State Authority to Regulate Mobile Source Greenhouse Gas Emissions, Part 1: History and Current Challenge

Abstract

In 2018, the National Highway Transportation Safety Administration (NHTSA) and the U.S. Environmental Protection Agency (EPA) proposed a dramatic rethinking of how federal laws that set standards for air pollution and fuel economy for the nation’s cars and trucks are implemented. The agencies have proposed a new reading of the Energy Policy and Conservation Act of 1975 (EPCA) which governs federal fuel economy standards. If finalized, the regulations would relax federal greenhouse gas tailpipe standards and fuel economy standards that are currently on the books. At the same time, the regulations would preempt emissions standards put in place by California and adopted by other States. It would also preempt California’s zero emission vehicle (ZEV) requirement.

This article examines the agencies’ proposal in light of previous regulatory actions by NHTSA and the jurisprudence that governs preemption. A review of NHTSA actions since 1975 shows that from the beginning of implementation, the agency was aware that California emissions standards could have significant effects on fuel economy. The federal rulemaking record shows that California standards have impacted fuel economy of specific models by as much as 28 percent. However, NHTSA’s historic approach has been to simply factor the impacts of the state standards into the determination of the appropriate stringency for federal fuel economy standards.

Informed by this analysis, the article proceeds to examine the agencies’ preemption rationale and finds that the expansive theory of preemption advanced by the agencies poses significant practical problems and logical flaws. NHTSA judges its previous consideration of California emissions standards to be appropriate, but then fails to provide a rational basis for distinguishing those actions from its current proposal for expansive preemption. NHTSA also does not provide any limiting principle that would prevent the agency’s preemption interpretation from being applied to a variety of state and local laws that seem well beyond a federal scheme relating to fuel economy performance requirements that apply to automobile manufacturers. NHTSA attempts to address or contain some of these problems. However, because the solutions aren’t rooted in statute, case law or legislative history, these solutions may ultimately be viewed as arbitrary or capricious.

Finally, the article examines the agencies’ preemption proposal in light of the Supreme Court’s preemption jurisprudence. The article argues that the agencies’ analysis is lacking because it fails to adequately discuss the objectives of the federal fuel economy laws, nor the purpose and effect of the state requirements. An examination of these issues suggests a narrower interpretation of federal preemption is warranted that would preserve California’s historic role in establishing tailpipe emissions standards.

Keywords: climate change, Clean Air Act, fuel economy, EPA, NHTSA, preemption, mobile sources, greenhouse gas emissions, ghg, emissions, electric vehicles, efficiency, pollution