By
Steve Hargreaves, CNNMoney.com staff writer
NEW YORK (CNNMoney.com) -- President Bush said Tuesday he is directing the Environmental Protection Agency, and the departments of energy, transportation and agriculture, to develop steps to reduce greenhouse gas emissions by 2008, but he failed to call for a specific increase in fuel efficiency standards.
He said the directive came in response to a Supreme Court ruling last month saying the EPA has the authority to regulate greenhouse gas emissions, including carbon dioxide, from the transportation sector.
The EPA has previously refused to regulate carbon dioxide emissions, arguing that it did not have the authority to do so.
Twelve states and several environmental organizations had sued the EPA for failing to act on the issue.
Bush said the EPA's plan should center around his State of the Union proposal to replace 20 percent of the nation's gasoline use with alternative fuels over the next 10 years.
Bush said during his Monday press conference from the White House Rose Garden that fuel efficiency will also be part of this plan, although he stopped short of calling for specific increases in fuel efficiency standards.
"When it comes to the environment and energy, the American people expect common sense, and they expect action," he said.
In a press conference after Bush's announcement, heads of the four agencies said a draft of proposals should be available by the fall, with some becoming law by the end of 2008.
"We know that emissions contribute to climate change and this is a serious issue," said EPA Administrator Steve Johnson. "The Bush administration is taking the first steps to regulate greenhouse gas emissions from cars."
But specifics on what might be called for were in short supply, and the cabinet heads ducked repeated questions from reporters as to whether auto fuel efficiency standards would be raised.
Last week a Senate committee approved a bill raising Corporate Average Fuel Economy (CAFE) standards to 35 miles per gallon by 2020 from the current 27.5 miles per gallon, with a 4 percent increase every year after 2020.
The auto industry lobbied hard against the bill, claiming it would be too expensive. Environmentalists said it isn't strict enough because it allows the mandates to be lifted they do prove too pricey.
But with the Democrats in control of Congress while energy issues and global warming are in the public spotlight, most experts see some type of increase in fuel efficiency standards in the future.
CAFE standards have remained basically unchanged for over two decades, and some say raising them is a key component in cutting gasoline demand, possibly bringing down record high gas prices. 
