waiver pose great concerns for us,’’ and other concerns need just for the GHG emission
include statements such as ‘‘Connecticut faces loss expressed by states such as Pennsylvania,
of its shoreline and beaches, forest die offs, Maryland, and New Mexico. See also Alliance of standards, some commenters suggest
destruction of shell fisheries and marine resources, Automobile Manufacturers, EPA–HQ–OAR–2006–
* * *’’ ‘‘Global warming is having a serious impact 0173–1297 at 14–17 and EPA–HQ–OAR–2006– 122 See EPA’s ‘‘Proposed Endangerment and
on New Jersey’s public health and economy * * *’’ 0173–0421–12 at 61–70 and General Motors Cause or Contribute Findings for Greenhouse Gases
‘‘Rhode Island * * * As the most densely Corporation, EPA–HQ–OAR–2006–0173–1596 at 6– under Section 202(a) of the Clean Air Act’’ at 74 FR
populated State in the country, direct impacts due 8. 18886 (April 29, 2009).
that the GHG emission standards must As noted above, the Agency’s inquiry EPA, while it is true that regulating
be proven to have some mitigative effect under section 209(b)(1)(B) is whether motor vehicle GHG emissions will not
in order for them to be needed. Some California needs its own motor vehicle by itself reverse global warming, a
commenters suggest that to the extent emission control program to meet reduction in domestic automobile
that California’s high ozone levels could compelling and extraordinary emissions would slow the pace of global
be exacerbated by higher temperatures conditions. Under this criterion, EPA emissions increase no matter what
from global warming, there is no does not consider, for example, the happens with regard to other
demonstration in the waiver record that extent to which specific PM standards emissions.127 Moreover, there is some
implementation of the California GHG will address the PM air pollution evidence in the record that proffers a
standards would have any perceptible problem.124 Under this approach, there specific level of reduction in
impact on temperature trends in is no need to delve into the extent to temperature resulting from California’s
California. Opponents of the waiver which the GHG standards at issue here regulations.128 EPA believes that under
have argued that California, therefore, would address climate change or ozone this alternative approach, opponents
cannot show that its GHG emission problems. That is an issue appropriately have not met their burden of
regulations will achieve a measurable left to California’s judgment. demonstrating that California’s motor
and specific temperature reduction in Given the comments submitted, vehicle program, or its GHG standards,
California, and thereby mitigate the however, EPA has also considered an does not have a rational relationship to
identified climate change impacts in alternative interpretation, which would contributing to amelioration of the air
California.123 They maintain that evaluate whether the program or pollution problems in California.
California’s GHG regulations will not be standards has a rational relationship to
contributing to amelioration of the air E. Section 209(b)(1)(B) Conclusion
needed to meet a particular condition
since there is no analysis suggesting that pollution problems in California. Even With respect to the need for
California’s GHG standards will have under this approach, EPA’s inquiry California’s state standards to meet
any discernible impact on that would end there. California’s policy compelling and extraordinary
condition or achieve any perceptible judgment that an incremental, conditions, I have found that the March
improvement in environmental directional improvement will occur and 6, 2008 Denial was based on a departure
conditions inside California. In terms of is worth pursuing is entitled, in EPA’s from the traditional interpretation of the
GHG concentrations in California’s judgment, to great deference.125 EPA’s waiver provision. An examination of the
atmosphere, EPA received comment consistent view is that it should give text of section 209(b) and the legislative
stating there is no offered proof that a deference to California’s policy history, when viewed together, lead to
reduction in GHG emissions from judgments, as it has in past waiver the conclusion that the best way to
California vehicles would have any decisions, on California’s choice of interpret this provision and the
impact on GHG concentrations in mechanism used to address air interpretation I adopt here, is to apply
California’s atmosphere compared to the pollution problems. EPA does not the traditional interpretation to the
GHG concentration impacts already in second-guess the wisdom or efficacy of evaluation of California’s greenhouse
the record. California’s standards.126 EPA has also gas standards for motor vehicles. As
In response, other commenters considered this approach with respect such, if California needs a separate
supporting the waiver assert that the to the specific GHG standards motor vehicle program to address the
efficacy of California’s standards is not themselves, as well as California’s motor kinds of compelling and extraordinary
at issue in this proceeding. There is no vehicle emissions program. conditions discussed in the traditional
requirement in section 209(b)(1)(B) that After reviewing the arguments, I
interpretation, then Congress intended
California prove a certain level of conclude that California has submitted
that California could have such a
environmental benefit. They assert that evidence demonstrating not only the
program. The best interpretation of the
is particularly true in this instance, causal connection between higher
text and legislative history of this
where the actual and anticipated temperatures from global warming and
provision is that Congress did not use
impacts of global warming are complex its general exacerbation of tropospheric
this criterion to limit California’s
and historically unprecedented, and it is ozone, but also the serious effects of that
discretion to a certain category of air
widely-recognized that a number of potential increase in ozone on the
pollution problems, to the exclusion of
efforts by governments, private entities, public health and welfare in California.
others.
and individuals globally will be EPA notes that several commenters have
stated that while California’s GHG Under that interpretation, I cannot
required to mitigate climate change, as find that opponents of the waiver have
no single source of GHG emissions, regulations will provide only a small
difference in temperatures and/or GHG demonstrated that California does not
whether from an entire state, sector of need its state standards to meet
the nation’s economy, or of individual concentrations, there clearly will be
some reductions. These commenters compelling and extraordinary
countries, is completely dominant in conditions. The opponents of the waiver
terms of influencing atmospheric note that given the numerous sources in
California and around the world that have not adequately demonstrated that
concentrations of GHGs. They claim that
California need not show that the contribute to GHG concentrations, no
127 Massachusetts v. EPA, 59 U.S. 497, 525–526
climate will in fact respond to its single regulation could on its own
(2007).
regulatory action; rather its obligation is reduce GHG emissions to the levels 128 EPA also received comment during the second
necessary to reduce all concerns, but
to show a rational connection between comment period indicating that a local decrease in
the regulation it has promulgated and that every small reduction is helpful in GHGs can have a direct effect on reducing local
the problem it seeks to address. reducing these concerns. As noted by ozone concentrations, as well as particulate matter
the Supreme Court in Massachusetts v. concentrations, in California, before they mix with
other greenhouse gases in the upper atmosphere.
123 However, the Alliance presented some The comments that address Dr. Jacobson’s
124 74
FR 12156, 12159–60 (March 6, 2008).
evidence at the May 30, 2007 waiver hearing that testimony do not dispute these atmospheric
125 MEMAI at 1110–11.
some temperature reduction may be achieved, reactions and the fact that they can increase local
based on application of the Wigley equation. EPA– 126 California Air Resources Board, EPA–HQ– temperature which can increase ozone
HQ–OAR–2006–0173–0421 at 71. OAR–2006–0173–0004. concentrations.
California no longer has a need for its consistency of the CARB standards with for evaluating lead time is discussed
motor vehicle emission program. section 202(a) of the Act follows. immediately below. The industry
Separately, even applying the opponents also raise arguments based
alternative interpretations set forth in A. Historical Approach: The Standard
on the cost of compliance with the
the March 6, 2008 Denial, I cannot find of Review for Consistency With Section
standards, and claims of possible
that that the opponents of the waiver 202(a)
significant vehicle safety problems
have demonstrated that California does Under section 209(b)(1)(C), EPA must caused, at least indirectly, by
not need its greenhouse gas emission deny California’s waiver request if the compliance with the GHG standards,
standards to meet compelling and Agency finds that California standards which will be discussed in other parts
extraordinary conditions. Nor can I find and accompanying enforcement of this section.
that the opponents of the waiver have procedures are not consistent with Regarding lead time, EPA historically
demonstrated that the impacts from section 202(a) of the Act. The scope of has relied on two decisions from the
climate change in California are not EPA’s review under this criterion is U.S. Court of Appeals for the DC Circuit
compelling and extraordinary. narrow. EPA has previously stated that for guidance regarding the lead time
Therefore, upon reconsideration of the determination is limited to whether requirements of section 202(a). Section
the March 6, 2008 Denial, I determine those opposed to the waiver have met 202(a) provides that an emission
that I cannot deny the waiver request their burden of establishing that standard shall take effect after such
under section 209(b)(1)(B). California’s standards are period as the Administrator finds
technologically infeasible, or that necessary to permit the development
VI. Are the California GHG Standards
California’s test procedures impose and application of the requisite
Consistent With Section 202(a) of the
requirements inconsistent with the technology, giving appropriate
Clean Air Act?
Federal test procedure.129 Previous consideration to the cost of compliance.
EPA has reviewed the information waivers of federal preemption have In Natural Resources Defense Council v.
submitted to the record of this stated that California’s standards are not EPA (‘‘NRDC’’), 655 F.2d 318 (DC Cir.
proceeding to determine whether the consistent with section 202(a) if there is 1981), the court reviewed claims that
parties opposing this waiver request inadequate lead time to permit the EPA’s particulate matter standards for
have met their burden to demonstrate development of technology necessary to diesel cars and light trucks were either
that the GHG standards are not meet those requirements, giving too stringent or not stringent enough. In
consistent with section 202(a). In its appropriate consideration to the cost of upholding the EPA standards, the court
submissions, CARB has submitted compliance within that time.130 concluded:
information and argument that these California’s accompanying enforcement
GHG standards do provide regulated procedures would be inconsistent with Given this time frame [a 1980 decision on
manufacturers with sufficient lead-time 1985 model year standards]; we feel that
section 202(a) if the Federal and there is substantial room for deference to the
for the near term standards regardless of California test procedures conflict, i.e., EPA’s expertise in projecting the likely
how it is measured and regardless of the if manufacturers would be unable to course of development. The essential
waiver denial. For the mid-term meet both the California and Federal question in this case is the pace of that
standards, CARB has stated that test requirements with the same test development, and absent a revolution in the
initially, manufacturers can achieve vehicle.131 study of industry, defense of such a
compliance with credits from the near- EPA does not believe that there is any projection can never possess the inescapable
term production, and subsequently can reason to review these criteria any logic of a mathematical deduction. We think
achieve compliance with refinements to differently for EPA’s evaluation of that the EPA will have demonstrated the
reasonableness of its basis for projection if it
existing technology and advanced California’s greenhouse gas waiver answers any theoretical objections to the
technology combinations. The industry request. There is nothing inherently [projected control technology], identifies the
opponents of the waiver have submitted different about how GHG control major steps necessary in refinement of the
information and argument that there is technologies should be reviewed when technology, and offers plausible reasons for
insufficient leadtime for the CARB near- making a determination about believing that each of those steps can be
term standards because the already technological feasibility or consistency completed in the time available.132
short time-frame for technology of test procedures. Another key case addressing the lead
development was made even shorter by In the GHG waiver proceeding, time requirements of section 202(a) is
EPA’s waiver denial. For the mid-term automobile industry opponents of the International Harvester v. Ruckelshaus
standards, the industry stated that it is waiver have presented evidence for (‘‘International Harvester’’), 478 F 2.d
likely that most large-volume EPA’s consideration which they believe 615 (DC Cir. 1979). In International
manufacturers will be able to comply will require EPA to make the finding of Harvester, the court reviewed EPA’s
with the CARB standards only by ‘‘mix- inconsistency with section 202(a), and decision to deny applications by several
shifting’’ their products to offer for sale therefore require EPA to deny this automobile and truck manufacturers for
more higher mileage vehicles to ensure waiver. They believe this finding should a one-year suspension of the 1975
meeting the CARB fleet average. The be made on one or more grounds that emission standards for light-duty
industry also submitted information and there is inadequate lead time provided vehicles. In the suspension proceeding,
argument that the GHG standards will by the CARB standards. EPA’s process the manufacturers presented data
result in unsafe vehicles because which, on its face, showed little chance
vehicles meeting the standards will be 129 MEMA I, 627 F.2d at 1126.
of compliance with the 1975 standards,
130 See
e.g., 38 FR 30136 (November 1, 1973) and
lighter and more hazardous to but which, at the same time, contained
40 FR 30311 (July 18, 1975).
occupants in accidents, and will be 131 To be consistent, the California certification many uncertainties and inconsistencies
driven more because of higher fuel test procedures need not be identical to the Federal regarding test procedures and
efficiency, so more accidents will occur. test procedures. California procedures would be parameters. In a May 1972 decision, the
The industry argued that these inconsistent, however, if manufacturers would be
unable to meet both the state and Federal Administrator applied an EPA
complying vehicles are technologically requirements with the same test vehicle in the
infeasible because of the safety course of the same test. See, e.g., 43 FR 32182, (July 132 Natural Resources Defense Council v. EPA,
concerns. EPA’s analysis of the 25, 1978). 655 F.2d 318, 331. (emphasis added)
methodology to the submitted data, and emission standards which may require lead time should have ‘‘tolled’’ at the
concluded that ‘‘compliance with the new and/or improved technology to time of the denial, since California
1975 standards by application of present meet challenging levels of compliance. could not implement and enforce
technology can probably be achieved,’’ This deference was discussed in an standards which had not received a
and so denied the suspension early waiver decision when EPA waiver. This tolling issue is discussed
applications.133 In reviewing the approved the waiver request for below in section VI.F.1. Additionally, if
Administrator’s decision, the court California’s 1977 model year standards: the tolling might be considered to cause
found that the applicants had the Even on this issue of technological a reduction in lead time for the CARB
burden of coming forward with data feasibility I would feel constrained to near-term standards, it could be argued
showing that they could not comply approve a California approach to the problem that the International Harvester
with the standards, and if they did, then which I might also feel unable to adopt at the approach, involving circumstances
EPA had the burden of demonstrating Federal level in my own capacity as a where the lead time is short, should
that the methodology it used to predict regulator. The whole approach of the Clean apply. CARB, while maintaining that
compliance was sufficiently reliable to Air Act is to force the development of new the NRDC approach is the correct
permit a finding of technological types of emission control technology where measurement here, commented that
that is needed by compelling the industry to even if International Harvester was the
feasibility. In that case, EPA failed to ‘catch up’ to some degree with newly
meet this burden. correct guide, ‘‘we believe that a
promulgated standards. Such an approach to
With respect to lead time, the court in automotive emission control might be combination of manufacturers’
NRDC pointed out that the court in attended with costs, in the shape of a statements and plans indicated that
International Harvester ‘‘probed deeply reduced product offering, or price or fuel manufacturers are already in, or with
into the reliability of EPA’s economy penalties, and by risks that a wider minor changes can demonstrate
methodology’’ because of the relatively number of vehicle classes may not be able to compliance for the 2009 and 2010
short amount of lead time involved (a complete their development work in time. model years.’’ 139 Under International
May 1972 decision regarding 1975 Since a balancing of these risks and costs Harvester, the burden was on the
against the potential benefits from reduced industry to demonstrate that the
model year vehicles, which could be
emissions is a central policy decision for any evidence supported the grant of an
produced starting in early 1974), and regulatory agency, under the statutory
because ‘‘the hardship resulting if a extension, then, the burden shifted to
scheme outlined above I believe I am
suspension were mistakenly denied required to give very substantial deference to EPA to demonstrate the reasonableness
outweigh the risk of a suspension California’s judgment on that score.’’ 137 of its projection. As discussed below,
needlessly granted.’’ 134 The NRDC court the manufacturers have not met their
EPA has traditionally considered lead burden to show that the California
compared the suspension proceedings
time as starting with the date that the standards are not technologically
with the circumstances concerning the
rules are adopted and become effective feasible, considering the lead time
diesel standards before it: ‘‘The present
under California state law—not from the provided and cost of compliance.
case is quite different; ‘the base hour’ for
subsequent date of a request for a waiver Under NRDC, when compliance with
commencement of production is
or the decision on a waiver.138 This is CARB standards is phased-in over a
relatively distant, and until that time the
consistent with the structure of section lengthy time period, the reasonableness
probable effect of a relaxation of the
209(b), where the waiver criteria are of a projection of technological
standard would be to mitigate the
presumed to be met absent an feasibility can be based on answering
consequences of any strictness in the
affirmative finding that requires EPA to any theoretical objections to the
final rule, not to create new
deny it, which gives EPA a limited projected control technology;
hardships.’’ 135 The NRDC court further
scope of review and affords deference to identifying the major steps necessary in
noted that International Harvester did
California. At the time that California refinement of the technology; and
not involve EPA’s predictions of future
adopts its rules, manufacturers have offering plausible reasons for believing
technological advances, but an
clear knowledge and are fully on notice that each of those steps can be
evaluation of presently available
of California’s requirements and the completed in the time available.140
technology.
EPA also evaluates CARB’s request in date when such requirements will be EPA’s review of the evidence on the
light of congressional intent regarding implemented. In this case, the CARB technological feasibility of GHG
the waiver program generally. This is GHG regulations became final and technologies follows.
consistent with the motivation behind effective in 2004. This was five years
B. CARB’s Assessment of the State of
section 209(b) to foster California’s role before the first phase of compliance (the
Development of GHG Reduction
as a laboratory for motor vehicle 2009 model year) and eight years before
Technology and Comments Supporting
emission control, in order ‘‘to continue compliance with the ‘‘mid-term’’
CARB’s Assessment
the national benefits that might flow standards, which include the most
from allowing California to continue to stringent standards (model year 2016). 1. Development of GHG Reduction
Because of this large amount of lead Technology
act as a pioneer in this field.’’ 136
For these reasons, EPA believes that time available to manufacturers under Under the terms of Assembly Bill
California must be given substantial CARB’s regulatory schedule, the 1493, which is the legislation that
deference when adopting motor vehicle approach described in NRDC is the most directed CARB to establish greenhouse
appropriate under the circumstances at gas emission standards, the CARB staff
133 International Harvester v. Ruckelshaus, 478 issue here. was directed to set those standards in a
F.2d 615, 626. EPA notes, however, that manner that would ‘‘achieve the
134 NRDC, 655 F.2d 318, 330. manufacturers have disputed whether maximum feasible and cost-effective
135 Id. The ‘‘hardships’’ referred to are hardships
ample lead time exists. Because EPA reduction of greenhouse gas emissions
that would be created for manufacturers able to initially denied this waiver request,
comply with the more stringent standards being from motor vehicles.’’ CARB has
relaxed late in the process. manufacturers have asserted that the
136 40 FR 23102, 23103 (waiver decision citing 139 California Air Resources Board, EPA–HQ–
137 Id.at 23103. OAR–2006–0173–9006, at 23.
views of Congressman Moss and Senator Murphy)
(May 28, 1975). 138 See e.g., 59 FR 40625 (September 22, 1994). 140 NRDC, 655 F.2d 318, 331.
identified four basic areas of GHG comprehensive vehicle simulation 2. Overview of Technologies and Their
reduction technology: (1) Engine, modeling effort and a thorough cost Projected Applications
drivetrain and other vehicle analysis performed for the Northeast
modifications; (2) mobile air The NESCAAF study identified
States Center for a Clean Air Future
conditioning system modifications; (3) technologies for reducing CO2 emissions
(NESCCAF), by the recognized expert
alternative fuel vehicles; and (4) exhaust that were modeled both individually
companies AVL Powertrain and in various technology combinations
catalyst improvements. Engineering, Martec, and Meszler
To accomplish the assessment (or ‘‘packages’’). Because there were a
Engineering Services.144 CARB staff multitude of technologies available for
mandated by AB 1493, CARB staff held believed that ‘‘the NESCAAF study is
several meetings and workshops in 2003 the CO2 reductions, CARB realized that
the most advanced and accurate there needed to be engineering
and 2004 on GHG vehicle technology.
evaluation of vehicle technologies that guidelines for choosing combinations
Those meetings brought together
reduce greenhouse gas emissions yet that would be economical to the
technology developers, researchers from
performed.’’ 145 Besides the NESCAAF consumer. The guidelines tried to avoid
the auto industry, vehicle component
suppliers, academic participants, and study on vehicle technologies, CARB combining technologies that tend to
vehicle simulation firms to discuss monitored a separate analysis of the address the same categories of losses or
technologies and their potential to GHG benefits of alternative fuel technologies that may not complement
reduce climate change emissions from technologies, including upstream one another from a drivability
motor vehicles. CARB staff presented its benefits and the cost associated with standpoint. Participants in the
preliminary findings in a draft alternative fuel technologies, from work NESCAAF study and CARB staff then
technology and cost assessment and performed by TIAX, LLC. Finally, for air assembled a wide variety of combined
held a public workshop to receive conditioning research, CARB staff met technologies to evaluate through
comments in April 2004. Following that with various groups (including EPA) to simulation modeling in order to identify
presentation, CARB issued a draft develop its approach for reducing the those which would provide the greatest
proposal on the methodology for emissions of air conditioning refrigerant CO2 reductions. In an effort to cover the
developing the GHG standards and the and excess CO2 emissions from air full spectrum of CO2 reductions that
preliminary standards themselves, in conditioning use. could be accomplished, CARB staff
June 2004. A public workshop on this divided the results into two categories:
After the release of the Initial Staff
draft was held in July 2004. After near-term phase-in and mid-term phase-
Report, CARB received comments on its
considering all the comments from these in applications. These translate to the
evaluation of technological steps that
sessions, CARB published its final staff following model year ranges: Near-term
could be taken to meet its GHG
proposal in the Staff Report: Initial (2009–2012) and mid-term to fully
standards from parties who supported
Statement of Reasons (ISOR) in August phased-in (2013–2016).147
the CARB study, and from various
2004.141 industry parties who disagreed with In the Initial Staff Report, CARB staff
The CARB vehicle technology results many of the CARB conclusions. As part summarized the state of near-term
in the ISOR relied on an existing vehicle technology for meeting its proposed CO2
of its standard-setting process, CARB
simulation study (discussed below), as standards:
staff considered the comments from all
well as other existing studies and The technologies explored (in the Initial
parties on both sides, and responded to
research, rather than on any sort of Staff Report) are currently available on
industry concerns in its Final Statement
primary development or engineering vehicles in various forms, or have been
of Reasons (FSOR), published in August
work. CARB staff acknowledged that demonstrated by auto companies and/or
‘‘because powertrain changes will be the 2005.146 CARB concluded that it had vehicle suppliers in at least prototype form
focus for obtaining the reductions identified the necessary technology in * * * There is near term, or off the shelf
sought in this (GHG) rulemaking rather existence at that time that could enable technology package in each of the vehicles
than aftertreatment technologies, staff vehicles to meet the GHG standards; or classes evaluated (small and large car,
specifically identified the projected minivan, small and large truck) that resulted
could not reasonably build prototypes in a reduction of CO2 emissions of at least 15
and test them in our laboratory. * * * control technologies; answered the
industry objections regarding the to 20 percent from baseline values. In
Because building and testing prototypes addition there is generally a near-term
is so expensive, and time consuming, technology; and has explained its technology package in each of the vehicle
even major automobile manufacturers reasons for believing that each of the classes that results in about a 25 percent CO2
rely on vehicle simulation firms to steps can be completed in the time emission reduction.’’ 148
predict the performance of new available.
For engines, CO2 is emitted with
technology either individually or in
engine exhaust as a result of the
combination, and to assess their 144 NESCCAF undertook this study ‘‘to help
define GHG—reducing motor vehicle technologies combustion process. CARB projected
performance and emissions.’’ 142 CARB
that are expected to be feasible, commercially that by 2009, reductions in engine CO2
further commented that the advantage of available and cost effective in the 2009–2015 emissions would result from these
systems modeling ‘‘is to allow a wide timeframe.’’ It was ‘‘inspired by the California’s
primary technology drive-train changes
diversity of combinations of legislature’s passage of Assembly Bill 1493 * * *’’
and it related to the Northeast U.S. because ‘‘the which could be expected in all vehicle
technologies to be modeled together and
results presented in this report have significant classes: Dual cam phasing,
examine how they interact when implications for states in the Northeast and turbocharging with engine downsizing,
simulating a vehicle operating on
elsewhere that share California’s commitment to

