Order Code RL34099
California’s Waiver Request to Control
Greenhouse Gases Under the Clean Air Act
Updated December 27, 2007
James E. McCarthy
Specialist in Environmental Policy
Resources, Science, and Industry Division
Robert Meltz
Legislative Attorney
American Law Division

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California’s Waiver Request to Control Greenhouse
Gases Under the Clean Air Act
Summary
California has adopted regulations requiring new motor vehicles to reduce
emissions of greenhouse gases (GHGs), beginning in model year 2009. The Clean
Air Act, however, generally preempts states from adopting their own emission
standards for mobile sources of air pollution. In order for the regulations to go into
effect, therefore, the state must obtain a waiver of Clean Air Act preemption from
the U.S. Environmental Protection Agency.
California requested this waiver in 2005, but EPA took until December 19,
2007, to decide that it would deny the request. On that day, EPA Administrator
Stephen Johnson wrote California Governor Schwarzenegger to say, “I have decided
that EPA will be denying the waiver and have instructed my staff to draft appropriate
documents setting forth the rationale for this denial in further detail ....” According
to press reports, the decision was taken against the unanimous advice of the agency’s
technical and legal staffs.
Following the announcement of EPA’s decision, Governor Schwarzenegger and
the state’s Attorney General announced their intention to sue to overturn the decision.
Fourteen other states have adopted California’s GHG regulations. Under the Clean
Air Act, their regulations avoid preemption only if California is granted a waiver, so
there is broader interest and more at stake than might otherwise be the case.
This report reviews the nature of EPA’s, California’s, and other states’ authority
to regulate emissions from mobile sources, discusses the applicability of that
authority to GHGs, and analyzes issues related to the California waiver request. The
conditions for granting or denying a waiver request under the Clean Air Act establish
four tests: whether the state has determined that its standards will be, in the
aggregate, at least as protective of public health and welfare as applicable federal
standards; whether this determination was arbitrary and capricious; whether the state
needs such standards to meet compelling and extraordinary conditions; and whether
the standards and accompanying enforcement procedures are consistent with Section
202(a) of the Clean Air Act. California appears to have a sound argument that it has
met these tests, though EPA’s announced intention to deny the waiver request
indicates that EPA will be setting forth an argument to the contrary.
This report does not analyze whether California is preempted from regulating
mobile-source GHGs by the Corporate Average Fuel Economy (CAFE) requirements
of the Energy Policy and Conservation Act of 1975 (EPCA), or the newly enacted
provisions of the Energy Independence and Security Act of 2007 (P.L. 110-140).
Under these laws, authority to set fuel economy standards is reserved for the federal
government — specifically, the National Highway Traffic Safety Administration. In
several court cases, and in other venues, the auto industry is maintaining that the
regulation of mobile-source GHG emissions is simply another method of regulating
fuel economy, so California’s GHG standards (and identical standards adopted by
other states) are preempted. Two federal district courts have rejected this argument,
but one decision has been appealed and the other likely will be.

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Contents
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
California’s Greenhouse Gas Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
EPA’s Response to the Waiver Request . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Actions by Other States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Waiver Criteria . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Evaluating the GHG Standards in Isolation . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Applicable Federal Standards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Compelling and Extraordinary Conditions . . . . . . . . . . . . . . . . . . . . . . 9
Consistency with Section 202(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Evaluating the State’s Program in the Aggregate . . . . . . . . . . . . . . . . . . . . 12
Has EPA Ever Turned Down a Waiver Request? . . . . . . . . . . . . . . . . . . . . . . . . 14
Related Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
List of Figures
Figure 1. California GHG Emission Requirements . . . . . . . . . . . . . . . . . . . . . . . 3
List of Tables
Table 1. States Adopting California’s Mobile Source GHG Standards . . . . . . . . . 6

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California’s Waiver Request to Control
Greenhouse Gases Under the Clean Air Act
Introduction
Every federal law imposing environmental standards raises the question of
whether the states are allowed to set stricter standards. In deference to states’ rights,
Congress’ usual approach is to allow stricter state standards; for example, the Clean
Air Act (CAA) allows stricter state standards for stationary sources of air pollution
(power plants, refineries, etc.). For mobile sources of air pollution, however — cars,
trucks, planes, etc. — a lack of national uniformity creates a problem, since
manufacturers would potentially face the task of complying with different standards
in each state. Such standards would fragment the national market, increasing costs
and complicating the manufacture, sale, and servicing of the affected products. For
this reason, the mobile source portion of the CAA (Title II) generally does not allow
states to “adopt or attempt to enforce” their own emission standards for new motor
vehicles or engines.1 In general, it allows only federal standards for motor vehicle
emissions.
There is an exception to this rule, however, in CAA Section 209(b),2 which
provides that:
The [EPA] Administrator shall, after notice and opportunity for public hearing,
waive application of this section [the prohibition of State emission standards] to
any State which has adopted standards (other than crankcase emission standards)
for the control of emissions from new motor vehicles or new motor vehicle
engines prior to March 30, 1966, if the State determines that the State standards
will be, in the aggregate, at least as protective of public health and welfare as
applicable Federal standards.3
Only California adopted such standards before March 30, 1966, so only California
can qualify for such a waiver.
Faced with severe air pollution problems, especially in Los Angeles and the San
Joaquin Valley, California has regularly developed more stringent standards for
1 CAA § 209(a), 42 U.S.C. § 7543(a). See also S.Rept. 91-1196 (1970), p. 32.
2 42 U.S.C. § 7543(b).
3 As will be discussed in greater detail below, there are three conditions placed on the grant
of such waivers: The Administrator is to deny a waiver if he finds: 1) that the state’s
determination is arbitrary and capricious; 2) that the state does not need separate standards
to meet compelling and extraordinary conditions; or 3) that the state’s standards and
accompanying enforcement procedures are not consistent with Section 202(a) of the Act.

