The Bush administration denied California a waiver in 2007 to allow it to impose tougher vehicle pollution rules at the state level, despite legal and scientific staff from EPA recommending its approval.
The rejection was the first time Washington had ever denied the state's application to impose stricter regulations. The auto industry lobbied hard against it.
"This is something that indicates what the president has promised: science, not special interests, are once again in the driver's seat," said Bernadette Del Chiaro, Environment California.
President Obama also directed the U.S. Department of Transportation to increase fuel efficiency of new cars. The average is about 27.5 miles per gallon. That will go up to 35 miles a gallon by 2020.
The moves will have a dramatic effect on the nation's troubled car industry.
California's car dealers warn that you'll have to pay more, as manufacturers rush to redesign vehicles that meet the new mileage and emission standards.
"The technology, for instance, in your typical hybrid vehicle is several thousand dollars," said Peter Welch, California New Car Dealers Association. "Anywhere from $2,000 to $6,000 more. On a larger vehicle, it would get up to $8,000 in differential."
"It's about a child's right to breathe clean air," said Gov. Schwarzenegger. "It's about saving drivers money at the pump. And it's about reducing our nation's dependence on foreign oil."
MORE L.A. BREAKING NEWS, WEATHER, TRAFFIC, SPORTS
SEND TIP || REPORT TYPO || TWEET @abc7 || WIDGET