automated manual transmissions, and
various driving cycles.’’ 143 reducing transportation related GHG emissions as
The study forming the basis of the part of a broader effort to address the risks posed
by global climate change.’’ Reducing Greenhouse 147 The NESCAAF study had a different schedule:
ISOR vehicle technology results was a Gas Emissions from Light-Duty Motor Vehicles, Near-term technologies (2009–2012), mid-term
NESCCAF, p 1–1, September 2004. (2013–2015) and long term (2015 and later).
141 California Air Resources Board, EPA–HQ– 145 California Air Resources Board, EPA–HQ– California Air Resources Board, EPA–HQ–OAR–
OAR–2006–0173–0010.44. OAR–2006–0173–0010.44 at 44. 2006–0173–0004.1 at 27.
142 Id. at 43. 146 California Air Resources Board, EPA–HQ– 148 California Air Resources Board, EPA–HQ–
143 Id. at 58. OAR–2006–0173–0010.116. OAR–2006–0173–0010.44 at iii.
camless valve actuation.149 CARB also additional CO2 emissions from the letter responding to post-hearing
described several other technology engine which occur because of the comments, CARB offered additional
items that may not be present in most added load on the engine from information to bolster their GHG
vehicles in the early years of the operation of the air conditioning system. technology projections. Generally,
standards, but are expected to be used CARB, using the modeling in the CARB pointed to numerous instances in
in later years as development continues. NESCAAF Report, projected that CO2 which many of the near-term and mid-
These include: Gasoline direct injection, equivalent reductions could result from term technologies have been applied in
engine friction reduction, aerodynamic these improvements in the air vehicles which have been produced in
drag and rolling resistance, more conditioning system: improved variable the years since 2004 (when the CARB
aggressive shift logic, and early torque displacement compressor with revised standards became final) right up to mid-
converter lock-up. Finally, CARB staff controls, improved low-leak systems, 2007. For example, attached to
identified two other technology choices and the use of an improved additional comment letters it submitted
that while offering real GHG reduction refrigerant.154 to EPA’s Docket in June and July 2007,
capability were not as cost effective as CARB notes that alternative fueled CARB discussed the increased use of the
the other technologies, and, accordingly, vehicles generally can help reduce GHG GHG technologies discussed in the ISOR
were not projected to be applied in the emissions by: (1) Direct reduction of and provided summaries of GHG
near-term—these are hybridization and GHG emissions because the alternative technology used in 2007 and 2008
greater dieselization of the fleet. fuels will produce fewer GHG model year vehicles showing increased
For the later years of these standards, emissions, and (2) indirect reductions in use of all the near-term and mid-term
CARB stressed that its GHG regulations GHG emissions because of the decreased technologies.156 CARB also offered
‘‘rely less on traditional technology- upstream emissions. Upstream numerous examples, contained in
forcing than repackaging a combination emissions are well-to-tank emissions, manufacturer news releases and
of off-the-shelf technologies to meet the including the fuels’ extraction, advertisements, and trade press stories,
adopted standards.’’ 150 The NESCAAF processing, distribution and marketing. illustrating real-life adoption of the GHG
Report included, for each of the five The alternative fuels which result in technologies in both domestic and
vehicle categories, a table showing GHG reductions are CNG, LPG, ethanol foreign manufacturers’ vehicles.157
several promising technology packages, (including E85), electric, and hybrid- At its March 5, 2009 hearing
for each of the three time frames electric. following EPA’s decision to reconsider
(near-, mid-, and long-term), their In its ISOR, CARB identified exhaust its previous denial, CARB presented
resulting CO2 reductions, and expected catalyst improvement as another additional new information highlighting
costs.151 Additionally, for the long-term technology area that could lead to GHG developments in GHG technology since
phase of the standards (2015–2016), emission reductions, specifically the the last opportunity to submit public
CARB projects that there will be reduction of methane and nitrous oxide comment on this issue. In addition,
increased market penetration of hybrid- (N2O). These gases are greenhouse gases some environmental groups submitted
electric vehicles and advanced multi- just like CO2, but their mass emissions testimony and comments in support of
mode diesel vehicles.152 In its December from motor vehicles are very small the CARB finding of technological
2005 request letter, CARB discussed compared to CO2. CARB notes that feasibility of the GHG standards. This
how improvements will occur, as it ‘‘although it is conceivable that these next section will summarize the
expects ‘‘that a manufacturer would methane and N2O emissions could be technological feasibility information
plan for a rollout of new technologies reduced by faster catalyst heating at submitted by CARB and other parties.
vehicle start-up and enhanced catalysts CARB noted that the manufacturers
that would begin in 2009 and then build
systems with higher surface density or were employing the individual GHG-
on the initial efforts with additional
higher and/or revised catalyst loadings, reducing technologies as well as the
near and mid-term technologies that
staff is not aware of such efforts at this packages of those technologies CARB
would be commensurate with previous
time (August 2004).’’ 155 There were no had projected as viable compliance
investments.’’153
For air conditioning systems, GHG further submissions to the record by pathways as early as 2004. CARB also
emissions are either direct or indirect. CARB or any other party on this noted that in addition to phasing-in
particular technology area. technologies, as CARB had originally
Direct emissions are the result of normal
leakage of the air conditioning 3. CARB’s Updates on Technological predicted, manufacturers were using
refrigerant from the system over time, as Development other technologies that CARB did not
well as leakages that occur because of rely on originally—including increased
At the time of the first set of EPA hybrid sales, downsized turbocharged
vehicle accidents, poorly performed hearings on the CARB waiver request, in
maintenance, or improper refrigerant engines in light truck lines, a large
April 2007, CARB presented additional influx of diesel vehicle sales, and
recovery prior to vehicle scrappage. Air information to bolster its assertions on
conditioning refrigerants used in improved air conditioning systems. In
technological feasibility to highlight some cases, the resulting reductions
vehicles today are typically a hydro- developments in GHG technology since
fluorocarbon (HFC), which is a very produced as much as 10% of the GHG
CARB originally submitted its request to reductions needed for manufacturers’
strong GHG. Indirect emissions are the EPA in 2005. CARB summarized the fleet averages to meet the CARB
recent developments and additional standards.
examples of real-life implementation of CARB also cited to recent EPA studies
OAR–2006–0173–0010.44 at 59–60.

