By Ryan Beene

Bloomberg

Decades of L.A. smog led to tighter standards

In 1953, there were no San Gabriel Mountains — at least, not that Lee Begovich could see. When the 24-year-old kindergarten teacher moved from Chicago to Southern California that year, Los Angeles was choked with eye-burning, lung-stinging, headache-inducing smog. It hung so thick that it often limited visibility to mere miles for months. So when Begovich looked northeast from her Compton classroom, the Los Angeles topography faded into a gauzy haze, like peering into the smoke-filled backrooms of the era’s bars. But one day that fall, the wind blew hard; it cleared out the intractable smog and for the first time in her life, Begovich saw the outline of the San Gabriel Mountains. She was stunned, she remembered 66 years later.

You wouldn’t hear that story today, said Ann Carlson, Begovich’s daughter and an environmental law professor at the University of California at Los Angeles. For the last two decades, the air has been far cleaner. Now, in most panoramic photographs of the city, the mountains sit atop its skyline like a crown. “People don’t realize just how bad it was and how much better it is today,” said Carlson, who’s writing a book on the region’s history of air pollution.

With mountains on three sides and an ocean on the fourth, the region’s geography forms a bowl that pens in polluted air, Carlson said. And for most of the year, an inversion layer of warm air acts as a lid atop it, trapping the cooler air and pollution below. It is the perfect petri dish for smog. It’s obvious now, but for years, scientists couldn’t figure out what exactly was causing the smog. And Los Angeles was quickly becoming the car capital of America: 2 million cars by 1953.

The city and the state have made extraordinary progress in the past half-century, and it’s largely because of California’s ability under the Clean Air Act to curb emissions from automobiles. But President Donald Trump says he will revoke California’s ability to set its own auto emissions standards, a provision that gave the most populous state significant sway over the car industry. On Friday, California and 22 other states responded, filing a lawsuit that challenged his decision to revoke the waiver, which is rooted in Los Angeles’ smoggy past.

— The Washington Post

When President Barack Obama in 2009 announced a plan to bolster the fuel efficiency of cars to record levels, he stood shoulder to shoulder in the White House Rose Garden with chief executives of the largest automakers.

It was a far different scene Thursday at EPA headquarters, where administrator Andrew Wheeler and Transportation Secretary Elaine Chao formally began to dismantle the program.

Instead of a cadre of CEOs, the automobile industry’s lone envoy was a trade association official who after the event said the group neither opposed nor supported the plan yet.

The contrasting scenes highlight the position in which carmakers have found themselves in President Donald Trump’s Washington. The industry aggressively lobbied him to ease the Obama rules, yet the plan proposed in August 2018 went beyond what most carmakers actually sought.

No manufacturer has endorsed it so far, and in June, 17 urged the president to secure a single nationwide standard that all could support — including California’s regulators — warning that failure to do so would trigger “an extended period of litigation and instability, which could prove as untenable” as the rules they sought to change in the first place.

The next month, four of them defied the administration by negotiating a compromise standard with California.

Chao and Wheeler on Thursday all but guaranteed the instability the industry feared by revoking California’s authority to regulate tailpipe greenhouse gas emissions. California and other states are expected sue to block the move, leaving automakers facing uncertain requirements as they plan their vehicle lineups.

“This is exactly what we were trying to avoid, this uncertainty that is happening now,” Gloria Bergquist, spokeswoman for the Alliance of Automobile Manufacturers, said on the sidelines of the event Thursday. “We’re going to have to look at whatever the final rule is and look at the entire package and decide then what our position’s going to be, and different companies may fall in different places.”

That uncertainty comes in an already volatile time for the industry. Carmakers are under pressure from investors to funnel billions into future-oriented technologies including electric and autonomous vehicles. The U.S.-China trade conflict has pinched margins while the threat of punitive new American tariffs on imported autos and parts still looms. Sales in the U.S. market are softening amid signs of broader economic risk. All of that has raised the stakes for the auto industry when it comes to fuel-efficiency planning.

