Just over a month ago, the world’s major automakers sent President Donald Trump a polite but impassioned plea: End his administration’s two-year-old fight with California over the regulation of greenhouse gas emissions from automobiles. The dispute was threatening to bring chaos to the auto industry, the manufacturers said.
The White House dismissed the overture. So four of the largest companies, representing 30 percent of U.S. auto sales, began quietly formulating an end-around. On Thursday, they announced they’d struck a deal with California Gov. Gavin Newsom in which they pledged to build cars for the entire U.S. market that would significantly reduce carbon emissions. These vehicles, not coincidentally, would also increase fuel mileage by about 40 percent.
Trump’s administration dismissed the announcement as a “PR stunt” and vowed to continue working on tailpipe regulations that would gradually restrict carbon emissions, but nowhere near as dramatically as the California plan.
Here’s a look at what Newsom’s agreement means — for the car industry, for car buyers and for climate change.
Q: How did all this start?
A: Way back in 2009, then-President Barack Obama made a deal with California to begin curbing carbon emissions from motor vehicles as part of the fight against climate change. The restrictions would be phased in, and shortly before leaving office in January 2017, Obama finalized a new chapter of regulations that called for emissions to fall by about one-third by 2025.
Two months after being sworn in, at the urging of the auto industry, Trump vowed to roll back the rules. He said the restrictions were hurting automakers and costing American manufacturing jobs. California officials immediately vowed to fight him, and two years later it has cut its own deal with four major manufacturers: Ford, Honda, BMW and Volkswagen.
Q: What does the deal say?
A: Carbon emissions will by roughly 30 percent on cars made between 2022 and 2026. That’s a compromise; the original Obama plan put a 2025 deadline on it. The deal affects all cars those four companies sell in the U.S., not just California. Newsom and Mary Nichols, chairwoman of the California Air Resources Board, said they believe other automakers will join the agreement as well.
Q: So Newsom has pretty much outfoxed the Trump administration, right?
A: He thinks so. But officials in the Trump administration told McClatchy that they think the automakers are bluffing in an effort to compel the White House back into negotiations with California. That is highly unlikely at this stage; negotiations broke down in February.
Q: So what will happen? Will the White House try to undermine this agreement?
A: Apparently not. One administration official said the Trump plan is “more or less a floor” — a minimum standard that automakers must meet on carbon emissions. “If some of the automakers want to go above and beyond, they can,” this official said. In the meantime, the administration plans to forge ahead with its rule-making process for a single national standard.
Q: What does all this mean for car buyers?
A: The only realistic way to curb carbon emissions is to build lighter, more fuel-efficient vehicles. The Obama rules — the standards the Trump White House has been trying to roll back — will raise average vehicle prices by $1,850, the administration says. In addition, by forcing motorists into smaller and lighter cars, these rules will make driving inherently more dangerous.
Q: So this is bad for motorists?
A: California says the White House’s warning on safety are erroneous. And it says any sticker shock on new-car purchases will be more than offset by fuel savings over the life of the vehicle.
Q: Why is California so heavily involved in this?
A: California has been a leader on climate change issues — and has special legal authority to assert itself on air pollution issues.
Because of the state’s notoriously bad air, it has the right under the federal Clean Air Act to impose stricter regulations than the federal government — so long as the U.S. Environmental Protection Agency agrees. Obama’s EPA gave California permission to set out tougher rules on carbon emissions, although as it turned out, the state and the federal government agreed to a compromise on how quickly the emissions would be scaled back. The result was one set of rules for the whole country.
Q: What difference does it make if there’s one set of rules?
A: Because the alternative could be chaos. Other states have the right to piggyback on California’s pollution standards. That means automakers could have to make one fleet of cars for California and its followers, and another set of vehicles for all the other states. As a practical matter, that would be enormously costly for manufacturers.
Q: But didn’t the automakers encourage Trump to loosen the regulations?
A: Initially, yes. But as the split between California and the administration hardened into cement, automakers got nervous. When their effort to forge a compromise between the two warring factions failed in June, they went to officials in Sacramento and offered a deal.
“We were quick to extend a hand,” Newsom said. The automakers “stepped up, they engaged ... and they deserve enormous credit.”
Q: Can’t Trump simply force California to fall into line and accept the lighter standards?
A: It wants to. It has vowed to revoke the authority Obama granted California a decade ago. But the EPA has never tried to revoke that authority before. Cara Horowitz, an environmental-law expert at UCLA, told McClatchy that California is probably on solid legal ground.