the technologies identified in its waiver on technological feasibility and costs for
OAR–2006–0173–0004.1 at 34. request. In its comments following the
151 California Air Resources Board, EPA–HQ– April 2007 hearings, and its July 2007 156 California Air Resources Board, EPA–HQ–
OAR–2006–0173–0004.1 at 27 and 35, and OAR– OAR–2006–0173–1686, Attachments 84 and 85.
2006–0173–0010.44 at 59. 154 California Air Resources Board, EPA–HQ– 157 California Air Resources Board, EPA–HQ–
OAR–2006–0173–0010.44 at 69–73, and EPA–HQ– OAR–2006–0173–1686, Attachments 86 through 93
OAR–2006–0173–0004.1 at 27. OAR–2006–0173–0004.1 at 22–23. and 103, 104, 114, and California Air Resources
153 California Air Resources Board, EPA–HQ– 155 California Air Resources Board, EPA–HQ– Board, EPA–HQ–OAR–2006–0173–3601,
OAR–2006–0173–0004.1 at 35–36. OAR–2006–0173–0010.44 at 78–79. Attachments 173–177.
GHG reductions in motor vehicles, Effectiveness Estimates of Technologies tending to overestimate the costs and/or
conducted by EPA in 2007. These EPA Used to Reduce Light-duty Vehicle underestimate the benefits. In its most
reports were discussed in EPA’s Carbon Dioxide Emissions.’’ This report recent comment, CARB noted that the
Advanced Notice of Proposed presented the EPA staff assessment of EPA lead time estimates in EPA’s
Rulemaking on Regulating Greenhouse costs and effectiveness of over 40 CO2 ANPRM cite implementation rates
Gas Emissions Under the Clean Air Act reduction technologies in the categories supportive of CARB’s estimates for
published on July 30, 2008.158 The of engines, transmissions, hybrids, implementing vehicle GHG reducing
findings in these studies were very accessories and other technologies (e.g., technologies.166
consistent with the technological aerodynamic improvements). EPA noted CARB summarizes the reports from
feasibility, cost and lead time estimates that the majority of the technologies EPA, NESCAAF and others by declaring
from the CARB ISOR in 2004. investigated are in production and that ‘‘the technologies examined are
Three EPA studies were referenced by available on current vehicles, either in well known and most are already being
CARB. First, CARB discussed the June the U.S., Europe or Japan. As part of that implemented on today’s vehicles, while
2008 document ‘‘Vehicle Technical report, EPA worked with an the others are simply advanced versions
Support Document: Evaluating Potential internationally recognized automotive of conventional technologies that are
GHG Reduction Programs for Light-Duty technology firm to perform a detailed already being demonstrated by vehicle
Vehicles (Light-Duty Vehicle TSD).’’ 159 vehicle simulation modeling study of manufacturers and component
The Light-Duty Vehicle TSD the GHG reduction effectiveness of a suppliers.’’ 167 To bolster this statement,
represented EPA’s assessment during number of advanced automotive CARB submitted a list of Model Year
2007 of how a light-duty vehicle technologies. As noted by CARB, the 2009 vehicles which employ GHG
program for GHG emission reductions EPA Report obtained technology reduction technologies, which shows a
under the Clean Air Act might be package reductions and cost estimates gradual phasing-in of these technologies
designed and implemented, with two very similar to those in the CARB across all manufacturers and all product
program options: either (1) a fixed ISOR.162 As in the earlier Light-Duty lines. CARB also submitted a list
percentage reduction (4%) in CO2 TSD, EPA noted that the estimates in showing 2009 Model Year vehicles that
emissions per model year from 2011 to this report are conservative because they comply with the CARB GHG standards;
2018, or (2) an annual reduction in CO2 rely on data sources from one to six the list shows significant numbers of
emissions per model year from 2011 to years old and declared that the 2009 passenger cars and light trucks
2018, based on a model developed by ‘‘automotive industry is a technology- meeting the 2012 and later standards,
the Department of Transportation’s driven industry, and new technologies significantly ahead of the deadlines.
Volpe Center, establishing CO2 emission are developed and introduced quickly. With respect to the overall
standards, at the point the model A number of technologies which have technological feasibility of its GHG
projects maximum net benefits for those only recently been introduced or will be standards, CARB believes that it has
model years.160 The Light-Duty Vehicle within the next year are likely to see reasonably projected technological
TSD collected information from a wide improvements in their effectiveness and feasibility, consistent with the approach
range of sources, including a 2002 cost reductions beyond what we employed in the NRDC decision, when
National Academy of Sciences report, estimate (in this report).’’ 163 manufacturers have several years of lead
the 2004 NESCAAF report (also used by Finally, CARB referenced an EPA staff time before compliance. CARB notes
CARB), current technical literature, and technical memorandum that it ‘‘either has demonstrated that the
information from vehicle manufacturers ‘‘Documentation of Updated Light-duty necessary technologies presently exist to
and automotive suppliers. CARB noted Vehicle GHG Scenarios,’’ dated June 23, meet the established standards or we
that the emission reduction potentials 2008.164 This memorandum have specifically identified the
and costs in the EPA study were similar summarized the staff work to update the projected control technologies,
to the reduction potentials and costs ‘‘4% per year’’ GHG reduction scenario answered objections raised by industry
estimated by CARB in its ISOR. In that was first documented in the Light- regarding those technologies, and
discussing the Light-duty TSD in the duty Vehicle TSD, by addressing some explained why we believe that each of
ANPRM, EPA also acknowledged that, of the deficiencies of the earlier the steps can be completed in the time
based on enhancements to the Volpe study,165 and was discussed in the available.’’ 168
Model later in 2007, the earlier EPA ANPRM for GHG Standards. EPA once In support of its conclusion, CARB
analysis ‘‘tended to underestimate the again noted that because the updated submitted for the record three analyses
benefits and/or overestimate the costs of analysis did not address all the issues showing that the manufacturers are
light-duty vehicle CO2 standards that identified in the earlier TSD, it employing the GHG technologies at least
could be established under the continued to believe that the results of as fast as CARB predicted, and certainly
CAA.’’ 161 this updated analysis are conservative, in time for compliance with the early
CARB also referenced the March 2008 model years. First, CARB did an
‘‘EPA Staff Technical Report: Cost and 162 California Air Resources Board, EPA–HQ–
‘‘industry-wide’’ projection using
OAR–2006–0173–9006, at 21. manufacturers’ 2009 sales projections
158 Advanced Notice of Proposed Rulemaking, 163 California Air Resources Board, EPA–HQ–
Regulating Greenhouse Gas Emissions Under the OAR–2006–0173–9019.6. at 1.
and worst case CO2 values per single
Clean Air Act, 73 FR 44354 (July 30, 2008). 164 California Air Resources Board, EPA–HQ– test vehicle, and used the 2009
OAR–2007–0173–9019.7. projected sales as unchanged for 2010
OAR–2006–0173–9019.5. 165 For example, this updated analysis included and 2011 model years.169 The results of
160 This approach uses a computer model
factors such as consideration of multi-year planning this analysis show industry-wide GHG
developed by the Department of Transportation cycles available to manufacturers, consideration of
Volpe Center called the ‘‘CAFE Effects and CO2 trading between car and truck fleets within the 166 California Air Resources Board, EPA–HQ–
Compliance Model’’ (‘‘Volpe Model’’). same manufacturer, and inclusion of plug-in
161 This EPA assessment of the Light-Duty hybrids as a viable technology beginning in 2012. OAR–2006–0173–9006, at 21.
167 Id.
Vehicle TSD was contained in the Advanced Notice Advanced Notice of Proposed Rulemaking,
168 Id. at 23.
of Proposed Rulemaking, Regulating Greenhouse Regulating Greenhouse Gas Emissions Under the
Gas Emissions Under the Clean Air Act, 73 FR Clean Air Act, 73 FR 44354, at 44444 (July 30, 169 California Air Resources Board, EPA–HQ–
44354, at 44444 (July 30, 2008). 2008). OAR–2006–0173–9019.12.
credits for 2009 and 2010 and a debit for the LDT2/MDV fleet over-complied by diesel vehicles, EEA projected that
2011, but an overall credit for the three- 27 grams per mile, generating Toyota and Honda will meet California
year period. CARB noted that because substantial credits for 2010 and beyond. GHG standards through 2012, and that
this was done on a worst-case testing Additional support for 2009–2011 Nissan may have a shortfall in LDV/
basis, it is likely that testing with compliance was provided by the Natural LDT1 for 2012, but will easily comply
additional vehicles in each test group Resources Defense Council. At EPA’s with LDT2/MDV in 2012, and will be
would show even the debiting March 5, 2009 waiver hearing, NRDC able to meet the 2012 standards by
companies in compliance.170 presented testimony regarding the trading between categories and using
Second, CARB looked at the technological feasibility of the GHG banked credits from prior years.
compliance projection for the major standards for the early years of For the domestic manufacturers, EEA
domestic manufacturers (Ford, GM and compliance. NRDC performed its noted concerns about compliance with
Chrysler) for the 2009 and 2010 model analysis by using EPA fuel economy the California GHG standards, in part
years.171 CARB used the actual 2009 trends data for MY 2008, which because these companies have Federal
model year registration data (from Polk) predicted a national average fuel CAFE values which are significantly
and, then, applied CO2 emissions data economy level without CAFE credits for below the three Japanese companies,
by vehicle model obtained from EPA, flexible fuel vehicles. NRDC then meaning that it will be harder for them
selecting the highest CO2 emissions data converted the miles per gallon numbers to reach the target. Nevertheless, the
for those vehicle models with multiple to CO2 grams per mile levels using the EEA report noted that the product plans
engines. The results showed that for the California sales mix and the GHG of these companies show the following
2009 model year, GM and Ford have conversion established by CARB. The industry-wide technology
ample compliance margins for both PC/ result is that industry accrues improvements coming on line in the
LDT1 and LDT2/MDV, while Chrysler substantial amount of credits in 2009 next 4 to 5 years:
has a debit for its PC/LDT1 fleet, but a and 2010, and then runs a small deficit —Luxury vehicles adopting GDI across
wide margin for its LDT2/MDV fleet. in 2011 that can be easily made up most product lines;
The overall net result is compliance for using banked credits from the first two —4 valve OHC/DOHC engines with VVT
all three companies. For 2010, the three years.173 replacing the few remaining 2-valve
companies run debits for PC/LDT1 but Beyond submitting results from its OHC 4 and 6 cylinder engines;
have compliance margins for LDT2/ own recent analyses, CARB submitted a —6-speed transmissions replacing 4 or 5
MDV (a small margin for GM, and very recent (March 2009) study by speed units in most mass market
substantial margins for Ford and Energy & Environmental Analysis (EEA) vehicles
Chrysler). Again, based on the use of entitled ‘‘Automakers Ability to Comply —Electric power steering replacing
accumulated credits, these companies with California GHG Standards Through hydraulic units in compact and mid
would comply with the model years 2012.’’ 174 The EEA study notes that, if size cars;
the California waiver is granted, —Cylinder cut-out applications to V–8
analyzed.
Third, CARB focused on just GM for manufacturers would be required to and some V–6 units;
comply with standards for MY 2009 —Variable valve lift used more widely
the 2009 model year, using a different
vehicles, which are already in by Japanese manufacturers;
technique than their study directly —Introduction of several new diesel
above.172 CARB used certification data production and being sold, and would
have very little lead time to make models and hybrid models by all
provided by GM, projected sales based manufacturers;
on GM’s latest manufacturer update to changes for MY 2010 (which will start
production in mid-calendar year 2009), —Introduction of new small ‘‘crossover’’
CARB, and CO2 results provided by SUV and car models that are one size
EPA. Then each GM certification test and limited opportunity to make
changes at this point for MY 2011 and class below the existing smallest
group was divided by GM into sales models offered by the domestic
sub-groups, each having one or several 2012. EEA looked at the product plans
for the ‘‘Big Six’’ manufacturers in the manufacturers to compete with the
vehicle models. For each sub-group, the Toyota Scion XD and XB models and
CO2 emissions of the highest emitting U.S. (GM, Ford, Chrysler, Toyota,
Honda and Nissan) based on the Honda Fit model.
model were multiplied with the total To perform the GHG estimate, the
commercially available data, and from
number of vehicles in the subgroup to EEA study used the actual fuel economy
public information reported in the trade
calculate the sub-group’s GHG value. data by vehicle model for MY 2009, and
press, as well as the information
The GHG values from all sales used the product-plan based technology
submitted by the manufacturers to the
subgroups in a test group were summed forecasts to derive fuel economy by
Federal government in connection to the
up to represent the sales group GHG model for MY 2010 through 2012. For
auto restructuring plans.175 Generally,
value. For the 2009 model year, under sales numbers, EEA used 2008 sales
because of projected large sales of
this analysis, the GM PC/LDT1 fleet data and sales for the first two months
hybrids and to a lesser extent, sales of
over-complies by 14 grams per mile and of 2009 both nationally and for
170 California
173 Natural Resources Defense Council, EPA–HQ– California as sales indicators for the
Air Resources Board, EPA–HQ– OAR–2006–0173–7176.13, at 5–6. The NRDC
OAR–2006–0173–9006 at 24. near term (MY 2009 and 2010). For 2011
testimony also noted that developments in the
period between the first waiver hearing (May 2007) and 2012, EEA used the sales forecast it
OAR–2006–0173–9019.13. CARB limited this and the new hearing strengthen the California case had developed in the 2008 DOE study,
particular analysis to the domestic manufacturers that the GHG standards are cost-effective and which was a 15 million annual sales
because, in its assessment, ‘‘the international auto technically feasible—namely, higher gas prices, the
companies are better positioned to comply and will market shift to cleaner cars and the passage of new
level of light duty vehicles nationally.
unquestionably meet early model year standards.’’ Federal fuel economy standards. The power train mix numbers (engine/
As summarized in the first (industry-wide) CARB 174 California Air Resources Board, EPA–HQ– transmission combinations) for all years
analysis, although at least one international OAR–2006–0173–9019.15. were the 2008 numbers because this was
manufacturer (BMW) projected a slight debit for 175 EEA completed a detailed study of product
2009, all the manufacturers were projected for
the latest data available from the CAFE
plans for the Big Six manufacturers for the U.S.
overall compliance for the period 2009–2011. Department of Energy in late 2008, and they used data base.
172 California Air Resources Board, EPA–HQ– that study as a baseline for this report on California Using this approach, EEA found that
OAR–2006–0173–9019.14. GHG compliance. all three domestic manufacturers are in
compliance with current and expected pointed out that the plans of both GM advanced transmissions and engine
CAFE through 2012, with Chrysler and Ford show MY 2012 fuel economy technologies in their vehicles, and that
lagging somewhat behind Ford and GM. levels for cars and light trucks fleet the gradual phase-in of the CARB
EEA then translated these forecasts to average that come very close to allowing standards allowed manufacturers to
GHG forecasts for the California vehicle the automakers to comply with the GHG accomplish this during regular
class definitions, assuming no A/C standards with little or no additional scheduled vehicle upgrades. CARB also
improvement credits or alternative fuel effort.179 Additionally, CARB noted that noted that its modeling done by AVL
credits, and no trading of credits Chrysler stated that, should this GHG specifically avoided double-counting
between manufacturers, and predicted waiver be granted, the company would (while some manufacturers’ modeling
as follows: try its best to comply using available did not).
—All manufacturers will comply with technology; however, as a last resort it Regarding the EPA waiver proceeding,
GHG requirements for 2009; might restrict sales of certain vehicle while the manufacturers did take issue
—GM and Chrysler will comply with models in California and other states with some of the CARB modeling work
GHG regulation in 2010 while Ford is adopting the California standards, out of during the CARB rulemaking, the
on the edge of compliance. Ford can necessity.180 Finally, regarding Ford, manufacturers did not challenge CARB’s
likely comply by either using banked NRDC stated in its testimony that Ford general conclusions that the necessary
credits from 2009 or with small plans to improve the average fuel technology presently exists to meet the
adjustments to the power train and economy by 26 percent by 2012 and by near-term standards, that projected
sales mix sold in California if 36 percent by 2015.181 control technologies for future years
necessary; have been identified, and that objections
4. Manufacturers’ Comments on the raised by industry have been answered.
—Chrysler and GM may be able to meet
Technological Feasibility of the GHG Rather, the industry offered an
2011 GHG standards using banked
Standards assessment that much of this technology
credits from 2009 and 2010 and credit
trading between classes. All three Manufacturers raised arguments is already at hand. At the first EPA
manufacturers could require regarding the feasibility of the CARB hearing in March 2007, although no
additional efforts such as air GHG standards both in the underlying individual manufacturer presented
conditioner improvements to comply rulemaking in California, and in the testimony, the Alliance of Automobile
with 2011 GHG requirements. EPA waiver proceeding. In the CARB Manufacturers discussed the progress of
—Compliance with 2012 GHG rulemaking, the manufacturers generally the industry in producing more fuel-
requirements will be a challenge and criticized some aspects of the CARB efficient vehicles. The Alliance stated
may require credit trading and banked modeling work that substantiated that ‘‘every model available today is
past and future credits over and above CARB’s conclusions on technological equipped with some kind of fuel
credits from air conditioner feasibility. For example, a manufacturer efficient technology, including direct
improvements and introduction of argued that CARB overestimated the fuel injection, variable valve timing,
alternative fuel vehicles. emission reductions from the continuously variable transmissions,
—The results appear to be very realistic powertrain changes in many of the cylinder deactivations, and more.’’ 184
based on the auto-manufacturers technology packages used in the These technologies in the 2007 and
public statements of future fuel modeling studies, such as the NESCAAF 2008 MY vehicles are among those that
economy.176 study. Because the studies assumed CARB projected as being in use for the
Regarding the long-term (MY 2012 changes in the use of advanced near-term GHG standards (see above
and later) outlook, CARB compared the transmissions and engines in such a discussion on ‘‘Overview of
restructuring plans submitted by the magnitude to be unrealistic for the U.S. Technologies and Their Projected
automakers to the arguments fleet, the manufacturer stated that the Applications,’’ section VI.B.2).
manufacturers made in this proceeding, changes would require retooling of all In comments sent to EPA after the
regarding later model year feasibility. U.S. driveline plants, perhaps more than March 2007 hearing, the industry
CARB stated that ‘‘by 2015, even those once.182 Manufacturers also argued that commenters focused on whether there
manufacturers facing the most difficult the modeling of technology packages was adequate lead time to comply with
challenge complying with California’s risked ‘‘double-counting’’ emission the near-term standards, citing
standards have made statements that on benefits produced by the individual testimony from a CARB official (in the
their face show they plan to comply technologies, thus producing an Vermont litigation) that some
with the later model years standards, unrealistic estimate of emission manufacturers may need up to six years
even before receiving additional credit reductions.183 CARB responded to these to comply with the 2011 MY standards
for GHG reductions from air comments by stating that manufacturers and up to 7 years to comply with the
conditioning improvements and were already planning to incorporate 2012 MY standards.185 Also, the
regardless of 2009 and 2010 credits industry criticized CARB for not
carrying forward.’’ 177 For example, 179 Natural Resources Defense Council, EPA–HQ–
providing sufficient information on
OAR–2006–0173–7176.13, at 4. some technology issues for the EPA (or
CARB cited from the GM restructuring 180 California Air Resources Board, EPA–HQ–
plan that the company stated that it will OAR–2006–0173–9020.2, at U116, and California
the public) to make an informed
work to develop any changes needed to Air Resources Board, EPA–HQ–OAR–2006–0173– decision.186 CARB responded to these
* * * meet such additional 9020.3, at 118–120.
181 Natural Resources Defense Council, EPA–HQ– 184 Testimony of Alliance of Automobile
requirements as California’s.178 Further,
OAR–2006–0173–7176.13, at 4, citing from Ford Manufacturers, EPA–HQ–OAR–2006–0173–0422, at
at EPA’s March 5, 2009 hearing, NRDC Motor Company Business Plan, Submitted to the 98.
House Financial Services Committee, December 2, 185 Association of International Automobile
176 California Air Resources Board, EPA–HQ– 2008. Manufacturers, EPA–HQ–OAR–2006–0173–1455.2
OAR–2006–0173–9019.15. 182 California Air Resources Board, EPA–HQ- at 11–12. The litigation in Vermont is Green
177 California Air Resources Board, EPA–HQ– OAR–2006–0173–0010.116, Comment 154 (at 107) Mountain Chrysler-Plymouth Dodge-Jeep v.
OAR–2006–0173–9006, at 27. and Comments 158–159(–115). Crombie, 508 F. Supp, 295 (D. Vt.).
178 California Air Resources Board, EPA–HQ– 183 California Air Resources Board, EPA–HQ– 186 Alliance of Automobile Manufacturers, EPA–
OAR–2006–0173–9021.1, at 21. OAR–2006–0173–0010.116, Comment 162 at 117. HQ–OAR–2006–0173–1297.2 at 35–36.
points, stating that the CARB official testimony and subsequent comments, standards is a policy decision left to the
also testified that most of the CARB- presented its new analyses of state.194
identified technologies are already compliance (for the industry in general,
C. Technological Feasibility and the
developed and required only a few years and for GM) that showed industry
Cost of Compliance
of lead time for implementation. compliance is likely if not certain for
Additionally, based on lead time the 2009 through 2011 model years (see 1. Historical Approach
beginning at the time of the final discussion above at section VI.B.3.). Congress has stated that the
adoption of the standards by CARB Additionally, if any individual consistency requirement of section
(August 2005), CARB notes that the 6 or manufacturers incur a debit in any 202(a) relates to technological
7 year lead time for the 2011 and 2012 model year, the CARB regulations feasibility.195 Section 202(a)(2) states, in
model years respectively is provide the manufacturer up to five part, that any regulation promulgated
reasonable.187 CARB also provided, in model years afterwards to make up the under its authority ‘‘shall take effect
its June 2007 and July 2007 comments, debit to avoid any noncompliance after such period as the Administrator
information from the Vermont litigation penalty. finds necessary to permit the
where various manufacturers testified Regarding the mid-term (2012–2016)
development and application of the
that they would be able to meet the model years of the GHG standards, the
relevant technology, considering the
early years of the California GHG industry commenters have argued that
cost of compliance within that time.’’
standards.188 Concerning the list of the only means by which most large-
Section 202(a) thus requires the
technical issues on which the industry volume manufacturers will be able to
meet the CARB standards is by ‘‘mix- Administrator to first review whether
claimed CARB had not provided enough
shifting’’ their product lines to offer for adequate technology already exists, or if
information to allow public comment,
sale more higher mileage vehicles to it does not, whether there is adequate
CARB stated that these issues were
ensure meeting the CARB fleet time to develop and apply the
among many issues previously
average.192 The Alliance stated that ‘‘it technology before the standards go into
addressed fully both in submissions to
is simply too late for manufacturers to effect.
the Docket (primarily the CARB Final
In MEMA I, the court addressed the
Statement of Reasons) as well as in the meet all the Pavley standards for future
cost of compliance issue at some length
Federal litigation.189 model years through the use of
Manufacturers also presented technologies, if for no other reason than in reviewing a waiver decision.
information on technological feasibility because approximately 18 months of the According to the court:
at EPA’s March 5, 2009 hearing and the product planning and development Section 202’s cost of compliance concern,
subsequent comment period. At the EPA cycle was pretermitted while the waiver juxtaposed as it is with the requirement that
hearing, the Alliance continued to was denied (assuming for purposed of the Administrator provide the requisite lead
time to allow technological developments,
acknowledge technological advances in this analysis that a waiver would be refers to the economic costs of motor vehicle
GHG control. The Alliance stated that granted in June 2009).’’ 193 As discussed emission standards and accompanying
‘‘automakers have made major earlier, CARB responded to these enforcement procedures. See S. Rep. No. 192,
contributions into developing new fuel arguments by noting that in the 89th Cong., 1st Sass. 5–8 (1965); H.R. Rep.
efficient technologies and the results are restructuring plans recently submitted No. 728 90th Cong., 1st Sass. 23 (1967),
now coming to dealer showrooms. More to the government, the manufacturers reprinted in U.S. Code Cong. & Admin. News
than 50 technologies offered in vehicles have made statements demonstrating 1967, p. 1938. It relates to the timing of a
today reduce emissions, increase they plan to comply with the later particular emission control regulation rather
mileage and allow vehicles to run on than to its social implications. Congress
model years of the CARB standards,
cleaner fuels.’’ 190 Regarding wanted to avoid undue economic disruption
even before receiving additional credit in the automotive manufacturing industry
technological feasibility for the early for GHG reductions from air and also sought to avoid doubling or tripling
years (near-term), the industry trade conditioning improvements and the cost of motor vehicles to purchasers. It,
groups generally argued that CARB regardless of 2009 and 2010 credits therefore, requires that the emission control
relied on manufacturer credits for these carrying forward. Regarding the regulations be technologically feasible within
years to provide a cushion for manufacturers’ mix-shifting argument, economic parameters. Therein lies the intent
compliance in the later years, but that EPA notes that under the narrow of the cost of compliance requirement.196
the several years of lead time required standard of review applied to Previous waiver decisions are fully
for mid-term compliance combined with California’s technological feasibility consistent with MEMA I, which
uncertainty resulting from the EPA determinations, consistency with indicates that the cost of compliance
waiver denial makes even the near-term section 202(a) does not mean that all must reach a very high level before the
lead time inadequate.191 CARB, in its manufacturers will be able to sell all EPA can deny a waiver. Therefore, past
vehicle models in California and that a decisions indicate that the costs must be
reduced product offering in California excessive to find that California’s
OAR–2006–0173–3601, at 26–27.
188 CARB referenced the industry assessments of resulting from California emission standards are inconsistent with section
early model year compliance from the litigation in 202(a).197 It should be noted that, as
Vermont, Green Mountain Chrysler-Plymouth Manufacturers, EPA–HQ–OAR–2006–0173–9005.2 with other issues related to the
Dodge-Jeep v. Crombie, 508 F. Supp, 295 (D. Vt.), at 4.
California Air Resources Board, EPA–HQ–OAR– 192 Regarding mix-shifting, the National
determination of consistency with
2006–0173–1686 at 20–21, California Air Resources Automobile Dealers Association also commented
194 40 FR 23102, 23103 (May 28, 1975).
Board, EPA–HQ–OAR–2006–0173–3601, at 27–28. that this would be costly to dealers who would lose
189 The list of issues and the CARB response are 195 H.R. Rep. No. 95–294, 95th Cong., 1st Sess.
business due to the ‘‘scrappage effect’’ (see above
discussed in the CARB July 2007 letter. EPA–HQ– pp 46–49), being forced to accept smaller vehicles 301 (1977).
OAR–2006–0173–3601, at 26. regardless of local consumer demand, rationing of 196 MEMA I at 1118 (emphasis added). See also
190 Testimony of Association of Automobile larger vehicles, and out-of state dealers id. at 1114 n. 40 (‘‘[T]he ‘cost of compliance’
Manufacturers, EPA–HQ–OAR–2006–0173–7177, at unencumbered by CARB’s regulations. National criterion relates to the timing of standards and
108. Automobile Dealers Association, EPA–HQ–OAR– procedures.’’).
191 Association of Automobile Manufacturers, 2006–0173–8956.1, at 8–9. 197 See, e.g., 47 FR 7306, 7309 (Feb. 18, 1982), 43
EPA–HQ–OAR–2006–0173–8994.1, at 24–25; 193 Association of Automobile Manufacturers, FR 25735 (Jun. 14, 1978), and 46 FR 26371, 26373
Association of International Automobile EPA–HQ–OAR–2006–0173–8994.1 at 26. (May 12, 1981).
section 202(a), the burden of proof estimates of costs for the ‘‘major 6’’ patchwork approach to fuel economy
regarding the cost issue falls upon the manufacturers cost of compliance over that would fill their lots with more
opponents of the grant of the waiver. the term of these standards. These unsold vehicles.’’ 202 NAMAD believes
Consistent with MEMA I, the Agency figures ranged from $0 (for the three that ‘‘dealer will lose sales if automakers
has evaluated costs in the waiver Japanese companies and GM) for the have to ration delivery of large vehicles
context by looking at the actual cost of 2009 MY (i.e., the fleets of these in CARB (Section 177) states to meet the
compliance in the time provided by the companies would comply with the 2009 fleet average, and * * * if dealers are
regulation, not the regulation’s cost- standards with no changes) to the forced to take delivery of more small
effectiveness. Cost-effectiveness is a highest costs in the 2016 MY, with a cars that their customers don’t want,
policy decision of California that is $1,288–$1,341 range for the domestic dealers will be stuck paying the interest
considered and made when California manufacturers and a $272–$298 range charges while these vehicles sit on their
adopts the regulations, and EPA, for the Japanese manufacturers. lots.’’ 203 EPA notes the comments of
historically, has deferred to these policy During the CARB GHG rulemaking, NADA and NAMAD on this particular
decisions. EPA has stated in this regard, the manufacturers commented that type of cost, but also notes that these
‘‘the law makes it clear that the waiver CARB underestimated costs of comments are not relevant to the issue
request cannot be denied unless the individual technologies because CARB of whether the technology feasibility of
specific findings designated in the did not use the manufacturers’ costs to the GHG standards are consistent with
statute can be made. The issue of individually develop each of the section 202(a). The comments regarding
whether a proposed California technologies, and CARB used a mark-up the ‘‘patchwork’’ of the GHG standards
requirement is likely to result in only factor for final technology cost that was in other states are discussed below in
marginal improvement in air quality not too low. The Alliance commissioned a section VII. B. 2.
commensurate with its cost or is study by Air Improvement Resources,
otherwise an arguably unwise exercise 3. Consistency of Certification Test
NERA Economic Consulting, and Sierra
of regulatory power is not legally Procedures
Research (the above noted ‘‘June 2007
pertinent to my decision under section AIR/NERA/Sierra Study’’) that found The enforcement procedures that
209 * * *’’ 198 Thus, under the language the average vehicle cost increase to be accompany California’s greenhouse gas
of section 202(a)(2), EPA will look at the about $3000, several times larger that standards would also be inconsistent
compliance costs for manufacturers in the CARB estimates. In response, CARB with section 202(a) if the California test
developing and applying the technology provided a detailed critique of why the procedures impose testing requirements
with the costs being broken down on a cost conclusions in this study were not inconsistent with the Federal testing
cost per vehicle or unit basis. reasonable. CARB found faulty technical requirements. Such inconsistency
2. Technology Cost Information in This analysis and inflated component means that manufacturers would be
Proceeding costs.200 In the time period since the unable to meet both the California and
CARB request, CARB has updated its the Federal test requirements with the
At the time of CARB’s original waiver same test vehicle.204
request, CARB presented the projected technology cost estimates with new real-
life information to show that CARB stated in its December 2005
technology costs for the GHG vehicle Waiver Request letter that there ‘‘are no
standards based on cost estimates for manufacturers are continuing to
implement the GHG technology Federal test procedures that measure
necessary components provided by GHG for climate change purposes, [so]
Martec, the company that did the packages and combinations CARB had
identified at the outset—at costs in line there are no potential inconsistencies
modeling studies that produced the precluding a manufacturer from using
CARB technology assessment in its with CARB’s projections.201
EPA also received comments from the the same test vehicle to meet both
ISOR. The costs were calculated by Federal and California requirements’’
applying a mark-up factor, determined National Auto Dealers Association
(NADA) and the National Association of and noted in its most recent (April
by the Argonne National Laboratory, for 2009) comment letter that this was still
the components needed for the vehicles. Minority Automobile Dealers (NAMAD)
concerning the costs of the CARB true.205
Additionally, CARB assumed an EPA received no comments suggesting
additional 30% discount for a limited standards to its constituents, above the
costs that GHG technology adds to the that CARB’s GHG testing requirements
number of components where pose a test procedure consistency
unanticipated improvements in vehicle price to buyers. NADA notes
that because of ‘‘dire financial straits’’ in problem with federal test procedures.
production processes or simplifications
or consolidation in parts after additional the auto industry due to the economic 4. Safety Implications of the CARB GHG
further development would be likely.199 recession, dealers are experiencing Standards
At that time, CARB stated that the financial difficulties from vastly
reduced vehicle sales (among other The industry raised a vehicle safety
average cost of control for near-term issue for consideration within the
technology packages on PC/LDT1 problems). NADA believes that if this
waiver is granted, and the various other technological feasibility criterion. The
category vehicles was estimated at $383 industry has proffered the idea that the
per vehicle, and for LDT2/MDV category states which have adopted the GHG
standards begin their own programs, the CARB GHG standards will result in the
vehicles was estimated at $327 per production of vehicles which will be
vehicle. Performing similar calculations result will be a ‘‘state-by-state
unsafe for two reasons. First, they claim
for the mid-term technology packages,

