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Last April, the Trump administration set the stage for a legal battle with California by nullifying the Obama administration's clean-car regulatory plan. Instead of requiring new vehicles to score an average of nearly 50 miles per gallon on lab tests by 2025, standards would flatline after 2020.

What's new: Formal public reaction to this plan was due on Oct. 26, and the comments show that none of the major stakeholders supports the administration's proposal. While the prospect of a compromise long looked slim, it now appears that the makings of a deal might be on the table.

California, allied states and major green groups have prepared to defend existing targets, with the Environmental Defense Fund calling the administration's proposal "arbitrary, capricious and illegal."

Automakers started this fight and praise the administration for reversing the Obama-era decisions. But even they say the proposal is too weak, and want to keep the peace by compromising on a single, national program that still offers regulatory relief.

Automakers have been vague about their preferred targets, stipulating only that they be in line with market realities. California has said it's open to greater flexibility, but insists on strong progress toward long-term greenhouse gas reduction goals, including rapid electrification of the state's vehicle fleet.

Between the lines: The key to a compromise may lie in regulatory credits. These would enable automakers to meet standards that look increasingly stringent on paper despite being weaker in practice. Such credits would give companies extra "brownie points" for adding popular technologies to their cars, whether or not they actually cut emissions.

The Auto Alliance calls for a "significant expansion" of credits for plug-in hybrid electric and battery electric vehicles as well as additional credits for gasoline-only hybrids across the entire fleet.

Automakers also want a raft of new credits for assorted safety technologies they claim will save fuel, such as driver assistance and automation features.

The bottom line: As proposed, many of the automakers' recommendations won't work for California and its allies. But if the parties can strike a deal that sets federal standards closer to the Obama administration's, allows California to keep authority to set its own and includes extra credits (especially for electric vehicles), they might be able to avoid a lengthy court battle with high risks for both sides.

John M. DeCicco is a research professor at the University of Michigan Energy Institute.

After EPA rollback, a compromise on car standards could be in sight

Automakers and California might be able to avoid a lengthy court battle.

Cars drive over the Golden Gate Bridge on August 2, 2018 in Sausalito, California. 

Cars drive over the Golden Gate Bridge on Aug. 2 in Sausalito, California. Photo: Justin Sullivan via Getty Images

Energy

Automobiles

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Politics

Last April, the Trump administration set the stage for a legal battle with California by <a class="gtmContentClick" data-vars-link-text="nullifying the Obama administration&#x27;s " data-vars-click-url="https://www.epa.gov/regulations-emissions-vehicles-and-engines/midterm-evaluation-light-duty-vehicle-greenhouse-gas#final" data-vars-content-id="68174c2a-378d-4903-a901-009552faeb3b" data-vars-headline="After EPA rollback, a compromise on car standards could be in sight" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.epa.gov/regulations-emissions-vehicles-and-engines/midterm-evaluation-light-duty-vehicle-greenhouse-gas#final" target="_blank">nullifying the Obama administration&#x27;s </a>clean-car regulatory plan. Instead of requiring new vehicles to score an average of nearly 50 miles per gallon on lab tests by 2025, standards would flatline after 2020.What&#x27;s new: Formal public reaction to this plan was due on Oct. 26, and the <a class="gtmContentClick" data-vars-link-text="comments" data-vars-click-url="https://www.regulations.gov/docketBrowser?&amp;D=EPA-HQ-OAR-2018-0283" data-vars-content-id="68174c2a-378d-4903-a901-009552faeb3b" data-vars-headline="After EPA rollback, a compromise on car standards could be in sight" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.regulations.gov/docketBrowser?&amp;D=EPA-HQ-OAR-2018-0283" target="_blank">comments</a> show that none of the major stakeholders supports the administration&#x27;s proposal. While the prospect of a compromise long looked slim, <a class="gtmContentClick" data-vars-link-text="it now appears" data-vars-click-url="https://www.bloomberg.com/news/articles/2018-11-13/california-counters-trump-s-car-emissions-rollback-with-new-plan" data-vars-content-id="68174c2a-378d-4903-a901-009552faeb3b" data-vars-headline="After EPA rollback, a compromise on car standards could be in sight" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.bloomberg.com/news/articles/2018-11-13/california-counters-trump-s-car-emissions-rollback-with-new-plan" target="_blank">it now appears</a> that the makings of a deal might be on the table.

Ominous forecasts about the impact of climate change serve as the backdrop for the world — led by U.S. lawmakers and companies — to debate big action on the problem, which could upend energy systems and our way of life.

Energy & Environment

The Trump administration sent its proposed revisions of automotive fuel-economy standards to its budget office last week, the final step before public rollout. A key effort to address climate change, this Obama-era regulatory plan would greatly reduce car and light-truck greenhouse gas (GHG) emissions by 2025, while the Trump administration seeks to freeze standards after 2020. 

What to watch:  The freeze would spark a legal battle with California, which wants to maintain the Obama-era standards. Automakers publicly say they don't want this fight, but they set the stage by investing in groups like the Competitive Enterprise Institute, whose Myron Ebell headed the Trump EPA transition, and asking the transition team to reconsider the standards two days after the election. Now, they might look for California to make concessions before it enters the risky litigation process. 

