Auto Dealers, U.S. Chamber Take on California Climate Regulation

(MoneyWatch)  Although automakers essentially signed a peace treaty last May with the Obama administration and the state of California, some arms of the industry don't seem to have gotten the olive branch.

On Tuesday, the National Automobile Dealers Association and the U.S. Chamber of Commerce quietly filed a preliminary lawsuit in Washington, D.C. federal court. It was so quiet that hardly anyone noticed the papers had been entered until today. The litigants want to take away California's right to regulate tailpipe greenhouse gas emissions. The bare-bones September 8 filing did not spell out their arguments, but a more complete document is due in court by October 13.

The suit caught many of the major players, including the targeted Environmental Protection Agency, unawares. The EPA and its administrator, Lisa Jackson, are named because last July the agency granted California its waiver allowing it to regulate greenhouse gases.

It's plain that this legal attack represents a split between the automobile dealers and the Chamber (whose membership includes many auto-related companies) and the industry itself. The Alliance of Automobile Manufacturers is not a party to it and, in fact, supports the national agreement (which includes the EPA and the state of California) that was hammered out last May.

An Alliance spokesman, Charles Territo, said, "We talk to the dealers about a number of issues, but the bottom line is we remain committed to the national program." Automakers and dealers have actually been at odds over the closing of dealerships, resulting in some lawsuits.

The subject is somewhat confusing because the only effective way to regulate greenhouse gas from tailpipes is by making cars more fuel-efficient. The federal program then, under the guide of regulating climate emissions, imposes tighter fuel economy rules. California originally passed a law regulating tailpipe greenhouse gas in 2002, but its implementation was blocked by the Bush administration's EPA. After President Obama ordered a review, Jackson's EPA reversed course.

California has the right to set tailpipe standards, but the federal agreement is designed to make it unnecessary for it to actually do so. The national target is 35.5 mpg by 2016, and the rules to get there are essentially similar to those that were pending in California.

Mary Nichols, chairman of the California Air Resources Board, described the waiver as "a push in the right direction--for automakers to be more innovative and competitive with the rest of the world to provide cleaner cars." She said that California "has led the nation on aggressive greenhouse gas reduction efforts."

Neither the Chamber nor NADA had an on-the-record comment about the pending lawsuit. On September 10, the NADA homepage and list of press releases contained no mention of the court filing.

Photo: National Academy of Sciences