CARB put the estimates for PC/LDT1 at 202 National Automobile Dealers Association,
OAR–2006–0173–0010.116 at 141–155.
$1,115, and for LDT2/MDV at $1,341. 201 California Air Resources Board, EPA–HQ– EPA–HQ–OAR–2006–0173–8956.1 at 5–6.
CARB also presented information on the OAR–2006–0173–1686 at 19, and EPA–HQ–OAR–
203 Testimony of National Association of Minority
2006–0173–3601 at 28–29. CARB also notes that in Automobile Dealers, EPA HQ–OAR–2006–0173–
198 36 FR 17158 (August 31, 1971). See also 40 the Green Mountain case, 508 F. Supp. 2d at 365– 7177, at 126–127.
204 See, e.g., 43 FR 32182 (Jul. 25, 1978).
FR 23102, 23104; 58 FR 4166 (January 7, 1993), LEV 366, the Court found that the industry consultant’s
Waiver Decision Document at 20. (T. Austin) baseline assumptions and resulting cost 205 California Air Resources Board, EPA–HQ–
199 California Air Resources Board, EPA–HQ– estimates—double that of defendants’ expert—were OAR–2006–0173–0004.1 at 42 and EPA–HQ–OAR–
OAR–2006–0173–0004.1 at 40. unsupported by the evidence. 2006–0173–9006 at 29.
that many GHG-compliant vehicles will rejected the industry arguments in itself. This is a public policy argument
achieve compliance because they will several ways. First, it pointed out that that is left for California’s discretion but
be downsized, and will be inherently under the terms of AB 1493, CARB is is not relevant to the narrow
less safe in collisions. Second, they precluded from requiring vehicle down- technological feasibility analysis
claim that because GHG-compliant weighting as a means of achieving authorized for EPA under section
vehicles will also have higher fuel compliance. Second, CARB has laid out 209(b).
economy than today’s fleet, owners will a broad pathway of potential For these reasons, EPA finds that the
drive more, and that additional VMT technologies for achieving compliance industry opponents of this waiver
means more accidents will occur. The for all vehicle types, none of which request, with respect to the vehicle
industry asserts that because the GHG require any weight reduction of safety impact of the CARB GHG
standards will cause these problems, the vehicles. Third, CARB notes that an standards have not met their burden of
resulting vehicles are technologically industry study (Sierra 2004) shows that proof for EPA to find that these
infeasible because of the safety weight reduction is far from cost- standards are not consistent with
concerns. effective and therefore becomes an section 202(a) of the Act.
EPA takes safety into account in unlikely compliance option. Fourth, E. Conclusion on Technological
evaluating technology, feasibility and CARB submitted reports from experts Feasibility
lead time of California emission that tend to dispute any safety impacts
standards. For example, when CARB in from the GHG standards by After its review of the information in
1994 requested authorization for its demonstrating that any weight this proceeding, EPA has determined
original set of emission standards for reduction that may be made to comply that CARB has demonstrated a
small spark-ignition engines used in with the GHG standards need not reasonable projection that compliance
utility, lawn and garden equipment, the adversely affect vehicle safety. Finally, with its GHG standards is reasonable,
industry trade association raised safety the opponents VMT safety theory is based upon the current and future
concerns in the EPA authorization entirely based on their flawed rebound availability of the described
proceeding. The industry argued that and fleet turnover arguments (discussed technologies in the lead-time provided
compliance with the CARB standards above in section IV.C.2). and considering the cost of compliance.
would require the use of catalyst Regarding the safety issue, EPA notes The industry opponents have not met
technology in equipment, and that that CARB has provided considerable the burden of producing the evidence
current catalysts produced high exhaust evidence that its GHG standards can be necessary for EPA to find that
and surface temperatures, and could met without any increase in concern California’s GHG standards are not
also possibly cause sparking and regarding vehicle safety. Even accepting consistent with section 202(a).
flaming, so these safety issues must be the industry arguments regarding the With regard to motor vehicles
addressed before this technology could safety implications of downsizing— required to meet the near-term
become feasible, and the authorization which are disputed by CARB, standards for the 2009 through 2011
should be denied on that basis. EPA particularly for downsizing of larger model years, the CARB technical
examined these safety issues within the vehicles—EPA cannot make the finding information presented in this record
traditional consistency with section that the CARB standards are clearly indicates that these requirements
202(a) criterion, with the requisite technologically infeasible because are feasible. CARB has presented the
deference given to CARB and the manufacturers may choose to use a case that the industry as a whole will be
burden placed on those arguing that method of compliance that is not as safe able to meet these standards for this
safety concerns should give cause for as the methods CARB has identified, period—for the 2009 and 2010 model
EPA to deny the authorization. CARB particularly where there are many years—with compliance with the
responded to the industry objections by business reasons for manufacturers not standards including credit generation,
offering a detailed review of steps to choose such a method. The burden, and for the 2011 model year—with a
necessary to refine small engine catalyst here, is on manufacturers to carry-forward of credits earned in the
technology to meet the standards while demonstrate that safety concerns with 2009 and 2010 model years. Within the
reducing the high temperature risks, as the technology available for compliance industry, several manufacturers are not
well as identifying some current small were unavoidable and substantial and expected to need credits to comply in
engines that met the standards without that manufacturers would have no the 2011 model year. Moreover,
using a catalyst. After reviewing all reasonable technological option California has provided several
relevant information from CARB and available to them in the lead time technological avenues that are currently
other commenters on the safety issues provided for compliance. Based on the available for meeting the 2011 MY
(and other technological feasibility entire record, they have not made such standards without the need for credits.
issues) the Administrator stated he was a demonstration. Beyond this limited Manufacturers have provided no
‘‘unable to make the finding that the type of review under section 209(b), evidence that these technologies cannot
CARB Tier 2 standards are not EPA’s proper role is to leave for be applied to meet the 2009–2011 MY
technologically feasible within the California the judgment of what standards.
available lead time.’’ 206 greenhouse standards are appropriate in For the mid-term standards, 2012 MY
In the California GHG proceeding, light of safety concerns raised by and beyond, CARB again identified
CARB has responded to the industry manufacturers. various and reasonable technological
safety arguments, both during the With regard to the claim that avenues that manufacturers could use to
underlying California rulemaking and in increased VMT will increase the meet the mid-term standards. CARB
comments submitted to EPA in this number of accidents, this argument is initially presented that the continued
waiver proceeding. In summary, CARB not relevant to the safety of the vehicle use of technologies identified for the
but to an outcome based on the possible near-term along with more sophisticated
206 Decision Document, Authorization of
actions or changes of driving patterns of technologies and the expected upswing
California’s Under 25 Horsepower Utility Lawn and people who own these vehicles. This in hybrid-electric and diesel vehicles
Garden Equipment Engine Exhaust Emission
Standards (ULGE) (July 5, 1995), EPA Docket A–91– argument does not go to the would result in industry compliance for
01 at 61–70. technological feasibility of the vehicle these years. In its June 2007 comments,
CARB noted that it expected identifying major steps needed to refine standards are consistent with section
manufacturers to use combinations of technology, and offering plausible 202(a), including lead time.
the initially introduced technologies to reasons for predicting successful In comments submitted for this
meet the mid-term standards and cited technologies.209 reconsideration, the industry
several examples of this already Regarding the cost component of the commenters asserted that any lead time
happening in several manufacturers’ technological feasibility test, EPA clock that may have been running
products. CARB also noted that in 2007, believes that the opponents of the should have stopped completely and
manufacturers were aggressively waiver have not met the burden of proof immediately upon EPA’s March 6, 2008
introducing new hybrid vehicles well to show that the GHG standards are not Denial. Both the Alliance of Automobile
ahead of the mid-term standards. For technologically feasible because of Manufacturers and the Association of
the longer term, as noted earlier, CARB excessive cost. The industry cost study International Automobile Manufacturers
states that ‘‘by 2015, even those (from Sierra Research) from the CARB noted that even CARB officials testified
manufacturers facing the most difficult rulemaking found an average vehicle that manufacturers should have started
challenge complying with California’s cost increase of about $3,000 to comply development of their 2010–2012 MY
standards have made statements that on with the CARB standards, an increase product lines at the time the final
their face show they plan to comply which CARB rebutted in detail, and standards were finalized in the 2004–
with the later model years of standards, which was also found not credible by 2005 time frame, and that there should
even before receiving additional credit the district court in the Vermont be a presumption that the industry
for GHG reductions from air litigation. Alternatively, even if the could and would stop ongoing
conditioning improvements and industry estimates were closer to the development efforts when this waiver
regardless of 2009 and 2010 credits mark than the CARB estimates, CARB was denied.211 In its comments, the
carrying forward.’’ 207 points out that Congress was concerned Alliance noted that it should not be
In its comment submitted after EPA’s with standards causing a doubling or assumed that a ‘‘retroactive’’ waiver
March 5, 2009 hearing, CARB tripling of vehicle costs (MEMA 627 would impose no hardship because
summarized the industry discussion on F.2d at 1118), not the cost increases that manufacturers are able to earn credits
technological feasibility as follows: CARB has projected (ranging from under for sales for the 2009 and 2010 MYs in
$100 for some manufacturers in near- advance of any waiver grant. They claim
In our July 24, 2007 comments CARB
stated ‘‘* * * not a single manufacturer from
term to a maximum of $1,100 to $1,350 that the regulated parties would have
either the Alliance or AIAM has for vehicles in the 2016 MY).210 conducted their business differently if
independently presented any substantive Therefore, for the above reasons, I am they knew in advance that these
comment concerning the principal and unable to find that the CARB GHG regulations would be enforced.212
proper focus of the (EPA) proceeding—the motor vehicle emission standards are On the other hand, CARB urges EPA
technological feasibility and lead time for not technologically feasible within the to reject the argument that the March 6,
those manufacturers to comply with the available lead-time giving consideration 2008 Denial tolled the lead time
subject greenhouse gas standards.’’ Document to the cost of compliance. countdown. CARB noted that it always
ID No. EPA–HQ–OAR–2006–0173.3601 at 26.
That statement remains true today, and F. Other Issues Related to Consistency maintained that it intended to enforce
stands in stark contrast to the renewed With Section 202(a) the GHG standards from their start point
demonstration CARB has made in this for the 2009 MY, discussed how it
reconsideration proceeding.208 1. Impact of EPA’s March 6, 2008 Denial pursued promptly all available avenues
on Lead Time to overturn the March 6, 2008 Denial,
Regarding the lead time provided by
California to meet the near-term and the In EPA’s February 12, 2009 Federal and noted that the denial was all but
mid-term and later standards, the Register notice, EPA specifically sought guaranteed to be revisited because its
commenters have not met their burden comment on the effect of the March 6, waiver request was supported by both
to show that the lead time is 2008 Denial on whether CARB’s GHG candidates for President in 2008.
insufficient. California provided Additionally, CARB argues that any
manufacturers 4–5 years before the near- 209 Regarding lead time, some industry comments period the March 6, 2008 Denial was in
term GHG standards would go into
suggest that EPA should count lead time from the effect was not significant compared to
time the waiver is granted. EPA, however, believes the four to ten years of lead time
effect and 8–9 years before the later that lead time should run from the time the rule is
standards, giving substantial time for adopted by California. As EPA made clear in its available to the manufacturers, and that
development of technologies to meet the waiver decision for California’s standards regulating technological advancements continued
standards. The industry commenters
medium-duty motor vehicles (59 FR 48625 (Sept. to appear during the denial period.
22, 1994), Decision Document at 39–41), lead time The manufacturers argue that EPA’s
have not shown that this lead time was should generally be measured from the point at
insufficient, both for the near-term GHG which California adopts its regulations. At that earlier denial was reasonably relied
standards, that were based on point, the regulations, and their obligations on upon by manufacturers, that the denial
technologies already known and
regulated parties, are clear. EPA measures lead time tolled or suspended lead time and
for its regulations from the time of promulgation, allowed them to stop working towards
developed, as well as for the mid-term which is analogous to California’s adoption of its
GHG standards, where CARB provided regulations. EPA review of CARB waiver requests compliance, which affects the adequacy
a reasonable pathway to be followed— causes no more uncertainty than judicial review of of the lead-time for California’s
answering theoretical objections,
EPA regulations. In addition, California and standards. This amounts to an argument
regulated parties do not know when EPA will make that they reasonably had the
a final decision on a request for waiver of
opportunity to stop work towards
207 California Air Resources Board, EPA–HQ– preemption, so California would have little ability
OAR–2006–0173–9006 at 27. to evaluate lead time at the time it adopts its
208 California Air Resources Board, EPA–HQ– standards if lead time were based on a future action 211 Alliance of Automobile Manufacturers, EPA–
OAR–2006–0173–9006 at 29. CARB also noted, that by another entity the timing of which is uncertain. HQ–OAR–2006–0173–8994.2 at 27, and, Alliance of
in the final efforts to persuade EPA to deny this In any case, the commenters have not shown that International Automobile Manufacturers, EPA–HQ–
waiver, waiver opponents cited policy arguments the amount of lead time provided from the date of OAR–2006–0173–9005.2 at 16, Note 4.
against the waiver, such as the preference for a the waiver is insufficient. 212 Alliance of Automobile Manufacturers, EPA–
uniform national standard to avoid a ‘‘patchwork’’ 210 California Air Resources Board, EPA–HQ– HQ–OAR–2006–0173–8994.2 at 23–25, see also
of state regulations, rather than any attack on the OAR–2006–0173–0010.14 at 80–83 and, EPA–HQ– National Automobile Dealers Association, EPA–
technological feasibility of the standards. OAR–2006–0173–0004.1 at 39–40. HQ–OAR–2006–0173–8956.1, at 10–12.
compliance at that point if they chose. compliance with the annual fleet- concern raised by manufacturers over
However it does not change the basic averaging requirements for the 2009 MY their potential reliance upon EPA’s
issue before EPA: whether the standards by the end of 2009, based on previous waiver denial.
manufacturers, as opponents of the sales throughout the year. The fact that
2. Endangerment of Public Health or
waiver, demonstrated that the standards some conduct which occurred in 2009
Welfare
are not consistent with section 202(a) prior to the grant of the waiver is
because of inadequate lead time. relevant to determining compliance a. Is it Appropriate To Review
Based on a review of the entire record, with the 2009 MY obligation, after the Endangerment of Public Health or
and even assuming the reasonableness end of the model year, does not by itself Welfare Under the ‘‘Consistency With
of the manufacturers’ claim that they make the obligation to comply with the Section 202(a)’’ Criterion?
could have reasonably stopped work 2009 MY standards a retroactive legal EPA has traditionally stated that a
towards compliance upon the March 6, obligation. In any case, even if a waiver state standard would be inconsistent
2008 Denial, the industry commenters for the 2009 MY was considered to with section 202(a) if there is
have not shown that the lead time impose retroactive obligations, EPA has inadequate lead time to permit the
provided under these circumstances the authority in an adjudication to take development of the necessary
was insufficient. This is particularly such action under appropriate technology, given the cost of
true regarding the near-term GHG circumstances.214 compliance within that time, or if the
standards, which were based on Under these circumstances, all of the Federal and State test procedures
technologies already known and evidence presented to date indicates impose inconsistent certification
developed. But this is also true for the that manufacturers will be in requirements.215 The legislative history
mid-term GHG standards, where CARB compliance with the 2009 standards. of this provision and judicial precedent
provided a reasonable pathway to be EPA is granting the waiver for 2009 and indicate that technological feasibility in
followed—answering theoretical later years. However, out of an the lead time provided was intended to
objections, identifying major steps abundance of caution, and since any be the primary focus of this criterion.216
needed to refine technology, and delay in granting this waiver stems from However, several industry
offering plausible reasons for predicting EPA’s prior March 2008 Denial, EPA is commenters have suggested that in the
successful technologies.213 I believe that imposing one specific limitation context of this waiver, it is also
this is borne out by the evidence designed to ensure that CARB not hold appropriate for EPA to include
submitted to the record by CARB and a manufacturer liable or responsible for endangerment to public health or
the NRDC, which show industry-wide any noncompliance civil penalty action welfare in its evaluation of consistency
compliance with the near-term GHG that could be caused by emission debits with section 202(a). They note the
standards and with future-term generated by a manufacturer for the language in section 202(a)(1) of the
compliance attainable using technology 2009 model year. For the 2009 model Clean Air Act that requires the
developments as well as early credits. year, CARB can fully implement and Administrator to promulgate standards
Manufacturers have not come forward enforce its regulations, including ‘‘applicable to the emission of any air
with evidence to show that they cannot implementation of CARB’s Executive pollutant * * * which in his judgment
feasibly achieve the near-term or mid- Orders for 2009 model year families cause, or contribute to, air pollution
term GHG standards, based on lead issued both before and after the date of which may reasonably be anticipated to
time. Although the industry trade today’s waiver, as described below. endanger public health or welfare.’’
association comments generally While debits from model year 2009 may While acknowledging the limits of
discussed manufacturers’ reliance on offset credits generated in later years, EPA’s traditional review under the
the EPA waiver denial to suspend or and reduce the amount of credits ‘‘consistency with section 202(a)’’
stop planning for California compliance, available to a manufacturer, any debits criterion, they note that previous
no manufacturer came forward and from model year 2009 may not be used waivers have generally reviewed
asserted that it actually stopped as a basis for holding a manufacturer in standards designed to reduce
planning. Whatever disruptions may or noncompliance and no civil penalties concentrations of air pollutants, like
may not have occurred as a result of the may be assessed based on such debits. criteria air pollutants that EPA has
denial, near-term standards have clearly Other than that restriction, CARB may listed under section 108 of the CAA, for
been shown to be feasible and mid-term fully implement and enforce, and which an endangerment finding
standards are clearly feasible given the manufacturers may use the GHG required under section 202(a)(1) has
lead time provided, even taking account standards program as promulgated, such already been made. Even standards
of the denial. that CARB may implement certification regulating PM and formaldehyde, for
Regarding implementation and for MY 2009 motor vehicles, and may which EPA has granted waivers,
enforcement by CARB for the 2009 MY, grant manufacturers credits that can be involved pollutants that had been
manufacturers claim that approving the used for future obligations. This identified by EPA, or by Congress in the
waiver for that year would be a restriction on handling of any possible Clean Air Act, as needing regulation.
retroactive grant of a waiver and would debits appropriately limits any potential Thus, the question of endangerment was
be improper. However, approval of the not in dispute in previous waivers. By
waiver for the 2009 MY technically 214 Securities and Exchange Commission v.
contrast, EPA has not made any final
would not be a retroactive action. EPA Chenery Corp., 332 U.S. 194 at 203 (‘‘That such
action might have a retroactive effect was not
decision regarding whether emissions of
would not be determining that past GHGs from new motor vehicles cause or
necessarily fatal to its validity. Every case of first

