Document ID: EPA-HQ-OAR-2016-0179-0027
Agency: epa
Document Type: Notice
Title: California State Motor Vehicle Pollution Control Standards: Greenhouse Gas Emissions from 2014 and Subsequent Model Year Medium and Heavy-Duty Engines and Vehicles; Decision
Posted Date: 2016-12-29T05:00Z

[Federal Register Volume 81, Number 250 (Thursday, December 29, 2016)]
[Notices]
[Pages 95982-95987]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-31646]

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ENVIRONMENTAL PROTECTION AGENCY

[EPA-HQ-OAR-2016-0179; FRL-9957-70-OAR]

California State Motor Vehicle Pollution Control Standards; 
Greenhouse Gas Emissions From 2014 and Subsequent Model Year Medium- 
and Heavy-Duty Engines and Vehicles; Notice of Decision

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice of decision.

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SUMMARY: The Environmental Protection Agency (EPA) is granting the 
California Air Resources Board's (``CARB's'') request for a waiver of 
Clean Air Act preemption for its greenhouse gas (``GHG'') emission 
regulation for the new 2014 and subsequent model year on-road medium- 
and heavy-duty engines and vehicles (``California Phase 1 GHG 
Regulation'') adopted in 2011. This regulation establishes requirements 
applicable to new motor vehicles with a gross vehicle weight rating 
exceeding 8,500 pounds and engines that power such motor vehicles, 
except for medium-duty passenger vehicles that are subject to 
California's Low Emission Vehicle Program. This regulation generally 
aligns California's GHG emission standards and test procedures with the 
federal GHG emission standards and test procedures that EPA

[[Page 95983]]

adopted in 2011. A deemed-to-comply provision is included in CARB's 
regulation whereby manufacturers may demonstrate compliance with 
California's Phase 1 GHG Regulation by complying with EPA's Phase 1 
regulation. This decision is issued under the authority of the Clean 
Air Act (``CAA'' or ``the Act'').

DATES: Petitions for review must be filed by February 27, 2017.

ADDRESSES: EPA has established a docket for this action under Docket ID 
EPA-HQ-OAR-2016-0179. All documents relied upon in making this 
decision, including those submitted to EPA by CARB, are contained in 
the public docket. Publicly available docket materials are available 
either electronically through www.regulations.gov or in hard copy at 
the Air and Radiation Docket in the EPA Headquarters Library, EPA West 
Building, Room 3334, 1301 Constitution Avenue NW., Washington, DC. The 
Public Reading Room is open to the public on all federal government 
working days from 8:30 a.m. to 4:30 p.m.; generally, it is open Monday 
through Friday, excluding holidays. The telephone number for the 
Reading Room is (202) 566-1744. The Air and Radiation Docket and 
Information Center's Web site is http://www.epa.gov/oar/docket.html. 
The email address for the Air and Radiation Docket is: a-and-r-docket@epa.gov, the telephone number is (202) 566-1742, and the fax 
number is (202) 566-9744. An electronic version of the public docket is 
available through the federal government's electronic public docket and 
comment system at http://www.regulations.gov. After opening the 
www.regulations.gov Web site, enter EPA-HQ-OAR-2016-0179 in the ``Enter 
Keyword or ID'' fill-in box to view documents in the record. Although a 
part of the official docket, the public docket does not include 
Confidential Business Information (``CBI'') or other information whose 
disclosure is restricted by statute.
    EPA's Office of Transportation and Air Quality (``OTAQ'') maintains 
a Web page that contains general information on its review of 
California waiver and authorization requests. Included on that page are 
links to prior waiver Federal Register notices, some of which are cited 
in today's notice; the page can be accessed at http://www.epa.gov/otaq/cafr.htm.

FOR FURTHER INFORMATION CONTACT: David Dickinson, Office of 
Transportation and Air Quality, U.S. Environmental Protection Agency, 
1200 Pennsylvania Ave. NW., Telephone: (202) 343-9256. Email: 
dickinson.david@epa.gov.

