In a letter to the White House, the Environmental Protection Agency has declared CO2 a danger to public welfare. This represents the next step in the regulation of greenhouse gas emissions that come from motor vehicles, power plants, factories, as well as certain home products. The so-called “endangerment finding” that CO2 is harmful is currently under review in the Office of Management and Budget (OMB). If it approves the finding, CO2 could be regulated under the Clean Air Act as stipulated by the Supreme Court in 2007. The Obama administration has noted that saving energy and reducing global warming emissions are key priorities, and it has included a new “cap and trade” regime to do so in the budget it submitted to Congress. And the EPA has proposed a “CO2 registry,” to track greenhouse gas emissions, a precursor to implementing restrictions.

This effort will have come at a huge cost to the already-ailing auto industry. According to the Energy Information Agency, transportation accounted for 28 percent of U.S. greenhouse gas emissions in 2007. That may be conservative. A report published in 2006 by the Environmental Defense Fund found that U.S. cars and light trucks are responsible for 45 percent of the CO2 emitted by automobiles around the world. This regulation in addition to the government CAFE (Corporate Average Fuel Economy) standards for increasing the fuel efficiency of vehicles would come at a rough time for automakers currently facing the lowest annual sales rate since 1981.

--Liza Barth