conduct was or was not lawful when it impression has a retroactive effect, whether the new contribute to air pollution that may
occurred in the past, or rewriting past principle is announced by a court or by an reasonably be anticipated to endanger
legal obligations. The legal obligation at administrative agency. But such retroactivity must
be balanced against the mischief of producing a
public health or welfare (this two-part
issue is still a future obligation— result which is contrary to a statutory design or to
215 68 FR 19811, 12 (April 22, 2003).
legal and equitable principles. If that mischief is
213 EPAnotes here (again) that lead time begins greater than the ill effect of the retroactive 216 MEMA III, 142 F. 3d at 463; Ford, 606 F. 2d
when California promulgates its standards, not application of a new standard, it is not the type of at 1296, n. 17, 1297; H.R.Rep, No. 728, 90th Cong,
when the waiver is granted. retroactivity which is condemned by law.’’). at 22–23.
test is hereafter referred to as regulation under section 202(a), EPA To the extent endangerment is
‘‘endangerment’’). This is a requirement cannot grant a waiver to California. relevant to whether California’s
for EPA to issue regulations under They also state that the fact that the standards are consistent with section
section 202(a).217 Thus, the commenters current California waiver request 202(a), this criterion should be narrowly
state that there is an issue for review in pertains to global climate change interpreted and should require more
this waiver under the consistency with emissions, rather than to conventional than the fact that EPA has not yet made
section 202(a) criterion that was never pollutants, means that EPA should not a final decision concerning
relevant for EPA’s review of previous give California’s waiver request a endangerment. Denial of a waiver based
waiver requests. presumption of consistency under on this issue should require either a
In contrast, CARB states that no new Section 209(b)(1)(C). previous determination by EPA on the
test of consistency with section 202(a) is In contrast, commenters supporting merits that the endangerment test has
warranted or permissible. CARB argues the waiver request contend that EPA’s not been met, or a demonstration in this
that precedent shows that nothing more lack of a determination on proceeding by the opponents of the
than technological feasibility and test endangerment and lack of GHG waiver that EPA could not find that the
compatibility is required under section emission regulations is not relevant to endangerment test is met. Lack of a final
209(b)(1)(C). EPA’s consideration of the waiver decision by EPA on this would not be
I find that in this instance, I do not request. CARB notes in its comments sufficient to deny the waiver. Those
need to resolve the issue of whether it opposing the waiver cannot simply
that EPA may not find inconsistency on
is appropriate to address the issue of point to an open question regarding the
the ground that EPA must first make its
endangerment under the consistency issue at hand—on the contrary, they
own endangerment finding on GHG
with section 202(a) criterion of section must come forward with evidence
emissions before granting California’s
209(b). This is because in this instance, demonstrating that California’s
waiver request. CARB suggests that
I find that even if the issue of standards are not consistent with
Massachusetts v. EPA’s contemplation
endangerment is relevant to EPA’s section 202(a).219
of coordinated activity at the federal
evaluation of consistency with section In order to regulate emissions of a
level is entirely irrelevant to the waiver.
202(a), those opposing the waiver have particular pollutant under section
CARB also provides significant
not met their burden of proving that 202(a), EPA must review several issues,
California’s regulations are inconsistent discussion on this issue providing
including whether the emissions of the
with section 202(a) based on that evidence that, according to CARB,
pollutant from motor vehicles cause, or
concern. shows that global climate change does
contribute to, air pollution which may
endanger public health and welfare.
b. Parties Opposing the Waiver Have reasonably be anticipated to endanger
Manufacturer suggestions that EPA public health or welfare, and whether
Not Met Their Burden of Showing Lack should deny California’s request
of Endangerment to Public Health or the standards are technologically
because it has not yet made a finding of feasible within the lead time provided.
Welfare endangerment mistake the burden of EPA has to make such determinations as
As noted above, parties opposed to a proof that opponents of a waiver are part of lawfully adopting GHG standards
waiver have the burden of proof to show obliged to meet before EPA must deny under section 202(a). However, lack of
that one of the findings under section a waiver. To deny a waiver based on either kind of action by EPA is not by
209(b)(1) should be made. To the extent section 209(b)(1)(C), EPA must find that itself evidence that GHG standards are
that the two-part endangerment test is California’s standards ‘‘are not in fact inconsistent with section 202(a).
relevant to a determination of consistent with section 202(a).’’ It is not The fact that EPA has not yet made
consistency with section 202(a), those enough that EPA has not made a either determination, in the context of
opposing a waiver must affirmatively decision on the subject of whether GHG its own rulemaking, is by itself not a
demonstrate that California’s standards standards are authorized under section basis to deny a waiver.
are inconsistent with this criterion. 202(a). To deny a waiver the Congress understood that California
They have failed to do so in this Administrator must affirmatively find may act a ‘‘laboratory for innovation’’ in
instance. that the standards are inconsistent with the regulation of motor vehicles, and
Commenters who claim that EPA section 202(a). The initial presumption intended section 209 to allow such
should deny the waiver generally base of consistency is not dependent on the innovation.220 Yet the ability of
their claim on the fact that EPA has not pollutants being regulated, as suggested California to encourage such innovation
yet determined whether greenhouse gas by commenters—the presumption is would be greatly compromised if EPA
emissions from new motor vehicles provided for in the statute.218 Regarding were to determine that California could
cause or contribute to air pollution endangerment, therefore, I believe that, take no action under section 209 unless
which may reasonably be anticipated to to the extent it is even an appropriate EPA had already made all of the
endanger public health or welfare, or criterion under section 209(b)(1)(C), it necessary determinations regarding the
promulgated greenhouse gas standards would not be appropriate to deny a consistency of its own standards in the
pursuant to section 202(a). They claim waiver request unless it is affirmatively context of its own regulation under
that unless and until EPA makes such demonstrated that the pollutants being section 202(a).
a determination that authorizes regulated do not ‘‘cause, or contribute In similar instances where EPA
to, air pollution which may reasonably reviewed California standards and EPA
217 On April 24, 2009, EPA published a notice
be anticipated to endanger public health had not promulgated similar standards,
proposing to find that elevated concentrations of or welfare.’’

