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OREGON, ET AL. VS. THE FEDS STATE EFFORTS TO REDUCE GREENHOUSE GAS EMISSIONS FROM VEHICLES

OREGON, ET AL. VS. THE FEDS STATE EFFORTS TO REDUCE GREENHOUSE GAS EMISSIONS FROM VEHICLES. Paul Logan March 4, 2008

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OREGON, ET AL. VS. THE FEDS STATE EFFORTS TO REDUCE GREENHOUSE GAS EMISSIONS FROM VEHICLES

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  1. OREGON, ET AL. VS. THE FEDSSTATE EFFORTS TO REDUCE GREENHOUSE GAS EMISSIONS FROM VEHICLES Paul Logan March 4, 2008 This presentation does not necessarily reflect the opinions of Oregon’s Attorney General, the Oregon Department of Justice, the Oregon Department of Environmental Quality or the State of Oregon

  2. Overview • State efforts to encourage federal GHG emission standards for new on-road autos • Mass. v. EPA • State efforts to adopt state GHG emission standards for new on-road autos • OR LEV; Automaker challenges to California (“Pavley”) standards; state challenge to EPA denial of waiver for Pavley standards • State efforts to encourage federal GHG emission standards for new non-road vehicles • Petitions for ships, aircraft and nonroad vehicles generally

  3. Hot Off the Press Last Week • Mass. v. EPA • Feb. 27th letter to states: EPA has “no specific timeline” to comply with Court’s decision • Challenge to EPA waiver denial: • Feb. 29th: EPA publishes additional decision documents explaining its denial of California’s waiver request for the Pavley standards • Nonroad engines: • Feb. 27th: Ninth Circuit preempts California’s Marine Vessel Rules, with significance for state efforts to regulate GHG emissions from nonroad engines

  4. Why have states litigated the issue of regulating vehicle GHG emissions? • Cars and trucks about 25% of U.S. GHG emissions • Federal government refuses to regulate, while attempting to preempt states from regulating • Clean Air Act preempts state new motor vehicle emission standards, unless EPA grants a waiver to California • If EPA waives for California, other states may opt-in • 12 states have adopted Pavley: CT, ME, MY, MD, NY, NM, NY, OR, PA, RI, VT, and WA • 5 in process of adopting Pavley: AZ, CO, FL, IA, and UT • 18 states: about 45% of U.S. population and new auto sales

  5. Clean Air Act section 209(a) • “No State or any political subdivision thereof shall adopt or attempt to enforce any standard relating to the control of emissions from new motor vehicles or new motor vehicle engines subject to this part.”

  6. Clean Air Act section 209(b) • The Administrator shall . . . waive application of this section to any State which has adopted standards . . . for the control of emissions from new motor vehicles . . . prior to March 30, 1966 [California], if the State determines that the State standards will be, in the aggregate, at least as protective of public health and welfare as applicable Federal standards. No such waiver shall be granted if the Administrator finds that - • (A) the determination of the State is arbitrary and capricious, • (B) such State does not need such State standards to meet compelling and extraordinary conditions, or • (C) such State standards and accompanying enforcement procedures are not consistent with section 202(a) of this part.

  7. State regulation of GHG emissions from nonroad vehicles • Clean Air Act section 209(e) addresses nonroad vehicles with the same standards as section 209(a)-(b)

  8. Summary of State Efforts to Date • Clinton administration EPA appeared interested in regulating vehicle GHG emissions • Bush administration EPA reversed course and has staunchly resisted regulation • Absent federal regulation, states adopt regulations, which EPA and automakers challenge • Mass. v. EPA begins a rapid stream of state victories • But still no federal GHG emission standards, and states need an EPA waiver to enforce Pavley standards • NEPA analysis must include climate change • Recent initiative – states petition EPA to regulate nonroad vehicle GHG emissions (Mass v. EPA in the nonroad context?)

