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Starting immediately, California state agencies will no longer buy gas-powered sedans, officials said Friday—and starting in January, the state will stop purchasing vehicles from carmakers that haven’t agreed to follow California’s clean-car rules.

The decision affects General Motors, Fiat Chrysler, Toyota and multiple other automakers that sided with the Trump administration in the ongoing battle over tailpipe-pollution rules. The policy will hit General Motors particularly hard; California spent more than $27 million on passenger vehicles from GM-owned Chevrolet in 2018.

California’s Department of General Services, the state’s business manager that oversees vehicle purchases for California’s fleet, announced the bans on Friday afternoon. The immediate ban on state purchases of cars powered only by gas will include exceptions for public-safety vehicles. 

“The state is finally making the smart move away from internal-combustion engine sedans,” California Gov. Gavin Newsom said in a statement emailed to CalMatters. The new policies align with Newsom’s September executive order urging the state government to reduce greenhouse gases. “Carmakers that have chosen to be on the wrong side of history will be on the losing end of California’s buying power,” Newsom said.

It’s the latest volley in the fight over climate-changing pollution from cars and trucks. “It certainly sends a strong message to the automakers that have come out on the other side of California in this litigation,” said Julia Stein, supervising attorney at UCLA’s Frank G. Wells Environmental Law Clinic. “It’s taking steps to encourage automakers to be on what it views as the right side of that dispute.”

The Trump administration has long proposed rolling back Obama-era standards curbing greenhouse gases and increasing fuel economy of passenger vehicles. Those rollbacks have yet to be finalized, but in September, the Environmental Protection Agency and the National Highway Traffic Safety Administration stripped California’s authority to make its own greenhouse gas rules—rules that 13 other states and the District of Columbia follow.

The move kicked off what’s likely to become a lengthy court battle—and, indeed, California and 22 states sued the EPA this month, after suing the National Highway Traffic Safety Administration in September.

To fend off the uncertainty of a long fight in court, four major automakers—Ford, Honda, BMW, and Volkswagen—cut a deal with California. California agreed to relax the Obama-era greenhouse-gas targets somewhat, and the carmakers agreed to follow the state’s rules.

Earlier this year, California officials indicated they were optimistic that more carmakers would sign on. But amid growing pressure from the White House, two auto-industry trade groups representing more than a dozen auto manufacturers including General Motors, Fiat Chrysler, and Toyota aligned themselves with the Trump administration by calling for a single set of clean-car standards nationwide.

Now California’s Department of General Services is crafting policy that will prohibit state purchases from carmakers that haven’t signed on to its clean-car deal—and manufacturers could stand to lose millions in sales to the state. In addition to the $27 million in purchases from Chevrolet, the state also spent more than $11 million on Fiat Chrysler brands, and more than $3.6 million on Toyota. Toyota, well-known for its environmentally friendly Prius, is also facing public backlash for its alliance with the Trump administration. 

The move might deepen the divide in an already fracturing auto industry, Stein speculates. “There’s already been a little bit of a wedge driven,” she said. “You could see something like this driving the wedge even further.”

Gloria Bergquist, vice president of the Auto Alliance trade group that represents both automakers that signed on with California’s clean-car deal and companies that sided with the Trump administration, said automakers have invested heavily in electrified vehicles. “So we support efforts by fleet managers to buy more of these vehicles,” she said in an email. “As consumers see more electrified vehicles on the roadways, we hope to see a tipping point where they become more mainstream.”

This isn’t the first time that California has hinted it would use its power as the world’s fifth largest economy to reward carmakers that followed its rules, and punish those that didn’t. In remarks written for a May workshop, California Air Resources Board Chair Mary Nichols warned that federal tailpipe emissions rollbacks could force “an outright ban on internal-combustion engines.”

More recently, CalMatters discovered that legislation written in September would weaponize the state’s clean-car rebates by restricting them to only the carmakers that signed on to California’s deal. The bill didn’t receive a vote, but its language urging the state to spurn “companies that are not helping to achieve the state’s public health and climate goals” foreshadowed Newsom’s comments today: “In court, and in the marketplace, California is standing up to those who put short-term profits ahead of our health and our future.”

