Referring to a New York Times article on New York’s adoption of California’s greenhouse gas emissions standards, you asked (1) whether these standards are in effect in California; (2) when these standards take effect in Connecticut; and (3) if it is likely manufacturers will produce one line of vehicles that meets California’s stricter standards rather than one line for “California” states and one for other states.

SUMMARY

“Battle Lines Set as New York Acts to Cut Emissions,” (The New York Times, November 26, 2005) reports on New York state’s adoption of California regulations aimed at cutting emissions of carbon dioxide and other greenhouse gases (GHG) that contribute to global warming.

The GHG regulations are scheduled to take effect in California starting with 2009 model year motor vehicles. A group of car makers has sued California in federal court to block implementation of the regulations. The case is now in its early stages.

PA 04-84, AAC Clean Cars, required Connecticut to adopt regulations implementing California’s motor vehicle emission standards, and to keep them current with the California law. The Department of Environmental Protection (DEP) heard comments on California’s GHG regulations last summer, and the Regulations Review Committee is scheduled to act on the proposed regulations later this month. The proposed regulations are scheduled to take effect in Connecticut starting with 2009 model year motor vehicles.

It is difficult to predict if automakers will produce only California-compliant vehicles. Some observers say demand from additional states for such vehicles will persuade car makers to produce them exclusively, reducing production and consumer costs. But car makers have said the additional costs of producing California-compliant vehicles will lead to a drop in consumer demand, and less willingness on their part to manufacture such vehicles.

More information on California’s emissions program is provided in OLR Reports 2004-R-0089 and 2002-R-0652 (attached).

STATUS OF THE CALIFORNIA REGULATIONS

In 2002 California passed AB 1493, which required the California Air Resources Board (CARB) to adopt regulations to achieve the maximum feasible and cost-effective reduction in GHG emissions from motor vehicles. The regulations go into effect January 1, 2006, and only apply to 2009 and later model year vehicles. The standards are designed to reduce GHG emissions by about 30% by the year 2016.

California has completed the administrative process necessary to approve the regulations, but the regulations have been challenged in federal court by the Alliance of Automobile Manufacturers (AAM), which represents General Motors, Ford, DaimlerChrysler, Toyota and other car makers, and by 13 California motor vehicle dealers. Central Valley Chrysler-Jeep, Inc. v. Witherspoon, filed in the Eastern District of California, is in its early stages. It is unclear at this point how the legal challenge will affect the regulations’ implementation.

CONNECTICUT’S ADOPTION OF CALIFORNIA CLEAN CARS REGULATIONS

PA 04-84, AAC Clean Cars, required the DEP to adopt, by December 31, 2004, regulations implementing California’s motor vehicle emissions standards, and to keep the Connecticut regulations current with changes California makes. Connecticut adopted California’s Low Emission Vehicle II (LEV II) regulations to reduce emissions of toxic air pollutants on December 3, 2004. Those standards take effect in Connecticut starting with 2008 model year vehicles.

Because PA 04-84 requires Connecticut to conform to changes California makes in its clean car regulations, Connecticut is in the process of adopting California’s GHG emission standards for passenger cars, light duty trucks, and medium duty passenger vehicles. DEP held a hearing on the proposed GHG regulations on August 25, 2005. The hearing report is available on the DEP website. The Regulations Review Committee is scheduled to hear the proposed GHG regulations on December 20, 2005.

THE “CALIFORNIA CAR”

Federal law requires all new vehicles to comply either with emission standards set by the U. S. Environmental Protection Agency (EPA) or California. California’s standards have traditionally been stricter.

In the Times article, a representative of the National Resources Defense Council stated that if 10 states, including New York, adopt the California GHG standards, a “tipping point” in the new vehicle market will be reached that would prompt car makers to make one “California” vehicle that would meet the stricter requirements, rather than one vehicle for the California market and a different vehicle for “EPA” states.

It is not clear how car makers will react. AAM contends that the implementation of the California GHG standards will raise the cost of new vehicles, reducing demand for them. One CARB estimate projects a drop of four to five percent in California new vehicle sales once the GHG-reduction standards are fully implemented. AAM says it would not make sense for car makers to produce vehicles for which there is less demand.

But DEP hearing officer Paul Farrell found that the projected drop in demand would not be sufficient to cause car makers to stop offering vehicles for sale. “It makes no sense,” Farrell wrote in the hearing report, “to assert that because demand drops…that a manufacturer would willingly surrender existing market share. ”

PF: dw