Vol. 52-2 Washington Update

Washington Update

The Most Ambitious Rule Yet?

In December of 2021, the EPA finalized a rule which created “the most ambitious vehicle emissions standards for greenhouse gases ever established,” for light-duty vehicle model years (MY) 23-26.^[1] This rulemaking stemmed from an executive order that President Biden signed on his first day in Office, which pledged, 

“to listen to the science; to improve public health and protect our environment; to ensure access to clean air and water; to limit exposure to dangerous chemicals and pesticides; to hold polluters accountable, including those who disproportionately harm communities of color and low-income communities; to reduce greenhouse gas emissions; to bolster resilience to the impacts of climate change; to restore and expand our national treasures and monuments; and to prioritize both environmental justice and the creation of the well paying union jobs necessary to deliver on these goals.”^[2]

            To deliver on these presidential promises, the Order requires agency heads to review all agency actions that occurred during the Trump Administration and to, “consider suspending, revising, or rescinding,” any action that might be, “inconsistent with, or present obstacles to,” to the above policy in the Order.^[3] In an effort to establish, “ambitious, job-creating fuel standards,” Section 2 of the Order specifically requires agencies to review the Trump Administration’s Safe Affordable Fuel Efficient (SAFE) Vehicles program and gives agencies the ability to re-open the notice and comment process for the SAFE vehicle rule.^[4] The Order further required that agencies suspend, revise, or revoke the SAFE rule by July 2021 and consider the views of labor unions, states, and industry in its decision.^[5]

The rule incorporates a slew of ambitious goals that are designed to incorporate the Biden Administration’s climate change and environmental justice initiatives and target a highly pollutive industry. Light duty vehicles, which include passenger cars and most SUVs, vans, and pickup trucks, account for almost 60% of greenhouse gas (GHG) emissions in the transportation sector and 17% of total US GHG emissions.^[6] The transportation sector is the largest emitter of GHG in the United states and, while work certainly needs to be done to address commercial transportation and to improve access and availability of public transportation, transforming emission standards for light duty vehicles is an important part of lowering emissions and ultimately decarbonizing transportation.^[7] 

The EPA has authority to promulgate this rule under Section 202(a) of the Clean Air Act (CAA) which requires it to, “establish standards for emissions of pollutants from new motor vehicles which, in the Administrator’s judgment, cause or contribute to air pollution which may reasonably be anticipated to endanger public health or welfare.” ^[8] The EPA must consider the cost of compliance including, “technological feasibility, compliance cost (…) lead time (…) the impacts of potential GHG standards on the auto industry, cost impacts for consumers, oil conservation, energy security (…) other energy impacts [and] safety.”^[9] While all factors must be considered, the ultimate purpose of adopting regulations under section 202(a) of the CAA is to address harmful air pollution that can potentially endanger public health and welfare.^[10] The agency openly stated that it handled this calculus differently than it did when promulgating the SAFE rule, and explained that it was putting greater weight on emissions reductions (rather than industry considerations) and the resultant public health and welfare benefits in light of the CAA’s clear statutory purpose.^[11] This is just one example of the marked difference between the Trump and Biden administrations different approaches to agency duty, environmental regulation, and public health and welfare.  

            The EPA also cites Supreme Court precedent establishing that agencies can change their opinions regarding existing policy, in what might be an attempt to prevent litigation or to just prove again that it has the authority to carry out the actions at hand.^[12] Agencies are allowed to change their existing policies as long as they give adequate rationales and properly explain the reasons for said changes.^[13] In changing the SAFE regulations the EPA does not even need to provide a more detailed justification; instead, an explanation that would accompany a regulation made from scratch would do.^[14] The EPA goes above and beyond this requirement, clearly explaining why it is turning away from the position it held in promulgating the SAFE regulations. 

The EPA’s amended approach, which returns to the original statutory purpose of the CAA, will reduce emissions by 50% more than the original SAFE standards would.^[15] The new rule also results in an expected decrease of CO2 by almost 50 grams/mile for MY 2026^[16] and helps to avoid over 3 billion metric tons of CO2 as compared to the SAFE rule.^[17] The benefits of the program far outweigh the costs as well; the program under the new rule has a net present value of 120 to 190 billion dollars,^[18] will reduce gasoline consumption by more than 360 billion gallons (15% of annual consumption),^[19] and will result in a total fuel savings of $210 billion and $420 billion through 2050.^[20]

The EPA also incorporated a robust environmental justice approach in the promulgation of the new rule. In creating the new rule the agency sought to identify and address the potential, “disproportionately high and adverse human health or environmental effects…on minority populations and low-income populations in the United States,” that the rule might have in order to achieve the, “fair treatment and meaningful involvement of all people regardless of race, color, national origin, or income with respect to the development, implementation, and enforcement of environmental laws, regulations, and policies.^[21] This is in accordance with Biden’s Executive Order 14008 which calls on federal agencies to make achieving environmental justice through the implementation of their programs and actions a priority via a policy, “to secure environmental justice and spur economic opportunity for disadvantaged communities that have been historically marginalized and overburdened by pollution and underinvestment in housing, transportation, water and wastewater infrastructure and health care.”^[22] The EPA explains its incorporation of this mission into the new rule as two-pronged. First, the adverse impacts of climate change will be felt more strongly by people of color and low-income communities, as they are especially vulnerable to these changes. By attempting to reduce GHG emissions and the impacts of climate change, these populations will benefit and potentially avoid some of the more disastrous impacts of global climate change. Second, the EPA also mentioned the reduction of non-GHG emissions from the adoption of the new rule. People of color and low income communities are more likely to live in areas with higher levels of air pollution, so the reduction of harmful, non-GHG emissions will also increase efforts to incorporate environmental justice initiatives.^[23]

The EPA’s new rule is functionally an overhaul of the Trump Administration’s SAFE regulations. The new rule properly incorporates the CAA’s clear statutory purpose of reducing GHG emissions and prioritizing public health and safety, sets ambitious yet realizable goals for one of the US’s most pollutive industries, sets up future MY regulations on a steadily decreasing path, and incorporates crucial yet generally lacking environmental justice criteria, all while still accounting for industry concerns such as compliance costs, lead time and other relevant factors. The rule also properly explains the agency’s change in reasoning for the new rule and cites strong Supreme Court precedent for its authority to do so. While the rule has not been legally challenged yet, time will what attacks are levied against it in the court, if any. 

Blake Welborn is a 3L from Austin, Texas. He majored in environmental studies at Texas A&M and then taught high school science before coming to Texas Law. He served as a staff editor and then a senior staff editor on TELJ, was a Pro Bono scholar with the Expunction Project during his 2L year, and is a member of Texas Law Review. Blake hopes to work on environmental justice issues in Texas after he graduates.

Jacob Arechiga is a Special Counsel in Duane Morris LLP’s Austin, Texas office. His practice is focused on complex commercial matters, particularly those in the energy and electric power industries.