CalMatters.org is a nonprofit, nonpartisan media venture explaining California policies and politics.

Published in Environment

Commuters in California may not have to worry about federal threats to yank highway funding just yet—but the recent tiff with the feds over California’s clean air plans is bigger than a simple paper-shuffling standoff.

The fight started with a two-page missive from U.S. Environmental Protection Agency Administrator Andrew Wheeler. Sent in September, the letter accused California of what the EPA called a “backlog” of federally required paperwork detailing the state’s plans and policies to cut air pollution. The EPA threatened to level sanctions at the state, including withholding federal highway funds, if California did not withdraw plans that the federal government considered “unapprovable.”

California Gov. Gavin Newsom called it retaliation, a “brazen political stunt.” In response, EPA spokesman Michael Abboud told CalMatters in an emailed statement: “Highlighting that California has the worst air quality in the nation along with other serious environmental problems is not a political issue.”

Then last week, California’s head air quality enforcer, Mary Nichols, responded to the EPA, saying that highway sanctions typically take more than 18 months to mete out, and in any case, the backlog is on the EPA’s end, not California’s. “Indeed,” she wrote, “you may not have been aware in writing your letter, (the California Air Resources Board) has been helping U.S. EPA to resolve its administrative backlog for years.”

The EPA’s Abboud told CalMatters it is reviewing Nichols’ letter, and reiterated that the agency is asking California to withdraw any plans to cut air pollution that can’t be approved, writing: “Every state must comply with the federal air-quality standards. California is not alone or unique in this requirement.”

There’s more to the story than California trading barbs with the feds, according to University of California, Los Angeles, environmental law professor Ann Carlson. “This is (the) EPA being willing to play very fast and loose with the facts in order to push the president’s agenda.”

So what are the facts? And how will this affect you?

What’s the paperwork California and EPA are fighting about?

Thanks to California’s 39-million-plus people, its pollution-trapping terrain, and the sunny conditions primed for stewing tailpipe emissions into smog, the state has historically bad air quality.

About 93 percent of Californians live in areas that don’t meet federal targets for air pollutants like ozone, the major component of smog, or tiny particles of pollution. California and its patchwork of local air districts are required to come up with something called a State Implementation Plan, or SIP, describing how the state intends to cut air pollution.

Those SIP submissions are piling up at the EPA—more than 130 of them, according to Wheeler’s letter. Why so many? Because “SIP” can refer to both the overarching roadmap for hitting federal clean air targets, and the collection of rules and regulations needed to get there.

That roadmap and the piecemeal trickle of local and statewide policies all end up at the California air board for approval,and for ultimate submission to the EPA. The EPA then has 18 months to decide whether to approve the submissions—which would make the regulation enforceable at the federal level, too, according to Kurt Karperos, deputy executive officer of the Air Resources Board.

In the meantime, the air board and air districts typically start implementing the regulations.“To the extent we can, we do not wait for EPA to act,” Karperos said. “The challenge is too great in California for us to sit around and wait for EPA.”

Can the EPA really take away California’s highway funding?

Federal and state officials agree on this much: If the air pollution dispute winds its way to federal-funding sanctions, Californians can expect to see restrictions on how the state uses certain federal transportation funding. That may affect specific highway projects, but it is too early to know.

Still, experts say that sanctions, if it comes to that, will take a while. “Even though it’s a big headline, and he’s threatening our money, we have time to work through those issues,” said Tanisha Taylor, director of sustainability at the California Association of Councils of Governments, at a recent workshop.

Once the EPA formally notifies a state that its SIP is missing or inadequate, an 18-month clock starts ticking before the EPA can impose sanctions, the nonpartisan Congressional Research Service says. Those sanctions typically start with crackdowns on pollution from sources like heavy industry, according to a Federal Highway Administration webpage. It then takes another six months for sanctions to escalate to highway funding.

Rather than threatening sanctions that couldn’t hit until at least 2021, Karperos said, “Focusing on fixing and clearing out the backlog—EPA’s backlog—would have been a much more productive (use) of everybody’s time.”