SUPPLEMENTARY INFORMATION: 

I. Background

    California's Phase 1 GHG Regulation complements CARB's existing 
Tractor-Trailer GHG regulation that was initially adopted in December 
2008 and subsequently amended in 2010 and 2012. EPA granted California 
a waiver for the Tractor-Trailer GHG regulation in 2014.\1\ The 
Tractor-Trailer GHG regulation requires new 2011 and subsequent model 
year (``MY'') sleeper-cab tractors that haul 53-foot or longer box-type 
trailers on California highways, and 53-foot and longer box-type 
trailers operating on California highways to be equipped with U.S. EPA 
SmartWay approved aerodynamic technologies and low-rolling resistance 
tires. California's Phase 1 GHG Regulation establishes emission 
standards for tractors that are also subject to the requirements of 
CARB's Tractor-Trailer GHG regulation. CARB amended the Tractor-Trailer 
GHG regulation in conjunction with its adoption of the Phase 1 GHG 
Regulation to make California's GHG requirements for new medium- and 
heavy-duty engines and vehicles consistent with corresponding 
requirements of EPA's Phase 1 GHG regulation.\2\ The California Phase 1 
GHG Regulation establishes GHG emission standards and associated test 
procedures for new 2014 and subsequent MY diesel-fueled medium- and 
heavy-duty engines and for new 2016 and subsequent MY gasoline-fueled 
medium- and heavy-duty engines used in combination tractors and 
vocational vehicles that are identical to the corresponding GHG 
emission standards and associated test procedures for diesel and 
gasoline-fueled heavy-duty engines in EPA's Phase 1 GHG regulation. The 
California Phase 1 GHG Regulation also contains ``deemed to comply'' 
provisions that allow engine manufacturers to demonstrate that 2014 
through 2022 model year medium- and heavy-duty engines comply with 
California's GHG emission standards by showing compliance with EPA's 
Phase 1 regulation, i.e., submitting to CARB the engine family's 
Certificate of Conformity issued by EPA.\3\
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    \1\ 79 FR 46256 (August 7, 2014).
    \2\ 76 FR 57106 (September 15, 2011).
    \3\ See ``California Exhaust Emission Standards and Test 
Procedures for 2004 and Subsequent Model Heavy-Duty Diesel-Engines 
and Vehicles'', Part 1036, Subpart B, section 1036.108, and 
``California Exhaust Emission Standards and Test Procedures for 2004 
and Subsequent Model Heavy-Duty Otto-Cycle Engines and Vehicles'', 
Part 1036, Subpart B, section 1036.108. See also ``California 
Greenhouse Gas Exhaust Emission Standards and Test Procedures for 
2014 and Subsequent Model Heavy-Duty Vehicles'', Part 1037, Subpart 
B, section 1037.101(b)(2).
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    By letter dated January 29, 2016,\4\ CARB submitted to EPA a 
request for a waiver of the preemption found at section 209(a) of Clean 
Air Act, 42 U.S.C. 7543(a), for the California Phase 1 GHG Regulation. 
CARB's submission provides analysis and evidence to support its finding 
that the California Phase 1 GHG Regulation satisfies the CAA section 
209(b) criteria and that a waiver of preemption should be granted.
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    \4\ CARB, ``In the Matter of California's Request for Waiver 
Pursuant to Clean Air Act Section 209(b) for California's Greenhouse 
Gas Regulation for Medium- and heavy-Duty Engines and Vehicles,'' 
January 29, 2016 (``California Waiver Request Support Document'') 
See www.regulations.gov Web site, docket number EPA-HQ-OAR-2016-
0179-0003.
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II. Principles Governing This Review

A. Scope of Review

    Section 209(a) of the CAA provides:

    No State or any political subdivision thereof shall adopt or 
attempt to enforce any standard relating to the control of emissions 
from new motor vehicles or new motor vehicle engines subject to this 
part. No State shall require certification, inspection or any other 
approval relating to the control of emissions from any new motor 
vehicle or new motor vehicle engine as condition precedent to the 
initial retail sale, titling (if any), or registration of such motor 
vehicle, motor vehicle engine, or equipment.\5\
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    \5\ CAA Sec.  209(a). 42 U.S.C. 7543(a).

    Section 209(b)(1) of the Act requires the Administrator, after an 
opportunity for public hearing, to waive application of the 
prohibitions of section 209(a) for any state that has adopted standards 
(other than crankcase emission standards) for the control of emissions 
from new motor vehicles or new motor vehicle engines prior to March 30, 
1966, if the state determines that its state standards will be, in the 
aggregate, at least as protective of public health and welfare as 
applicable federal standards.\6\ However, no such waiver shall be 
granted if the Administrator finds that: (A) The protectiveness 
determination of the state is arbitrary and capricious; (B) the state 
does not need such state standards to meet compelling and extraordinary 
conditions; or (C) such state standards and accompanying enforcement 
procedures are not consistent with section 202(a) of the Act.\7\
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    \6\ CAA Sec.  209(b)(1). 42 U.S.C. 7543(b)(1). California is the 
only state that meets section 209(b)(1)'s requirement for obtaining 
a waiver. See S. Rep. No. 90-403 at 632 (1967).
    \7\ CAA Sec.  209(b)(1). 42 U.S.C. 7543(b)(1).