  9. Mass. v. EPA (April 2007) • 1998: Clinton administration EPA finds CO2 and other GHGs from new on-road vehicles are air pollutants under CAA section 202(a) • 1999: NGOs petition EPA to regulate • 2003: Bush administration EPA denies petition: • EPA lacks authority under CAA section 202(a) • Unwise to regulate due to residual uncertainty in climate change science; and • Regulation would conflict with administration’s nonregulatory approach

  10. Mass. v. EPA (continued) • CAA section 202(a) requires EPA to set emission standards for “any air pollutants” which, in EPA’s judgment, cause or contribute to air pollution which may reasonably be anticipated to endanger public health or welfare. • “Air pollutant” includes “any air pollution agent or combination of such agents including any physical, chemical … substance or matter which is emitted into or otherwise enters the ambient air …” Section 302 • “Welfare” is defined to include, among others, “effects on … weather … and climate.”

  11. Mass. v. EPA (continued) • States (incl. Oregon), local govt’s and NGOs sue • 5-4 ruling favoring states et al. • Standing: “Special solicitude” accorded states in protecting “quasi-sovereign interests” • Merits: “Capacious” definition of air pollutant • “that DOT sets mileage standards in no way licenses EPA to shirk its environmental responsibilities.” • EPA’s statutory obligation to protect public health and welfare “wholly independent” of DOT’s obligations • Merits: EPA judgment in endangerment decision “not a roving license to ignore the statutory text.”

  12. Mass. v. EPA (continued) • Court remands to EPA for endangerment determination • EPA indicated to Congress that it would move forward with regulation by end of 2007, but has not yet made an endangerment determination • Energy Independence and Security Act of 2007 • Jan. 23, 2008: States, cities and NGOs request EPA status on endangerment determination. • Feb. 27, 2008: EPA has “no specific timeline” • Next steps?

  13. In the meanwhile… • As Mass. v. EPA was working its way through the courts, states focused on two other issues: • First, federal fuel economy standards for light trucks • Second, state GHG emission standards for on-road vehicles

  14. Timeline - state standards for vehicle GHG emissions • Sept. 2004: California adopts Pavley standards beginning with MY 2009 • February 2005: Automakers sue California (Central Valley Chrysler) • Dec. 2005: California requests CAA section 209(b) waiver for Pavley standards • Dec. 2005: Oregon adopts Pavley standards as Oregon Low Emission Vehicle Standards • EPA waits for Mass. v. EPA

  15. Timeline - state standards for vehicle GHG emissions (continued) • Sept. 2006: Order in Central Valley Chrysler favoring automakers • Jan. 2007: Court stays Central Valley Chrysler pending Mass. v. EPA • April 2007: Mass. v. EPA • Sept. 9, 2007: Green Mountain decision • Nov. 8, 2007: California, Oregon and other states sue EPA for unreasonably delaying waiver decision • Nov. 15, 2007: Center for Biological Diversity v. NHTSA • Dec. 11, 2007: Decision in Central Valley Chrysler upholding Pavley standards against preemption

  16. Timeline - state standards for vehicle GHG emissions (continued) • Dec. 19, 2007: President signs Energy Independence and Security Act of 2007 • Dec. 19, 2007 (evening): EPA denies California waiver request for Pavley standards • Jan. 2, 2008: California challenges EPA denial in the Ninth Circuit; Oregon and other states join • Feb. 29, 2008: EPA issues additional decision documents concerning its waiver denial

  17. Green Mountain (Sept. 9, 2007) • Automakers challenge Vermont’s adoption of the Pavley standards • Oregon did not participate • 16 day bench trial, battle of experts focused on EPCA preemption • 244 page opinion favoring Vermont • On appeal

  18. Unreasonable Delay (filed Nov. 8, 2007) • California sues EPA for unreasonable delay re: its Dec. 2005 waiver request • Suits in DC Circuit and DC District Court due to jurisdictional questions • Oregon and other states intervene • EPA commits to decide by end of 2007 • EPA denies by letter dated Dec. 19, 2007, but later claims letter was a preliminary courtesy letter and not actual denial

  19. Unreasonable Delay (continued) • Briefing almost completed in both cases; oral argument in DC Circuit on April 17th • Feb. 29, 2008: EPA issues what it considers to be final decision documents. • Parties are circulating stipulations to dismiss the cases