So if sanctions are a distant threat, what’s the big deal?

The concern is that partisan politicking is replacing a science-based, collaborative federal and state effort to reduce California’s very real pollution problems.

Nichols called the threat of sanctions “an abuse of U.S. EPA authority” in the letter she sent last week. The next day, nearly 600 former EPA employees sent their own letter urging Congress to investigate whether the EPA’s correspondence with California—including a second missive about homelessness and water quality—constituted retaliation against the state.

When asked whether the White House was involved in drafting or motivating the EPA’s letter about the backlog, Abboud said: “No.”

It’s one part of a bigger picture, said UCLA’s Carlson—one that shows the EPA repeatedly taking aim at California. She pointed to the antitrust investigation launched by the Department of Justice after California reached a tailpipe-emissions agreement with four auto companies. And just days before the EPA sent its two letters, the Trump administration finalized a rule to strip California of its power to police tailpipe pollution on its own terms—a move that will end California’s zero-emission vehicle program intended to combat both air pollution and climate change.

Wheeler’s letter, Carlson said, “Is so hypocritical at a time when EPA is trying to remove from California the authority that it needs to come into compliance with air quality standards.”

In its emailed response to CalMatters, the EPA’s Abboud said, “The Federal government has done nothing to bar California to set health-based pollutant standards, and we are ready to assist California in improving the air quality in their state.”

The air board’s Karperos worries that this very public battle with the EPA is, in fact, a distraction from doing exactly that: cleaning up California’s air.

“Rather than threatening to withhold highway money over an administrative issue that we’re working to clear up, it’s much more important for U.S. EPA to be thinking about what it needs to do to clean up trains, which they regulate,” he said, listing other polluters the EPA is largely responsible for: planes, ships and certain off-road vehicles like construction equipment.

Nichols’ letter includes a graph showing that by 2030, these federally regulated polluters are expected to churn out more of a key smog ingredient than the cars, trucks and equipment California regulates across a major chunk of southern California.

The EPA did not respond to a CalMatters request for comment about Nichols’ concern that EPA is failing to reduce emissions from federally regulated sources. Abboud said only that “California has been granted Clean Air Act waivers for a wide variety of emissions from a wide variety of vehicle types,” and provided a link to a list. He also sent a link to a press release about air pollution trends, saying: “EPA and its state and local partners continue to see substantial reductions in emissions that contribute to ozone, particulate matter, and other criteria pollutants across the country.”

In the end, it isn’t about pointing fingers, Karperos said — it’s about keeping Californians healthy. “We may argue about backlogs, but it’s really about what’s in the air they’re breathing.”

CalMatters.org is a nonprofit, nonpartisan media venture explaining California policies and politics.

Published in Environment

The punch-counterpunch sparring between the Trump administration and the state of California over rollbacks of federal environmental regulations is often described as a war of words, with neither the president nor Gov. Jerry Brown giving an inch.

Some of the disputes are largely symbolic—foot-stamping gestures from Washington, D.C., designed to resonate with the president’s core supporters rather than to hold up in court.

But the latest skirmish is serious: The federal Environmental Protection Agency’s decision to unravel fuel-efficiency standards for cars and light trucks not only threatens California’s autonomy in setting its own emissions limits; it also could derail the state’s ability to reach its future greenhouse-gas-reduction goals.

“This is a politically motivated effort to weaken clean-vehicle standards with no documentation, evidence or law to back up that decision,” said Mary Nichols, chairwoman of the state Air Resources Board, in a statement. “This is not a technical assessment; it is a move to demolish the nation’s clean-car program. The EPA’s action, if implemented, will worsen people’s health with degraded air quality and undermine regulatory certainty for automakers.”

The gauntlet was thrown down by EPA Administrator Scott Pruitt, a darling of the Trump administration for his zeal in dismantling Obama-era environmental regulations. Even though Pruitt is the target of multiple investigations for alleged ethical transgressions and has found his job security in question, the effect of his current decisions may resonate far beyond his or his boss’ terms in office.