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[[Page 95984]]

    Key principles governing this review are that EPA should limit its 
inquiry to the specific findings identified in section 209(b)(1) of the 
Clean Air Act, and that EPA will give substantial deference to the 
policy judgments California has made in adopting its regulations. In 
previous waiver decisions, EPA has stated that Congress intended the 
Agency's review of California's decision-making to be narrow. EPA has 
rejected arguments that are not specified in the statute as grounds for 
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denying a waiver:

    The law makes it clear that the waiver requests cannot be denied 
unless the specific findings designated in the statute can properly 
be made. The issue of whether a proposed California requirement is 
likely to result in only marginal improvement in California air 
quality not commensurate with its costs or is otherwise an arguably 
unwise exercise of regulatory power is not legally pertinent to my 
decision under section 209, so long as the California requirement is 
consistent with section 202(a) and is more stringent than applicable 
Federal requirements in the sense that it may result in some further 
reduction in air pollution in California.\8\
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    \8\ ``Waiver of Application of Clean Air Act to California State 
Standards,'' 36 FR 17458 (Aug. 31, 1971). Note that the more 
stringent standard expressed here, in 1971, was superseded by the 
1977 amendments to section 209, which established that California 
must determine that its standards are, in the aggregate, at least as 
protective of public health and welfare as applicable federal 
standards.

    This principle of narrow EPA review has been upheld by the U.S. 
Court of Appeals for the District of Columbia Circuit.\9\ ``[T]he 
statute does not provide for any probing substantive review of the 
California standards by federal officials.'' Ford Motor Co. v. EPA, 606 
F.2d 1293, 1300 (D.C. Cir. 1979). Thus, EPA's consideration of all the 
evidence submitted concerning a waiver decision is circumscribed by its 
relevance to those questions that may be considered under section 
209(b)(1).
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    \9\ See, e.g., Motor and Equip. Mfrs Assoc. v. EPA, 627 F.2d 
1095 (D.C. Cir. 1979) (``MEMA I'').
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B. Burden and Standard of Proof

    As the U.S. Court of Appeals for the D.C. Circuit has made clear in 
MEMA I, opponents of a waiver request by California bear the burden of 
showing that the statutory criteria for a denial of the request have 
been met:

    [T]he language of the statute and its legislative history 
indicate that California's regulations, and California's 
determinations that they must comply with the statute, when 
presented to the Administrator are presumed to satisfy the waiver 
requirements and that the burden of proving otherwise is on whoever 
attacks them. California must present its regulations and findings 
at the hearing and thereafter the parties opposing the waiver 
request bear the burden of persuading the Administrator that the 
waiver request should be denied.\10\
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    \10\ MEMA I, note 19, at 1121.

    The Administrator's burden, on the other hand, is to make a 
reasonable evaluation of the information in the record in coming to the 
waiver decision. As the court in MEMA I stated: ``here, too, if the 
Administrator ignores evidence demonstrating that the waiver should not 
be granted, or if he seeks to overcome that evidence with unsupported 
assumptions of his own, he runs the risk of having his waiver decision 
set aside as `arbitrary and capricious.' '' \11\ Therefore, the 
Administrator's burden is to act ``reasonably.'' \12\
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    \11\ Id. at 1126.
    \12\ Id. at 1126.
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    With regard to the standard of proof, the court in MEMA I explained 
that the Administrator's role in a section 209 proceeding is to:

[ . . . ]consider all evidence that passes the threshold test of 
materiality and . . . thereafter assess such material evidence 
against a standard of proof to determine whether the parties 
favoring a denial of the waiver have shown that the factual 
circumstances exist in which Congress intended a denial of the 
waiver.\13\
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    \13\ Id. at 1122.

