Calif. waiver creates ‘cooperative federalism’ test for EPA

By Maxine Joselow | 07/24/2018 01:18 PM EDT

When Andrew Wheeler became EPA acting administrator, he promised a federal-state partnership.

EPA headquarters in Washington.

EPA headquarters in Washington. Robin Bravender/E&E News

When Andrew Wheeler became EPA acting administrator, he promised a federal-state partnership.

"No. 1, we need to provide certainty to the states," Wheeler vowed in his first speech at the agency’s helm (E&E News PM, July 11).

"When Congress established the EPA’s authority, it intended states to be partners in our effort to protect the environment and public health."


Fast-forward to this week: Wheeler is expected to propose revoking California’s authority to regulate greenhouse gas emissions from vehicles.

EPA and the National Highway Traffic Safety Administration will not explicitly revoke the state’s Clean Air Act waiver for greenhouse gases. Instead, they will take comments on the legality and necessity of the waiver (E&E News PM, July 19).

Many see that move as a retreat from "cooperative federalism," in which states adhere to the minimum federal standards but can experiment with stricter rules.

"Restoring cooperative federalism has been a theme of this administration," said Janet McCabe, who was acting EPA air chief under President Obama. "The California waiver is sort of a case in point to illustrate whether this administration is really serious about the principles of cooperative federalism."

And Ann Carlson, co-director of UCLA’s Emmett Institute on Climate Change and the Environment, said rescinding California’s waiver would actually create more regulatory uncertainty, not less, for the state.

"It’s hard to say that this is regulatory certainty when California’s been operating with a waiver for years," Carlson said. "It has been planning its entire greenhouse gas emissions programs on this waiver."

Scott Pruitt, who resigned as administrator July 5 in a hailstorm of ethics allegations, made cooperative federalism a focus of his time at the agency’s helm. He talked up the idea of state and federal regulators working collaboratively without "one-size-fits-all" mandates from Washington.

"In just one year, we have made tremendous progress implementing President Trump’s agenda by refocusing the Agency to its core mission, restoring power to the states through cooperative federalism and adhering to the rule of law," Pruitt said in a statement about his first year at EPA. "The American people can now trust that states and stakeholders will be treated as partners."

But Pruitt’s interpretation of cooperative federalism was shaded by the red-state, blue-state divide (Climatewire, April 11).

In announcing his decision to rewrite the Obama-era clean car rules, Pruitt signaled his revised program would force California to follow federal standards.

"Cooperative federalism doesn’t mean that one state can dictate standards for the rest of the country," he said in a statement.

Irene Gutierrez, a Natural Resources Defense Council energy attorney, said rescinding California’s waiver would "certainly be at odds with Scott Pruitt’s general philosophy of honoring the authority of states to do their own thing."

Jody Freeman, director of the environmental and energy law program at Harvard Law School, concurred.

"Even without Pruitt at the helm, the theory of the EPA is still that states should be in the lead," Freeman said. "Nobody’s taken that back. Andy Wheeler has not announced a departure from that approach. But this flies directly in the face of respect for state primacy."

She added, "So state primacy seems to be the agenda when it’s every other state. But when it’s California, the agenda seems to be pre-emption."

Wheeler’s options

Wheeler could take several paths on the California waiver.

First, he could argue California lacks authority to regulate fuel economy under the 1975 Energy Policy and Conservation Act, which gives that power solely to the federal Transportation Department.

But that argument has failed in court before.

In the landmark 2007 Supreme Court case Massachusetts v. EPA, the agency argued it shouldn’t be required to regulate tailpipe greenhouse gas emissions because another agency — DOT — was already regulating fuel economy.

But in its 5-4 decision, the Supreme Court ruled that "the fact that DOT’s mandate to promote energy efficiency by setting mileage standards may overlap with EPA’s environmental responsibilities in no way licenses EPA to shirk its duty to protect the public ‘health’ and ‘welfare.’"

Also under the George W. Bush administration, automakers sought to challenge California’s clean cars program, but several district courts rebuffed their attempts.

A second argument for Wheeler is that California lacks "compelling and extraordinary conditions" to justify a waiver, as required by Section 209 of the Clean Air Act, Carlson said.

"But it’s very hard to say that California doesn’t have ‘compelling and extraordinary’ circumstances for conventional pollutants," Carlson said. "As we’ve seen in the past several years, California is being hammered by the effects of climate change, between droughts, water shortages and wildfires."

Another possibility is Wheeler will also attack California’s mandate for electric car sales. The program that forces automakers to sell a minimum number of electric vehicles is a potential target for EPA, sources familiar with the plan told Bloomberg News.

In addition, EPA and NHTSA are expected to solicit public comment on freezing fuel economy targets at 2020 levels through 2026. That will set up more legal battles with California and 13 other states that follow its tailpipe rules.

"I expect a barrage of litigation," Freeman said.