greenhouse gases in the atmosphere are reasonably
EPA has determined that the absence of
anticipated endanger the public health and welfare EPA standards does not by itself
of current and future generations and also 218 See MEMA I, 627 F. 2d at 1121 (‘‘The language preclude a waiver or prevent its ability
proposing to find that emissions of carbon dioxide, of the statute and its legislative history indicate that to review California’s standards under
methane, nitrous oxide, and hydrofluorocarbons California’s regulations, and California’s
from new motor vehicles and new motor vehicle determination to comply with the statute, when
section 209. Any comparisons necessary
engines are contributing to this air pollution under presented to the Administrator are presumed to
219 See MEMA I, 627 F. 2d at 1126.
section 202(a) of the Clean Air Act. 74 FR 18885, satisfy the waiver requirements and that the burden
18886. of proving otherwise is on whoever attacks them.’’). 220 See MEMA I, 627 F. 2d at 1111.
under section 209 would simply take should be considered if and when EPA In this case, opponents of the waiver
account of the absence of EPA takes action. Otherwise, the waiver have not met their burden of proving
regulations, i.e., the comparison would could be denied now, even though in that EPA could not find that emissions
be California standards to the absence of the future it could be determined that it of GHGs from new motor vehicles cause
EPA standards. For example, under the should have been granted. This would or contribute to air pollution which may
similar procedures of section 209(e), tend to reverse the statutory reasonably be anticipated to endanger
EPA authorized California to enforce its presumption of the grant of waiver public health or welfare. To the
standards on evaporative emissions for unless opponents demonstrate it should contrary, while California and others
small nonroad engines despite the fact be denied for certain specific reasons. have provided a great deal of evidence
that EPA had not yet promulgated Instead, it would be denied because of regarding the dangers posed by GHGs,
evaporative standards for such some future possible action that may or opponents of the waiver have not
engines.221 In any case, commenters’ may not occur, and may be delayed for provided significant evidence that
discussions of ‘‘comparisons to federal an unspecified period of time. Basing a emissions of GHGs from motor vehicles
standards’’ in this context is more suited denial on the possibility of events that do not cause or contribute to air
to review of section 209(b)(1)(A), which may happen in the future is not pollution that can reasonably be
discusses comparisons between consistent with Congress’ goal to anticipated to endanger public health or
California and applicable federal preserve the broadest possible welfare. The recent EPA proposal to
standards. Section 209(b)(1)(C) concerns discretion to California. A more prudent find that elevated concentrations of
whether California standards are approach is to take action based on the greenhouse gases in the atmosphere are
consistent with section 202(a). This record at hand, with the possibility of reasonably anticipated to endanger
criterion is not dependent on the reviewing such action in the future if public health and welfare, and to find
existence of comparable federal facts change that merit such a review. that emissions of carbon dioxide,
standards.222 As discussed above in section IV.C.1, methane, nitrous oxide, and
An additional reason for interpreting EPA may withdraw a waiver in the hydrofluorocarbons from new motor
the waiver criterion this way, and not future if circumstances make such vehicles and new motor vehicle engines
determining inconsistency with section action appropriate. are contributing to this air pollution
202(a) based on lack of an EPA final It is important to remember that the under section 202(a) of the Clean Air
decision on an issue, is that EPA may criterion being reviewed under section Act is further indication that opponents
always take action in the future that 209(b)(1)(C) is consistency with section of the waiver did not meet their burden
may impact the criteria for a waiver. For 202(a) and not consistency with EPA of proof on this issue.224 Thus, I cannot
example, if in the future EPA standards. EPA has considerable find that those opposing the waiver
promulgated standards that were more deference within section 202(a) to have met their burden of proving that
stringent than California’s standards, promulgate the regulations it believes California’s GHG standards are not
this could implicate the are most reasonable. The test for EPA consistent with section 202(a) for
‘‘protectiveness’’ criterion of section under section 209(b)(1)(C) is not reasons of the endangerment test.225
209(b)(1)(A). The possibility of such whether California standards are the
future events should not be used as a G. Section 209(b)(1)(C) Conclusion
same as the standards that EPA has
reason to deny a waiver now. Instead, Based on its review of the information
promulgated or would promulgate
the impact of a future EPA action in the docket of this proceeding, I have
under section 202(a), but whether the determined that the opponents have not
221 71
opponents of the waiver have met their met their burden to demonstrate that the
FR 75536 (December 15, 2006).
222 Commenter Alliance appears to put much
burden to show, based on the record CARB GHG standards are not consistent
weight on the existence of section 202(b)(3). That before the Agency, that the standards with section 202(a). Therefore, I am
subsection was added in 1977 to ensure that where promulgated by California could not unable to find that the CARB motor
EPA provides a waiver for vehicle standards, lawfully be promulgated in a manner
vehicles meeting California standards can still vehicle GHG emission standards are not
receive a Federal certificate and be sold in consistent with section 202(a). As a consistent with section 202(a) of the
California and other states where California prior Administrator has stated: Act.
standards are applicable. This was needed as some
of the California standards may not individually be
I would feel constrained to approve a
California approach to the problem which I VII. Additional Issues Raised
as stringent as federal standards, given the ‘‘in the
aggregate’’ protectiveness provision. See discussion might also feel unable to adopt at the federal A. EPA’s Administrative Process for
in Ford v. EPA, 606 F.2d 1293 (DC Cir. 1979). level in my own capacity as a regulator. The Evaluating California’s Waiver Request
Without this provision, where more stringent whole approach of the Clean Air Act is to
individual federal standards applied, vehicles force the development of new types of 1. Public Comment Process
complying only with California standards could not emission control technology where that is
receive a federal certificate of conformity. The Section 209(b)(1) states in part that
needed by compelling the industry to ‘‘catch
language therefore is designed to deal with
up’’ to some degree with newly promulgated ‘‘The Administrator shall, after notice
situations where federal standards exist, and may and opportunity for public hearing,
be more stringent than California’s. It was not standards. Such an approach * * * may be
intended to add or imply any new substantive attended with costs, in the shape of a waive application of this section * * *’’
requirements regarding the existence of federal reduced product offering, or price or fuel In response to this language, EPA has
standards. Similarly, Alliance’s reference to use of economy penalties, and by risks that a wider consistently announced in the Federal
the word ‘‘the’’ in section 202(b)(2) is directed number of vehicle classes may not be able to Register the opportunity for a public
towards the first criterion of section 209(b), not the
third. In any case, the argument raised could at
complete their development work in time.
Since a balancing of these risks and costs
224 74 FR 18885 (April 24, 2009).