In that decision, the court considered the standards of proof under 
section 209 for the two findings related to granting a waiver for an 
``accompanying enforcement procedure.'' Those findings involve: (1) 
Whether the enforcement procedures impact California's prior 
protectiveness determination for the associated standards, and (2) 
whether the procedures are consistent with section 202(a). The 
principles set forth by the court are similarly applicable to an EPA 
review of a request for a waiver of preemption for a standard. The 
court instructed that ``the standard of proof must take account of the 
nature of the risk of error involved in any given decision, and it 
therefore varies with the finding involved. We need not decide how this 
standard operates in every waiver decision.'' \14\
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    \14\ Id.
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    With regard to the protectiveness finding, the court upheld the 
Administrator's position that, to deny a waiver, there must be ``clear 
and compelling evidence'' to show that proposed enforcement procedures 
undermine the protectiveness of California's standards.\15\ The court 
noted that this standard of proof also accords with the congressional 
intent to provide California with the broadest possible discretion in 
setting regulations it finds protective of the public health and 
welfare.\16\
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    \15\ Id.
    \16\ Id.
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    With respect to the consistency finding, the court did not 
articulate a standard of proof applicable to all proceedings, but found 
that the opponents of the waiver were unable to meet their burden of 
proof even if the standard were a mere preponderance of the evidence. 
Although MEMA I did not explicitly consider the standards of proof 
under section 209 concerning a waiver request for ``standards,'' as 
compared to a waiver request for accompanying enforcement procedures, 
there is nothing in the opinion to suggest that the court's analysis 
would not apply with equal force to such determinations. EPA's past 
waiver decisions have consistently made clear that: ``[E]ven in the two 
areas concededly reserved for Federal judgment by this legislation--the 
existence of `compelling and extraordinary' conditions and whether the 
standards are technologically feasible--Congress intended that the 
standards of EPA review of the State decision to be a narrow one.'' 
\17\
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    \17\ See, e.g., ``California State Motor Vehicle Pollution 
Control Standards; Waiver of Federal Preemption,'' 40 FR 23102 (May 
28, 1975), at 23103.
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C. Deference to California

    In previous waiver decisions, EPA has recognized that the intent of 
Congress in creating a limited review based on specifically listed 
criteria was to ensure that the federal government did not second-guess 
state policy choices. As the Agency explained in one prior waiver 
decision:

    It is worth noting . . . I would feel constrained to approve a 
California approach to the problem which I might also feel unable to 
adopt at the federal level in my own capacity as a regulator. . . . 
Since a balancing of risks and costs against the potential benefits 
from reduced emissions is a central policy decision for any 
regulatory agency under the statutory scheme outlined above, I 
believe I am required to give very substantial deference to 
California's judgments on this score.\18\

    \18\ 40 FR 23102, 23103-04 (May 28, 1975).
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    Similarly, EPA has stated that the text, structure, and history of 
the California waiver provision clearly indicate both a congressional 
intent and appropriate EPA practice of leaving the decision on 
``ambiguous and controversial matters of public policy'' to 
California's judgment.\19\ This interpretation is supported by relevant 
discussion in the House Committee

[[Page 95985]]

Report for the 1977 amendments to the CAA. Congress had the opportunity 
through the 1977 amendments to restrict the preexisting waiver 
provision, but elected instead to expand California's flexibility to 
adopt a complete program of motor vehicle emission controls. The report 
explains that the amendment is intended to ratify and strengthen the 
preexisting California waiver provision and to affirm the underlying 
intent of that provision, that is, to afford California the broadest 
possible discretion in selecting the best means to protect the health 
of its citizens and the public welfare.\20\
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    \19\ 40 FR 23102, 23104 (May 28, 1975); 58 FR 4166 (January 13, 
1993).
    \20\ MEMA I, 627 F.2d at 1110 (citing H.R. Rep. No. 294, 95th 
Cong., 1st Sess. 301-02 (1977)).
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D. EPA's Administrative Process in Consideration of California's 
Request

    On August 9, 2016, EPA published a notice of opportunity for public 
hearing and comment on California's waiver request. In that notice, EPA 
requested comments on CARB's request for a waiver for the California 
Phase 1 GHG Regulation under the following three criteria: Whether (a) 
California's determination that its motor vehicle emissions standards 
are, in the aggregate, at least as protective of public health and 
welfare as applicable federal standards is arbitrary and capricious, 
(b) California needs such State standards to meet compelling and 
extraordinary conditions, and (c) California's standards and 
accompanying enforcement procedures are consistent with section 202(a) 
of the Clean Air Act.
    EPA received no comments and no requests for a public hearing. 
Consequently, EPA did not hold a public hearing.

