U.S. and Auto Makers Fight California's Clean-Air Plan

JEFFREY BALL / Wall Street Journal 11oct02

The Bush Administration, in a slap at state efforts to regulate automotive-fuel consumption, sided with major auto makers suing to block a California program designed to put cleaner cars and trucks on the road.

The Justice Department submitted a legal brief supporting General Motors Corp. and DaimlerChrysler AG's Chrysler unit in a lawsuit they have filed against a California clean-air effort known as the zero-emission vehicle program. The administration, notified of the case by lawyers for GM and DaimlerChrysler, endorsed the auto makers' argument that the California program is illegal because it amounts to a state effort to regulate automotive fuel economy, an authority reserved for Washington under federal law.

"We cannot have a chaotic mix of 50 separate standards," said Chet Lunner, a spokesman for the Department of Transportation, which oversees the federal fuel-economy rules. "Regulating fuel economy has always been, and should continue to be, a federal responsibility."

The move marks an early push by Washington to protect its regulatory turf from state incursions. California and several other states are moving to implement their own rules designed to curb greenhouse-gas emissions. They are reacting to what they regard as inaction on global warming from the Bush administration. The administration has opposed the Kyoto global-warming treaty on the grounds that it would crimp the U.S. economy, and it has helped the auto industry fight off calls for significantly tougher federal fuel-economy rules, especially for sport-utility vehicles and pickup trucks. Higher fuel economy means lower greenhouse-gas emissions, because the main automotive greenhouse gas, carbon dioxide, is produced when fuel burns in an engine.

California is the most activist of the states. Earlier this year, it passed the nation's first law limiting greenhouse-gas emissions from autos. The auto industry strongly opposed California's greenhouse-gas move because it saw the threat to its most-profitable products -- SUVs and pickups. For years, the industry has been able to derail calls for Congress to significantly toughen the federal fuel-economy rules. Although the Bush administration is considering tightening those standards, most experts predict only a minor adjustment.

Technically, the auto makers' suit and the administration's brief take issue only with California's zero-emission vehicle program. But in practice they are likely to affect the way California shapes its new greenhouse-gas law -- a law that is likely to be copied by other states, including New York.

California Governor Gray Davis said he was "disappointed that the federal government would intervene with our efforts to protect our air quality."

The legal dispute results from changes California regulators made to their zero-emission-vehicle program last year. The program was intended to force the auto industry to sell thousands of nonpolluting battery-powered electric cars. But the few electric vehicles offered for sale have failed to attract many buyers. In response, California regulators said auto makers could get credit toward the mandate by selling highly fuel-efficient hybrid gas-and-electric vehicles. GM and DaimlerChrysler sued, arguing the changes amount to an illegal fuel-economy regulation from a state. The auto makers won an injunction in U.S. District Court in Fresno, Calif., earlier this year, delaying the implementation of the California mandate, at least in its current form, to 2005 from 2003.

Outside lawyers for GM and DaimlerChrysler sent a letter to the Justice Department informing it of the injunction, according to a GM official. Typically, lawyers send such letters in hopes of soliciting supportive friend-of-the-court briefs.

California has appealed the decision to the U.S. Court of Appeals in San Francisco. The state argues that pushing for higher fuel economy is only a side effect of its broader effort to limit smog-causing pollutants from cars. Similarly, state officials say their greenhouse-gas law is legal because it seeks to curb not just carbon dioxide, but also other global-warming gases that have nothing to do with fuel economy.

But the auto industry's trade group, the Alliance of Automobile Manufacturers, based in Washington, has said it plans to sue to block the greenhouse-has law using the same legal argument the Bush administration has now endorsed.