“There have been some troubling developments,” said Deborah Sivas, director of the Environmental Law Clinic at Stanford Law School. “But I think a lot of this is ultimately not going to happen.”


Putting the Brakes on Fuel Efficiency

Sivas said an attack on the fuel-efficiency standard is one of the critical fights for California, which must drastically reduce emissions from the state’s enormous transportation sector to stay on track in cutting carbon.

At issue are miles-per-gallon standards set near the end of the Obama administration. They require an average 45.4 miles per gallon by 2022 and more than 50 miles per gallon by 2025. Standards differ by vehicle type and are stricter for cars than for SUVs and light trucks.

Chet France, the former EPA senior executive who directed the office that crafted the regulations, says the fuel-standard rule is solid. France, who retired in 2012, said the benchmarks were the product of rigorous technical research and vetting with federal agencies, the California air board and car manufacturers.

The rule was reviewed again during the last days of the Obama administration and determined to be reasonable.

“The mid-term review was thorough and found that advances in auto-industry technology meant that meeting the standards was easier and cheaper than the EPA had predicted,” France said. “It concluded that the standards were attainable, and, if anything, they could have gone further.”

Pruitt called the current regulations inappropriate, saying they “set the standards too high.” He said his agency and the National Highway Traffic Safety Administration would revisit them, but he has not yet announced any proposed changes.

In explaining its rationale, the EPA is expected to dust off a decades-old analysis that suggests lighter, more fuel-efficient cars are not substantial enough to withstand crashes and thus pose a danger to drivers. Federal and state crash tests disprove that, but Sivas said she anticipates similar arguments.

The state is pushing back hard. Brown, during a recent visit to Washington, told reporters that the rollback is “not going to happen, and the attempts to do this are going to be bogged down in litigation long after we have a new president.”

On Tuesday, May 1, California filed its 32nd lawsuit against the Trump administration, asserting that in preparing to change the emission standards, the EPA is violating the Clean Air Act and failing to follow its own regulations. In announcing the suit, which 17 other states have joined, Brown conjured images of floods and wildfires ravaging the state as greenhouse gases warm the planet.

“This is real stuff,” he said. “I intend to fight this as hard as I can.”

In addition to rolling back mileage requirements, Pruitt has signaled that he may revoke California’s legal authority to establish its own emissions standards, independent of federal benchmarks. A dozen other states have adopted California’s standards; together, that coalition represents more than a third of the national auto market.

“California is not the arbiter of these issues,” Pruitt said in television interview in March. While the state may set its own limits on greenhouse-gas emissions, he said, it “shouldn’t and can’t dictate to the rest of the country.”

California’s right to request a waiver from federal clean-air laws is well established and, legal experts say, the burden would be high for the administration to convince a court that there is a compelling reason to change the longstanding policy.

Pruitt told lawmakers in Washington, D.C., last week that his agency was engaged in talks with California officials regarding proposed changes.

California Air Resources Board spokesman Stanley Young said the state has had three meetings with the EPA since December, adding: “Nothing substantive was discussed, so I wouldn’t characterize them as negotiations.”

He said the board had not seen a final proposal, and no future meetings were scheduled.

On Friday, Nichols tweeted to Pruitt: “Call me.”


Opening the Coast to Drilling

Perhaps the most consequential of the administration’s many moves to expand domestic-energy production is the Interior Department’s five-year plan to offer lease sales in federal waters off the outer continental shelf, including parcels where drilling has been banned for decades. That includes the California coast.

The plan, announced by Interior Secretary Ryan Zinke, envisions drilling in the Arctic, off the Hawaiian coast and in the Atlantic and Pacific oceans, as well as expanding existing exploration into the eastern Gulf of Mexico. The leasing is scheduled to begin in 2019 off the north coast of Alaska, and then move to the lower 48 states, the agency said.

Zinke said the leasing plans would expand the country’s energy independence. “This is the beginning of an opening up,” he said, promising that the months-long public-comment period before enactment would include all stakeholders. “The states will have a voice.”

