Now, the Trump Administration says the US needs a complete "50-state solution" to the climate change problem -- a problem it officially pretends does not exist. So, California cannot be allowed to have its own program. This argument just doesn't hold water, however, for two reasons: (1) it is not supported by any language in the CAA, which specifically provides for the California waiver; and (2) EPA cannot possibly shut down other parts of California's comprehensive policy for reducing GHG emissions. Even without the waiver for automobile emissions for CO2, California's regulations of GHG emissions from stationary standards would remain intact. So, one ostensible purpose of the newly proposed EPA-DOT regulation can possibly be attained.
In seeking to revoke the California waiver (initially denied by the Bush EPA before being granted by the Obama EPA) for CO2 emissions EPA makes a couple of more discrete arguments. For one, the agency argues that emission standards for CO2 are equivalent to fuel-economy standards, which fall within exclusive federal jurisdiction (i.e., California cannot set its own fuel-economy standards). This argument is overbroad, however, because the same is true of emission standards for CO and HC (see, e.g., https://www.sciencedirect.com/science/article/pii/S0095069697909943). California has had federal waivers for those two pollutants, without controversy, for many decades. Nevertheless, EPA will argue that those waivers, unlike the waiver for CO2, were necessary for California's special air-pollution problems.
- was arbitrary and capricious in its finding that its standards are in the aggregate at least as protective of public health and welfare as applicable federal standards;
- does not need such standards to meet compelling and extraordinary conditions; or
- has proposed standards not consistent with Section 202(a) of the Clean Air Act.
But, as Bob Dylan wrote, "the times, they are a'changin'." The political center-of-gravity of the US Supreme Court is in the process of shifting substantially rightward. Whether it turns out to be Judge Kavanaugh or another nominee, the next Trump appointee will create a Supreme Court that is more conservative than any since the inception of federal environmental law. This is especially bad news because, as Richard Lazarus has argued, the Supreme Court has never really understood environmental law. Certainly, it has not (with a few notable exceptions) been very friendly to pro-environmental plaintiffs.
Not to put too fine a point on it, I fully expect that Trump's EPA will prevail in this case, regardless of the merits or any precedents that might exist. The most supporters of the California waiver for CO2 can hope for is election of a Democratic president in 2020. After all, as every president since Ronald Reagan has taught us: what one president does through the (de)regulatory process, another can undo.
You can read the full text of the proposed EPA-DOT regulation here: https://www.nhtsa.gov/sites/nhtsa.dot.gov/files/documents/ld_cafe_my2021-26_nprm_2.pdf.
The preliminary regulatory impact analysis for the new proposed rule is here: https://www.nhtsa.gov/sites/nhtsa.dot.gov/files/documents/ld_cafe_my2021-26_pria_0.pdf.