13-03-2025
CARB strikes back
With help from Camille von Kaenel and Nicole Norman
GLOVES OFF: California has been taking body blows to its suite of electric vehicle policies — but it's starting to fight back.
Republicans are attacking California on multiple fronts, including an effort to revoke its car and truck electrification mandates through congressional review. EPA Administrator Lee Zeldin ratcheted up the pressure Wednesday, announcing that he's seeking to overturn dozens of climate regulations, including federal tailpipe emission standards.
California Air Resources Board Chair Liane Randolph is going on the offensive, pushing back against auto dealers' ad campaign warning that the state's electric vehicle goals are unreachable. A new five-page rebuttal accompanies the effort to combat the auto industry narrative, which the state calls a 'doomsday scenario.'
'This is a classic misinformation campaign,' Randolph told POLITICO in an exclusive interview. 'They are really just perpetuating a false narrative that creates the impression that there is some artificial crisis that does not really exist.'
This transcript has been edited for length and clarity.
What about the car dealers' ad campaign is false, and are you worried it will create fear among Californians that prices will go up on lots?
They're trying to build this specter of a doomsday scenario, and it's just not real, given how carefully constructed both [Advanced Clean Cars I] and [Advanced Clean Cars II] are.
These rules build in a lot of flexibility for the automakers, and they are able to take advantage of the fact that they are ahead of the game. They have been successful in deploying electric vehicles, and it is absolutely possible for them to comply.
CARB has for decades had a relationship with the manufacturers such that we can really talk about how the rules are working, what challenges the automakers are running into, and are able to work through a lot of these issues.
What have you heard from automakers directly about potential changes they want to see to the regulation?
Automakers are each unique. They all have different issues. They all have different perspectives and different strategies for how they're moving forward. If you look at some of the largest automakers in America, they have made significant investments in moving the zero-emission future forward. They see the international landscape. And so they have developed plans and strategies that will increase their fully zero-emission and their plug-in hybrid vehicles and even in some cases hydrogen vehicles.
Are you surprised by it?
Well, these days, nothing surprises anyone.
Congress seems to be on the path to revoking ACC II very soon via the Congressional Review Act. If the rule is paused while litigation plays out, what effect will that have on California, U.S. and global auto markets?
We are telling everyone we can, we are doing everything we can to ensure that Congress does not take the unlawful activity of using CRA in the context in which it is not legally appropriate to use. One of the points that we're making in these conversations is these rules have a fair amount of flexibility. There's opportunities to trade credits back and forth. We have a three-year compliance window so you can manage your compliance.
We continue to see a lot of interest in the consumer market for these vehicles. We know they're cleaner, they are fun to drive. The infrastructure is catching up, and so we think the automakers still recognize that their customers are interested in these vehicles. They have a market for them.
Do you take this campaign by the auto dealers to be the first public salvo in a new round of negotiations? And do you think there's an opportunity for a deal to come out of it?
No, I see the ad campaign as sort of a sideshow that, to me, is an unfortunate example of a political climate that focuses on loud voices and less on solutions, and we're focused on solutions.
How does California's climate policy picture fit into the larger picture of California and Trump?
A lot of California's climate work is in place, in process. Our vehicle rules being a classic example. We have rules that cover every segment of the vehicle market. And so we are the status quo, right? The status quo is continuing to increase the number of zero-emission vehicles.
What are your priorities for this year?
Our priority is to keep that status quo and implement it as best we can. We continue to work with our sister agencies on infrastructure deployment, we continue to engage around questions of affordability and ways that we can help with that conversation. We're still wrapping up the [Low Carbon Fuel Standard] rulemaking. We're making changes that the Office of Administrative Law requested, so that's in process and I think that'll be finished within the next few months.
We're engaging with the legislature on cap-and-trade, and we have a lot of bread-and-butter air quality and climate work. — AN
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CAP AND WAIT: CARB is pushing back its timeline — again — for amending its cornerstone emissions program.
The agency updated its website today to say that it expects to start the process of amending the program 'this year,' rather than in 'early 2025' as it previously said. The agency also said it was working with lawmakers, which are holding discussions around bills to extend the market's authorization past 2030.
'We're still working through the regulatory package and expect to move forward this year,' the site says. 'At the same time, the administration is working with the legislature as they consider extension of the Cap-and-Trade Program.'
It's not a shocker, after the agency already pushed its timeline back last fall. But it doesn't bode well for auction proceeds, which are dipping due to the uncertainty around when CARB will move to tighten supplies of emissions permits.
'Today's update from CARB caused allowance prices to drop after hours, meaning the market seemingly interpreted the new language as signaling potential regulatory delay,' Clayton Munnings, CEO of the consulting firm Elevate Climate, said in a statement. 'Any continued delay to the rulemaking will probably lead to lower revenues and low auction revenues.' — DK
STILL MORE CARB: Democrats aren't ready to rubber stamp Gov. Gavin Newsom's plan for funding CARB.
Lawmakers pushed back on a swath of budget proposals for the powerful agency during a budget hearing today, as negotiations between the administration and Legislature are picking up steam. While Democrats and CARB officials have largely been aligned in recent years on the agency's mission to reduce greenhouse gases and other pollutants, new funding has come under increased scrutiny as lawmakers are under pressure to address affordability.
They particularly honed in on a proposal that would give CARB the power to assess fees on businesses it regulates to cover costs the agency incurs. Lawmakers and the Legislative Analyst's Office, a nonpartisan advisory agency, criticized the ask, arguing it's too broad and would give CARB too much authority to develop fees without legislative oversight.
CARB Legislative Director David Garcia said while it would allow CARB to develop fees without seeking new legislation, lawmakers would still need to approve those fees through the budget process.
Assemblymembers Steve Bennett, who chairs the subcommittee that reviews climate spending, and Cottie Petrie-Norris also called out funding asks for the emissions rules hampered by the Trump administration — including an electrification mandate for forklifts that CARB doesn't plan to seek federal approval for.
'It seems completely insane for us to be suggesting that we spend millions and millions of dollars to implement a policy that we most certainly are not going to get a waiver to actually implement,' Petrie-Norris said. — AN
SAME AS IT EVER WAS: A Senate hearing today on California's prospects for sharing its electricity grid with its neighbors turned up familiar concerns about giving up control.
The Senate Energy, Utilities and Communications Committee's debate over SB 540, the latest proposal to create a new entity to oversee the state's grid and neighboring states' via a 'West-Wide Governance Pathways Initiative,' circled around the question of whether tighter ties to states with higher-emitting electricity could dilute California's mix.
Sen. Monique Limón was skeptical that the governance structure would be able to keep out higher-carbon electricity.
'We're still getting some of what we don't like,' she said.
State officials stumped for the proposal. 'What electricity markets do is they optimize the dispatch of resources,' said California Public Utilities Commission President Alice Reynolds. 'There's a value to having a market that is bigger than any one weather event.' — NN
— Sen. Lena Gonzalez is urging the Dodgers to end sponsorship deals with oil and gas companies.
— Los Angeles residents support higher home building standards and restricting construction in fire-prone areas, according to a new poll.
— A new Morgan Stanley survey found that 85 percent of Tesla investors believe Elon Musk is hurting the company. Relatedly, Sean Hannity is now Tesla's newest customer.