Whose voice will be heeded may be another matter. Florida’s governor has already negotiated directly with President Donald Trump to exempt his state from leasing. Even though Brown had a conversation with administration officials relaying California’s wish to be included in a similar exemption, no announcement has been made that would prevent drilling in federal waters off the coast.

But this is one issue where the state may get its way, thanks to current market forces and a stubborn regulatory blockade.

The oil and gas industries have shown little interest in exploring off the California coast, and the State Lands Commission has resolved to make it much more difficult and expensive for companies to get crude oil to land and into pipelines.

The commission’s policy to prevent construction of onshore infrastructure does nothing to stop drilling but could limit the volume of oil shipped at a time when the low price per barrel is already discouraging new exploration.

Given those financial and logistical headaches, companies may take a pass.

“A state like California is going to put its full force and resources on the line,” said Timothy O’Connor, a California-based attorney for the Environmental Defense Fund. “There’s still an element of local and state control, and we are going to defend our values to their very core. That’s certainly one of them.”


Rolling Back Air Rules

California has notched two victories over the Trump administration’s efforts to undo a methane regulation instituted during Obama’s term.

The Waste Prevention Rule was to have gone into effect in January 2017, regulating emissions of natural gas leaking from more than 100,000 oil and gas wells on public lands across the country.

The federal Interior Department delayed enactment of the rule and was sued by California and New Mexico. The states prevailed. The agency then suspended part of the new rule and the two states sued again, winning in court once more.

The victory has significant impact in California, home to vast, aging oil fields and energy infrastructure. Methane’s potent heat-trapping capacity makes it many times more damaging to the atmosphere than carbon dioxide. The state Air Resources Board recently limited methane coming from both new and existing oil and gas sources.

Another win came in a suit the state joined after the EPA postponed implementation of yet another Obama-era rule aimed at combating smog. The “Ozone Rule” reduced allowable concentrations of ozone, a main component of smog.

Pruitt ordered the EPA to extend the deadline to comply with the new standards by at least a year. Two days after California and 15 other states filed suit, Pruitt reversed his decision.

The state also won a suit calling for federal transportation officials to monitor greenhouse-gas emissions along national highways, but the government is considering repealing the regulations.

In another pending case, California and other states are suing the EPA to identify areas of the country with the most polluted air. In April, Trump weighed in, directing the EPA to relax restrictions on state governments and businesses that have been key to cutting smog.

In a memo, the president instructed Pruitt to expedite a review of state smog-reduction plans and streamline the process for businesses to get air-quality-related permits. In addition, Trump ordered a review of other air-quality regulations related to public health to determine whether they “should be revised or rescinded.”

The agency said the directive was aimed at trimming costs and maximizing efficiency.


Dropping Protection for Water

In an effort to more precisely define which bodies of water are covered under federal law, the Obama administration adopted a rule in 2015 that effectively expanded the number of protected waterways, including springs and floodplains that appear for only part of the year.

The idea was to safeguard both water quality and water quantity, and to put an end to the time-consuming practice of determining status on a case-by-case basis. The U.S. Supreme Court had already weighed in, but the high court’s definitions of the “waters of the United States” failed to provide adequate clarification.

The Obama administration’s definition-stretching rules were strenuously opposed by developers, who said they swept up much of the undeveloped land in California, including wetlands.

Soon after Trump came into office, the EPA launched a review of the rule, and then got rid of it.

In February, California sued the EPA and the U.S. Army Corps of Engineers, which signs off on development permits in protected wetlands.

The legal case is still pending, but Sivas said the Trump administration is doing an end-run by requiring the Army Corps to run all permit requests through Washington, rather than making those determinations in regional offices.

By centralizing the decision-making, Sivas said, political appointees can circumvent scientific and legal analysis performed by field offices and determine the outcome based on other factors.

“My guess is they are going to say (to developers), ‘You don’t need a permit,’” she said.

CALmatters.org is a nonprofit, nonpartisan media venture explaining California policies and politics.

