Detroit Loses Vt. CO2 Battle

Automakers have lost a key court fight in the State ofVermont, where a federal judge has opened the door for states to tightly regulate greenhouse gas emissions.

In and of itself, the decision by Judge William Sessions III only applies in the state of Vermont. In theory General Motors, Ford Motor Co., Chrysler LLC, and Toyota Motor Corp., the principal companies involved in the suit, could simply stop selling big vehicles in Vermont to comply with the state regulations likely to follow in the wake of the ruling.

However, the Vermont regulations are virtually identical to those in California, which are also being contested in court.

The Vermont decision isn’t controlling in California, but it’s very likely to influence the federal court ruling in California, and the California new vehicle market is too large, too rich and too important for carmakers to ignore.

If the California controls on greenhouse gases stick, the automakers have no choice but to comply, which could force carmakers to design smaller, lighter, and significantly more efficient vehicles.

Environmental groups, which have long pressed for tougher fuel economy and for the regulation of emissions of greenhouse gases such as carbon dioxide, are jubilant.


“This ruling takes away the last excuse for delay – it’s time for EPA to clear the way for cleaner cars,” said Jim Tripp, General Counsel for Environmental Defense, who helped argue the Vermont case. “The U.S. auto industry should stop litigating and start innovating,” he said.

In his 244-page opinion, Judge Sessions also indicated that he believed the automakers could meet the new standards.

Dave McCurdy, president of the Washington-based Alliance of Automobile Manufacturers, insisted only the federal government have the right to set fuel economy standards. The curbs on greenhouse gas emissions are little more than an end run around the federal fuel economy standards, he insisted.

"Federal law is designed to ensure a consistent fuel economy program across the country," McCurdy said. "It makes sense that only the federal government can regulate fuel economy.  Automakers support improving fuel economy standards nationally, rather than piecemeal and will continue to work with the Congress, the NHTSA and EPA to reduce our oil dependence while increasing fuel economy.

"The Alliance will continue studying the decision and considering the options, including an appeal," he said.

Industry options, however, are relatively limited. Congress is pushing for tighter standards and in April, a business-friendly U.S. Supreme Court ruled in April states can demand the EPA issue regulations controlling the emission of so-called greenhouse gasses.

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