PROVIDENCE — A federal judge has ruled that a lawsuit seeking to prevent Rhode Island from setting its own standards for carbon dioxide pollution from automobiles can go forward.

Chief U.S. District Court Judge Ernest C. Torres last month denied a motion by the state to dismiss the lawsuit. Torres issued his ruling two days after the U.S. Environmental Protection Agency denied California and 16 other states, including Rhode Island and Massachusetts, the right to set their own auto pollution standards.

W. Michael Sullivan, director of the state Department of Environmental Management, said the Torres ruling is a “disappointment,” but the state will “regroup” and continue fighting to implement regulations Rhode Island proposed in 2005. In February 2006, a group of Rhode Island auto dealers, along with General Motors Corp., the former DaimlerChrysler Corp., and industry trade group Alliance of Automobile Manufacturers, filed suit in U.S. District Court asking the court to rule that federal pollution standards supersede a 2005 law tightening the state’s auto emissions regulations. Among the Rhode Island dealerships joined in the lawsuit are Tasca Automotive Group Inc., The New Bay Buick Inc., and Hurd Chevrolet Inc.

Auto industry companies filed similar lawsuits in California and the other states that have proposed emission standards deemed more restrictive that existing federal law.

The U.S. Supreme Court handed down a decision in April 2007 that could create an unprecedented opportunity for setting new standards for reducing greenhouse gases from automobiles.

In Massachusetts et al v. Environmental Protection Agency et al, the court ruled 5 to 4 against the Bush administration’s contention that it didn’t have the authority to regulate carbon dioxide emissions from motor vehicles.

The EPA had resisted calls by Massachusetts and other states to impose limits, saying it didn’t have the authority to do so. But the court rejected every argument made by the EPA to do nothing.

Environmentalists hailed the decision as a landmark.

“It is hard to overstate the importance of this decision for combating climate change — the most pressing environmental challenge of our time,” Cynthia J. Giles, the head of the Conservation Law Foundation in Rhode Island, which has intervened in the Rhode Island case in support of the tighter rules, said at the time.

In the Massachusetts climate change case, the EPA argued that a link between the increase in greenhouse gases and global surface air temperatures “cannot be unequivocally established.”

But Justice John Paul Stevens disagreed. Writing for the majority, Stevens first established that Massachusetts had standing to file its case. “When a state enters the Union, it surrenders certain sovereign prerogatives,” he wrote. “Massachusetts cannot invade Rhode Island to force reductions in greenhouse gas emissions; it cannot negotiate an emissions treaty with China or India....”

Those prerogatives, Stevens wrote, are lodged in the federal government and “Congress has ordered EPA to protect Massachusetts (among others) by prescribing standards” to limit air pollution.

“In short, EPA has offered no reasoned explanation for its refusal to decide whether greenhouse gases cause or contribute to climate change,” Stevens wrote. “Its action was therefore arbitrary and capricious ... or otherwise not in accordance with the law.”

But EPA administrator Stephen L. Johnson, handed the auto industry a gift just before Christmas.

On Dec. 19, Johnson said the proposed California auto-emission rules were preempted by federal authority and made moot by the energy bill signed into law last month by President Bush.

Johnson said California had failed to make a compelling case that it needed authority to write its own standards for greenhouse gas emissions from cars and trucks to help curb global warming.

“The Bush administration is moving forward with a clear national solution, not a confusing patchwork of state rules,” Johnson said in an evening conference call with reporters. “I believe this is a better approach than if individual states were to act alone.”

Officials from the states and numerous environmental groups vowed to sue to overturn the edict.

“Needless to say, we’re appealing that [EPA ruling], said Giles.

The federal Clean Air Act allows California to set anti-pollution standards stricter than those of the federal government, subject to EPA approval. California, and 16 other states which have been hoping to follow its lead — including Rhode Island and Massachusetts — had been waiting for the EPA to act since the state petitioned the agency in 2005.

The emissions standards California adopted in 2004 — but not approved by the federal government — would have forced automakers to cut greenhouse gas emissions by 30 percent in new cars and light trucks by 2016, with the cutbacks to begin in 2009 models. That would have translated into roughly 43 miles per gallon for cars and some light trucks and about 27 miles per gallon for heavier trucks and sport-utility vehicles.

The new federal law will require automakers to meet a 35-mile-per-gallon fleetwide standard for cars and trucks sold in the United States by 2020. It does not address carbon dioxide emissions, but such emissions would be reduced as cars were forced to become more fuel efficient.

California’s proposed rules had sought to address the impact of carbon dioxide and other pollutants from cars and trucks that scientists say contribute to the warming of the planet.

California Gov. Arnold Schwarzenegger said the states would go to federal court to reverse the EPA decision.

Twelve other states — New York, New Jersey, Connecticut, Maine, Maryland, Massachusetts, New Mexico, Oregon, Pennsylvania, Rhode Island, Vermont and Washington — had proposed standards like California’s, and the governors of Arizona, Colorado, Florida and Utah have said they would adopt them.

If the waiver had been granted and all the states adopted the California standard, it would have covered nearly half of all vehicles sold in the United States.

In September a Vermont federal judge rejected the carmakers’ lawsuit seeking to block that state’s adoption of the new standards.

“The Vermont ruling, we thought, was consistent with our request,” said Sullivan, of the Rhode Island DEM.

States, he said, have the right to regulate auto emissions.

Rhode Island’s new regulations have yet to go into effect because the EPA has not issued the necessary waiver in the California case.

Automakers have sued in the participating states, claiming they would need substantial lead time, at least four years, to comply with the new standards.

Ruling Dec. 21 on Rhode Island’s motion to dismiss the lawsuit filed here, Torres wrote: “Any uncertainty regarding the probability that the Rhode Island regulation will be applied to the plaintiffs is outweighed by the hardship that the existence of the regulation already imposes on the plaintiffs. . . To require [the manufacturers] to challenge these regulations only as a defense to an action brought by the government might harm them severely and unnecessarily.”

“What the judge is telling us is [the Rhode Island] case is going to proceed,” Giles said.

Last week, the DEM and the environmental groups requested more time to file more documents in the case.

“We will continue down the path that we have,” Sullivan said.

pgrimald@projo.com