In a decision with ramifications for the auto industry, the Environmental Protection Agency (EPA) concluded on September 4 that it lacks the legal authority to regulate the carbon dioxide emissions of motor vehicles. The International Center for Technology Assessment (ICTA), a nonprofit research group in Washington, asked the EPA in a 1999 petition to set standards for car and truck tailpipe emissions of CO2, arguing the greenhouse gas was contributing to global warming and was a pollutant. The EPA disagreed, hewing to a narrow interpretation of the Clean Air Act. "Congress must provide us with clear legal authority before we can take regulatory action to address a fundamental issue such as climate change," said Jeff Holmstead, assistant administrator at the EPA. "Regulating the transportation sector for climate change purposes would have enormous economic, practical and societal impacts." Joe Mendelson, legal director of the ICTA, said the EPA decision will be challenged in court. If it stands, the decision could thwart an effort in California to reduce the state's carbon dioxide output. The California Air Resources Board (CARB) is drawing up regulations aimed at motor vehicle CO2 emissions. Under the Clean Air Act, California can set its own stringent pollution standards, which can be matched by other states. California's efforts will continue, said Jerry Martin, spokesman for CARB. The board will analyze the EPA decision but feels there is a legal basis for its new rules, which are expected to require new pollution-preventing or fuel-saving technologies.

Originally posted on Fleet Financials