Automakers are “making enormous investments and bets, and those bets determine the outcome of the future of the company,” said Brett Smith, director of propulsion technology and energy infrastructure at the Center for Automotive Research, a nonprofit. “If they’re wrong because a policy changes in six months or two years, that hurts them, and it hurts them massively.”

Models are years ahead

Carmakers plan their vehicle portfolios several years in advance, so lineups through 2022 model year are largely locked in place, said Gopal Duleep, president of H-D Systems, an industry research firm in Washington. “So really, 2023-2025 is where you might see some differences.”

If the Trump administration prevails on all fronts — weakening national standards and stripping California’s power to set its own — it won’t necessarily be a clear-cut win for the industry. Those locked-in product plans and parts contract have improved fuel-efficiency baked in, for vehicles powered by gasoline and electricity.

“If the standards are weakened, then those suppliers who worked on those technologies — be they internal-combustion-engine or electric-vehicle — will find those volumes lessened, so it’s a risk for the suppliers,” said Alan Baum, an independent auto analyst in West Bloomfield, Michigan.

The nightmare outcome of the anticipated litigation is a bifurcated market, in which companies face California’s more stringent standards in more than a dozen states that follow its lead while Trump’s rolled-back standards govern elsewhere.

Some companies may also alter pricing and vehicle incentives to manage diverging standards, said Joshua Linn, a senior fellow at Resources for the Future who’s studied the effects of mileage regulations. For example, plug-in hybrids could be discounted in states that follow California’s standards, such as Maryland, but not in states under federal standards, like Virginia.

“So, you could have an odd scenario where you just go across the border and get a deal,” he said.

Seeking to avert that, Ford, Honda, BMW and Volkswagen in July agreed to meet compromise efficiency requirements offered by California even if they are more stringent than what the Trump administration proposes.

The California deal essentially pushes back the Obama-era standards by one year, lowering the pace of annual improvements, and enhances compliance incentives for electric vehicles, among other features. It also includes an agreement by the carmakers to not challenge California’s authority.

In a statement Thursday, Ford said it has “consistently said that the best path forward is a negotiated settlement that offers a workable compromise. We need regulatory certainty, not litigation.”

Hyundai echoed that sentiment. “While there are differences between the various stakeholders, it is our hope that a solution to reduce carbon emissions would provide business certainty, balance consumer choice, and avoid lengthy litigation,” the company said in a statement.

General Motors, Fiat Chrysler, Mercedes-Benz parent Daimler and others either declined to comment on the Trump administration’s move or deferred to the Alliance.

‘Show some courage’

After Thursday’s event at the Environmental Protection Agency, the California Air Resources Board voted to approve the compromise plan it struck with the four carmakers. The vote came after DOT and EPA lawyers warned the state agency that it might be unlawful, and the Justice Department began an antitrust probe into the four automakers involved in the deal.

“Politically, it’s a very challenging time for anyone to step forward. They’ve seen what’s happened to other car companies,” CAR’s Smith said. “They’ve decided that this is a time when they can’t just lift their heads up.”

Sen. Tom Carper, D-Del., signaled his frustration that automakers that had warned against Trump taking this step are suddenly quiet as he does so. Automakers need to “show some courage and do the right thing” by standing up to Trump’s plan, Carper said.

While there may be some early disruption, the Trump administration argues, its plan will give automakers the so-called one national program that companies repeatedly asked for, even using that phrase as the name of the rule to rescind California’s powers.

Wheeler predicted the carmakers would be satisfied when the replacement standards, to be known as Safer Affordable Fuel-Efficient Vehicles Rule, are released.

“We expect at the end of the day when we release the second half of the SAFE proposal, the standards, that all of the automakers will take a look at it and see that it is feasible, the right thing to do, and I expect everyone will support it, and hopefully, the state of California will put politics aside and support it, as well,” he said.

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