III. Discussion

A. Whether California's Protectiveness Determination Was Arbitrary and 
Capricious

    As stated in the background, section 209(b)(1)(A) of the Act sets 
forth the first of the three criteria governing a new waiver request--
whether California was arbitrary and capricious in its determination 
that its motor vehicle emissions standards will be, in the aggregate, 
at least as protective of public health and welfare as applicable 
federal standards. Section 209(b)(1)(A) of the CAA requires EPA to deny 
a waiver if the Administrator finds that California's protectiveness 
determination was arbitrary and capricious. However, a finding that 
California's determination was arbitrary and capricious must be based 
upon clear and convincing evidence that California's finding was 
unreasonable.\21\
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    \21\ MEMA I, 627 F.2d at 1122, 1124 (``Once California has come 
forward with a finding that the procedures it seeks to adopt will 
not undermine the protectiveness of its standards, parties opposing 
the waiver request must show that this finding is unreasonable.''); 
see also 78 FR 2112, at 2121 (Jan. 9, 2013).
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    CARB did make a protectiveness determination in adopting the 
California Phase 1 GHG Regulation, and found that the California Phase 
1 GHG Regulation would not cause California motor vehicle emissions 
standards, in the aggregate, to be less protective of the public health 
and welfare than applicable federal standards.\22\ CARB notes that its 
rulemaking action established California GHG emission standards for 
medium- and heavy-duty vehicles that are identical to the corresponding 
GHG emission standards for heavy-duty engines and vehicles in EPA's 
Phase 1 GHG regulation, and the regulation further contains ``deemed to 
comply'' provisions that allow manufacturers to demonstrate 2014 
through 2022 model year medium- and heavy-duty engines and vehicles 
comply with California GHG emission standards by providing CARB the 
same emissions data and related information required to certify the 
engine or vehicle to EPA's Phase 1 GHG regulations' requirements.\23\ 
In addition, CARB notes that minor differences remain between the EPA 
and CARB programs that provide further assurances that California's 
program is, in the aggregate, at least as protective as the federal 
program as applied to the categories of affected medium- and heavy-duty 
engines and vehicles.\24\ EPA received no comments and EPA is not 
otherwise aware of evidence suggesting that CARB's protectiveness 
determination was unreasonable.
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    \22\ California Waiver Request Support Document at 30-31, and 
Attachment 11 (CARB Resolution 13-50, dated December 12, 2013, at 
EPA-HQ-OAR-2016-0179-0012). The CARB Board expressly declared in 
Resolution 13-50 that ``BE IT FURTHER RESOLVED that the Board hereby 
determines that the regulations adopted herein will not cause 
California motor vehicle emission standards, in the aggregate, to be 
less protective of the public health and welfare than applicable 
federal standards.
    \23\ Id. ``Phase 1 Certified Tractor'' means a tractor that has 
been certified in accordance with either the Greenhouse Gas 
Emissions Standards and Fuel Efficiency Standards for Medium- and 
Heavy-Duty Engines and Vehicles, as adopted by the US EPA (76 FR 
57106 (September 15, 2011)); or the Greenhouse Gas Emission 
Requirements for New 2014 and Subsequent Model Heavy-Duty Vehicles, 
as adopted by the California Air Resources Board, sections 95660 to 
95664, Subarticle 12, title 17, California Code of Regulations 
95302.
    \24\ Id. For example, CARB explains that California's Phase 1 
GHG Regulation does not fully incorporate the federal definition of 
``urban bus'' in order to preserve California's existing requirement 
that urban buses be powered by heavy heavy-duty diesel engines (HHD) 
for which an EPA waiver has already been granted (78 FR 44112 (July 
23, 2013), and that the useful life period for HHD diesel engines 
exceeds the federal useful life period for light heavy-duty and 
medium heavy-duty diesel engines.
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    As it is clear that California's standards are at least as 
protective of public health and welfare as applicable federal 
standards, and that CARB's deemed to comply provision together with the 
unique aspects of the California Phase 1 GHG Regulation make 
California's standards even more protective, EPA finds that 
California's protectiveness determination is not arbitrary and 
capricious.

