The US Court of Appeals for the Ninth Circuit [official website] ruled [opinion, PDF] Wednesday that California's Low Carbon Fuel Standard [text, PDF] does not violate the Dormant Commerce Clause. The regulation requires reduction of carbon emissions for fuels. Emissions are measured by a "lifecycle analysis," which includes production and transportation. Thus, out-of-state manufacturers argued that they are discriminated against because they have to transport their fuels farther than their California counterparts. However, the court held that the regulation adopted by the state's Air Resources Board (ARB) [official website] does not facially discriminate against out-of-state companies. The court also noted that although the Clean Air Act (CAA) [official website; EPA backgrounder] expressly prohibits state regulation of emissions from motor vehicles, California has been allowed to adopt its own standards if it "determine[d] that the State standards will be, in the aggregate, at least as protective of public health and welfare as applicable Federal standards." Moreover, the court stressed that Congress has been recognizing California as the "laboratory" for innovation in terms of adopting and enforcing motor vehicle emission standards that are more advanced than the federal program. Thus, the court determined that California should be encouraged to find workable solutions in reducing or slowing carbon emissions which may prevent great harm to the public. The dissenting judge stated that the regulation in fact discriminates against out-of-state manufacturers, given that discrimination simply means different treatment. The judge added that the purpose or justification of the regulation has no impact on the determination of whether it is facially discriminatory. According to the dissent, California failed to demonstrate that it could not reduce carbon emissions in a non-discriminatory manner. With the recent ruling, the Ninth Circuit reversed a prior ruling by the US District Court for the Eastern District of California [official website] that held the regulation to be in violation of the dormant Commerce Clause.
The rising emission of greenhouse gases has not been a new problem. In June 2012 the US Court of Appeals for the District of Columbia Circuit [official website] upheld [JURIST report] the findings of the Environmental Protection Agency (EPA) [official website] that heat-trapping pollutants such as carbon dioxide are endangering the public health and welfare. The findings at issue laid out the foundations for EPA's new restriction of greenhouse gas emissions placed on car models build in 2012 and on new regulations on permits for power plants and factories. The EPA has been granted [JURIST report] authority under the CAA to regulate the emission of greenhouse gases, such as carbon dioxide, by automobiles. In Massachusetts v. EPA [OYEZ backgrounder; JURIST report], 12 states and several environmental groups sued the EPA arguing that the agency had "abdicated its responsibility under the Clean Air Act" to regulate greenhouse gas emissions. The court held that greenhouse gas was within the CAA's definition of "air pollutant" and thus, the EPA had statutory authority to take control the emission of such gases from new motor vehicles. In December 2010 the ARB approved measures [JURIST report] that will provide incentives to companies and factories that decrease their greenhouse gas emissions.