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Michigan Automakers Await Climate Change Ruling

Will Supreme Court OK regulating a greenhouse gas?

August 14, 2006 |
Great Lakes Bulletin News Service

General Motors Corporation

Cutting autos' greenhouse gases requires new technology. This hydrogen-powered General Motors vehicle emits only water vapor.

In a court action that is likely to have broad ramifications for Michigan’s three major automakers and the thousands of workers who build their vehicles, the United States Supreme Court has agreed to hear arguments in a lawsuit meant to force the Environmental Protection Agency to begin regulating a common greenhouse gas.

The suit, brought in June 2003 by Massachusetts and 12 other states, asks the nine justices to tell the EPA that it has jurisdiction over emissions of that gas, carbon dioxide, from auto vehicles. A successful suit would be a critical step in the states' ultimate goal: compelling the agency to require reductions of those vehicular emissions.

Observers on all sides say that the Supreme Court’s decision, whatever it is, could be one of the most important on environmental protection in U.S. history. Although the State of Michigan has studiously avoided taking sides in the case, it will profoundly affect the state’s automakers, their employees and suppliers, and the communities where they are located. Roughly 27 percent of the United States’ carbon dioxide emissions come from vehicles, according to the federal government’s Energy Information Center, and more than 60 percent of those vehicles are made by Michigan-based manufacturers.

In fact, the state lost 42 percent of its automobile assembly jobs between 2000 and July 2005, according to labor statistics, while nationwide the drop was 14 percent. In June 2006, Michigan’s auto industry employed 252,000 workers, according to the state Department of Labor and Economic Growth, down substantially from 347,000 workers in 2000.

While opponents of carbon dioxide regulation say limiting the gas would harm domestic automakers, supporters point out that recent job losses were not the result of government regulation, but reflect the public’s newfound interest in buying more fuel-efficient vehicles in response to increasing gasoline prices. Consumers are buying larger numbers of cleaner-running, higher-mileage vehicles, a change that strongly favors foreign manufacturers—and reduces carbon dioxide emissions. The trend has made Toyota the second-largest auto manufacturer; it surged ahead of Ford Motor Company just weeks ago.

“Domestic manufacturers have had more of a market share in larger vehicles, so they will take the hit a lot harder than companies with smaller vehicles” if the EPA is forced to begin regulating carbon dioxide emissions, which are linked to gas mileage, said Charles Griffith, director of the auto project at the Ecology Center, an environmental organization based in Ann Arbor.

The Basics
The premise of the lawsuit is straightforward. The plaintiffs argue that, under the provisions of the 1970 federal Clean Air Act, the EPA must follow scientific developments that identify new, harmful emissions. The government counters that Congress never identified carbon dioxide as subject to federal regulation, and the agency does not have the legal authority or scientific basis to do so.

“Until more is understood about the causes, extent, and significance of climate change, and the potential options for addressing it,” said government lawyers in a court brief in May, “the EPA believes it is inappropriate to regulate greenhouse gas emissions from motor vehicles.”

The lawsuit brought by Massachusetts and its partners, and the government’s response, come at a time of fast-growing national concern about rising temperatures, increasingly extreme weather events, and changing precipitation patterns caused by global warming.

The Supreme Court will decide whether the Clean Air Act directs the EPA to reduce vehicle emissions beside those it now regulates: sulfur dioxide, nitrogen oxide, carbon monoxide, lead, and hydrocarbons. The Supreme Court may also wade into the long-running scientific discussion about the causes of global climate change, a conversation that has, with extraordinarily few dissenters, now clearly identified fossil fuel-burning as a primary culprit.

Even President George W. Bush has updated his view on global warming. On June 11, the president promised to form a science-based response to climate change. “The United States is the world's largest emitter of manmade greenhouse gases,” the president said, referring to the roughly 25 percent of worldwide greenhouse gas emissions produced by America. “We recognize the responsibility to reduce our emissions.”

But Mr. Bush also said he was worried about the cost of complying with regulations limiting greenhouse gas production.

Means for limiting carbon dioxide, the most common greenhouse gas, say experts, include driving less and deploying more efficient vehicles—two approaches that rising gasoline prices are already triggering.

“The way to reduce carbon dioxide is to use less fuel—either to drive less or to have a more fuel efficient vehicle or to use an alternative to gasoline,” said Gloria Bergquist, vice president of public affairs for the Alliance of Automobile Manufacturers, a trade organization based in Washington.

But Michael McCracken, the chief climate change scientist at the Washington-based Climate Institute, said that market forces like high gas prices, along with voluntary carbon emission controls, are not enough. The government, he said, needs to regulate carbon dioxide emissions, and even if that raises costs the result will be beneficial to the environment and public health. “If you raise the cost of polluting,” he said, referring to adding new rules and regulations, “people will figure out other options and it will be done quite cost effectively.”

Auto Companies: Panic or Profit?
To some extent the government, automakers, and scientists have participated in this sort of regulatory dispute before. In the 1950s, automakers amassed what they said was irrefutable scientific evidence that the smog choking Los Angeles had nothing to do with their cars, a thesis that independent scientists easily dismantled. In the early 1970s, automakers fought bitterly to avoid federal regulation of tailpipe emissions and battled to prevent new fuel economy standards inspired by an Arab oil embargo that sent gas prices—and sales of smaller, more efficient cars—soaring.

