Obama begins reversing Bush climate policies

WASHINGTON Mon Jan 26, 2009 2:53pm EST

1 of 5. President Barack Obama hands over one of two executive orders on combating climate change while in the East Room of the White House, January 26, 2009. From L-R are: Obama, Secretary of Transportation Ray LaHood, and EPA Administrator Lisa Jackson.

Credit: Reuters/Larry Downing

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WASHINGTON (Reuters) - President Barack Obama began reversing the climate policies of the Bush administration on Monday, clearing the way for new rules to force auto makers to produce more fuel-efficient and less polluting cars.

The president told the Environmental Protection Agency to reconsider immediately a request by California to impose its own strict limits on vehicle carbon dioxide emissions, blamed for contributing to global warming.

The Democratic Obama took over last Tuesday from former President George W. Bush, whose Republican administration had denied the request, prompting California and other states to sue.

"The federal government must work with, not against, states to reduce greenhouse gas emissions," Obama said at the White House, taking a stab at his predecessor's policies.

"California has shown bold and bipartisan leadership through its effort to 21st century standards. And over a dozen states have followed its lead."

Obama's directive, which is likely to result in a formal change in coming months, could prompt as many as 18 states to follow California's lead by putting into effect tailpipe emissions standards that are tougher than federal requirements.

The president directed the Department of Transportation to move forward with setting vehicle fuel efficiency standards for model year 2011 by March, giving automakers an 18-month period to prepare.

The rules piled pressure on an ailing car industry struggling to survive in a deepening recession with the help of federal bailouts.

General Motors Corp said it is "working aggressively" to develop better hybrids and electric cars to reduce emissions and improve mileage, but policymakers must weigh in economic factors when making their decision.

"We're ready to engage the Obama administration and Congress on policies that support meaningful and workable solutions and targets," the company said in a statement.

Their future may be more troubled as the U.S. recession deepens. Economists polled by Reuters in advance of Friday's Gross Domestic Product report think GDP contracted at a 5.4 percent rate on an annualized basis in the fourth quarter, which would be the worst performance since 1982.

SIGNALS ON ENVIRONMENT

The Obama directive pleased environmentalists, who supported his election but could annoy labor unions, another key constituency, whose members are embittered about the loss of auto jobs.

Obama said the policy shift would help carmakers in the long run.

"Our goal is not to further burden an already struggling industry, it is to help America's automakers prepare for the future," he said.

California's Republican Gov. Arnold Schwarzenegger urged the Obama administration last week to review the pollution emissions decision.

"It is clear that California and the environment now have a strong ally in the White House," he said in a statement, welcoming the move on Monday.

"Allowing California and other states to aggressively reduce their own harmful vehicle tailpipe emissions would be a historic win for clean air and for millions of Americans who want more fuel-efficient, environmentally friendly cars."

Democratic lawmakers in Washington hailed the measure as a step toward energy independence and clean air, but some Republicans accused him of setting back the struggling U.S. auto industry.

The moves signaled Obama's desire to move forward quickly with his campaign promises to fight climate change and reduce U.S. dependence on foreign oil.

Obama laid out broad principles that he said his administration would follow. It was time for the United States to lead on climate change, he said, and reduce its dependence on foreign oil.

"It will be the policy of my administration to reverse our dependence on foreign oil," he said, adding previous administrations had made similar goals.

"We need more than the same old empty promises. We need to show that this time it will be different," he said.

The U.S. State Department is expected to name Todd Stern, a senior White House official under former President Bill Clinton, as its climate change envoy, two people familiar with the decision said on Monday.

Stern coordinated the Clinton administration's Initiative on Global Climate Change from 1997 to 1999 and acted as the senior White House negotiator in the Kyoto negotiations on climate change.

(additional reporting by Matt Spetalnick, Caren Bohan, Arshad Mohammed; editing by Jackie Frank)

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