B. Whether the Standards Are Necessary To Meet Compelling and 
Extraordinary Conditions

    Section 209(b)(1)(B) instructs that EPA cannot grant a waiver if 
the Agency finds that California ``does not need such State standards 
to meet compelling and extraordinary conditions.'' EPA's inquiry under 
this second criterion has traditionally been to determine whether 
California needs its own motor vehicle emission control program (i.e. 
set of standards) to meet compelling and extraordinary conditions, and 
not whether the specific standards (the California Phase 1 GHG 
Regulation) that are the subject of the waiver request are necessary to 
meet such conditions.\25\ In recent waiver actions, EPA again examined 
the language of section 209(b)(1)(B) and reiterated this longstanding 
traditional interpretation as the appropriate approach for analyzing 
the need for ``such State standards'' to meet ``compelling and 
extraordinary conditions.'' \26\
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    \25\ See California State Motor Vehicle Pollution Control 
Standards; Notice of Decision Granting a Waiver of Clean Air Act 
Preemption for California's 2009 and Subsequent Model Year 
Greenhouse Gas Emission Standards for New Motor Vehicles,'' 74 FR 
32744 (July 8, 2009), at 32761; see also ``California State Motor 
Vehicle Pollution Control Standards; Waiver of Federal Preemption 
Notice of Decision,'' 49 FR 18887 (May 3, 1984), at 18889-18890.
    \26\ See 78 FR 2112, at 2125-26 (Jan. 9, 2013) (``EPA does not 
look at whether the specific standards at issue are needed to meet 
compelling and extraordinary conditions related to that air 
pollutant.''; see also EPA's July 9, 2009 GHG Waiver Decision 
wherein EPA rejected the suggested interpretation of section 
209(b)(1)(B) as requiring a review of the specific need for 
California's new motor vehicle greenhouse gas emission standards as 
opposed to the traditional interpretation (need for the motor 
vehicle emission program as a whole) applied to local or regional 
air pollution problems. See also 79 FR 46256, 46261 (August 7, 
2014).
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    In conjunction with the California Phase 1 GHG Regulation, CARB 
determined in Resolution 13-50 that California continues to need its 
own motor vehicle program to meet serious

[[Page 95986]]

ongoing air pollution problems.\27\ CARB asserted that ``The 
geographical and climatic conditions and the tremendous growth in 
vehicle population and use that moved Congress to authorize California 
to establish vehicle standards in 1967 still exist today. EPA has long 
confirmed CARB's judgment, on behalf of the State of California, on 
this matter.'' \28\ In enacting the California Global Warming Solutions 
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Act of 2006, the Legislature found and declared that:

    Global warming poses a serious threat to the economic well-
being, public health, natural resources, and the environment of 
California. The potential adverse impacts of global warming include 
the exacerbation of air quality problems, a reduction in the quality 
and supply of water to the state from the Sierra snowpack, a rise in 
sea levels resulting in the displacement of thousands of coastal 
businesses and residences, damage to the marine ecosystems and the 
natural environment, and an increase in the incidences of infectious 
diseases, asthma, and other health-related problems.\29\