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CRS-2
motor vehicle emissions than those required by federal law. In order to impose these
standards, the state has requested and been granted Section 209(b) waivers at least
53 times since 1967.4 (Although only California may be granted a waiver under this
section, elsewhere in the Act, as discussed later in this report, there is a waiver of
preemption for other states that have adopted California’s standards, if EPA grants
California a waiver.)
Using Section 209(b) waivers, California has served as a laboratory for the
demonstration of cutting edge emission control technologies, which, after being
successfully demonstrated there, were adopted in similar form at the national level.
Catalytic converters, cleaner fuels, and numerous other advances were introduced in
this way. Currently, waivers allow California to require that a portion of each
manufacturer’s sales meet Zero Emission Vehicle (ZEV) and Partial ZEV
requirements, which has stimulated the sale of electric and hybrid vehicles.
California’s Greenhouse Gas Requirements
On July 22, 2002, California became the first state to enact legislation requiring
reductions of greenhouse gas (GHG) emissions from motor vehicles. The legislation,
AB 1493, required the California Air Resources Board (CARB) to adopt regulations
requiring the “maximum feasible and cost-effective reduction” of GHG emissions
from any vehicle whose primary use is noncommercial personal transportation.
GHGs are defined by the state as carbon dioxide, methane, nitrous oxide,
hydrofluorocarbons, perfluorocarbons, and sulfur hexafluoride, but for the purpose
of this regulatory program, only the first four of these are subject to control. The
reductions are to apply to motor vehicles manufactured in the 2009 model year and
thereafter.
Under this authority, CARB adopted regulations September 24, 2004, requiring
gradual reductions in fleet average GHG emissions until they are about 30% below
the emissions of the 2002 fleet in 2016.5 As illustrated in Figure 1, the regulations
set separate standards for two classes of vehicles. The first class consists of all
passenger cars, plus light duty trucks and SUVs weighing 3,750 lbs. or less; these
vehicles must reduce emissions by an average of 36.5% between 2009 and 2016. The
second group consists of light trucks and passenger vehicles over 3,750 lbs., which
must reduce emissions 24.4% over the same time period.
The regulations require reductions in fleet averages, rather than compliance by
individual vehicles. They provide substantial flexibility, including credit generation
from alternative fuel vehicles and averaging, banking, and trading of credits within
and among manufacturers. Credits — and debits for any year in which a
manufacturer exceeds the standards — must be equalized within five years of their
4 Personal communication, U.S. EPA Office of Transportation and Air Quality, July 20,
2007.
5 A table showing the mandated reductions year-by-year can be found in CARB’s
Regulations to Control Greenhouse Gas Emissions from Motor Vehicles, Final Statement
of Reasons, August 4, 2005, p. 8 at [http://www.arb.ca.gov/regact/grnhsgas/fsor.pdf].

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generation, with the first equalization required in 2014. Thus, manufacturers would
not be subject to penalties for failure to meet the standards until 2014 at the earliest.6
Following adoption of these regulations by CARB, they were subjected to public
comment and legislative review, and CARB submitted a request to U.S. EPA,
December 21, 2005, for a waiver under Section 209(b).
Figure 1. California GHG Emission
Requirements
(grams/mile, CO2 equivalent)
500
400
300
200
100
0
2009
10
11
12
13
14
15
2016
Cars, Trucks # 3750 lbs.
Trucks > 3750 lbs
Source: California Air Resources Board
EPA’s Response to the Waiver Request
On December 19, 2007, EPA Administrator Stephen Johnson wrote California
Governor Schwarzenegger to say, “I have decided that EPA will be denying the
waiver and have instructed my staff to draft appropriate documents setting forth the
rationale for this denial in further detail....” According to press reports, the decision
was taken against the unanimous advice of the agency’s technical and legal staffs.7
The Administrator’s letter to Governor Schwarzenegger does not constitute “final
action” by the agency, and thus cannot be challenged in court. The agency must issue
a formal decision (generally published in the Federal Register) before it would
legally be considered to have taken action.
The agency’s long response time has been the result of several factors. First, the
agency was waiting for the U.S. Supreme Court to decide whether GHGs are “air
6 California Air Resources Board, Regulations to Control Greenhouse Gas Emissions from
Motor Vehicles; Request for Waiver of Preemption Under Clean Air Act Section 209(b),
December 21, 2005, Attachment 2, Support Document, p. 2. Hereafter referred to as
“Support Document.”
7 “EPA Chief Denies Calif. Limit on Auto Emissions,” Washington Post, December 20,
2007, p. A1.

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pollutants” under the CAA, and thus subject to EPA’s regulatory authority. The
court case posing this question challenged EPA’s denial, in 2003, of a petition from
19 private organizations that asked the agency to regulate GHG emissions from new
motor vehicles. The agency concluded that it lacked authority under the CAA to
regulate motor vehicle emissions based on their climate effects. The petition denial
was challenged by Massachusetts and twelve other states (CA, CT, IL, MA, ME, NJ,
NM, NY, OR, RI, VT, WA); three cities (New York, Baltimore, and Washington,
DC); two U.S. territories (American Samoa and Northern Mariana Islands); and
several environmental groups. In its April 2, 2007 decision in Massachusetts v.
EPA,8 the Supreme Court resolved this issue, finding:
The Clean Air Act’s sweeping definition of “air pollutant” includes “any air
pollution agent or combination of such agents, including any physical, chemical
... substance or matter which is emitted into or otherwise enters the ambient
air....” ... Carbon dioxide, methane, nitrous oxide, and hydrofluorocarbons are
without a doubt “physical [and] chemical ... substance[s] which [are] emitted into
... the ambient air.” The statute is unambiguous.9
Thus, the Court had no doubt that the CAA gives EPA authority to regulate GHGs
from new motor vehicles, although the specifics of such regulation might be subject
to agency discretion. (For further discussion of the Court’s decision, see CRS Report
RS22665, The Supreme Court’s Climate Change Decision: Massachusetts v. EPA,
by Robert Meltz.)
Following this decision, EPA announced that it would consider the California
waiver request. The agency held public hearings on May 22, 2007, in Arlington, VA,
and on May 30 in Sacramento, CA. Under pressure from California’s Senator Boxer,
who chairs the Environment and Public Works Committee,10 and other California
leaders, including Governor Schwarzenegger and Attorney General Brown,11 EPA
Administrator Johnson announced that he would decide whether to grant the waiver
request by the end of 2007.12
8 127 S. Ct. 1438 (2007).
9 Id. at 1460 (emphasis in original).
10 At a May 22, 2007 hearing, for example, Senator Boxer stated, “EPA already has all the
authority it needs to begin regulating greenhouse gas emissions from motor vehicles now.
The Supreme Court’s landmark decision has now cleared the way. The time to act is now.
The clearest example of this point is the case for the California waiver. ... Further delay in
this matter is simply unacceptable.” See Opening Statement of Senator Barbara Boxer, U.S.
Senate, Committee on Environment and Public Works, Hearing on “Examining the Case for
the California Waiver,” May 22, 2007, at [http://epw.senate.gov/public/index.cfm?Fuse
Action=Hearings.Statement&Statement_ID=39508511-fd9e-469b-80af-faaf843f6696].
11 See “California Attorney General to File Lawsuit if EPA Fails to Act on Waiver Past Oct.
25,” Daily Environment Report, May 23, 2007, p. A-13.
12 Testimony of Stephen L. Johnson, Administrator, U.S. EPA, before the Senate Committee
on Environment and Public Works, July 26, 2007, at [http://epw.senate.gov/public/index.
cfm?FuseAction=Files.View&FileStore_id=1a49cc26-6d6b-4f55-9eb4-759b7e0e039c].

