Transportation and the Global Environment

The transportation sector accounts for a third of U.S. greenhouse gas (GHG) emissions from fossil fuels. There have been several important developments related to efforts to control emissions from this sector in past weeks. On December 19 the U.S. Environmental Protection Agency (EPA) shocked most observers when it denied California’s request for permission to impose its own controls on GHG emissions from motor vehicles. California’s regulations, which would have become effective with 2009 model-year vehicles, would have mandated a 30% reduction in GHG emissions from new cars and light trucks sold in the state by 2016.

EPA’s decision to veto these regulations was hastily announced by Administrator Steve Johnson just hours after President Bush had signed legislation raising national fuel economy standards to a fleetwide average of 35 mpg by 2020. EPA, which previously had routinely approved California’s requests to adopt more stringent air pollution standards pursuant to §209 of the Clean Air Act (CAA), argued that “a clear national solution” was a better approach than “a confusing patchwork of state standards.” This rationale was transparently false because EPA has no national strategy to control GHG emissions, the new fuel economy legislation was never intended to represent a national solution, and “a confusing patchwork” is impossible because the CAA requires any other states who wish to adopt more stringent standards to adopt standards identical to California’s. EPA’s veto of the California standards came after two federal district courts - one in Vermont in September and one in California in December - had ruled that state adoption of the California standards was not preempted by existing national fuel economy standards. EPA also argued that California’s waiver request differed from previously approved requests because climate change is a global problem - but that hardly justifies blocking the most promising state initiative to combat it.

Outrage at EPA’s decision was expressed by officials in California and the 16 other states (with a combined total of nearly half of the U.S. auto market) that had planned to adopt the California standards. A prominent Chinese environmental law professor who is part of our China/U.S. Research Project on the Experience of Environmental Law in Foreign Countries (see Nov. 11, 2007 post on globalenvironmentallaw.com) expressed shock that EPA had vetoed the California standards. In an email message he indicated that maybe the environmental laws in the U.S. are not as good as he had previously believed.

On December 19, 2007, the Environment Council of the European Union (EU) reached agreement on a plan to include GHG emissions from aircraft in the EU’s scheme to control GHG emissions beginning in 2012. While emissions from this sector account for only 3% of EU emissions, they are growing rapidly, having doubled since 1990. They are projected to double again by 2020 if not controlled. The plan is to cap aircraft emissions at average levels prevailing from 2004-2006 beginning in 2012, a year later than initially recommended by the European Parliament. Airlines will be able to purchase carbon credits to comply with the standards. Rapidly growing airlines will have access to extra allowances and companies in developing countries with few flights to the EU may be exempted. The U.S. has strongly opposed these limits. After being adopted as a “common position” sometime in 2008, the plan will be returned to the European Parliament for review.

On December 19, the European Commission proposed tightening limits on GHG emissions from new motor vehicles in the EU to levels that are almost as stringent as California’s plan. Under the Commission proposal, new passenger cars would have to cut average emissions of CO2 from the current limit of 160 grams per kilometer to 130 g/km by 2012. German automakers are strongly proposed to the proposal, which they believe will disadvantage larger vehicles, though the proposal incorporates a sliding scale that allows greater emissions from larger cars. The California’s regulations that were vetoed (for now) by EPA would limit CO2 emissions from new passenger cars and light duty trucks to 205 grams per mile in the 2016 vehicle year and beyond. For purposes of comparing this to the EU limits, the EU limit of 130g/km translates into a limit of 209 grams per mile, not quite as stringent as California’s. The EU previously had proposed a target of 120 g/km (193 g/mile), which would have been more stringent than California’s program. On January 2, 2008 California, 15 other states, and several environmental organizations filed suit against EPA to challenge its denial of California’s waiver request, which blocked controls the states planned to impose on emissions of greenhouse gases (GHG) from motor vehicles. The lawsuit was filed in the U.S. Court of Appeals for the Ninth Circuit, rather than in the D.C. Circuit, which has exclusive venue over nationally applicable regulatory decisions under the Clean Air Act (CAA). The Ninth Circuit may be more favorably disposed to California’s lawsuit, though even conservative judges on the D.C. Circuit have not hesitated to strike down politically-motivated decisions by the Bush EPA.

EPA may argue that the case should have been filed in D.C. because the decision has a national effect and it also may claim that the lawsuit is premature. Even if such arguments are successful, they would only postpone a likely defeat in court for EPA. EPA’s rationale for its decision appears to have been hastily concocted in response to White House dictates, despite the opposition of EPA’s professional staff who advised that the agency would lose in court. While a good case could be made for expedited review of the litigation, the most likely result is that the courts will not decide the case before January 2009 when a new administration will promptly reverse EPA’s decision and approve California’s waiver request.

India’s Tata Group announced on January 10, 2008 that beginning in September it will be marketing a new “one lakh” “People’s Car” to make automobiles far more affordable to the general population of that rapidly growing country. “One lakh” refers to the vehicle’s price tag of 100,000 rupees, approximately $2,600, less than half the price of current small passenger cars in India. Tata apparently is able to make a car this inexpensive by stripping it down to include only the most basic technology. Environmentalists are concerned that this includes only minimal safety and pollution control technology. If the car proves to be as popular as expected, it could further clog India’s already overtaxed transportation infrastructure and greatly increase the country’s (and the globe’s) pollution problems. The rapid growth in automobile use in China already is contributing mightily to that country’s growing pollution problems. The availability of such a low-cost automobile in India could replicate this pattern in India. Tata’s response is that if it does not move aggressively to appeal to India’s growing middle class, Chinese and other countries’ automobile manufacturers will claim this market instead.

This issue poses a particularly important challenge as part of the larger set of issues of how to reconcile the demands of global environmental protection with the legitimate aspirations of developing countries. The development of an inexpensive automobile will create many jobs in India (the Indian government’s “automotive mission plan” projects the creation of 25 million jobs in this sector by 2016) and bring “motoring to the masses.” How can these benefits be achieved without greatly adding to already serious pollution and climate change problems? The Financial Times quotes R.K. Pachauri, the Indian chair of the Intergovernmental Panel on Climate Change, as stating that the prospect of the “one lakh” car hitting the Indian market is giving him “nightmares.”