California Auto Rule Poised to Reshape Detroit

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California Gov. Arnold Schwarzenegger didn't waste any time, sending a letter to President Obama on his first day in office, asking him for help curbing global warming pollution from cars. California has a lot of them, and it wants to reduce vehicle emissions 30% by 2016. Thirteen other states are ready to follow California's lead.

While the letter looks on the surface like the final resolution of long legal skirmish with the previous administration, granting California's request will effectively transform the demand coming from a big chunk of Detroit's car market and mean that manufacturers would have to deliver higher mileage vehicles on an accelerated schedule. Under orders from President Obama,  EPA administrator-designee Lisa Jackson can guarantee steep future emissions reductions from the transport sector with the stroke of a pen, and allow the thorny bailout of Detroit to proceed without any doubt as to where the industry must head, despite current low fuel prices.  

On the campaign trail, Obama said he would grant California's request, and on day one , Schwarzenegger came knocking. His impatience is understandable since his wait has been protracted. Back in December 2005, California dutifully filed its paperwork under the Clean Air Act so it could move forward with these more stringent controls on greenhouse gases from automobiles, but the EPA under orders from the Bush White House blocked the move. Finally, Administrator Stephen Johnson last year officially denied California's request, known as a "waiver" under the law. Schwarzenegger wants the decision reversed as quickly as possible.

In his letter, copied to the governors of 13 other states, Schwarzenegger called Johnson's decision "fundamentally flawed."

For four years, California and a growing number of farsighted states have sought to enforce a common-sense policy to reduce global-warming pollution from passenger vehicles, which are the source of 20 percent of our nation's greenhouse gas emissions. Regulation will not only reduce these emissions, but will also save drivers money and reduce our nation's dependence on imported oil.

However, last March, the U.S. Environmental Protection Agency (EPA) made what we believe was a fundamentally flawed decision to deny California's request for the Clean Air Act waiver necessary to enforce our regulation. Today, the California Air Resources Board wrote to EPA Administrator-designee Lisa Jackson to request that she immediately reconsider the waiver based on clear legal standards. I have enclosed a copy of the Board's letter.

The Board's letter is a blistering legal critique of Johnson for his misinterpretation of the Clean Air Act, misapplication of facts, improper evaluations and flouting of waiver law and practice. The letter was signed by Mary Nichols, chairman of California's Air Resources Board.

Both the governor's letter to Obama and Nichols' letter to Jackson are attached below. These documents mark a fundamental legal turning point for the US auto industry. 

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