most mean that section 209(b)(2) is not applicable
to this waiver request. California does not rely on against the potential benefits from reduced 225 Some commenters have indicated that if EPA
section 209(b)(2) in its request. Also, as noted emissions is a central policy decision for any chooses not to deny the waiver based on lack of an
above, EPA has long held that the absence of regulatory agency under the statutory scheme endangerment finding, EPA should hold its
comparable federal standards would not outlined above, I believe I am required to decision in abeyance until it makes a finding.
automatically result in a denial of a waiver request give very substantial deference to California’s However, given the burden of proof on opponents
under the ‘‘in the aggregate’’ criterion because EPA of a waiver, and the lack of any significant evidence
judgments on this score.223
believes the appropriate comparison is between the to the contrary in the record on this issue, I believe
protectiveness of the California standards as it is not appropriate to delay further a decision on
compared to the absence of the federal standards. 223 40 FR 23104. this matter.
hearing for any waiver request received in the waiver proceeding are the rights standards. Unlike a license or permit
from CARB. As a general matter EPA of the State of California to adopt and applicant, the burden of proof is on the
has also offered an opportunity for enforce its state regulations. The other opponents of the waiver and EPA must
written comment which has opened on legal impacts flow from the operation of make an affirmative finding of one of
the date of the Federal Register notice other laws, once the waiver is granted. the three waiver criteria in order to deny
and closed on a date after the public Therefore EPA believes that its waiver California’s waiver request. On the face
hearing. As part of EPA’s public proceedings and actions therein should of the Act, what California receives from
hearings, the presiding officer has be considered an informal adjudication EPA is a waiver, not a license or permit.
consistently stated that the hearing was rather than a rulemaking. EPA has been Contrary to commenter’s claim, APA
being conducted in accordance with conducting its waiver proceedings in section 558 does not require the
section 209(b) of the Clean Air Act and this manner for decades, and while ‘‘adversary process’’ described in
that any interested parties have the Congress has amended provisions in sections 556 and 557 for this action.
opportunity to present both oral section 209 on two separate occasions, APA section 558 requires the agency to
testimony and written comments. Congress has not chosen to alter EPA’s ‘‘complete proceedings required to be
EPA has received comment suggesting administrative requirements. Instead, conducted in accordance with sections
that EPA has failed to provide any Congress has expressed support for 556 and 557 of [the APA] or other
systematic procedure for commenters EPA’s practice in applying and proceedings required by law.’’ 5 U.S.C.
opposing the waiver to rebut the interpreting section 209(b).227 558(c) (emphasis added). By complying
comments of those commenters EPA disagrees with the suggestion with the procedural requirements of
supporting the waiver. Because that its waiver proceedings are governed section 209(b) of the Act, EPA is
opponents bear the burden of proof, this by section 554 of the Administrative complying with both the CAA and any
commenter believes that EPA should Procedure Act (APA) or any other relevant standards set in the APA.
not treat the waiver proceeding like an provision of Title 5 of the United States Regardless, the approval provision in
informal rulemaking but instead clearly Code, including sections 556, 557 and APA section 558 was not meant to
announce what evidence is admissible 558. Section 554 of the APA, regarding establish additional procedural
and applicable burdens of proof and formal adjudications, only applies to requirements beyond those required by
evidentiary procedures, such as order of adjudications required by statute to be law. Instead, the goal of the approval
proof and argument that parties must determined on the record after an provision of the section is to ensure
follow.226 opportunity for an agency hearing. ‘‘that an agency shall hear and decide
EPA’s waiver proceedings and actions Section 209(b)(1) merely states that the licensing proceedings as quickly as
under section 209(b)(1) are informal Administrator shall provide notice and possible.’’ Attorney General’s Manual of
adjudications. In a waiver proceeding, opportunity for a public hearing and the APA (1947), 89. Horn Farms is not
EPA receives a request from one entity does not include language stating that applicable to this situation, as the dicta
(CARB) that is presenting an existing EPA’s decision shall be on record after statement regarding APA section 558
regulation established as a matter of an opportunity for a hearing. applied only to section 558’s provisions
California law. The request is for a Conversely, other provisions in the regarding revoking a previously granted
waiver of preemption for that party, so Clean Air Act, including section license, which is not at issue here.
it may adopt and enforce the specific 205(c)(1) specifically state that EPA’s EPA believes that only those actions
regulations. In deciding this request, actions shall be made on the record after or sections of the Clean Air Act that
EPA interprets and applies the three opportunity for a hearing in accordance specifically reference section 554 or
specific criteria established by the Act, with sections 554 and 556 of title 5 of otherwise state that EPA’s decision must
and under this provision EPA is the United States Code. Section be determined on the record after an
required to grant the waiver unless EPA 205(c)(1) also requires the Administrator opportunity for a hearing are subject to
makes one of the three specified to issue reasonable rules for discovery the formal adjudication requirements of
findings. EPA applies the pre-existing and other procedures for hearings. the Administrative Procedure Act. EPA
law, section 209(b), to a specific request Any potential action on the waiver nevertheless, as part of good
covering a specific regulation or request is not subject to the administrative practice, provides every
regulations, and applies the three requirements of APA section 558(c). interested party the opportunity to
statutory criteria to the facts of the Any potential action by EPA would not present oral testimony and provide
specific request. The decision to grant or constitute granting a ‘‘license’’ to written comment based on a Federal
deny a waiver changes the legal rights California. The fundamental purpose of Register notice that clearly sets out the
of the party before EPA, California. If section 209(b) is to waive application of criteria by which EPA will evaluate
EPA grants the waiver, then CARB may the preemption set forth in section CARB’s waiver requests. EPA believes
enforce its state regulations. In that case, 209(a) of the Act, and is not a formal all commenters, including opponents of
the rights and obligations of other approval of the type contemplated in the waiver, have had ample opportunity
parties, for example, the manufacturers, the APA. As noted previously, CARB to comment and meet their applicable
are affected by the operation of the state must merely submit its regulations to burdens of proof. Opponents of CARB’s
regulation that is no longer preempted. EPA with a finding that its standards, in GHG regulations and of its waiver
In addition, under a separate statutory the aggregate, are as protective of public request have had ample opportunity to
provision, other States may then adopt health and welfare as applicable federal present their viewpoints during the
and enforce California’s’ standards, course of CARB’s rulemaking and EPA’s
under their state law. While these