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During the public comment period, the agency received more than 60,000
comments, the vast majority of them urging it to grant the waiver. Support came
from environmental groups, the Manufacturers of Emission Controls Association, the
National Association of Clean Air Agencies (which represents state and local air
pollution control departments), and a number of governors. As will be discussed
further below, 14 other states have adopted regulations identical to California’s, but
their ability to implement the regulations depends on California first being granted
a waiver.13 Thus, they have weighed in in support of the waiver request.
The auto industry and the U.S. Department of Transportation (DOT), among
others, opposed the granting of a waiver. The auto industry maintains that there is
effectively no difference between California and federal emission standards in their
impact on criteria air pollutants (ozone, in particular), that the benefits of the GHG
regulations are “zero”, and that emissions from California’s auto fleet will actually
increase as a result of the regulations as consumers keep older, higher-emitting cars
longer.14
California’s governor and attorney general threatened to sue EPA if a decision
was not announced by October 2007; the state did file suit on November 8.15 In
addition, Florida’s Senator Nelson and Washington’s Representative Inslee
introduced legislation (S. 1785/H.R. 3083) to require a decision no later than
September 30, 2007. By a vote of 10-9, Senator Nelson’s bill was ordered reported,
amended, by the Environment and Public Works Committee, July 31, 2007. The bill
was reported, without a written report, August 2. A written report (S.Rept. 110-243)
was filed December 12, 2007.16
In early June, on the other hand, officials in the Department of Transportation’s
Office of Governmental Affairs called a number of Members of Congress, urging
them to contact EPA to urge the Administrator to extend its public comment period,
13 The 14 states are Arizona, Connecticut, Florida, Maine, Maryland, Massachusetts, New
Jersey, New Mexico, New York, Oregon, Pennsylvania, Rhode Island, Vermont, and
Washington. Under Section 177 of the Act, states that have nonattainment or “maintenance”
areas can adopt California’s emission standards for mobile sources in lieu of federal
standards. Every state except Hawaii, North Dakota, and South Dakota would be eligible
to adopt California’s standards under this so-called “piggyback” provision. Thus, there is
broad interest in the California waiver decision and more at stake than would be the case if
only California had adopted the regulations.
14 Alliance of Automobile Manufacturers, “California Waiver Request,” presentation
materials from U.S. EPA public hearing, Sacramento, CA, May 30, 2007.
15 Because of ambiguity as to which court has jurisdiction, the case was filed twice:
California v. U.S. EPA, No. 1:07-CV-02024-RCL (D.D.C. filed November 8, 2007) and No.
07-1457 (D.C.Cir. filed November 8, 2007).
16 The House companion bill, Rep. Inslee’s H.R. 3083, had not seen action as of December
20. These bills might seem moot in light of Administrator Johnson’s December 19
announcement of his decision, but, as noted earlier, the Administrator’s letter to Governor
Schwarzenegger does not constitute “final action” by the agency, and thus cannot be
challenged in court. The agency must issue a formal decision before it would legally be
considered to have taken action.

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thus delaying a decision — a step that EPA did not take. DOT’s talking points
(subsequently obtained by Representative Waxman) stated: “If asked our position,
we say we are in opposition of the waiver.”17
Table 1. States Adopting California’s Mobile Source GHG
Standards
State
2006 Population
Legislation/Regulation
Arizona
6,166,318
Executive Order 2006-13, September
8, 2006
California
36,457,549
AB 1493, July 22, 2002
Connecticut
3,504,809
Public Act 04-84, May 4, 2004
Florida
18,089,888
Executive Order 07-127, July 13,
2007
Maine
1,321,574
Amendments to Chapter 127,
December 19, 2005
Maryland
5,615,727
Senate Bill 103, April 24, 2007
Massachusetts
6,437,193
Amendments to the state’s LEV
regulations, December 30, 2005
New Jersey
8,724,560
P.L. 2003, Chapter 266, January 14,
2004
New Mexico
1,954,599
Executive Order 2006-69, December
28, 2006
New York
19,306,183
Chapter III, Subpart 218-8,
November 9, 2005
Oregon
3,700,758
Regulations (Division 257; OAR
340-256-0220; and
Division 12), June 22, 2006
Pennsylvania
12,440,621
Amendments to Title 25, Chapters
121 and 126, December 9, 2006
Rhode Island
1,067,610
Air Pollution Control Regulation No.
37, December 22, 2005
Vermont
623,908
Amendments to Subchapter XI,
November 7, 2005
Washington
6,395,798
House Bill 1397, May 6, 2005
Total
131,807,095
Source: Pew Center on Global Climate Change for information and links to state regulations, at
[http://www.pewclimate.org/what_s_being_done/in_the_states/vehicle_ghg_standard.cfm], U.S.
Census Bureau for population data. As of December 20, 2007, the Pew Center also listed Colorado
and Utah as having announced their intention to adopt California’s standards, although neither state
had formally adopted legislation or regulations as of that date.
17 See p. 11 of internal e-mail from the U.S. DOT, Office of Governmental Affairs, available
on the website of the House Oversight and Government Reform Committee, at
[http://oversight.house.gov/documents/20070702164117.pdf].

