US court backs California greenhouse gas limits

SAN FRANCISCO (Reuters) - California's landmark law requiring cuts in greenhouse gas emissions may stand, a federal court judge in Fresno, California, ruled Wednesday, rejecting arguments by car makers that federal law should preempt the state's effort.

A spokesman for the auto industry, which had argued that California's law is unconstitutional, said an appeal is uncertain.

"We're still reviewing the decision and a decision on whether or not to appeal hasn't been made yet," said Charles Territo, a spokesman for the Alliance of Automobile Manufacturers.

Environmental activists cheered the decision as a major breakthrough in their legal efforts addressing global warming.

U.S. District Court Judge Anthony Ishii said in his opinion that California's law mandating a 30 percent reduction in greenhouse gas emissions, including carbon dioxide, from passenger vehicles would necessarily require a substantial increase in their fuel efficiency in terms of mileage per gallon.

Car makers had argued that mileage standards are the responsibility of U.S. regulators.

Ishii said that California still needs to obtain a waiver from the U.S. government to implement its greenhouse gas law, which would affect model-2009 cars, sport-utility vehicles, pick-up trucks and minivans, including some which may come on the market next year.

"The only thing standing in the way of California and 16 other states in implementing this clean-car law is a waiver from the EPA," said Roland Hwang, an automobile industry analyst with the Natural Resources Defense Council.

Ishii's decision marked a "stinging rejection" of the automobile industry's challenge to California's emissions law, said state Attorney General Jerry Brown.

"This court ruling leaves the Bush administration as the last remaining roadblock to California's regulation of tailpipe greenhouse gas emissions," Brown said in a statement.

Brown, a Democrat, and Gov. Arnold Schwarzenegger, a Republican, have sued the U.S. Environmental Protection Agency to force it for a ruling on whether California, the most populous U.S. state, may set its own greenhouse gas emissions limits.

The 9th U.S. Circuit Court of Appeals last month dealt a setback to the Bush administration and the auto industry on fuel efficiency by ordering new standards for sport utility vehicles, pickups and other light trucks.

A three-judge panel of the San Francisco-based appeals court held the National Highway Traffic Safety Administration failed in a 2006 regulation to account for the environmental impact of tailpipe emissions and said the U.S. government must close a loophole that permits the vehicle class to satisfy lower fuel efficiency standards than cars. (Reporting by Jim Christie; Editing by Gary Hill)