Bush Directs EPA to Examine Regulating CO2

President Bush has ordered the US Environmental Protection Agency (EPA) to begin evaluating stricter emissions standards in response to the recent Supreme Court decision that determined CO2 to be a pollutant. By labelling CO2 a pollutant the Supreme Court opened it to regulation by the EPA, potentially circumventing the requirement for Congress to pass stricter Corporate Average Fuel Economy (CAFE) standards. The President indicated that he wants action prior to his departure from office in January 2009. The EPA will work with the Departments of Transportation and Agriculture in developing the standards which will have to consider factors such as vehicle safety and the cost of the mandates. Deutsche Bank analysts have reported that CO2 regulation will have a “materially positive intermediate-term impact” on some aftermarket companies.