The Obama appointee claimed the waiver is appropriate and consistent with previous interpretations of the Clean Air Act by EPA.

At least 13 other states and the District of Columbia have said that they intend to follow California in instituting tougher standards than previously called for under federal regulation. Since these areas comprise about 40% of new car sales, it is possible that California legislators and bureaucrats will determine the size and types of cars that you can buy after 2016.

The first California waiver request was made in December 2005 under the Bush Administration and was subsequently denied in March 2008. This previous decision was based on an interpretation of the Clean Air Act finding that California did not have a need for its greenhouse gas emission standards to meet “compelling and extraordinary conditions,” EPA said in a statement defending the reversal of this previous policy ruling.

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“This decision puts the law and science first. After review of the scientific findings, and another comprehensive round of public engagement, I have decided this is the appropriate course under the law,” said EPA Administrator Lisa P. Jackson. The Obama appointee claimed the waiver is consistent with the Clean Air Act as it’s been used for the last 40 years. 

“More importantly, this decision reinforces the historic agreement on nationwide emissions standards developed by a broad coalition of industry, government and environmental stakeholders earlier this year,” she said.

While automakers dependent on government support and others observing the “bully pulpit” that the administration has used to shape the debate on automotive matters have been cowed into public silence, auto dealers, many them small business owners with Republican ties, are more vocal in their opposition.

“EPA’s decision to reverse its 2008 denial of California’s request for a pre-emption waiver is sadly a triumph of politics over good common sense,” said John McEleney, chairman of the National Automobile Dealers Association. “Moreover, with its action today, the Obama administration has effectively ceded the long-term setting of national fuel economy standards to unelected California regulators,” he added.

Just after taking office in late January, President Barack Obama directed EPA to assess the appropriateness of denying the waiver. EPA received a letter from California on January 21, 2009, raising several issues for Administrator Jackson to review regarding the denial.

Last month, President Obama announced a first-ever national policy aimed at both increasing fuel economy and reducing greenhouse gas pollution for all new cars and trucks sold in the United States. The new standards would cover model years 2012-2016. Cars and light trucks must average 35.5 miles per gallon by 2016, about 40% higher than today. Congress in 2007 passed a 35 mpg requirement by 2020. The accelerated time table will add thousands upon thousands of dollars to the cost of a new car critics say.

Sunrise or sunset for the auto industry?

Automakers responded to EPA’s California ruling by reaffirming their support for the single, national program announced last month by President Obama.

“President Obama’s decision last month to create a single national program for greenhouse gas emissions and fuel economy standards moves us toward a policy that ensures that consumers in all 50 states have access to highly fuel-efficient vehicles at an affordable price,” said Dave McCurdy, president and CEO, Alliance of Automobile Manufacturers. “We are hopeful the granting of this waiver will not undermine the enormous efforts put forth to create the national program.”

“The President has succeeded in bringing three regulatory bodies, 15 states, a dozen automakers and many environmental groups to the table,” added McCurdy. “The national program has launched a new beginning, a new chapter and a new era of cooperation. Automakers remain committed to working with all parties to further this single national program administered by the federal government.”

When this national program takes effect, California said it will allow automakers who comply with the national program to also be deemed in compliance with state requirements. Rulemaking for this program has not even started yet, and there is and will be heavy lobbying by special interests as it proceeds.

More problems for automakers will likely arise after 2016 when it is expected that California will pursue CO2 standards that will require drastic increases in fuel economy for popular selling cars and trucks. If the state follows the policies outlined in its previous proposals going back to 2004, the cars bought by the rich and famous will be exempted.

EPA said it based its decision on an extensive record of scientific and technical evidence. As part of the reconsideration, EPA revisited the prior decision documents and record. The agency also opened a new comment period this spring, including public hearings.

The Clean Air Act gives EPA the authority to allow California to adopt its own emission standards for new motor vehicles due to the seriousness of the state’s air pollution challenges. There is a long-standing history of EPA granting waivers to the state of California.