    \27\ California Waiver Request Support Document, at 31, 
referencing Resolution 13-50, dated December 12, 2013 (see EPA-HQ-
OAR-2016-0179-0012). Resolution 13-50 also states ``WHEREAS, heavy-
duty trucks, buses, and motor homes emitted 23 percent of greenhouse 
gas (GHG) emissions from on-road vehicles and 8 percent of GHG 
emissions from all sources in California in 2010. Resolution 13-50 
also states ``WHEREAS, in recognition of the devastating impacts of 
climate change emissions on California, Governor Schwarzenegger, in 
June 2005, enacted Executive Order S-3-05 which established the 
following GHG emission targets: By 2010, reduce GHG emissions to 
2000 levels; by 2020, reduce GHG emissions to 1990 levels; and by 
2050, reduce GHG emissions 80 percent below 1990 levels. In 
addition, the South Coast and San Joaquin Valley air basins continue 
to experience some of the worst air quality in the nation, and many 
areas in California continue to be in nonattainment for the national 
ambient air quality standards for particulate matter and ozone (81 
FR 78149, 78153, November 7, 2016). To address this issue, for 
example, California's heavy-duty program also includes an optional 
low NOX provision, and CARB states ``Because the proposed 
regulation for Optional Low NOX emissions standards is 
optional, the emission benefits from that proposal will depend on 
the level of participation by engine manufacturers. Staff estimated 
NOX emission benefits for two different scenarios based 
on low and high participation rates from manufacturers and estimated 
NOX emission benefits of 0.6 to 1.2 tons per day (TPD) 
statewide in 2020, and 3.3 to 6.9 TPD in 2035.'' CARB Initial 
Statement of Reasons, December 12, 2013, EPA-HQ-OAR-2016-0179-0003.
    \28\ California Waiver Request Support Document, at 33 
(referencing 70 FR 50322, 50323 (August 26, 2005); 74 FR 32744, 
32762-763 (July 9, 2009); 79 FR 46256, 46262 (August 7, 2014).
    \29\ Id. at 33. The Global Warming Solutions Act also sets for 
the California Legislature's finding and declaration that 
``Continuing to reduce greenhouse gas emissions is critical for the 
protection of all areas of the state, but especially for the state's 
most disadvantaged communities, as those communities are affected 
first, and, most frequently, by the adverse impacts of climate 
change, including an increased frequency of extreme weather events, 
such as drought, heat, and flooding. The state's most disadvantaged 
communities also are disproportionately impacted by the deleterious 
effects of climate change on public health.'' In addition, on April 
29, 2015, California Governor Edmund Brown issued Executive Order B-
30-15 which states in part ``WHEREAS climate change poses an ever-
growing threat to the well-being, public health, natural resources, 
economy, and the environment of California, including loss of 
snowpack, drought, sea level rise, more frequent and intense 
wildfires, heat waves, more severe smog, and harm to natural and 
working lands, and these effects are already being felt in the 
state.''
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    There has been no evidence submitted to indicate that California's 
compelling and extraordinary conditions do not continue to exist. 
California, particularly in the South Coast and San Joaquin Valley air 
basins, continues to experience some of the worst air quality in the 
nation, and many areas in California continue to be in non-attainment 
with national ambient air quality standards for fine particulate matter 
and ozone.\30\ As California has previously stated, ``nothing in 
[California's unique geographic and climatic] conditions has changed to 
warrant a change in this determination.'' \31\ EPA agrees that the 
fundamental conditions that cause California's serious air pollution 
problems continue to exist.\32\ Therefore, EPA affirms California's 
need for its new motor vehicle emissions program as a whole, to meet 
compelling and extraordinary conditions. In addition, EPA notes the 
continued adverse impacts of California's changing climate (e.g. the 
increase in wildfires, increased threats to coastal developments and 
ecosystems, etc.).\33\
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    \30\ 74 FR 32744, 32762-63 (July 8, 2009).
    \31\ 74 FR 32744, 32762 (July 8, 2009); 76 FR 77515, 77518 
(December 13, 2011).
    \32\ In addition to the variety of human health impacts 
associated with high air temperatures (e.g., heat stroke and 
dehydration, and effects on people's cardiovascular, respiratory, 
and nervous systems), warming can also increase the formation of 
ground-level ozone, a component of smog that can contribute to 
respiratory problems. See ``What Climate Change Means for 
California,'' August 2016, EPA 430-F-16-007 at https://www.epa.gov/sites/production/files/2016-09/documents/climate-change-ca.pdf.
    \33\ Id.
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    Based on the record before us, including EPA's prior waiver 
decisions, EPA is unable to identify any change in circumstances or 
evidence to suggest that the conditions that Congress identified as 
giving rise to serious air quality problems in California no longer 
exist. Therefore, EPA cannot find that California does not need its 
state standards, including greenhouse gas emission standards, to meet 
compelling and extraordinary conditions in California.

C. Consistency With Section 202(a)

    For the third and final criterion, EPA evaluates the program for 
consistency with section 202(a) of the CAA. Under section 209(b)(1)(C) 
of the CAA, EPA must deny California's waiver request if EPA finds that 
California's standards and accompanying enforcement procedures are not 
consistent with section 202(a). Section 202(a) requires that 
regulations ``shall take effect after such period as the Administrator 
finds necessary to permit the development and application of the 
relevant technology, considering the cost of compliance within that 
time.''
    EPA has previously stated that the determination is limited to 
whether those opposed to the waiver have met their burden of 
establishing that California's standards are technologically 
infeasible, or that California's test procedures impose requirements 
inconsistent with the federal test procedure. Infeasibility would be 
shown here by demonstrating that there is inadequate lead time to 
permit the development of technology necessary to meet the California 
Phase 1 GHG Regulation, giving appropriate consideration to the cost of 
compliance within that time.\34\ California's accompanying enforcement 
procedures would also be inconsistent with section 202(a) if the 
federal and California test procedures conflicted, i.e., if 
manufacturers would be unable to meet both the California and federal 
test requirements with the same test vehicle.\35\
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    \34\ See, e.g., 38 F.R 30136 (November 1, 1973) and 40 FR 30311 
(July 18, 1975).
    \35\ See, e.g., 43 FR 32182 (July 25, 1978).
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    Regarding test procedure conflict, CARB notes that it is not aware 
of any instances in which a manufacturer is precluded from conducting 
one set of tests on a heavy-duty engine or a heavy-duty vehicle to 
determine compliance with both California and federal GHG requirements. 
The regulation's ``deemed to comply'' provisions ensure that engine and 
vehicle manufacturers can use federal test results to demonstrate 
compliance with California's GHG emission standards through the 2022 
model year. CARB also notes that no test procedure inconsistencies 
exist for those manufactures that elect not to utilize the deemed to 
comply provisions, or for 2023 and subsequent model year engines and 
vehicles because the California GHG emission standards and associated 
test procedures for new medium- and heavy-duty engines and new medium- 
and heavy-duty vehicles are identical to corresponding federal GHG 
emission standards and test procedures.\36\ For the reasons set forth 
above, and because