227 The Committee on Interstate and Foreign waiver proceeding. First, as noted in the
Commerce that drafted the amendments to section March 6, 2008 Denial, in response to
subsequent impacts clearly affect the 209 in 1977 stated that the amendment was
legal rights and obligations of various ‘‘intended to ratify and strengthen the California several requests to extend the comment
parties, the only legal rights and waiver provision and to affirm the underlying period during EPA’s initial
obligations directly determined by EPA intent of that provision, i.e., to afford California the consideration of CARB’s waiver request
broadest possible discretion in selecting the best EPA indicated that consistent with past
means to protect the health of its citizens and the
226 Alliance of Automobile Manufacturers, EPA– public welfare.’’ (H.R. Rep. No. 294 301–302 waiver practice, it would continue, as
HQ–OAR–2006–0173.8994 at C–2 through C–4. (1977)). appropriate, to communicate with any
stakeholders in the waiver process after findings. The Agency set forth sufficient California standards by an opt-in
the comment period ended and that it reason for initiating a reconsideration state.230
would continue to evaluate any process, and is under no obligation to
B. Scope of EPA’s Waiver Review
comments submitted after the close of provide anything further in the Notice
the comment period to the extent announcing the process. EPA clearly set 1. Relevance of the Energy Policy and
practicable.228 EPA did not receive any forth the criteria and issues it would Conservation Act (EPCA) to the Waiver
request to extend the written comment review in the notice for reconsideration, Decision
period during the reconsideration of which covered all of the issues relevant In EPA’s initial Federal Register
CARB’s request. Opponents have also under section 209(b). It was unnecessary notice of California’s request for a
had the opportunity to submit lengthy to provide any further justification for waiver, we requested comment on
comments during two separate comment its reconsideration beyond that which whether the Energy Policy and
periods (one of which occurred well was supplied in the notice. Commenters Conservation Act (EPCA) fuel economy
after CARB had submitted all of their have failed to disclose that any provisions are relevant to EPA’s
initial comments) and to testify at three procedural error by EPA prejudiced consideration of the request and to
separate public hearings. The regulated them in any way, or that EPA’s February California’s authority to implement its
industry has in its possession, along 12, 2009 notice limited their ability to vehicle GHG regulations.231
with CARB, the necessary information fully comment on any of the issues EPA received many comments
to adequately comment on whether the relevant to California’s request for a regarding EPCA and its effect, or lack
GHG emission standards are waiver. thereof, on this proceeding. Several
technologically feasible and also what commenters stated that the provisions of
3. Is a Waiver Required Before
CARB has said about the protectiveness EPCA are not relevant to EPA’s waiver
California or Section 177 States Adopt
of its standards from both CARB’s California’s Motor Vehicle Emission determination. They note that the
rulemaking phase and from earlier Standards? language of section 209(b) limits the
comments. Opponents have the same authority of EPA to deny a waiver to
access to the necessary information in lllSeveral commenters have
three criteria and does not reference
order to formulate comments in regard suggested that section 209(a), which
inconsistency with EPCA (or with any
to the second waiver criterion at section provides that no ‘‘political subdivision
shall adopt or enforce any standard,’’ other statute, other than section 202(a)
209(b)(1)(B). of the Clean Air Act) as a basis for
should be read to mean that neither
2. EPA’s Reconsideration Process California nor any Section 177 state may denial. One commenter noted that EPCA
‘‘adopt’’ a motor vehicle emission was already in existence when Congress
Upon receiving CARB’s January 21,
emissions regulation before EPA grants strengthened California’s authority to
2009 request for reconsideration of the
a waiver. Since lead time is an issue adopt motor vehicle emission standards,
March 6, 2008 waiver Denial, EPA
under section 209(b)(1)(C), see section and Congress indicated no intent to
published a notice on February 12, 2008
VI, EPA believes it appropriate to clarify limit such authority based on EPCA.
notifying the public that EPA was
this issue especially since EPA has Some commenters noted the Supreme
reconsidering its March 6, 2008 Denial,
previously stated that lead time runs Court decision in Massachusetts v. EPA,
and was providing an additional hearing
from the date of adoption of the which stated that EPCA does not license
and the opportunity to submit comment
regulation. Similarly, because of the EPA to shirk its environmental
on all issues relevant to the waiver,
number of states that have already responsibilities under the Clean Air Act.
including inviting comment on certain Several commenters also provided
specific criteria and questions. adopted CARB’s GHG emission
standards EPA believes it appropriate to arguments regarding their view that
EPA received comment suggesting
clarify this issue for purposes of section California’s GHG standards were
that the February 12, 2009 notice failed
177 as well. consistent with the provisions of EPCA.
to inform the public of relevant issues Other commenters stated that
and contained misleading statements EPA believes that section 209(b) on its
face provides the necessary clarification California’s standards violate EPCA.
and, therefore, the Agency must issue a Several of these commenters noted that
new notice before proceeding with any as to whether California should adopt
its regulations before or after receiving EPA and court precedent regarding
reconsideration of the denial.229 This section 209(b) indicate that EPA cannot
commenter notes the EPA fails to a waiver from EPA. Section 209(b)(1)
clearly envisions EPA commencing a rule on EPCA preemption under section
discuss the legal standards EPA believes 209(b). However, the commenters state
it must meet to justify reconsideration of waiver process after California has
submitted standards that have been that if EPA does consider EPCA-related
a major policy action including the legal issues in this waiver proceeding, it must
standards EPA believes governs how it adopted. Section 209(b)(1) states in part
‘‘The Administrator shall, after notice rule that California’s standards violate
is to reopen a previously decided EPCA. One commenter states that recent
matter. EPA believes this commenter and opportunity for public hearing
waive application of this section to any court cases have created confusion
fundamentally misunderstands the regarding the scope and effect of EPA
purpose of the February 12, 2009 notice. State which has adopted standards
* * *’’ (Emphasis added). It would be waivers. The commenters state that if
EPA’s February 12, 2009 notice did not EPA decides not to address the issue of
constitute a final decision to change the illogical, if not impossible, for EPA to
analyze the criteria in section 209(b) if EPCA preemption in this proceeding, it
Agency’s position with regard to
California’s greenhouse gas waiver it does not have a final regulation upon
230 See Motor Vehicle Manufacturers Association

request, and did not implicate any which to do the analysis. It would not
v. New York Dept. of Environmental Conservation,
arguable requirement to supply a be appropriate for EPA to analyze non- 17 F.3d 521, 533–34 (2d Cir. 1994)—‘‘[T]he plain
justification for changing previous final documents that may or may not language of 177, coupled with common sense,’’
interpretations of law or evidentiary become final and that may or may not leads to the conclusion that other states ‘may adopt
be revised prior to becoming final. the [California] standards prior to the EPA’s having
granted a waiver, so long as [the state] makes no
228 73
FR 12156, 12157 (March 6, 2008). Similarly, the courts have long attempt to enforce the plan prior to the time when
229 Utility
Air Regulatory Group, EPA–HQ–OAR– interpreted the Clean Air Act to the waiver is actually granted.’’
2006–0173–8690 at 2–5. authorize pre-waiver adoption of 231 72 FR 12261.
needs to explicitly state that it is not adopted by other states. EPCA however, CAFE Standards’’ announcing EPA and
addressing the issue of express sets a single national fuel economy DOT’s intent to work in coordination to
preemption under EPCA or conflict with standard and is designed to prevent a propose standards for control of
EPCA, and that those issues are best left fracturing of the marketplace into emissions of greenhouse gases and for
to the courts. individual state programs. Commenters fuel economy, respectively. If proposed
As EPA has stated on numerous argue that manufacturers will have at and finalized, these standards would
occasions, section 209(b) of the Clean least 15 different fleets they will have to apply to passenger cars, light-duty
Air Act limits our authority to deny balance for purposes of fuel economy trucks, and medium-duty passenger
California’s requests for waivers to the and greenhouse gas emissions flowing vehicles (light-duty vehicles) built in
three criteria therein, and EPA has from the fleet-average emission model years 2012 through 2016. EPA
refrained from denying California’s requirements of each state. believes that if these standards are
requests for waivers based on any other Manufacturers also are concerned that ultimately adopted, they would
criteria. As EPA noted in its initial there are significant differences between represent a harmonized and consistent
decision denying California’s waiver manufacturers’ fleets in California and national policy pursuant to the separate
request, the decision was ‘‘based solely those in individual section 177 states statutory frameworks under which EPA
on the criteria in section 209(b) of the creating unnecessary compliance and DOT operate.
Clean Air Act and this decision does not burdens. The commenters suggest that
attempt to interpret or apply EPCA or 3. What Impact Does Granting California
the federal government should establish
any other statutory provision.’’ 232 a Waiver for Its GHG Emission
a single, national program for regulation
Where the Court of Appeals for the Standards Have on PSD Requirements
of vehicle greenhouse gas standards and
District of Columbia Circuit has for GHGs?
fuel economy.
reviewed EPA decisions declining to EPA also received comment stating Several commenters suggest that there
deny waiver requests based on criteria that to the extent the auto industry is would be a major consequence if an
not found in section 209(b), the court arguing that a patchwork is created EPA waiver were to trigger other
has upheld and agreed with EPA’s because of differences between fleet requirements under the Act, including
determination.233 composition in different states, that Prevention of Significant Deterioration
As many of the commenters note, argument lacks merit and is irrelevant to (PSD) requirements, and should it grant
evaluation of whether California’s GHG this waiver proceeding. Citing an EPA the waiver, EPA should state clearly that
standards are preempted, either waiver decision from 1971, this the waiver does not render GHGs
explicitly or implicitly, under EPCA, is commenter notes that claims such as the ‘‘subject to regulation’’ under the Act.
not among the criteria listed under patchwork issue are not appropriate in EPA also received comment suggesting
section 209(b). EPA may only deny a waiver proceeding since EPA’s that the question of when and how
waiver requests based on the criteria in consideration of evidence submitted GHGs should be addressed in the PSD
section 209(b), and inconsistency with during a waiver proceeding is limited by program or otherwise regulated under
EPCA is not one of those criteria. In its relevance to the three waiver criteria the Act should instead be addressed in
considering California’s request for a EPA must consider under section 209. separate proceedings dedicated to
waiver, I therefore have not considered This has led EPA to previously reject evaluating the complicated issues and
whether California’s standards are arguments that are not specified in the impacts associated with those issues.
preempted under EPCA. As in the statute as grounds for denying a EPA agrees that these issues are not
March 2008 decision, the decision on waiver.234 relevant to the waiver decision criteria,
whether to grant the waiver is based Similar to EPA’s response to the and are most appropriately addressed in
solely on the criteria in section 209(b) EPCA claims noted above, EPA may a separate forum. EPA is not addressing
of the Clean Air Act and this decision only deny waiver requests based on the these issues in today’s decision.
does not attempt to interpret or apply criteria in section 209(b). The actions of
EPCA or any other statutory provision. VIII. Decision
other states relating to the adoption of
EPA takes no position regarding the California GHG emission standards After review of the information
whether or not California’s GHG is not a factor I may consider under submitted by CARB and other parties to
standards are preempted under EPCA. section 209(b). The actions of such this Docket, I find that those opposing
states are authorized under a separate the waiver request have not met the
2. Do California’s GHG Emission
section of the Act, section 177, and must burden of demonstrating that
Standards Create an Impermissible
conform to the requirements of that California’s regulations do not satisfy
‘‘Patchwork’’?
section, including identicality. Section any of the three statutory criteria of
Under section 177 of the Act, other section 209(b). For this reason, I am
209(b) does not authorize me in
states may adopt California new motor granting California’s waiver request to
reviewing a waiver request to consider
vehicle emission standards under enforce its motor vehicle GHG emission
the impact of actions or potential
certain conditions. In this waiver regulations.
actions taken by other states under
proceeding EPA received comment My decision will affect not only
section 177 of the Act.235 I therefore will
suggesting that sections 202(a), 209(a) persons in California but also persons
not consider this claim in determining
and 177 of the Act establish a regulatory outside the State who would need to
whether to grant California’s waiver
framework designed to foster a national comply with California’s GHG emission
request.
marketplace for vehicles while It is important to note that on May 19, regulations. For this reason, I hereby
recognizing California’s ability to 2009, EPA and the Department of determine and find that this is a final
establish its own program which can be Transportation (DOT) issued a ‘‘Notice action of national applicability.
of Upcoming Joint Rulemaking to Under section 307(b)(1) of the Act,
232 74 FR at 12159.
Establish Vehicle GHG Emissions and judicial review of this final action may
233 See Motor and Equipment Manufacturers be sought only in the United States
Ass’n v. Nichols, 142 F.3d 449, 462–63, 466–67 (DC
Cir. 1998), Motor and Equipment Manufacturers 234 36
FR 17458 (August 31, 1971). Court of Appeals for the District of
Ass’n v. EPA, 627 F.2d 1095, 1111, 1114–20 (DC 235 43
FR 1829, 1833 (January 12, 1978), LEV I Columbia Circuit. Petitions for review
Cir. 1979). waiver decision document at 185–186. must be filed by September 8, 2009.
Under section 307(b)(2) of the Act, rules and regulations by Executive Business Regulatory Enforcement
judicial review of this final action may Order 12866. Fairness Act of 1996, does not apply
not be obtained in subsequent In addition, this action is not a rule because this action is not a rule, for
enforcement proceedings. as defined in the Regulatory Flexibility purposes of 5 U.S.C. 804(3).
Act, 5 U.S.C. 601(2). Therefore, EPA has
As with past waiver decisions, this not prepared a supporting regulatory Dated: June 30, 2009.
action is not a rule as defined by flexibility analysis addressing the Lisa P. Jackson,
Executive Order 12866. Therefore, it is impact of this action on small business Administrator.
exempt from review by the Office of entities. [FR Doc. E9–15943 Filed 7–6–09; 8:45 am]
Management and Budget as required for The Congressional Review Act, 5 BILLING CODE 6560–50–P
U.S.C. 801 et seq., as added by the Small

EPA grants California waiver for vehicle greenhouse gas standards

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Wednesday,

3 California Air Resources Board, EPA–HQ–OAR–

12 36 FR 17458 (Aug. 31, 1971). Note that the

Document at 64. 18 Id. 24 Alliance of Automobile Manufacturers, EPA–

applicable Federal requirements in the sense that it 1124.

pollution in California.’’). The ‘‘more stringent’’ OAR–2006–0173–0010.107, ‘‘Resolution 04–28,

explicitly regulate the same vehicles and air

(ULGE) (July 5, 1995). 21. 80 NERA Economic Consulting and Sierra

Preemption for California Zero Emission Vehicle

fashioning its own motor vehicle program without response.’’). OAR–2006–0173–3601 at 8.

Id. at 12. OAR–2006–0173–3601. Research, EPA–HQ–OAR–2006–0173–3651.

OAR–2006–0173–13662 at 2. Yet this analysis included similar analyses based on diverging

OAR–2006–0173–13662. they rely upon. OAR–2006–0173.0010.116.

protectiveness determination, EPA takes effects of a regulation should naturally include

the largest effects in urban areas and during

and gravity of the risks that climate change poses

121 Id. at 9–10. The Association of International

elsewhere that share California’s commitment to

150 California Air Resources Board, EPA–HQ–

44354, at 44444 (July 30, 2008). 2008). OAR–2006–0173–9019.12.

OAR–2006–0173–9021.1, at 21. OAR–2006–0173–0010.116, Comment 162 at 117. HQ–OAR–2006–0173–1297.2 at 35–36.

200 California Air Resources Board, EPA–HQ–

necessarily fatal to its validity. Every case of first

proposing to find that elevated concentrations of or welfare.’’

224 74 FR 18885 (April 24, 2009).

under their state law. While these

230 See Motor Vehicle Manufacturers Association

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