The following is the second in a series of guest posts from the Constitutional Accountability Center, a progressive legal think tank that works on constitutional and environmental issues. It is written by online communications director Hannah McCrea and president Doug Kendall, who also help maintain CAC’s blog, Warming Law. (Part I)

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In a 1932 dissenting opinion, Supreme Court Justice Louis Brandeis famously wrote: “It is one of the happy incidents of the federal system that a single courageous State may, if its citizens chose, serve as a laboratory, and try novel social and economic experiments without risk to the rest of the country.”

In the absence of federal action on climate change under the Bush administration, state and local governments have been taking advantage of this “happy incident” by passing measures that will reduce their contribution to global warming. Last September, ten northeastern states began auctioning allowances in the country’s first mandatory regional cap-and-trade program, the Regional Greenhouse Gas Initiative (RGGI), while several western states began working with Canadian provinces to set up a similar program under the Western Climate Initiative.

Signaling that the nexus of leadership in U.S. climate policy lies currently at the state level, California Gov. Arnold Schwarzenegger hosted the Governors’ Global Climate Summit in November, ostensibly to facilitate a high-level meeting between international and American leaders that bypassed the federal government. Unsurprisingly, California has led state efforts in advancing climate policy, and is currently in the process of adopting the largest and most comprehensive greenhouse gas reduction program in the country. These initiatives signal that Justice Brandeis’s vision of states as “laboratories” of regulation is very much alive in the realm of climate policy.

Of course, state innovation has been most visible (and most contentious) when it comes to auto emissions standards, as seen with this week’s blockbuster news that President Barack Obama is ordering the EPA to revisit the California waiver denial. As Grist readers may recall, in 2004 California formally adopted the “Pavley standards,” an aggressive enhancement of auto emissions standards that would require a 30 percent reduction in greenhouse gas emissions for new vehicles by 2016. Normally, states aren’t allowed to depart from federal auto emissions standards in this way, but under Section 209 of the Clean Air Act, California has special permission to set better-than-federal fuel economy standards, provided it obtains a waiver of preemption from the EPA. Once California gets a waiver, other states are allowed to adjust their own standards to match California’s, creating a mechanism in which states gradually bring about a nation-wide reduction in auto emissions.

It’s important to note that in 1970 when Congress was writing the Clean Air Act, it intentionally gave California this special right in recognition of its historic role as a leader in advancing alternative regulatory schemes for air pollutants. Never once in the next 30 years did the EPA fully deny a request by California for a waiver, yet in December 2007, the Bush EPA denied the state a waiver to implement the Pavley standards, against the recommendations of its own career scientists. In spite of the EPA’s denial, at least 17 other states — accounting for well over half of the U.S. auto market — have formally adopted, or are considering adopting, the Pavley standards, and will be ready to enforce them if California is granted its waiver.

California, along with 17 other states and numerous environmental groups, has sued the EPA to overturn the waiver denial, in California et. al v. EPA et. al. (08-1178), a case that will now likely be stayed and eventually dismissed if the EPA’s formal review process results in granting the waiver as is widely expected.

But granting the waiver will not be enough to ensure that the Pavley standards can go smoothly into effect. In anticipation of the waiver eventually being granted, the auto industry has been aggressively challenging the standards on the grounds that they are preempted by the Energy Policy and Conservation Act, which authorizes the Department of Transportation to set federal fuel economy standards for the national fleet. (By its own terms, Section 209(b) of the CAA only provides for a waiver of preemption under the CAA itself; therefore it would not necessarily preclude preemption of California’s greenhouse gas emission controls under other federal statutes.)

Fortunately, this claim has been rejected by two federal courts, in California and Vermont. However, the auto industry is appealing both rulings in the U.S. Courts of Appeals for the Ninth and Second Circuits, respectively, and has filed additional complaints in federal courts in Rhode Island and New Mexico. In April, the Bush administration filed an amicus brief with the U.S. Court of Appeals for the Second Circuit in support of the auto industry’s claims of preemption. It also tried to bolster these claims by adding pro-preemption language to the preamble of fuel economy regulations it issued last May, arguing that state clean car laws are preempted expressly and because they are an obstacle to federal law. As recently as December, the Bush White House kept signaling its solidarity with the auto industry by intervening in negotiations over the ultimately-doomed auto bailout bill, insisting on the removal of any language that would have required recipients of bailout money to stop supporting these legal challenges.

All this makes it critical that President Obama break with the Bush administration’s position that EPCA separately preempts the California standards. Fortunately, the President already set this process in motion earlier this week with his Executive Order instructing the Department of Transportation to tighten CAFE standards, in which he specifically instructed the agency to revisit preemption language. Now, he should go further still, by ordering the Department of Justice to withdraw the government’s support of the federal preemption claim in the Second Circuit and to oppose preemption claims both in that court and the Ninth Circuit. This is because even if the California waiver is granted, states can expect automakers to persist with their lawsuits arguing that the Pavley standards are preempted by EPCA, which will be made weaker if opposed by the federal government.

President Obama should also do all that he can to support the impressive array of other stat
e and local initiatives that aim to mitigate global warming. These programs not only serve as important laboratories for broader policy innovation, but they also mitigate emissions while Congress gets to work on new climate legislation. More important, they signal to industry that it will soon have to comply with a costly smorgasbord of fuel economy standards and emissions regulations, which should make the prospect of a uniform national regulatory approach more attractive. The stronger and more widespread these policies, the higher the bar will be set for a strong, long-term, comprehensive federal climate bill.