Market News

 June 30, 2009
EPA Grants California GHG Waiver

 EPA -  The U.S. Environmental Protection Agency (EPA) has granted California’s waiver request enabling the state to enforce its greenhouse gas emissions standards for new motor vehicles, beginning with the current model year. Using the law and science as its guide, EPA has taken this action to tackle air pollution and protect human health.

"This decision puts the law and science first. After review of the scientific findings, and another comprehensive round of public engagement, I have decided this is the appropriate course under the law," said EPA Administrator Lisa P. Jackson.

"This waiver is consistent with the Clean Air Act as it’s been used for the last 40 years and supports the prerogatives of the 13 states and the District of Columbia who have opted to follow California’s lead. More importantly, this decision reinforces the historic agreement on nationwide emissions standards developed by a broad coalition of industry, government and environmental stakeholders earlier this year."

The first California waiver request was made in December 2005 and was subsequently denied in March 2008. This previous decision was based on an interpretation of the Clean Air Act finding that California did not have a need for its greenhouse gas emission standards to meet "compelling and extraordinary conditions."   

Shortly after taking office in January, President Barack Obama directed EPA to assess the appropriateness of denying the waiver. EPA received a letter from California on January 21, 2009, raising several issues for Administrator Jackson to review regarding the denial.

Last month, President Obama announced a first-ever national policy aimed at both increasing fuel economy and reducing greenhouse gas pollution for all new cars and trucks sold in the United States. The new standards would cover model years 2012-2016.  When the national program takes effect, California has committed to allowing automakers who show compliance with the national program to also be deemed in compliance with state requirements.

With the decision to grant the California waiver, EPA returns to its traditional legal interpretation of the Clean Air Act that has been applied consistently during the past 40 years. EPA finds that California continues to have a need for its motor vehicle emissions program, including the greenhouse gas standards. EPA also finds that the California program meets legal requirements regarding the protectiveness of public health and welfare as well as technological feasibility.

EPA based its decision on an extensive record of scientific and technical evidence. As part of the reconsideration, EPA revisited the prior decision documents and record. The agency also opened a new comment period, including public hearings.

As noted in a New York Times article by Felicity Barringer, The immediate impact of the decision, which had been widely anticipated, is more symbolic than practical. The 2009 fleet of new vehicles is already in compliance with the California rules and the 2010 fleet is also expected to meet the requirements, said Tom Cackette, deputy director of California’s Air Resources Board.

"Auto manufacturers have been making changes to vehicles both because they anticipated they might have to meet California standards and because there was a general interest in public in buying more efficient cars," Mr. Cackette said.

California Governor Arnold Schwarzenegger hailed the decision noting that "After being asleep at the wheel for over two decades, the federal government has finally stepped up and granted California its nation-leading tailpipe emissions waiver." It was a sentiment echoed by other State legislators. New York Gov. David Paterson noted "The decision is living proof that there is new leadership in Washington."

See article Turning Back the Tide - Remaking the EPA

The Clean Air Act gives EPA the authority to allow California to adopt its own emission standards for new motor vehicles due to the seriousness of the state’s air pollution challenges. There is a long-standing history of EPA granting waivers to the state of California.

Full details on the EPA decison are available here.

For More Information: Environmental Protection Agency - US