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Actions by Other States
As noted above, California is the only state permitted to adopt more stringent
emission standards under the waiver provision of Section 209(b); but elsewhere (in
Section 177, 42 U.S.C. 7507), the CAA provides that any state with an EPA-
approved State Implementation Plan — every state except Hawaii, North Dakota, and
South Dakota — “may adopt and enforce for any model year standards relating to
control of emissions from new motor vehicles or new motor vehicle engines”
provided: 1) that the standards are identical to standards for which California has
been granted a waiver; and 2) that California and such state have adopted the
standards at least two years before the commencement of the model year to which the
standards apply. Relying on this authority, and presuming that California will be
granted a waiver, 14 other states (Arizona, Connecticut, Florida, Maine, Maryland,
Massachusetts, New Jersey, New Mexico, New York, Oregon, Pennsylvania, Rhode
Island, Vermont, and Washington) have adopted or announced their intention18 to
adopt California’s greenhouse gas emission controls. Including California, these
states account for 44% of the total U.S. population (Table 1). Thus, the stakes
involved (both the environmental consequences and the potential impact on the auto
industry) go well beyond California.
Waiver Criteria
As noted earlier, Section 209(b) says that the EPA Administrator “shall ...
waive” the prohibition on state emission standards “if the State determines that the
State standards will be, in the aggregate, at least as protective of public health and
welfare as applicable Federal standards.” Since California did so determine, this
language would seem to give EPA little room to turn down the waiver request. But
the section adds:
No such waiver shall be granted if the Administrator finds that-
(A) the determination of the State is arbitrary and capricious,
(B) such State does not need such State standards to meet compelling and
extraordinary conditions, or
(C) such State standards and accompanying enforcement procedures are not
consistent with section 202(a) of this part.
There are two ways in which this language can be interpreted. One is that it
refers to the specifics of the new standards under consideration — in this case, the
GHG standards. This interpretation has historically been rejected by EPA and by
California, as will be discussed at greater length (see “Evaluating the State’s Program
in the Aggregate,” below). The other interpretation is that the language refers to the
state’s program as a whole — i.e., whether, in the aggregate, all the state’s
requirements for auto emission controls are as protective of public health and welfare
18 In some cases, only one branch of government (e.g., the Governor, through Executive
Order) has ordered the adoption of the California GHG standards. Without reviewing each
state’s regulatory process, it is unclear to CRS whether, in such cases, the state can be
considered to have adopted the standards.

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as federal standards, are needed to meet compelling and extraordinary conditions, etc.
This has historically been EPA’s interpretation of the statute, relying on both its
wording and the accompanying legislative history. We look at each of these
interpretations in turn in the following sections. Since it appears likely that EPA will
break with its previous interpretation and base its decision on a consideration of the
GHG standards in isolation from the rest of California’s program, we begin by
examining this approach.
Evaluating the GHG Standards in Isolation
Applicable Federal Standards. If the Administrator’s final determination
is to be made on whether California’s GHG standards by themselves meet the waiver
criteria, he must first find whether the state’s determination that its standards are at
least as protective as applicable federal standards is arbitrary and capricious. There
are no federal standards for CO (the principal greenhouse gas), nor are there
2
standards for the other GHGs (methane, NOx, etc.) based on their greenhouse gas
effects. Thus, it is difficult to see how the Administrator could find California’s
determination that its standards are at least as protective to be arbitrary and
capricious.
Without addressing that point directly, the Administrator (in his letter to
Governor Schwarzenegger) and other EPA spokespersons, and the President himself,
in a December 20 news conference, have mentioned federal standards established by
the Energy Independence and Security Act (EISA, P.L. 110-140), which the President
signed December 19, 2007, as requiring greater fuel economy than the California
approach or being national in scope, as opposed to a “patchwork” of state standards.19
These statements would seem to imply that the Administration is considering the
argument that California’s GHG standards are not as protective as applicable federal
ones.
Such an argument would be tenuous for at least three reasons. First, the new
energy law does not establish emission standards; it sets fuel economy standards. As
will be discussed at greater length in the “Related Litigation” section below, two
courts have now found that energy legislation does not preempt EPA or California
actions to regulate auto emissions, even if the emissions in question (GHGs) are
19 At the President’s news conference, he stated:
The question is how to have an effective strategy. Is it more effective to let each
state make a decision as to how to proceed in curbing greenhouse gases? Or is
it more effective to have a national strategy? Director Johnson made a decision
based upon the fact that we passed a piece of legislation that enables us to have
a national strategy, which is the — increasing CAFE standards to 35 miles an
hour [sic] by 2020, and a substantial increase of alternative fuels, 36 billion
gallons by 2022.
And so the Director, in assessing this law, and assessing what would be more —
more effective for the country, says, we now have a national plan. It’s one of the
benefi t s o f C o n gr e s s p a s s i ng this piece of legi slation.
[http://www.whitehouse.gov/news/releases/2007/12/20071220-1.html]