Various parties to this debate claim impacts on other issues — jobs, safety and energy dominance — but the critical issue at stake is the climate. Transportation has become the nation's largest source of GHG emissions; the weaker the standards, the less these emissions get trimmed. Trump's freeze would likely lead to an excess of over 100 million metric tons of GHG by 2035.

Automakers are trying to persuade the administration to maintain enough of a fuel-economy gain to keep California on board. But, given that a more moderate proposal could reflect poorly on Trump, it might be too late to control the anti-regulatory juggernaut they've unleashed.

The bottom line: California may soon feel pressured to either make significant concessions or gamble that the Supreme Court won't rule against the state's ability to set its own standards. Either way, things don't look good for the planet.

Automakers struggle to head off the California–EPA legal battle

It might be too late to control the anti-regulatory juggernaut they've unleashed.

EPA Administrator Scott Pruitt during a Cabinet meeting May 9, 2018, in the Cabinet Room of the White House.

EPA Administrator Scott Pruitt during a Cabinet meeting on May 9, 2018, at the White House. Photo: Al Drago-Pool via Getty Images

Environmental Protection Agency (EPA)

The Trump administration <a class="gtmContentClick" data-vars-link-text="sent its proposed revisions" data-vars-click-url="https://www.nytimes.com/2018/05/31/climate/epa-car-pollution-rollback.html" data-vars-content-id="94f7371a-87be-49f1-bbc7-78ff5652b972" data-vars-headline="Automakers struggle to head off the California–EPA legal battle" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.nytimes.com/2018/05/31/climate/epa-car-pollution-rollback.html" target="_blank">sent its proposed revisions</a> of automotive fuel-economy standards to its budget office last week, the final step before public rollout. A key effort to address climate change, this Obama-era <a class="gtmContentClick" data-vars-link-text="regulatory plan would greatly reduce car and light-truck greenhouse gas (GHG) emissions" data-vars-click-url="https://www.epa.gov/regulations-emissions-vehicles-and-engines/final-rule-model-year-2017-and-later-light-duty-vehicle" data-vars-content-id="94f7371a-87be-49f1-bbc7-78ff5652b972" data-vars-headline="Automakers struggle to head off the California–EPA legal battle" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.epa.gov/regulations-emissions-vehicles-and-engines/final-rule-model-year-2017-and-later-light-duty-vehicle" target="_blank">regulatory plan would greatly reduce car and light-truck greenhouse gas (GHG) emissions</a> by 2025, while the Trump administration seeks to <a class="gtmContentClick" data-vars-link-text="freeze standards " data-vars-click-url="https://www.epw.senate.gov/public/_cache/files/7/2/72b2d596-d456-483a-8c8a-ba4bfea4a145/BE7A29D9A17B01162A7DA6FEE7C2A0BA.05012018-carper-letter-chao-pruitt-draft-fuel-economy-tailpipe-emissions.pdf" data-vars-content-id="94f7371a-87be-49f1-bbc7-78ff5652b972" data-vars-headline="Automakers struggle to head off the California–EPA legal battle" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.epw.senate.gov/public/_cache/files/7/2/72b2d596-d456-483a-8c8a-ba4bfea4a145/BE7A29D9A17B01162A7DA6FEE7C2A0BA.05012018-carper-letter-chao-pruitt-draft-fuel-economy-tailpipe-emissions.pdf" target="_blank">freeze standards </a>after 2020. What to watch: The freeze would spark a legal battle with California, which wants to maintain the Obama-era standards. <a class="gtmContentClick" data-vars-link-text="Automakers publicly say they don&#x27;t want this fight" data-vars-click-url="https://www.bloombergquint.com/politics/2018/05/23/trump-auto-officials-re-affirm-goal-of-national-mileage-rules" data-vars-content-id="94f7371a-87be-49f1-bbc7-78ff5652b972" data-vars-headline="Automakers struggle to head off the California–EPA legal battle" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.bloombergquint.com/politics/2018/05/23/trump-auto-officials-re-affirm-goal-of-national-mileage-rules" target="_blank">Automakers publicly say they don&#x27;t want this fight</a>, but they set the stage by investing in groups like the Competitive Enterprise Institute, whose Myron Ebell headed the Trump EPA transition, and <a class="gtmContentClick" data-vars-link-text="asking the transition team to reconsider the standards two days after the election" data-vars-click-url="http://www.autonews.com/article/20161110/OEM11/161119989/automakers-reach-out-to-trump-on-regulation-seek-review-of-fuel" data-vars-content-id="94f7371a-87be-49f1-bbc7-78ff5652b972" data-vars-headline="Automakers struggle to head off the California–EPA legal battle" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="http://www.autonews.com/article/20161110/OEM11/161119989/automakers-reach-out-to-trump-on-regulation-seek-review-of-fuel" target="_blank">asking the transition team to reconsider the standards two days after the election</a>. Now, they might look for California to make concessions before it enters the risky litigation process.

Stories

After EPA rollback, a compromise on car standards could be in sight

Automakers struggle to head off the California–EPA legal battle