Obama's EPA Could Greenlight 40-Plus MPG Standard in Calif.

(MoneyWatch)  The Obama Administration's Environmental Protection Agency signaled it will probably approve stricter standards for greenhouse gases from auto emissions in California.

The net effect would be to hike the average miles per gallon required for cars sold in California, to more than 40 mpg within about five years, according to the Association of International Automobile Manufacturers, an auto industry lobbying group. Proposed California standards for trucks wouldn't be as stiff.

The auto industry complains that achieving such high mileage will be technologically tough; that it will raise manufacturing costs and retail prices; that it will require big changes in consumer preferences; and that having to meet different state standards is inefficient and a logistical problem. Besides California, the decision could also affect eight to as many as a dozen states that seek to mimic California's tougher standards, including New York and most of New England.

Under the Bush Administration, the EPA in March 2008 turned down a request from California for a waiver that would allow California to regulate greenhouse gases like carbon dioxide. President Obama said in late January he would favor reviewing the denial. The EPA made the review process official today.

The denial, after California had previously been granted waivers 40 out of 40 times over the years, stunned environmental activists and auto industry lobbyists alike, according to the AIAM.

Ever since the Clean Air Act of 1970, California has routinely received waivers for its own separate air-pollution standards. California was grandfathered in, because it created its own standards in 1966, before federal standards existed. In addition, California's rules were consistently stricter than the federal standards. States are not allowed to create standards that would be less strict than federal standards.

Like the federal standards, the longstanding California rules cover pollutants like tiny solid particles of soot, plus the main ingredients for smog, also known as ground-level ozone. But in light of growing concern about global warming, California sought to create standards for carbon dioxide emissions, as well.

There's a direct, inverse relationship between carbon dioxide emissions and gas mileage, according to AIAM. That means the only way to achieve lower carbon dioxide emissions is to achieve higher gas mileage. So in effect, the proposed California greenhouse-gas regulations would mandate higher gas mileage.

The auto industry is already complaining because the federal government has raised Corporate Average Fuel Economy Standards to 35 mpg by the 2020 model year. But the California standards would pass 35 mpg eight years sooner, for the 2012 model year, according to the AIAM.