California proposes new air quality powers amid Trump concessions

from Alejandra Reyes-VelardeCalMatters

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When a package arrives at your door, it’s likely passed through a chain of ports, train stations, and warehouses across the state. All those ships, trains and trucks leave behind trails of diesel fumes as they go, leading to some of the highest rates of asthma in communities.

For decades, state and federal regulators have been trying to clean this up. Now, much of their authority is in doubt: The Trump administration revoked California’s authority to mandate electric vehicles and revoked federal authority to regulate greenhouse gas emissions — undermining California’s most effective tools.

A bill moving through the Legislature would try to close that gap. Bill of 1777, with author Democrat Robert Garcia, which represents parts of San Bernardino County, would give California air regulators the power to hold ports, warehouses and rail yards accountable for the pollution they bring to nearby communities — using a regulatory tool called the indirect source rule.

The proposal “reflects this changing environment and is intended to add more tools for California to combat the drastic rollback of the Trump administration’s desire to jeopardize the health and safety of Californians,” Garcia said in an email.

Indirect source regulations essentially hold operating sites responsible for the pollution they attract, not the trucks and trains themselves. But the tool is controversial because the state’s powers to use it are not clearly set out in law. Even at the local level, where power is more entrenched, indirect source rules have sparked litigation. And experts say those rules alone probably can’t make up for all the emissions reductions California is losing out on.

Court battles give the state pause

Ports, warehouses and railway stations do not own the trucks and trains that serve them. Why, business groups ask, should they be held responsible for the pollution these vehicles leave behind?

They have been fighting this battle in court for decades.

In 2005, the San Joaquin Valley Air District was the first to adopt an indirect source rule, requiring developers to reduce emissions from the construction of large industrial, commercial or residential buildings. The National Association of Home Builders sued, arguing that the rule constituted a vehicle emissions standard that was preempted by federal law.

In 2023, after the South Coast Air Quality Management District developed an indirect source rule for warehouses, The California Trucking Association is suing the air district over the regulation, making similar arguments as the National Association of Home Builders did two decades ago. In both cases, the courts sided with the air regulators.

The main legal distinction established by the courts is that the indirect source rules are aimed at facilities rather than vehicles. This makes them more like the regulation of stationary sources – such as refineries – than vehicle emissions standards.

“Every court that has ever seen a challenge to it has rejected the challenge,” said Brennan Mendes, a fellow in environmental law and policy at the UCLA School of Law. “There is precedent that will protect them from challenges.”

Chris Shimoda, a lobbyist for the California Trucking Association, said the issue is far from settled.

“The Clean Air Act is quite clear that mobile source emission standards are an exclusive provision of the federal EPA,” he said. “Just one lawsuit that hasn’t gotten past the district court is by no means a settled matter.”

Shimoda also questioned whether the tool was ever needed. “We’ve had tremendous success in reducing tailpipe emissions from what I call a traditional regulatory regime,” he said. “The need for indirect source review really never existed and was kind of latent for many decades.”

State air board leaders, despite a favorable court record, were wary of moving forward without clearer statutory authority — which Garcia’s proposal would provide.

Before the air board’s report to the governor last year, former chair Leanne Randolph said the board was weighing indirect source rules as just one part of a broader response to federal rollbacks.

“There is no single strategy that works,” she said. “It’s really going to have to be a range of different things.”

A test case in Southern California

The South Coast Air Quality Management District’s warehouse indirect source rule — called the Warehouse Actions and Investments to Reduce Emissions, or WAIRE, program — offers an early look at how those rules work in practice.

Warehouses of 100,000 square feet or more must earn points by taking actions to reduce pollution: doing business with companies that use electric trucks, installing charging infrastructure or paying a fee that goes toward mitigating the impact of pollution on nearby communities.

According to the South Coast Air Region, the results are significant. Warehouses in the region have purchased more than 1,400 zero-emission trucks and tractors. On average, warehouses earn 3.5 times more points than required, and mitigation fees account for only 5% of total points earned. Fees collected total $56 million to date.

Business groups say the air district’s data doesn’t tell the whole story. Brooke Armer, executive vice president of the California Business Roundtable, said the data doesn’t capture how many warehouse developments have been delayed or abandoned because of high operating costs. The warehouse rule, she said, is one expense layered on top of many.

“It’s not an isolated expense; it’s an expense in addition to an ever-cascading series of expenses,” she said.

Independent data offers some context. Michael McCarthy, a researcher who tracks trends in California warehouses, said the warehouse industry has grown at about the same rate as the national economy over the past two decades.

“We’re in a slowdown in warehouse construction right now, but that’s because of broader national market forces,” he said, not necessarily regulatory forces. “Five million square feet of warehouses are currently under construction in the Inland Empire this quarter, and that’s the slowest in more than a decade.

According to the South Coast Air District, about 100 million square feet of storage space has been added to the Southern California region since the rule went into effect.

Rob Lapsley, president of the California Business Roundtable, warned that AB 1777 would give state regulators new economic power.

“This bill essentially gives the (California Air Resources Board) and other regulatory agencies the most ability to control California’s economy of any bill we’ve seen, especially after cap and trade.” he said.

Supporters of the bill say the framing completely ignores a different set of costs.

“When families have to choose between buying their diesel-induced asthma inhaler and putting food on the table, it’s a cost-of-living issue,” said Ada Welder, a policy advocate at the environmental group Earthjustice.

A step towards electrification

The stakes are significant. The California Air Resources Board predicts that the loss of state programs, including its mandate to electrify cars and heavy-duty trucks, will lead to Another 14,500 deaths5,000 more hospitalizations and 6,700 more emergency room visits due to respiratory and cardiovascular problems by 2037.

“The gap that exists in California’s clean air progress because of these federal actions is significant. It’s deadly,” said Will Barrett of the American Lung Association.

Indirect source rules will not fill the gap by themselves. But Sam Wilson, senior vehicle analyst at the Union of Concerned Scientists, said such rules would help lay the foundations for large-scale electrification – and that other countries are paying attention. In Illinois, a measure inspired by the South Coast WAIRE program, called Warehouse Pollution Abatement Act, working its way through the legislative process.

“One thing states can do while we’re in the current political landscape is help build those foundations for future electrification of freight transportation through indirect source rules.”

In California, Wilson added, “This is literally the worst time to throw up our hands and say there’s nothing we can do about it.”

This article was originally published on CalMatters and is republished under Creative Commons Attribution-NonCommercial-No Derivatives license.