Published in Environment

Most weekdays, a long line of rail cars delivers thick slabs of steel to a factory in Fontana, about 40 miles east of Los Angeles, and 60 miles northwest of Palm Springs. Deep in the bowels of California Steel Industries, the slabs are toasted until they glow white-hot; they’re then rolled into thin sheets used to make shipping containers, metal roofing and car wheels.

The plant churns out more than 2 million tons of flat rolled steel each year, using enormous amounts of natural gas and electricity, and releasing more than 190,000 metric tons of climate-altering carbon dioxide annually. Now, California Steel and many other businesses have to pay for their carbon emissions under California's new cap-and-trade law, the first of its kind in the nation.

Last November, the company participated in the state's first auction of carbon allowances, purchasing an undisclosed number, each worth one metric ton of carbon dioxide and selling for $10.09. The online auction went fairly smoothly, says Brett Guge, executive vice president of finance and administration at the company. But for Guge, the long-term challenge is finding ways to meet California's ambitious greenhouse-gas reduction targets (down to 1990 levels by 2020) while remaining profitable.

The Golden State forged ahead with the carbon dioxide cap-and-trade program despite the U.S. Senate's 2010 failure to pass a national program. Given the state's history of implementing environmental regulations that later become national policy, a successful cap-and-trade system could serve as a federal model. If cap-and-trade in California "fails, or is perceived to have failed, then that could be the nail in the coffin for cap-and-trade consideration as a policy instrument in Washington," says Robert Stavins, a Harvard professor who studies climate policy.

While its overall impact on U.S. emissions won't be major, the California experiment makes several improvements to existing cap-and-trade strategies. It covers more sources of pollution than the 5-year-old Regional Greenhouse Gas Initiative in the Northeastern U.S., which applies only to power plants. The European Union started the world's largest carbon cap-and-trade program in 2005, but it had a significant flaw: The initial stage of the program gave away too many free credits, resulting in some power companies raking in windfall profits by raising electricity prices, even though they didn't have to pay for their allowances. It also contributed to low prices for carbon allowances, which provides scant incentive to cut emissions.

Mary Nichols, chairman of the California Air Resources Board, the agency steering the state program, is confident that California's effort will be different. The program covers 360 businesses, which represent about 600 facilities that each release more than 25,000 metric tons yearly—enough to put a big dent in California's total carbon output. The EU's difficulty, Nichols notes, was that authorities didn't have an accurate measure of the total quantity of emissions initially. California, though, has had a greenhouse-gas reporting requirement in place since 2008.

"We knew (what polluters) were actually putting into the atmosphere," says Nichols. "That gave us the assurance that if we started a (cap-and-trade) program … we would be able to implement it in a way that would not cause the kinds of problems that occurred in Europe."

Fraud could be another obstacle, but experts agree the state is equipped to keep that to a minimum. The Air Resources Board uses third-party verifiers to check reported emissions, and has a system to track allowances and prove their authenticity. Companies that fail to supply enough credits to cover their emissions are fined by having to purchase four times the number of outstanding allowances. While not flawless, the program is unlikely to suffer from market manipulation and fraud, according to an analysis by the University of California at Los Angeles.

But even if the cap-and-trade system works as intended, its economic impacts are a big unknown. Because of its many regulations, high electricity rates and taxes, California is already a costly place to do business.

Guge is worried there won't be a feasible way to reduce the carbon dioxide output of his company's gas-powered furnaces, which account for 75 percent of the plant's total releases. Without reductions, his company will have to pay for more allowances as the cap tightens, but it's reluctant to pass those increased costs on to customers, because that might put it at a competitive disadvantage.

Proponents of cap-and-trade hope the system will drive innovations, with new companies popping up to provide emissions-curbing breakthroughs. In late January, the Sacramento-based firm Clean Tech Advocates launched to do just that. It works to help clean tech developers get state funding, generated from the carbon-credit auctions, for their projects, and its consultants help companies reduce emissions. Founder Patrick Leathers says that, over time, the auctions will bring in "billions of dollars," which will boost the state's clean tech industry and result in carbon-cutting solutions for companies dealing with cap-and-trade.

Environmentalists—and businesses—are hoping he's right.

This story originally appeared in High Country News.

Published in Environment