WASHINGTON, July 30 (Reuters) - The Trump administration has billed its plan to undo U.S. climate regulation as a way to cut costs for industry, but it may backfire by forcing automakers, utilities, and manufacturers into a future of regulatory uncertainty and litigation risk, according to lawyers and trade groups.
Republican President Donald Trump's administration announced on Tuesday a plan to rescind the long-standing finding that greenhouse gas emissions endanger human health, removing the legal foundation for U.S. greenhouse gas regulations.
Environmental Protection Agency Administrator Lee Zeldin said the move, which would end limits on greenhouse gas pollution from vehicle tailpipes, power plants, smokestacks and other sources, would save companies $52 billion in environmental compliance costs.
But companies that have already invested heavily in reducing emissions to meet government limits, a move also demanded by many shareholders, are worried the proposal will lead into the regulatory and judicial unknown, lawyers said.
"Industries that have GHG standards set by EPA have long been complying with them and don’t want them to be stripped away," said Meghan Greenfield, partner with law firm Jenner & Block and former EPA counsel, who represents auto sector clients. "The stability of the regulatory regime is extremely important for industry as a baseline."
Repealing the endangerment finding could mean that companies would need to comply with a patchwork of different state laws on climate change rather than one federal standard, said Zach Pilchen, senior counsel at Holland & Knight.
"I think what the administration has missed is that most of industry has already retrofitted for regulations," said Camille Pannu, associate law professor at Columbia University. "Industry did want deregulation, but maybe not through this vehicle."
One former Trump administration source said during Trump's first term, the EPA had declined to take on the endangerment finding because of strong resistance from industry and the legal risk associated with undermining federal authority on the matter.
Three sources in the automaker industry told Reuters privately that the EPA’s proposed repeal of vehicle efficiency standards is much broader than anticipated. In addition to tailpipe standards, the proposal would eliminate air conditioning efficiency testing and remove requirements for battery monitoring and battery durability.
Albert Gore, executive director of the Zero Emission Transportation Association, said the EPA action to reverse long-settled law comes as "clean" car sales are growing steadily and powering a U.S. battery and vehicle manufacturing boom.
Over the last decade, manufacturers announced $197.6 billion in investments in U.S. EV and battery manufacturing facilities, according to the Environmental Defense Fund.
"Taking backward steps and adding new regulatory uncertainty harms consumers, unsettles markets, and will complicate ongoing business decisions for auto manufacturers," Gore said.