  20. CBD v. NHTSA (Nov. 15, 2007) • Challenge to National Highway Transportation and Safety Admin. (NHTSA) fuel economy standards rule for light trucks, MY 2008-2011 • Challenged because, among other reasons: • Fuel economy linked to GHG emissions • Rules enacted minor increase in fuel economy • Light trucks a significant portion of US auto sales • Rule exempted many SUVs, minivans, pickups • Failed to consider effects on climate change

  21. CBD v. NHTSA (continued) • NHTSA sets fuel economy standards pursuant to the Energy Policy and Conservation Act (EPCA). Under EPCA, NHTSA must set maximum feasible standards considering technological feasibility, economic practicability, effect of other government motor vehicle standards, and US need to conserve energy • EPCA explicitly preempts state regulations “related to” fuel economy standards • States also challenged NHTSA because the preamble to the final rule included a brief arguing that EPCA preempts state motor vehicle GHG emission standards because they are “related to” fuel economy standards

  22. CBD v. NHTSA (continued) • Automakers argued in Central Valley Chrysler that NHTSA’s brief was entitled to judicial deference, and court initially appeared to agree. • Ninth Circuit ultimately didn’t address this issue because the brief was not reviewable, final agency action.

  23. CBD v. NHTSA (fuel economy) • Ninth Circuit upheld NHTSA’s use of cost/benefit analysis generally, but not as applied • Cost/benefit analysis didn’t monetize the value of CO2 emissions • Didn’t set backstop (instead of fixed fleet average, standard by vehicle size) • Didn’t close SUV loophole • Didn’t set any CAFE standards for 8,500 – 10,000 lb. class (Ford F-250, Ford Excursion, Hummer H2, etc.)

  24. CBD v. NHTSA (NEPA) • NHTSA found no significant impact of the rule on the environment, and didn’t issue an EIS • NHTSA: rule decreases CO2 emissions compared to the status quo (decreased rate of growth of CO2 emissions) • Court: NEPA requires consideration of actual effects of emissions, and cumulative effects of emissions, and directs NHTSA to prepare full EIS (including overall effects of total emissions)

  25. CBD v. NHTSA (appeals) • In mid-February, NHTSA petitioned for rehearing en banc on NEPA issues • Petitioners to respond by March 7th • Will the decision, and its implications for NEPA analysis for climate change, stand?

  26. Central Valley Chrysler • Automakers challenge California’s Pavley GHG emission standards • Main arguments: • Clean Air Act preemption because CO2 and other GHGs aren’t “air pollutants” • EPCA preempts Pavley standards because they are “related to” fuel economy standards • Federal foreign affairs and foreign policy preemption

  27. Central Valley Chrysler (continued) • Sept. 2006: Order in Central Valley Chrysler favoring automakers • Court refuses to dismiss the three main claims, and appears to lean towards automakers • Jan. 2007: Case stayed pending Mass. v. EPA • Dec. 11, 2007: Decision in Central Valley Chrysler favoring California • Court relies heavily on Mass. v. EPA in significantly revising its previous analysis

  28. Energy Independence and Security Act of 2007 (Dec. 19, 2007) • Large bill covering many energy issues • Fuel economy standards: 35 mpg by 2020 • Phased in beginning in 2011

  29. EPA Waiver Denial (filed Jan. 2, 2008) • California, Oregon and other states sue in the Ninth Circuit re: merits of EPA’s waiver denial • Early Feb. 2008: EPA moves to dismiss, arguing that its Dec. 19th letter was not final agency action reviewable by a court, and that in any event the proper forum is the DC Circuit • Feb. 29, 2008: EPA files additional decision documents

  30. EPA Waiver Denial (filed Jan. 2, 2008) • EPA’s Dec. 19, 2007 letter • Claims climate change is global and not unique to California, thus CA doesn’t need the Pavley standards to meet “compelling and extraordinary conditions” • Claims global problem requires a national solution, such as EISA. Claims that EISA fuel economy standards more stringent than Pavley, thus insinuating that Pavley is not as protective as federal standards

