Taxes and Bans: That Was the Threat California's Top Air Regulator Leveled

by Kelsey Tamborrino (Politico's Morning Energy) Taxes and Bans: That was the threat California's top air regulator leveled Thursday in the ongoing war over the future of the state's aggressive auto efficiency rules. The Trump administration is seeking to dramatically roll back Obama-era greenhouse gas standards for vehicles, but California is fighting to protect its ability to keep enforcing the tougher rules.

"If we don't have the ability to continue to move forward with our transformation to cleaner cars, we will be faced with dramatic alternatives in terms of tighter, stricter controls on everything else, including movement of vehicles and potentially looking at things like fees and taxes and bans on certain types of vehicles and products," California Air Resources Board Chair Mary Nichols said Thursday. A draft of Nichols remarks included reference to an "outright ban on internal combustion engines," POLITICO Pro California's Debra Kahn reports.

INVESTORS WANT CLIMATE ACTION: General Motors shareholders warn that the company's lobbying on CAFE and greenhouse gas vehicle standards "will exacerbate climate risk, enhance reputational risk and lead to regulatory uncertainty," according to a new letter. Thirteen investors that make up more than $1.5 trillion in assets will deliver the letter today to GM CEO Mary Barra, calling on the company and its trade associations to immediately stop lobbying to weaken the vehicle fuel economy and GHG standards.

The signers of the letter also backed a shareholder resolution from New York City Comptroller Scott Stringer, on tap for shareholders' virtual meeting on June 4, which asks for better transparency and disclosure on GM's governance around climate lobbying.READ MORE

Excerpt from Detroit Free Press: (T)he investors said GM's position calling for one national standard will weaken the current standards and undermine California's authority to set strict standards.

"By claiming a commitment to climate action publicly while lobbying against strong federal standards, GM exposes itself, and investors, to significant reputational and legal risks, regulatory uncertainty and delay, and systemic economic risks," said Rob Fohr, director of Faith-Based Investing and Corporate Engagement for the Presbyterian Church U.S.A., an investor named in the letter. Fohr said GM stock is currently held by the Foundation of the Presbyterian Church U.S.A.

A spokesman for GM said the company is reviewing the letter and will be responding directly to the shareholders.

Shareholders said that GM's proposal for a national ZEV program would "effectively preempt California and states that have adopted" California's program. The result would be little progress in the reduction of emissions despite the deployment of more electric cars.

GM has said it wants a future of "zero crashes, zero emissions and zero congestion" and supports electric vehicle deployment as part of that as well as a national emissions standard that reduces emissions, but still allows flexibility to meet consumer demands.

Collectively the group of shareholders in the letter manage $1.96 trillion. The group is "concerned that the company, either through its industry association or through its own lobbying, is actively working against maintaining the existing clean vehicle standards," said Jamie Bonham, manager, of corporate engagement at NEI Investments, which owns 167,689 shares in GM. "Our concerns are driven primarily by the risks we feel this strategy is exposing the company to, such as, reputation, legal, regulatory uncertainty and delay."

"Ultimately we want to see the company publicly distance itself from some of the positions of the Alliance of Automobile Manufacturers and oppose any significant weakening of the CAFE standards," said Bonham, referring to federal Corporate Average Fuel Economy rules that automakers must meet. "We want them to play a constructive role in working with both California and federal interests to find a compromise that avoids the path we are currently heading down."

Currently, federal and California gas mileage standards have been the same since 2010. But if Trump relaxes the requirements, it could create two standards, one for California and the states that follow it, and another for the rest of the nation. California, battling severe pollution, has a waiver under the Clean Air Act to set its own vehicle emissions standards.

GM has long said it wants one national fuel economy standard. It doesn't support the freeze, but wants flexibility to deal with the shift in consumer preferences from cars to less-efficient SUVs and pickups.

Its proposed requirement would be based on current standards now set in California and nine other states. Under those rules, GM must sell a minimum of around 2,200 fully electric vehicles in California this year, or about 1.1 percent of the roughly 200,000 cars, trucks and SUVs that it normally sells in the state each year. READ MORE