The Alliance of Automobile Manufacturers – an auto industry group which includes General Motors, Ford, and Toyota – has appealed a ruling handed down last month by a Vermont federal district court that allowed states to set their own emissions standards, independently of the federal government.
The attempt by several states, including Vermont, Massachusetts and California, to assert the authority to mandate emissions and fuel economy standards different than those set by the federal government.
States are prohibited from setting their own fuel economy standards. However, these states have made an end-run around that prohibition by cloaking their fuel economy standards as emissions regulations. As regulating emissions can effectively dictate fuel economy by determining the amount of fuel that can be burned, the automakers view this approach as illegal.
Supporting that position are public statements by supporters of the legislation that said they were trying to do precisely that. The district court, in a state known for its liberal leanings and a judge appointed by President Clintion, ruled against the automakers.
Stressing that the state regulations are to go into effect in the 2009 model year, the automakers have asked the federal Court of Appeal to expedite consideration of the case.
"Automakers support increasing fuel economy standards and reducing emissions, and we will continue to do so by offering vehicles that use less gasoline and offering more Alternative Fuel Automobiles that are powered by new energy sources," according to Alliance Chief Executive Officer David McCurdy. "However, this case is not about that. This case centers on the critical issue of whether states can regulate a matter — fuel economy — that the law clearly identifies as a federal, national issue. Evidence provided during the trial demonstrates that the federal law is very explicit: states are pre-empted from adopting fuel economy laws; and complex issues such as greenhouse gas emissions must be dealt with comprehensively on the national level."
GM representatives testified at the trial that meeting the Vermont standard would cost the company $25 billion. To put that in perspective, that’s more cash than GM is putting into the VEBA deal just negotiated with the UAW.
Though public figures, including California governor Arnold Schwarzenegger have publicly supported the regulations, winning the lawsuit is critical to both the auto industry and anyone that likes cars. In fact, it is probably critical to anyone that drives a car.
Were the Vermont law to be upheld, it would mean that each state could create its own emissions and fuel economy standards. This isn’t just a question of whose standards are more strict, those of the federal government or of the states. It is a question of whether there are to be 51 separate sets of standards, some undoubtedly inconsistent with others, fifty set individually by the states and one set by the federal government. It was the obvious stupidity of that approach that underlies the federal prohibition against state’s setting their own fuel economy standards.
Similar suits are pending in California and other states and the courts in those states are not required to follow the Vermont federal court decision. Yet, the Vermont decision underscores the difficulties faced by automakers, domestic and foreign, attempting to plan future products for sale in America. Though developing a new car requires committing billions of dollars to the project at least five years in advance of introduction, states like Vermont would require that automakers be subject to the whim of whatever standard a state wanted to set, whenever it wanted to set it, and with a potential for it to go into effect very soon after it is adopted.
It is a commentary on the anti-business mentality of some lawmakers and some states that auto manufacturers are now finding China to be providing a more stable business climate than does the United States.