Environmental update

Publication August 9, 2018

The Trump administration announced plans in early August to roll back Obama-era automobile emissions and fuel efficiency standards and to revoke the long-standing authority of California and other states to impose stricter standards than those imposed nationally.

The joint move by the US Environmental Protection Agency and the US Department of Transportation is another step toward dismantling programs to limit greenhouse gas emissions that contribute to climate change.

The plan would undo a 2012 rule that requires automakers to achieve average fuel economy for passenger vehicles of about 54 miles per gallon by 2025. Instead, average fuel economy standards would be frozen at around 37 miles per gallon after 2021. The plan would also undo a requirement that automakers build more fuel-efficient and less polluting cars, such as electric vehicles and hybrids.

Many automakers had opposed the 2012 rule as overly burdensome. The Trump plan goes significantly farther than most automakers had requested.

It sets the stage for another epic legal battle that will introduce a period of regulatory uncertainty for the auto industry for years to come, whether or not the Trump administration survives past 2020. Even if the next administration were to withdraw the Trump action, reinstating the 2012 rule would also land in the courts. A settled policy would have to be re-litigated.

Accordingly, heavy pressure is being brought to bear not only from environmentalists, individual states and consumer groups, but also from some automakers to change the plan before it is finalized.

California has had dispensation by waiver to set stricter air pollution standards than those imposed nationally since 1970. More than a dozen other states have also been given similar waivers. The Trump plan would revoke these waivers.

California is the nation’s biggest state market for autos with more than two million new cars and light trucks sold in 2017. California and a dozen other states that follow its vehicle rules account for more than a third of US auto sales.

With such a large market share, the California standards have effectively displaced the federal auto emissions and efficiency standards.

The Trump administration argues that the lighter cars required to meet the California fuel efficiency standards will lead to more highway deaths.

By barring states from adopting their own standards, the administration will make it harder for states that want to try to comply with the Paris climate accord to do so. California and a number of other states have said they plan to comply with goals set in that accord for greenhouse gas reductions even though the United States has formally withdrawn from the accord.

The attorneys general of nearly 20 states have filed suit or announced plans to sue to try to block the latest Trump action.

California responded on August 8 by reaffirming that it expects automakers to comply with state law, even if the Trump administration weakens emissions and fuel efficiency standards that the state set jointly with the federal government during the Obama administration. The action merely bolsters the state’s legal footing in advance of the looming legal battle. The state is collecting comments through September 24.

Both California and federal officials have suggested that a deal could be reached. California said it is willing to consider adopting new “flexibilities that reduce compliance costs” for automakers while still driving down greenhouse gas emissions.

Other major auto markets in Europe and China are continuing to tighten tailpipe emissions standards and require higher fuel efficiency.

NEPA reform

The Council on Environmental Quality or CEQ — an office within the White House — announced in late June that it plans to update the implementing regulations for the National Environmental Policy Act.

NEPA requires federal agencies to prepare environmental impact statements for all “major Federal actions significantly affecting the quality of the human environment.” CEQ guidelines govern how the agencies must go about preparing these statements.

The CEQ rulemaking will be of particular interest to developers, lenders and investors in energy and other large-scale infrastructure projects as NEPA reviews can delay permit issuance and project completion.

CEQ issued an “advance notice of proposed rulemaking” on June 20 asking the public for comments about what it should do. The abbreviated deadline for commenting on the notice was in July.

President Trump issued an executive order in August 2017 called “Establishing Discipline and Accountability in the Environmental Review and Permitting Process for Infrastructure Projects.” The executive order is No. 13807.

It directed CEQ to implement a “one federal decision” policy and modernize the environmental review and authorization process under NEPA. Under the one federal decision policy, all the federal agencies involved in the NEPA review and environmental permitting of a major infrastructure project are required to develop a single permitting timetable, prepare a joint environmental impact statement where warranted, and issue all project approvals within 90 days after an agreed “record of decision” is signed.

CEQ has declined to impose hard-and-fast time limits on agencies in the past, leaving timing decisions to the agencies conducting their respective environmental reviews. This time, it is expected to adopt time frames to which 12 federal agencies agreed in an April 9, 2018 memorandum of understanding. These were consistent with the executive order.

Among the issues on which CEQ is seeking comments are whether key NEPA terms should be redefined. Such terms include “major federal action,” “significantly” and “cumulative impact.” The current definitions were last revisited in 1986. How these terms are defined can affect whether NEPA applies to a particular project at all.

CEQ also wants input on what the government should focus in its NEPA reviews. CEQ could end up following the lead of a recent Federal Energy Regulatory Commission order that limited consideration of upstream and downstream greenhouse gas emissions when evaluating natural gas infrastructure projects.

Endangered species

The Trump administration proposed in July to end the practice of automatically extending the same Endangered Species Act protections to species that are merely “threatened” as are given to species that are considered “endangered.”

The joint proposal by the US Departments of Interior and Commerce would instead make decisions on whether and how to protect threatened plants and animals on a case-by-case basis.

The Endangered Species Act was enacted during the Nixon administration in 1973. It protects plant and animal species by designating them as endangered or threatened. Either label makes it illegal to kill such species and requires preservation of their habitats. The law protects more than 1,600 plant and animal species.

The Trump administration would also allow regulators to take into account the economic impacts when deciding how wildlife should be protected. Currently, regulators are directed to make such determinations based solely on the best scientific and commercial evidence.

The administration is also proposing to change the definition of “foreseeable future.” Federal agencies are required by law to determine whether a species is “in danger of extinction, or likely to become so within the foreseeable future” in making a decision on whether to list a species as endangered or threatened. The administration would like to limit the foreseeable future “only so far as we can reasonably determine that the conditions posing the potential danger of extinction are probable,” an Interior Department spokesman said.

High Court

Brett Kavanaugh, whom President Trump has nominated to the US Supreme Court, has a record of questioning how far the Environmental Protection Agency can go in regulating greenhouse gas emissions. A number of EPA-related cases have come before the US appeals court on which Kavanaugh currently serves. He has had a tendency to read environmental statutes narrowly.

“Climate change is not a blank check for the President,” Kavanaugh wrote in an August 2017 opinion striking down large portions of Obama EPA limits on a greenhouse gas used in refrigerants. “However much we might sympathize or agree with EPA’s policy objectives, EPA may act only within the boundaries of its statutory authority.”

Kavanaugh is also a believer in following court precedent even when he disagrees with it. For example, in 2013, he sided with environmentalists against the EPA in a case in which several industry groups were trying to exempt emitters of biogenic carbon dioxide from the need for permits.

Justice Kennedy, whom Kavanaugh would replace, often showed a similar skepticism of agencies pushing the bounds of their statutory authority. However, Kennedy was the deciding vote in a number of landmark environmental cases, including a 2007 decision in Massachusetts v. EPA that concluded EPA is required to regulate greenhouse gases as an air pollutant under the Clean Air Act.


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