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closely related to fuel economy. The overlap between GHGs and fuel economy is not
precise: for example, California regulates GHG emissions from auto air conditioners,
which are not covered by fuel economy standards. Furthermore, Congress has twice
visited the issue of fuel economy without preempting EPA or state authority to set
emission standards. Second, even if one were to hold that GHG standards and fuel
economy standards serve identical purposes, there still is no federal standard to which
one might compare California’s for the years 2009-2019: the energy law does not
establish any new standard for fuel economy before 2020, 11 years after California’s
GHG standards would take effect. Thus, for the years 2009-2019, there is no
overlap.20 Third, far from establishing a “patchwork” of state standards, granting a
California waiver would establish only two sets of standards: California’s standards
in the 15 states that have adopted them, and federal standards (currently nonexistent)
in the other states. This two-standard approach is the system that Congress intended
when it authorized California standards in 1967,21 and amended in the Clean Air Act
Amendments of 1977.22
The other two criteria, (B) and (C), pose higher hurdles.
Compelling and Extraordinary Conditions. In the record accompanying
the adopted regulations, California identifies numerous conditions that climate
change presents to the state that are arguably compelling and extraordinary, including
the potential of rising sea levels that would bring increased salt water intrusion to its
limited supplies of water, diminishing snow pack that would also threaten its limited
water supply, and higher temperatures that would exacerbate the state’s ozone
nonattainment problem, which is already the worst in the nation.23
Whether the state’s mobile source GHG emission standards are “need[ed]” to
meet these conditions poses a more difficult question, however. Climate change is
a global issue, and will pose nearly identical challenges to California whether or not
the state is permitted to implement the adopted regulations. The reductions in GHG
emissions that the regulations would bring about are estimated at 155,200 tons of
CO equivalent per day in 203024 (i.e., when the fleet consists of vehicles that meet
2
the 2016 standard) — 56.6 million tons a year compared to a business-as-usual
scenario. If all 15 states that have adopted or announced plans to implement the
regulations do so, the reductions might be as much as 175 million or 200 million tons
annually. Compared to total current U.S. emissions from all sources of about 7
billion tons, California’s action alone would reduce emissions less than 1%, and all
15 states would eliminate 2.5% to 3%. Compared to world emissions from all
20 P.L. 110-140 (in Section 102(b)) does give authority to the Secretary of Transportation
to set such standards beginning in 2011, but it is not clear how stringent such standards will
be.
21 H.Rept. 90-728, as reprinted in 1967 U.S.C.A.A.N. 1938, 1956-57.
22 H.Rept. 95-294, as reprinted in 1977 U.S.C.A.A.N. 1077, 1380-81.
23 CARB, Support Document, p. 18.
24 CARB, Regulations to Control Greenhouse Gas Emissions from Motor Vehicles, Final
Statement of Reasons, August 4, 2005, at [http://www.arb.ca.gov/regact/grnhsgas/fsor.pdf],
p. 13.

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sources (34 billion tons), all 15 states would reduce the total about 0.6%. Thus, it
might be argued that the standards do not go far enough to be said to “meet” the
compelling and extraordinary conditions that the state has described.
This would appear to be the position that Administrator Johnson intends to take.
In his December 19 letter to Governor Schwarzenegger, he states,
Unlike other air pollutants covered by previous waivers, greenhouse gases are
fundamentally global in nature. Greenhouse gases contribute to the problem of
global climate change, a problem that poses challenges for the entire nation and
indeed the world. Unlike pollutants covered by the other waivers, greenhouse gas
emissions harm the environment in California and elsewhere regardless of where
the emissions occur. In other words, this challenge is not exclusive or unique to
California and differs in a basic way from the previous local and regional air
pollution problems addressed in prior waivers.25
He concludes, “In light of the global nature of the problem of climate change, I have
found that California does not have a ‘need to meet compelling and extraordinary
conditions.’”26
On the other hand, while the nature of the pollution problem (global vs. local
or regional) is clearly different, a case can still be made that the GHG regulations are
similar in fundamental respects to the 53 previous sets of regulations for which EPA
has granted California waivers. Like the GHG standards, each of the previous sets
of regulations were incremental steps that reduced emissions, but in themselves were
insufficient to solve the pollution problem they addressed: large portions of the state
are still in nonattainment of the ozone air quality standard nearly 40 years after the
first of these waivers, despite these incremental steps to reduce emissions.
Furthermore, auto and light truck emissions are major contributors to the total
pool of greenhouse gas emissions (about 20% of the total of U.S. emissions), and are
growing more quickly than emissions from other sources.27 In California, according
to CARB, the affected vehicles produce about 30% of the state’s total GHG
emissions.28 Stabilizing and reducing total GHG emissions would be difficult or
impossible without addressing this sector. Thus, a strong case can be made that
reducing GHG emissions from mobile sources is necessary if the state is to meet the
25 Letter of EPA Administrator Stephen L. Johnson to Governor Arnold Schwarzenegger,
December 19, 2007, p. 1.
26 Ibid., p. 2.
27 From 1990 to 2005, U.S. passenger car and light duty truck CO emissions increased
2
25.4%, while total U.S. CO emissions increased 21.7%. Source: U.S. EPA, Office of
2
Atmospheric Programs. 2007. The U.S. Inventory of Greenhouse Gas Emissions and Sinks.
Table 3-7.
28 California Environmental Protection Agency, Air Resources Board, Staff Report: Initial
Statement of Reasons for Proposed Rulemaking, Public Hearing to Consider Adoption of
Regulations to Control Greenhouse Gas Emissions from Motor Vehicles, August 6, 2004,
p. viii, available at [http://www.arb.ca.gov/regact/grnhsgas/isor.pdf].

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CRS-11
compelling and extraordinary conditions posed by the increasing concentration of
GHGs in the atmosphere.29
In Massachusetts v. EPA,30 the Supreme Court was concerned about a similar
issue. There, in determining whether petitioners had standing, the Court discussed
the question of “redressability” — whether a favorable decision in the case would
redress the injury caused by global warming.31 The Court concluded both that “the
harms associated with climate change are serious and well recognized,”32 and that a
state need not show that the government actions it is seeking would completely
remedy the injury:
... accepting that premise would doom most challenges to regulatory action.
Agencies, like legislatures, do not generally resolve massive problems in one fell
regulatory swoop.... They instead whittle away at them over time, refining their
preferred approach as circumstances change and as they develop a more-nuanced
understanding of how best to proceed.33
This Supreme Court language may prove useful to California in its quest for an EPA
preemption waiver, notwithstanding that it arose in a standing, rather than Section
209(b), context.
Consistency with Section 202(a). Although he did not raise this issue in
his letter to the Governor, the Administrator could also reject the request if he finds
that the state’s standards and accompanying enforcement procedures are not
consistent with section 202(a) of the CAA. Much of Section 202(a) is not applicable
to this waiver request: it addresses standards specific to heavy duty trucks, rebuilt
heavy-duty engines, motorcycles, and gasoline vapor recovery. But the section also
provides general authority for motor vehicle and motor vehicle engine emission
standards. It allows the Administrator to determine whether there are any
unreasonable risks to public health, welfare, or safety associated with specific
emission control devices or systems, and to determine the amount of lead time
necessary to permit the development and application of technology requisite to meet
emission standards. The Administrator has used the latter authority in the past, and
could do so again, to delay the effective date of California standards.
29 Taken literally, the Administrator’s letter appears to be making a slightly different
argument: it says that California does not have a need to meet these conditions. This is not
the actual criterion stated in Section 209(b), which would require him to find that the state
does not need such State standards to meet the conditions.
30 127 S. Ct. 1438 (2007).
31 To establish standing to sue in most federal courts, a plaintiff must demonstrate (1) that
he/she has suffered actual or imminent “injury in fact,” (2) that the injury is caused by
actions of the defendant, and (3) that the relief requested from the court will redress the
injury.
32 127 S. Ct. at 1455.
33 Id. at 1457.

