A federal judge has ruled that New York City cannot require taxi operators to drive hybrids. (Never mind that there aren't enough hybrids for the entire fleet to comply with the city ordinance.) The judge affirmed that the U.S. government alone has the authority to regulate gas mileage and engine emissions. This is a bad ruling as it limits policy innovation since the city was only requiring a shift towards existing technologies and not new technologies. Most states and cities are too small to have enough market power to change auto companies ways, but New York City is sufficiently large and can act as a laboratory for innovative transportation policies. (Los Angeles and California are also laboratory opportunities for policy innovation using existing technologies.)
Greenhouse gas emissions are certainly a global concern, but particulate matter, noise pollution and other direct effects of gasoline engines are strictly local concerns and should be regulated locally. I wonder if the Mayor required that taxis operated quietly would pass muster legally. Certainly the city ought to be able to regulate particulate matter that causes asthma and other respiratory problems.
If the city is serious about reducing the environmental effects of driving they absolutely should price curb parking at a level that eliminates cruising, which can be as much as 40 percent of traffic in some neighborhoods, and get rid of minimum parking requirements, which incentive driving to work.