Is EPA Trying to Centrally Plan the Auto Sector (in Addition to the Electric Sector)?

With the Clean Power Plan, President Obama’s marquee climate policy, the Environmental Protection Agency is trying to run the electricity sector. Of course, the agency is an environmental regulator, and it has no expertise overseeing the generation, transmission, distribution, and consumption of electricity. Authority over the wholesale and retail electricity markets is instead shared by the Federal Energy Regulatory Commission and the states, which have developed know-how and skill in their respective spheres of influence in the industry over the last 90 years. Despite its relative ignorance, the EPA wants to plan the entire electricity sector—both wholesale and retail—in the name of fighting climate change.

According to Reuters, the EPA might have a new and similarly large sector of the economy in its sights: the auto industry. Per a Reuters report from Frankfurt:

U.S. authorities have asked the German carmaker Volkswagen to produce electric vehicles in the United States as a way of making up for its rigging of emission tests, the German newspaper Welt am Sonntag reported.

The U.S. Environmental Protection Agency is currently in talks with Volkswagen with the aim of agreeing on a fix for nearly 600,000 diesel vehicles that emit up to 40 times legal pollution limits.

The paper, which gave no source for its report, said the EPA was asking VW to produce electric vehicles at its plant in Chattanooga, Tennessee, and to help build a network of charging stations for electric vehicles in the United States. … Read the rest here.

If this is true, it’s a huge development. The implementation of international trade and industrial policy by environmental sanction cannot be a power delegated to the EPA by Congress. I presume the parties are negotiating to reach a judicial settlement pursuant to Clean Air Act statutory violations. Could a court condone such an unnatural accretion of power? We’ll see (again, if this story is true).