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CRS-12
In its Initial Statement of Reasons and in other documents supporting the GHG
standards, the state emphasized that it had based the standards on the use of already
demonstrated technologies: “The technologies explored are currently available on
vehicles in various forms, or have been demonstrated by auto companies and/or
vehicle component suppliers in at least prototype form,” CARB stated in its Initial
Statement of Reasons.34 The Support Document accompanying its December 2005
formal request for a waiver contains 21 pages describing the technologies available
to meet the standards, and states: “... unlike most previous CARB requests setting
standards years into the future, each of the technology packages projected for
compliance contains many technologies that are currently available and in vehicles
today.”35
The state concluded that inconsistency with Section 202(a) can only be shown
if there is inadequate lead time to permit the development of technology to meet the
requirements, giving appropriate consideration to the cost of doing so, or if the
federal and California test procedures impose inconsistent certification requirements.
Because there are no federal test procedures that measure GHGs for climate change
purposes, test procedures cannot be an issue. CARB concludes:
The only relevant question, then, is whether manufacturers can apply these
technologies in sufficient quantities to meet the standards in time for the
regulatory compliance deadlines following model years 2012 and 2016, a lead
time of eight to 11 years respectively. The Greenhouse Gas Rulemaking record
shows that they can.36
In making past determinations on waiver requests, EPA has granted waivers
despite industry statements and its own findings that doing so would greatly increase
cost, result in substantial fuel economy penalties, cause the marketing of a more
restricted model line in California, result in poorer driveability, and cause California
auto dealers’ business to suffer substantially. Despite making all of these findings
in a 1975 waiver determination, then-EPA Administrator Russell Train granted a
waiver because he concluded that the statutory language required that he give
deference to California’s judgment.37
Evaluating the State’s Program in the Aggregate
The other interpretation of Section 209(b) is that the Administrator is to
determine whether California’s auto and light truck emission requirements in the
aggregate — not just the GHG controls — meet the criteria for a waiver. According
to numerous informed sources — including both California and EPA — this has
always been how the statute has been interpreted. California’s waiver submission,
for example, states: “The relevant inquiry under section 209(b)(1)(B) is whether
34 CARB, Initial Statement of Reasons, previously cited, p. iii. A more detailed discussion
is found on pp. 42-102 of the document.
35 Support Document, p. 21.
36 Ibid.
37 40 Federal Register 23103-23105, May 28, 1975.

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CRS-13
California needs its own emission control program to meet compelling and
extraordinary conditions, not whether any given standard is necessary to meet such
conditions.”38
EPA has agreed with this position in past determinations. For example, in a
1984 waiver determination, Administrator William Ruckelshaus stated:
CARB argues that ... EPA’s inquiry is restricted to whether California needs its
own motor vehicle pollution control program to meet compelling and
extraordinary conditions, and not whether any given standard, (e.g., the instant
particulate standards) is necessary to meet such conditions.... For the reasons
elaborated below, I agree with California....”39
The “reasons elaborated below” included Congress’s use of the term “State standards
... in the aggregate.”
Relying on this interpretation of the statute, EPA has repeatedly found, as
recently as December 2006, that California faces compelling and extraordinary
conditions (as to pollution, not climate change) and needs its own standards to meet
these conditions.40 EPA has also generally deferred to the state’s judgment regarding
consistency with Section 202(a).41 In general, as EPA stated in a 1975 waiver
determination:
These provisions must be read in the light of their unusually detailed and explicit
legislative history.... Congress meant to ensure by the language it adopted that
the Federal government would not second-guess the wisdom of state policy
here.... Sponsors of the language eventually adopted referred repeatedly to their
intent to make sure that no “Federal bureaucrat” would be able to tell the people
of California what auto emission standards were good for them, as long as they
were stricter than Federal standards.... (Senate language says “You may go
beyond the Federal statutes unless we find that there is no justification for your
progress”).42
In arguing thus, the Administrator foreshadowed the House Interstate and
Foreign Commerce committee report on the 1977 Clean Air Act Amendments, which
revisited and strengthened California’s position in seeking a waiver. The report
states:
38 Support Document, p. 15.
39 49 Federal Register 18889-18890, May 3, 1984.
40 71 Federal Register 78192, December 28, 2006.
41 As noted by Administrator Ruckelshaus in the same 1984 waiver determination, “EPA
has long held that consistency with section 202(a) does not require that all manufacturers
be permitted to sell all motor vehicle models in California.” As of 1984, he concluded,
“Only once has the Agency found a ... standard inconsistent with section 202(a) in a
California waiver proceeding. In that case, imposition of the standard would have forced
manufacturers out of the California market for an entire class of vehicles , i.e., light duty
trucks.” [49 Federal Register 18892, May 3, 1984.]
42 40 Federal Register 23103, May 28, 1975.

