On July 25, four automobile manufacturers—BMW, Ford, Honda and Volkswagen—and California agreed to a framework (emissions agreement) under which their national fleet of vehicles meet emissions standards that are much more stringent than the standards recently proposed by the Environmental Protection Agency (EPA) and National Highway Traffic Safety Administration (NHTSA). This emissions agreement between one state and companies occupying one third of the passenger car market has the potential to establish or greatly influence the emission standards for every passenger car or light truck sold in the United States over the next few years.

Under the Clean Air Act (CAA), the EPA is required to generate motor vehicle emissions rules concerning any air pollutant “which may reasonably be anticipated to endanger public health or welfare.” In establishing such standards, the EPA must consider technical feasibility and cost, and must provide sufficient time “to permit the development and application of the requisite technology.”