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Attacks on Trump Administration Environmental Federalism Fall Short

Today’s Energy & Environment News (subscription required) has an article titled “Wheeler preaches federalism on water, not cars.” The gist is that various critics claim the Trump-era Environmental Protection Agency, under Acting Administrator Andrew Wheeler, is an “inconsistent” and “hypocritical” advocate of federalism in environmental policy. The article begins:

When EPA announced its overhaul of a major water rule this week, it leaned heavily on the idea that it was promoting states' rights.

Critics say that's hypocritical.

The article goes on to quote from Wheeler’s guest commentary in Tuesday’s Kansas City Star. EPA’s proposed revision of the Obama administration’s Waters of the United States (WOTUS) rule would “give power back to the states.” It would “end years of uncertainty over where federal jurisdiction begins and ends,” for the first time “clearly delineating the difference between federally protected wetlands and state protected wetlands.”

The E&E article continues: “But critics of the Trump EPA say Wheeler’s message is hard to square with the agency’s rollback of pollution rules for cars.” The article refers here to EPA’s Safe Affordable Fuel Efficient (SAFE) motor vehicle rule, which would freeze the Obama administration’s fuel economy and greenhouse gas motor vehicle standards at model year 2020 levels, and revoke California’s Clean Air Act waiver authorizing the state to set its own greenhouse gas motor vehicle standards.

“Mary Nichols, chairwoman of the California Air Resources Board, told E&E News that EPA only seems to stand behind states’ rights when it involves setting less aggressive climate change rules than the federal government.” Sean Hecht, co-executive director of the Emmett Institute on Climate Change and the Environment at UCLA’s School of Law, agrees: “I do think it is inconsistent for the administration to say in some contexts that states need to have more authority and to say in other contexts that states should be prohibited. There is a lack of consistency there.”

Such criticisms are extremely shallow. Federalism does not means empowering each state to regulate any company or market it wants, regardless of what federal law allows, whether the company is inside or outside the state’s borders, or whether the market is local or national in scope.

Wheeler’s policies are consistent in three key respects—all studiously ignored (or quietly despised) by his critics.

1. Wheeler consistently seeks to follow the law. In the case of WOTUS, Wheeler’s aim is to ensure that the EPA’s Clean Water Act regulations do not exceed the agency’s statutory authority. Previous administrations stretched the phrase “navigable waters of the United States” to the point where it effectively means “moistures of the United States.” EPA has awarded itself more power over state land-use policy and private property rights than Congress intended. EPA’s proposed revision is meant to undo an illegal “power grab,” as Wheeler explains in his op-ed:

At issue is the extent of the federal government’s control over our nation’s waters. Under the Clean Water Act, the federal government has jurisdiction over navigable waters—defined as the “waters of the United States.” Federal regulators and the courts have broadened this definition over time, moving from waters a vessel can navigate to ponds and wetlands as well. The definition may seem like a trivial technicality, but it has enormous consequences for land use decisions nationwide.

The EPA is proposing to replace the Obama administration’s definition “with one that restores the rule of law and the role of states and landowners in managing their land and water resources.”

Similarly, the EPA and Department of Transportation’s SAFE vehicles rule would rescind California’s unlawful power to regulate fuel economy. The Environmental Policy and Conservation Act preempts states from adopting or enforcing laws or regulations “related to” fuel economy standards. California’s greenhouse gas motor vehicle standards are inherently and closely related to fuel economy standards. For the details, see pp. 9-21 of CEI’s comment letter.

2. Wheeler consistently seeks to follow the logic of federalism. Navigable waters of the United States are clearly a national concern and properly subject to EPA regulation. Not so non-navigable waters on private land that do not abut interstate waters. While California should have considerable authority to regulate wetlands in California, the state has no inherent power to regulate how automobiles are manufactured and sold beyond its borders.

Under the Clean Air Act, Congress allows California to set its own motor vehicle emission standards, which other states may adopt—with one critical exception. If California’s emission standards are “related to” fuel economy standards, they are preempted under the Energy Policy and Conservation Act. Wheeler’s policy follows the logic of federalism because, unlike isolated wetlands, the U.S. auto market is national in scope and auto sales are clearly in the “stream of interstate commerce.” A patchwork quilt of state-by-state fuel economy regimes would utterly destroy the U.S. auto industry.

Ideally, only consumers should have the “power” to “tell” automakers, via market signals, how much fuel economy the average vehicle achieves. But as long as we are stuck with mileage mandates, only Congress should have the power to impose such regulation, for three reasons. First, subjecting automakers to both state and federal fuel economy requirements is inefficient. Second, no state regulator should have the power to impose national sales mandates on companies located chiefly outside its borders. Third, unlike California, which produces few automobiles, Congress actually has to worry about how mileage standards affect autoworkers’ jobs and the competitiveness of the U.S. auto industry.

3. Wheeler consistently seeks to expand economic liberty. The WOTUS proposal, for example, aims to reduce wasteful bureaucratic interference with private landowners’ economic decisions. Wheeler’s op-ed explains:

Under the 2015 rule, more farmers, developers and landowners across the U.S. would need to apply for a federal permit to exercise control over their own property—a costly and time-consuming action that runs counter to our republican idea of government. Not only can the process to obtain a federal permit cost tens of thousands of dollars, but the 2015 definition also put local land use decisions in the hands of distant, unelected bureaucrats. The new, more precise definition means that farmers, land owners and businesses will spend less time and money determining whether they need a federal permit and more time upgrading aging infrastructure, building homes, creating jobs and growing crops to feed our families.

EPA’s SAFE Rule, for its part, will increase automakers’ ability to serve consumer preferences. By freezing fuel economy standards at the 2020 levels, the rule will reduce the average cost of owning a new vehicle by an estimated $2,340. That means new, safer, more fuel efficient vehicles will be more affordable for millions of middle-income households. Consumers who want to spend the extra bucks for additional fuel efficiency or to buy an electric vehicle will still be free to do so.

Best of all, automakers will no longer have to produce vehicles to satisfy the policy preferences of politicians and bureaucrats in Sacramento. They can concentrate more on producing vehicles consumers want. That, and an estimated $256.2 billion reduction in regulatory compliance costs, should help U.S. auto companies compete in the global marketplace and provide well-paying jobs for autoworkers.