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CRS-14
The Committee amendment is intended to ratify and strengthen the California
waiver provision and to affirm the underlying intent of that provision, i.e. to
afford California the broadest possible discretion in selecting the best means to
protect the health of its citizens and the public welfare.... The Administrator,
thus, is not to overturn California’s judgment lightly. Nor is he to substitute his
judgment for that of the State. There must be clear and compelling evidence that
the State acted unreasonably in evaluating the relative risks of various pollutants
in light of the air quality, topography, photochemistry, and climate in that State,
before EPA may deny a waiver.43
Has EPA Ever Turned Down a Waiver Request?
As noted earlier, California has requested waivers under Section 209(b) on
many occasions. A precise count of the number of such requests is difficult to
determine, according to EPA’s Office of Transportation and Air Quality (OTAQ), in
large part because the nature of such requests varies. The state has requested waivers
for new or amended standards on at least 53 occasions; on another 42 occasions, the
state has requested “within the scope” determinations (i.e., a request that EPA rule
on whether a new regulation is within the scope of a waiver that the agency has
already issued). Adding all of these together, one might say that there have been at
least 95 waiver requests, but nearly half of these were relatively minor actions that
may not deserve to be counted as formal requests.44
Of these, all were granted in whole or in part. “I don’t think we’ve ever outright
denied a request,” according to an OTAQ official, “but there were some grants in
which we denied part or delayed the effective date of part on feasibility grounds.”45
On at least six occasions prior to the 1977 CAA amendments, the agency granted a
waiver in part, while denying other parts of the request.46 In 1975, it denied a waiver
for the 1977 model year, but granted it for 1978.47 Since the 1977 amendments, there
was at least one instance in which EPA made a determination that California’s
requirements were feasible in part, granting a waiver for the 2007 through 2011
model years, but making no decision for model years after that.48
The EPA Administrator’s letter to Governor Schwarzenegger attempts to
undercut whatever precedent value this history of consistent waiver grants may have.
43 U.S. House of Representatives, Committee on Interstate and Foreign Commerce, Clean
Air Act Amendments of 1977, H.Rept. 95-294, May 12, 1977, pp. 301-302.
44 Personal communication, U.S. EPA, Office of Transportation and Air Quality, July 20,
2007. California has also submitted about 10 waiver requests for non-road vehicles and
engines under Section 209(e). These form a third category.
45 Ibid.
46 According to EPA, the dates were May 6, 1969 (34 FR 7348), April 30, 1971 (36 FR
8172), April 25, 1972 (37 FR 8128), April 26, 1973 (38 FR 10317), November 1, 1973 (38
FR 30136), and July 18, 1975 (40 FR 30311).
47 40 FR 30311, July 18, 1975.
48 71 FR 78190, December 28, 2006.

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CRS-15
As noted earlier, the letter argues that GHGs are unlike other air pollutants covered
by previous waivers, since they are fundamentally global in nature. GHGs harm the
environment in California and elsewhere regardless of where emissions occur. Thus,
the challenge they pose, the letter says, “differs in a basic way from the previous local
and regional air pollution problems addressed in prior waivers.”49
Related Litigation
Besides the expected EPA decision denying California’s waiver request under
the CAA, there is also active litigation raising non-CAA preemption and other
theories. This litigation, filed by auto dealers, trade associations, and manufacturers,
seeks to prevent California and other states from implementing the California mobile
source GHG standards even if the expected EPA waiver denial is overturned by the
courts. Suits are pending in three federal judicial circuits — not coincidentally, the
circuits containing most of the states that have adopted the California GHG controls.
Courts addressing this litigation have not doubted that without a California waiver,
state regulation of GHG emissions from motor vehicles is preempted by the CAA,
and the litigation is moot.
Two decisions have been handed down so far, both rejecting the non-CAA
preemption theories presented. In the first, Green Mountain Chrysler Plymouth
Dodge Jeep v. Crombie,50 the district court ruled that the relationship between
Vermont’s California-identical GHG standards and the Energy Policy and
Conservation Act (EPCA) was better analyzed as an interplay between two federal
statutes, rather than as a federal-state preemption question. So viewing the matter,
the court pointed out that the National Highway Traffic Safety Administration
(NHTSA) has consistently treated EPA-approved California emissions standards as
constituting “other motor vehicle standards of the Government,” which EPCA says
NHTSA must consider when setting CAFE standards.51 Moreover, in a related
context the Massachusetts v. EPA decision saw the CAA and EPCA CAFE
provisions as harmonious.52 Thus, the court found the CAA section 209/EPCA
relationship to be one of overlap, not conflict. Despite its conclusion that preemption
doctrine did not apply, the court also did a preemption analysis, finding that
Vermont’s GHG standards were preempted neither by EPCA nor as an intrusion
upon the foreign policy authority of the United States. An appeal is pending.
In the second decision, Central Valley Chrysler Jeep, Inc. v. Goldstone,53 a
district court similarly rejected claims that California’s regulation of GHG emissions
49 Letter of EPA Administrator Stephen L. Johnson to Governor Arnold Schwarzenegger,
December 19, 2007, p. 1.
50 508 F. Supp. 2d 295 (D. Vt. 2007)
51 49 U.S.C. § 32902(f).
52 127 S. Ct. at 1462.
53 No. 04-6663, 2007 Westlaw 4372878 (E.D. Cal. December 11, 2007).

