Yes They Can

Today, I and my colleague will testify at the EPA Waiver hearing where the Obama Administration EPA is going to reconsider the previous Administration's denial. There is little doubt in most observers' minds that the Obama Administration's EPA will grant California the waiver. As described in my colleague David Doniger's blog, science, the law and the rising tide of global warming politics are all on our side.

Attention, then, has started to shift to the next phase of the battle for cleaner cars. Intense speculation has now begun over the potential for a national greenhouse gas standard that will be sufficiently strong to entice California and the 13 other states with California's program to accept it as an alternative means of compliance instead of enforcing their programs on a state-by-state basis. Mostly recently an unnamed Obama Administration official was reported by Reuters as saying "A national policy at this point is in the conceptual stage and we do not have specifics we can share given that the conversations are ongoing."

The concept of a single national emissions program sounds familiar to David Doniger and me since it's what we have also been saying not just in our blogs, but even to Rick Wagoner himself. But there are some very important details to understand about the single national standard as a path forward:

First, it does not eliminate the need for the California waiver. The California waiver final decision is within a matter of months; a final GHG national rule wouldn't be finalized until one year from now, at earliest. With the waiver within its grasp, there is absolutely no way California drops its waiver request in return for promised more stringent national standard. If one does emerge a year from now and it's at least as stringent as California's program, then California and the other states could create an option to accept a sufficiently stringent federal GHG program as an alternative compliance pathway within their own programs.

Second, a single national standard cannot be done just through a strengthened fuel economy standards (the US fuel economy program is called "CAFE"). As we have said repeatedly, GHG and fuel economy standards are not identical. Using a CAFE standard to meet a GHG target is ultimately a less effective and more expensive way to meet a GHG target. That's because the CAFE program gives much too much credit to alternative fuel cars (include flex fuel vehicles that never run on ethanol) and ignores completely cheap reductions in air conditioning systems (the refrigerant is 1300 times more powerful than CO2 as a global warming pollutant). Therefore, a single national standard must be done by EPA as a GHG gas standard where all four of the motor vehicle GHG pollutants are simultaneously addressed. EPA is well equipped and is well prepared to do these standards.

Third, and perhaps most importantly, the automakers can meet a national GHG standard that's equivalent to applying California's program nationwide. In December, I analyzed GM and Ford's business plans and found that they where essentially in compliance with a national GHG standard at the California levels. More recently, I've used my same methodology to analyze the February 17th GM Restructuring Plan. My new analysis is showing that GM complies in most years and that they have variety of options, including using credits accrued in early over compliance years, introducing some new models slightly earlier, and/or making more simple improvements to the air conditioning systems, that will allow them to still comply with national version of the California program.

We are still waiting for Mr. Wagoner to tell us "Yes We Can". We think they are getting closer. Stay tuned.