At the heart of those previous debates, as well as the current one over carbon dioxide, is money. Manufacturers consistently claim that regulation drastically increases costs, harm sales, and reduces employment. Their choice, they say, is to pass the costs on to consumers and risk losing customers, or to swallow the costs, cutting employment, advertising, and new technology research.

But a well-regarded study conducted by the University of California at Davis finds that the effects of mileage regulation were negligible, requiring neither layoffs nor decreased profits. In response to new regulations, the California researchers found, automakers created technology that reduced emissions and offset the negative economic impacts of regulation. In 1970, for example, when Congress updated the nation’s clean air law, automakers responded by developing an oxidizing catalyst that chemically defanged toxic tailpipe emissions.

In 1980, as use of motor vehicles increased dramatically, Congress called for more regulations to reduce smog and constrict chemicals that eroded the ozone layer. Automakers improved past technology, installed new catalytic converters in most vehicles, and thus changed harmful carbon monoxide, nitrogen oxides and hydrocarbon into nitrogen, oxygen, water—and carbon dioxide. The cost to automakers was moderate, the study found, and quickly leveled off.

Those regulations also made vehicles more efficient. Ms. Bergquist said the added efficiency enabled automakers to provide more features while keeping emissions—and gas mileage—almost constant. “We have been able to give consumers the luxury features that they want, like air conditioning and safety features, and we have kept fuel efficiency at the same level,” she said.

“Those are the features that consumers appear to want,” said Charles Griffith, the auto project director for the Ecology Center. “Unfortunately it sells cars and the environment has suffered from that.”

Bigger Vehicles Frustrate Rising Efficiency
Environmentalists like Mr. Griffith are worried that as long as the law allows automakers to use increased fuel efficiency to make vehicles that are heavier and more powerful instead of less gas-guzzling, and as long as consumers are willing to buy them, auto emissions will continue to rise. Further complicating the problem is the exception the government makes for light trucks and sports utility vehicles, which enjoy lower efficiency standards than sedans. The fact that those larger vehicles form the bulk of the vehicles produced by American car companies increases the economic challenge to Ford, General Motors, and Daimler-Chrysler.

So greenhouse gases stemming from automobiles continue to rise, even as cars become more efficient. A report from the Washington-based environmental law and policy firm Environmental Defense found that carbon dioxide emissions increased by 64 percent since 1970, thanks to more vehicles on the road, more trucks and SUVs, and elevated carbon dioxide emissions caused by catalytic converters.

Industry critics argue that limiting carbon dioxide emissions could actually help beleaguered American automakers. They point out that, as the Big Three’s carbon dioxide emissions increased by an average 6.9% annually since 1990, their market share decreased 12 percent in the American market.

In fact, high gasoline prices appear to be persuading Americans to buy more cars that are smaller; sales of SUVs are dropping dramatically. Meanwhile Toyota, Honda, and BMW have limited carbon emissions while persuading more Americans to buy their cars.

Environmental Defense sums up the scenario: “The Big Three are losing in the market while leading a race to the bottom in terms of fuel economy and worsening carbon burdens.” And automakers having the greatest success “tend to position their products on the more efficient end of segments in which they compete.”

Hard to Predict
It is difficult to tell whether the Supreme Court will consider what appears to be a growing national interest in battling global warming when it makes its decision. In the first environmental decision of the newly-formed Supreme Court last June, a case involving wetland protection and the Clean Water Act in Michigan, four justices ruled in favor of protecting natural resources and four ruled in favor of developers. The last judge, seeing the impasse, sent the case back to a lower court with new criteria for making a decision--criteria that many observers found confusing.

The Massachusetts global warming case has already produced divisions in the federal judiciary. On July 15, 2005, a three-judge panel of the U.S. Federal Court of Appeals in Washington decided the EPA could avoid regulating carbon dioxide emissions from vehicles. But the way that the judges reached that decision was hardly decisive. One judge said that the 13 states could not sue the EPA because such a challenge should come from an individual, not a state. Another judge said that the EPA does not have authority to regulate carbon emissions. And the third judge said the EPA does have the authority, and violated the Clean Air Act by refusing to use it.



April 2, 2007
Supreme Court Has Authority to Act on Greenhouse Gases

WASHINGTON (NYT) — In one of its most important environmental decisions in years, the Supreme Court ruled on Monday that the Environmental Protection Agency has the authority to regulate heat-trapping gases in automobile emissions. The court further ruled that the agency could not sidestep its authority to regulate the greenhouse gases that contribute to global climate change unless it could provide a scientific basis for its refusal. The 5-to-4 decision was a strong rebuke to the Bush administration, which has maintained that it does not have the right to regulate carbon dioxide and other heat-trapping gases under the Clean Air Act, and that even if it did, it would not use the authority. The ruling does not force the environmental agency to regulate auto emissions, but it would almost certainly face further legal action if it failed to do so. Writing for the majority, Justice John Paul Stevens said the only way the agency could “avoid taking further action” now was “if it determines that greenhouse gases do not contribute to climate change” or provides a good explanation why it cannot or will not find out whether they do.




Ben Buchwalter, a student at Haverford College, writes for the Michigan Land Use Institute’s news desk this summer under a program supported by the college and the Institute. Reach him at Benb@mlui.org.

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