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CRS-16
from cars and trucks was precluded by EPCA, preempted by EPCA, and preempted
as an intrusion on federal authority over foreign policy.54 An appeal is likely.
The legal theories presented in the Crombie and Goldstone decisions are similar
to those in two Rhode Island suits — Lincoln Dodge, Inc. v. Sullivan55 and
Association of International Automobile Manufacturers v. Sullivan56 — challenging
that state’s adoption of the California standards.
Conclusion
California’s request for a greenhouse gas waiver under CAA Section 209(b)
marks the second time that EPA has been asked to regulate or to allow regulation of
GHG emissions from mobile sources. The first time, a petition from 19 private
organizations asking EPA to set federal GHG emission standards for mobile sources,
was denied by the agency in 2003; but it led to the Supreme Court’s decision
(Massachusetts v. EPA), April 2, 2007, in which the Court rejected EPA’s rationale
for denial, finding that GHGs are air pollutants within the meaning of the CAA and
spurning EPA’s arguments against their regulation as being insufficient.57
In light of the Court’s rationale, the California waiver request would seem to
have been on firmer ground. The Court found that the harms associated with climate
change are serious and well-recognized, and stated, albeit in a different legal context,
that a state need not show that the standards it seeks to impose would completely
remedy the problem. For such state standards to be granted a waiver from CAA
preemption, the state needs only to meet Section 209(b)’s tests, which are basically
four in number.58
First, the state must determine that the standards, in the aggregate, are at least
as protective of public health and welfare as applicable federal standards. The state
has made this determination, and since there are no comparable federal standards, the
state’s determination would appear to be correct. Administrator Johnson’s December
19 letter to Governor Schwarzenegger does reference the President’s signing that
same day the Energy Independence and Security Act, which includes new fuel
economy standards for cars and trucks to be phased in by 2020. The letter states that
these standards will require greater fuel economy than California’s approach, and be
national in scope. But the new energy law, while giving authority to the Secretary
54 In 2006, the district court dismissed claims under the Dormant Commerce Clause and
Sherman Antitrust Act.
55 No. 1:06-CV-00070 (D.R.I. filed February 13, 2006).
56 No. 1:06-CV-00069 (D.R.I. filed February 13, 2006).
57 The decision does not command EPA to regulate GHGs from motor vehicles, but it finds
that if it does not do so, it must ground its reasons for inaction in the statute. Following the
Supreme Court decision, the D.C. Circuit vacated the agency’s denial and remanded the
matter to EPA.
58 The state’s action might be preempted under the Energy Policy and Conservation Act, as
the auto industry maintains, but that is a separate issue for the courts to decide.

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CRS-17
of Transportation to do so, does not itself establish any standard for fuel economy
before 2020, 11 years after California’s standards would take effect. Nor does it
regulate auto emissions in any way. California’s standards are designed to address
emissions, even if their major impact might be on fuel economy. For example, the
California standards address emissions from auto air conditioners; the new CAFE
standards will not.
Second, EPA may deny the waiver if the Administrator finds that the
determination of the state (that its standards are at least as protective as comparable
federal standards) is arbitrary and capricious. Again, it is difficult to see how the
Administrator could reject a waiver on these grounds, since there are no federal
standards.
Third, the Administrator could reject the petition by finding that California does
not need the standards to meet compelling and extraordinary conditions. The state
has described the compelling and extraordinary conditions that the standards are
meant to address, including threats to its coast line and its water supply from rising
sea levels, threats to its water supply from a diminished snow pack, and threats to
human health and environment from higher temperatures and higher ozone
concentrations, among other factors. Without concerted action by California, the rest
of the United States, and other countries, these conditions are more likely to occur,
and to occur sooner, according to the state. Thus, there is a plausible argument that
the state’s action (together with many other actions) are necessary to meet compelling
and extraordinary conditions. Furthermore, EPA has repeatedly held that it is the
state’s entire program, not the specific standards, that must satisfy this criterion. As
recently as December 2006, the agency reaffirmed its conclusion that the state’s
program has met this test.
Fourth, EPA must deny a waiver if the Administrator finds the standards
inconsistent with Section 202(a) of the Act. Here, the issue appears to be whether
the state has allowed manufacturers sufficient lead time. California argues that, since
many of the requisite technologies were available and in vehicles in 2005,
manufacturers clearly have sufficient time to comply. Furthermore, the standards do
not require that each vehicle or each model reduce emissions below the standards.
By relying on fleet averages, the regulations allow manufacturers to exceed the limits
on some models, provided that others reduce emissions enough to make up for the
excess. EPA has delayed the effective date of a waiver on some other occasions, but
more often it has found that a waiver should be granted even if it meant that some
models offered for sale elsewhere in the United States would be unavailable in
California.59
59 See, for example, the discussion in 49 Federal Register 18892, May 3, 1984, which found
that for the 1983 model year, 73 models of small gasoline-powered pick-up trucks were
available federally, while only 55 models were available in California. The Administrator
there quoted the D.C. Circuit Court of Appeals (International Harvester v. Ruckelshaus, 478
F.2d at 640): “We are inclined to agree with the Administrator that as long as feasible
technology permits the demand for new passenger automobiles to be generally met, the basic
requirements of the [Clean Air] Act would be satisfied, even though this might occasion
fewer models and a more limited choice of engine types. The driving preferences of hot
(continued...)

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According to press reports, EPA technical and legal staff reviewed the law and
California’s arguments supporting its request and recommended unanimously that the
Administrator grant the requested waiver.60 But the Administrator overruled the staff
and, in his December 19 letter to Governor Schwarzenegger, said that he has
“instructed” his staff “to draft appropriate documents setting forth the rationale” for
his decision. This could result in a substantial delay, as the staff develops a further
rationale for the Administrator’s decision.
Ultimately, the Administrator’s decision is almost certain to be tested in court,
but before it can be challenged, the agency must undertake a “final action” by
publishing its decision and the rationale for it in the Federal Register. Any such
challenge would go to the U.S. Court of Appeals for the D.C. Circuit,61 where it
would be reviewed in light of the statutory requirements and relevant precedents.
Should the court find in favor of those challenging EPA, further delays could still
ensue; a court finding against the Administrator would be likely to remand the
decision to EPA for further consideration, enumerating the flaws in the agency’s
original decision. All things considered, it is unlikely that EPA could be forced to
grant a waiver through judicial means before the swearing in of a new Administration
in 2009.
Congressional action might pose the only shortcut for those opposed to the
waiver’s denial; but it, too, faces obstacles. Congress as a whole has not shown itself
to be united on climate change issues. Should legislation clear Congress and be
vetoed by the President, two-thirds majorities of the House and Senate would be
required for enactment. Thus, California’s GHG regulations for cars and trucks
appear likely to join a growing list of issues for which a decision could depend on the
outcome of the November 2008 elections.
59 (...continued)
rodders are not to outweigh the goal of a clean environment.”
60 “EPA Chief Denies Calif. Limit on Auto Emissions,” Washington Post, December 20,
2007, p. A1.
61 Clean Air Act § 307(b), 42 U.S.C. § 7607(b).

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