  31. EPA Waiver Denial (filed Jan. 2, 2008) • California response concerning protectiveness: • Applicability: Pavley standards apply to MY 2009; EISA standards to MY 20011. GHGs persist for decades, and thus earlier action is more protective. • Phase in: Pavley by MY 2016, EISA by MY 2020. In 2016, Pavley standards will reduce GHG emissions by more than double that achieved by EISA. • Future stringency: By 2020 phase in for EISA, Pavley will be more stringent, per California’s Climate Action Plan, and will reduce GHG emissions by more than 65 percent of the reduction achieved by EISA

  32. EPA Waiver Denial (filed Jan. 2, 2008) • Controversy re EPA decision making process • Congress investigating whether: • Before deciding, did EPA Administrator Johnson cut off discussions with EPA technical staff but confer with the White House? • Johnson ignored EPA’s legal advice that a court would likely overturn a denial, and that a court would likely uphold an approval? • Decision made before EPA had written the legal justification?

  33. EPA Waiver Denial (filed Jan. 2, 2008) • EPA’s Feb. 29, 2008 additional decision docs • Based upon “compelling and extraordinary conditions” • Doesn’t reach other potential denial criteria • Claims causes and effects must be local and regional, not global • Claims conditions mean local geographic, climate (thermal inversion), and auto concentration conditions • Claims causes and effects must substantial and unique • Finds climate change effects to California are not caused by local conditions, and the effects are serious, but not unique, compared to rest of U.S.

  34. EPA Waiver Denial (filed Jan. 2, 2008) • Will the waiver denial challenge continue in the Ninth Circuit? Or be transferred to the DC Circuit? • EPA waiver is the final obstacle to Pavley, OR LEV and state GHG emission standards for on-road vehicles • Will this case be resolved before the next president is sworn in?

  35. Petitions to regulate GHG emissions from nonroad vehicles • Non-road engines include aircraft, ships, RV’s, farm, construction, mining, industrial and logging equipment, etc. • Petition regarding ships: Oct. 3, 2007. Oregon didn’t join. • Petition regarding aircraft: Dec. 4, 2007. Oregon didn’t join. • Petition regarding other nonroad engines: Jan. 29, 2008. Oregon joined.

  36. Petitions to regulate GHG emissions from nonroad vehicles • Similar situation as state efforts to encourage federal regulation of on-road GHG emission standards in 1999 • EPA may or must regulate upon finding endangerment • Must for aircraft • May for ships and other nonroad engines • Mass. v. EPA endangerment determination would likely extend to nonroad vehicles as well • States cannot regulate emissions of new trains and farm / construction equipment less than 175 horsepower • For other new (and all existing) nonroad engines, CAA preempts state emission standards unless EPA waives for California • Other states may adopt California standards

  37. Petitions to regulate GHG emissions from nonroad vehicles • Mass. v. EPA all over again? • Court has already decided on standing for states, and that CO2 and other GHGs are air pollutants under the Clean Air Act • Can states persuade or force EPA to make an endangerment decision, and additionally to regulate? If not, will California adopt standards and request an EPA waiver?

  38. Petitions to regulate GHG emissions from nonroad vehicles • Pacific Merchant Shipping v. Goldstene (Feb. 27th, 2008) • Ninth Circuit finds that Clean Air Act section 209(e), concerning nonroad engines, preempts California’s Marine Vessel Rules • Rules regulated existing auxiliary diesel engines using dirty fuel • Rules weren’t GHG standards, but case is significant for GHG in reiterating that the CAA preempts state emission standards, even creative strategies addressing serious nonroad pollution issues that the feds haven’t regulated • California attempted to avoid preemption by regulating: • Existing, not new, engines • “In use requirements” instead of emission standards • Allowing fuel switching for compliance

  39. Citations • Mass. v. EPA, 549 U.S. ___, 127 S.Ct. 1438 (2007) • Green Mt. Chrysler Plymouth Dodge Jeep v. Crombie, 508 F. Supp. 2d 295 (D. Vt. 2007) • Center for Biological Diversityv. NHTSA, 508 F3d 508 (9th Cir. 2007) • Central Valley Chrysler-Jeep v. Goldstone, 2007 U.S. Dist. LEXIS 91309 (E.D. Cal. Dec. 11, 2007) • Pacific Merchant Shipping v. Goldstene, 2008 U.S. App. LEXIS 4171 (9th Cir. Feb. 27th, 2008)

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