[[Page 95987]]

there is no evidence in the record or other information that EPA is 
aware of, EPA cannot find that CARB's Phase I GHG Regulation is 
inconsistent with section 202(a) based upon test procedure 
inconsistency.
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    \36\ California Waiver Support Document at 44.
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    In addition, EPA did not receive any comments arguing that the 
California Phase 1 GHG Regulation was technologically infeasible or 
that the cost of compliance would be excessive, such that California's 
standards might be inconsistent with section 202(a).\37\ In EPA's 
review of CARB's Phase 1 GHG Regulation, we likewise cannot identify 
any requirements that appear technologically infeasible or excessively 
expensive for manufacturers to implement within the timeframes 
provided.\38\ EPA therefore cannot find that the California Phase 1 GHG 
Regulation does not provide adequate lead time or is otherwise not 
technically feasible.
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    \37\ See, e.g., 78 FR 2134 (Jan. 9, 2013), 47 FR 7306, 7309 
(Feb. 18, 1982), 43 FR 25735 (Jun. 17, 1978), and 46 FR 26371, 26373 
(May 12, 1981).
    \38\ California Waiver Support Document at 34-43. For example, 
both CARB and EPA identified a host of technologies suitable for 
compliance with medium- and heavy-duty diesel engine CO2 
standards, and for engines in combination tractors and vocational 
vehicles. In addition, CARB and EPA identified a variety of 
compliance strategy technologies for heavy-duty gasoline engine 
CO2 standards. EPA and CARB also identified a number of 
commercially available technologies that will enable 2014 through 
2018 MY heavy-duty pick-up truck and van (``PUV'') GHG emission 
standards.
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    We therefore cannot find that the California Phase 1 GHG Regulation 
that we analyzed under the waiver criteria is inconsistent with section 
202(a).
    Having found that the California Phase 1 GHG Regulation satisfies 
each of the criteria for a waiver, and having received no evidence to 
contradict this finding, we cannot deny a waiver for the regulation.

IV. Decision

    The Administrator has delegated the authority to grant California 
section 209(b) waivers to the Assistant Administrator for Air and 
Radiation. After evaluating CARB's California Phase 1 GHG Regulation 
and CARB's submissions for EPA review, EPA is hereby granting a waiver 
for the California Phase 1 GHG Regulation.
    This decision will affect persons in California and those 
manufacturers and/or owners/operators nationwide who must comply with 
California's requirements. In addition, because other states may adopt 
California's standards for which a section 209(b) waiver has been 
granted under section 177 of the Act if certain criteria are met, this 
decision would also affect those states and those persons in such 
states. For these reasons, EPA determines and finds that this is a 
final action of national applicability, and also a final action of 
nationwide scope or effect for purposes of section 307(b)(1) of the 
Act. Pursuant to section 307(b)(1) of the Act, judicial review of this 
final action may be sought only in the United States Court of Appeals 
for the District of Columbia Circuit. Petitions for review must be 
filed by February 27, 2017. Judicial review of this final action may 
not be obtained in subsequent enforcement proceedings, pursuant to 
section 307(b)(2) of the Act.

V. Statutory and Executive Order Reviews

    As with past waiver and authorization decisions, this action is not 
a rule as defined by Executive Order 12866. Therefore, it is exempt 
from review by the Office of Management and Budget as required for 
rules and regulations by Executive Order 12866.
    In addition, this action is not a rule as defined in the Regulatory 
Flexibility Act, 5 U.S.C. 601(2). Therefore, EPA has not prepared a 
supporting regulatory flexibility analysis addressing the impact of 
this action on small business entities.
    Further, the Congressional Review Act, 5 U.S.C. 801, et seq., as 
added by the Small Business Regulatory Enforcement Fairness Act of 
1996, does not apply because this action is not a rule for purposes of 
5 U.S.C. 804(3).

    Dated: December 22, 2016.
Janet G. McCabe,
Acting Assistant Administrator, Office of Air and Radiation.
[FR Doc. 2016-31646 Filed 12-28-16; 8:45 am]
BILLING CODE 6560-50-P