Re: He Who Pays the Piper

Stephen — I don’t think the auto industry’s capitulation is wholly — or even primarily — a consequence of the bailouts. Rather, I think it’s an effort to buy certainty and avoid some potentially serious downside regulatory risks. 

As I understand it, what they are accepting is an acceleration of the timetable on which CAFE standards are tightened by four years. In return, they are getting California and other states to drop their efforts to set their own greenhouse-gas standards. I suspect — and this is speculation on my part — that they are also getting the assurance that this new standard will also serve as the greenhouse gas standard that the EPA is due to promulgate under Section 202 of the Clean Air Act. For while some of my friends on the Right are loathe to admit it, federal regulation of vehicular greenhouse gas emissions is a done deal. It’s not a question of if EPA will regulate GHGs from cars and trucks, but when. 

The EPA’s endangerment finding will become final and will hold up in court, triggering a nondiscretionary duty to regulate vehicular GHG emissions. When would this happen? In 2-4 years — certainly in time for the EPA to set standards for the MY 2016 fleet. What’s the timetable for the Obama adminsitration’s new rules? Hitting the new CAFE target by 2016. 

So, by accepting this deal, not only to the automakers get a single national standard, they also get a certain schedule — and for large corporations that like long lead-times on their products, like the automakers, this is worth quite a bit. Is it a good deal for the automakers? I doubt it, and it’s almost certainly not a good deal for consumers, but it’s still a deal that I can understand.

Jonathan H. Adler — Jonathan H. Adler teaches courses in environmental, administrative, and constitutional law at the Case Western Reserve University School of Law.

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