Automakers Defy Trump, Stick With California in Climate Change Standoff

By Dale Kasler, The Sacramento Bee

22 September 19

 

alifornia officials, teeing up an epic fight with President Donald Trump’s administration over climate change and air pollution rules, have potentially powerful allies in their corner: four of world’s largest automakers.

Ford, Honda, BMW and Volkswagen are sticking with an agreement they made to meet California’s stricter standards on greenhouse gas emissions, the head of the California Air Resources Board said Thursday.

Hours after the Trump administration formally revoked California’s legal authority to set its pollution standards, board Chairwoman Mary Nichols lauded the four companies “for standing their ground on this issue” in spite of the Trump administration’s efforts to force them to pull out of the agreements.

Specifically, the U.S. Justice Department has launched an antitrust investigation into the four companies’ actions by entering into the agreement with California. Antitrust law covers business competition, and the Justice Department is reportedly examining whether the agreements could restrict competition by limiting the kinds of cars and trucks sold.

Democrats in California and elsewhere have called the investigation a politically motivated attack on California. Nichols, speaking at an air board meeting, called it “government-sponsored persecution.”

A Ford Motor Co. spokeswoman, Rachel McCleery, said the company won’t deviate from the California agreement. She referred a reporter to a set of deal terms in which all four companies recognized California’s legal power to create its own standards on greenhouse gas emissions.

A BMW spokesman, Phil Dilanni, said the agreement commits BMW to “continuous improvements in fuel economy and the reduction of emissions from our vehicles.” Honda had no comment and VW officials couldn’t be reached for comment.

But board officials acknowledged that the antitrust investigation is having a chilling effect on California’s attempt to get other car makers to sign onto its pollution standards.

“We were put on ‘pause’ a little bit with the antitrust allegation,” said Ellen Peter, the board’s chief counsel.

In announcing the initial agreements in July, Gov. Gavin Newsom promised that other car makers would sign on. Last month he said Mercedes Benz was on the verge of joining with California. But so far no other company, including Benz, has made a deal with California.

The industry craves certainty, and the prospect of a lengthy lawsuit between California and the federal government could jeopardize long-range product planning. The Association of Global Automakers on Thursday called for a “unified national standard” on pollution standards.

The state is moving ahead with the original four agreements. In a largely procedural move, the air board voted 12-0 on Thursday to direct its executive staff to finalize the deals.

Earlier Thursday, the Trump administration followed through on the president’s pledge from the day before and moved to revoke California’s authority to impose air pollution standards that are stricter than the federal government’s.

The state has vowed to sue the Trump administration to overturn its decision.

Because of the state’s historically dirty air, it has the exclusive right under the federal Clean Air Act to impose stricter standards as long as it gets a waiver from the U.S. Environmental Protection Agency.

California and former President Barack Obama’s administration had cut a deal that would reduce greenhouse gas emissions from cars by about 30 percent by 2025. Because building lighter cars is the most practical way of lowering carbon emissions, the plan would increase fuel economy from 35 mpg to about 50 mpg.

After the Trump administration signaled it was going to roll back those standards, California began negotiating with individual car makers. The deals announced in July would maintain the Obama rules but give the automakers an additional year, to 2026, to meet the emissions targets.

Separately, state Assemblyman Phil Ting, D-San Francisco, said Thursday he will push legislation next year, Assembly Bill 40, to cut off clean-car rebates to manufacturers that haven’t agreed to California’s greenhouse gas standards.

The state gives clean car buyers a variety of rebates, including $2,500 for electric cars and $5,000 for hydrogen fuel-cell vehicles. The Legislature budgeted a total of $238 million for this year. “These are taxpayer dollars” and should be limited to automakers that are supporting California’s climate goals.

By revoking California’s legal authority, the Trump administration also is undermining the state’s “clean car” mandates, which require automakers to double the number of electric vehicles and other clean cars they sell in the state over the next six years.