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The Obama Administration’s National Auto Policy: Lessons from the “Car Deal”

By Jody Freeman

This Article is the first comprehensive analysis of the Obama Administration’s national auto policy, which set the first federal greenhouse gas standards and strictest fuel efficiency standards for new cars and trucks in U.S. history. It describes the complicated legal, administrative and political background that led to a harmonized federal program, including the history of litigation and conflict among the auto industry, environmental groups, California and federal regulators. It explains how a confluence of events — a new administration, a domestic auto industry in crisis, a landmark Supreme Court decision, and collective exhaustion with a thirty-year struggle over fuel efficiency standards — primed all of the parties to support a solution, one that would require significant legal and administrative dexterity to devise and implement. The Article describes in detail the joint rulemaking by the U.S. Environmental Protection Agency and the National Highway Traffic Safety Administration, through which the agencies established a new uniform program. It explores how the joint rulemaking process afforded the agencies an opportunity to pool information and expertise, harmonize potentially inconsistent regulatory approaches and bridge cultural differences. It also chronicles the innovative use of commitment letters to formalize industry and state support for the joint rule, and to settle pending preemption litigation. The Article discusses the implications of the “car deal” for the Obama Administration, which at the time was bailing out the auto industry, pressing Congress for comprehensive energy and climate legislation, and anticipating the U.N sponsored climate negotiations in Copenhagen. It also discusses the importance of the car deal to environmental law. As the first binding federal regulation of greenhouse gas emissions under the Clean Air Act, this mobile source rule exerted a legal domino effect, leading, inexorably, to EPA regulation of stationary sources as well. The national auto policy thus unleashed the most powerful existing tool the administration had at its disposal for tackling the problem of global climate change. The Article concludes with a discussion of the implications for administrative law, arguing that one of the most important legacies of the car deal is the new prominence it brought to joint rulemaking, which has significant potential to improve the clarity and quality of regulation in situations where agencies share overlapping or closely related regulatory authority.

Cite as: Jody Freeman, The Obama Administration’s National Auto Policy: Lessons from the “Car Deal”, 35 Harv. Envtl. L. Rev. 343 (2011).

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