As the Government contemplates introducing vehicle emission standards, the Australian Automobile Association (AAA) has warned it could increase the price of vehicles and lead to Australians holding onto their "older dirtier cars" for longer.

Key points: US winding back emissions standards to make cars more affordable

US winding back emissions standards to make cars more affordable AAA says regulation will increase prices and affect every household budget

AAA says regulation will increase prices and affect every household budget Australian Conservation Foundation hope the Government will follow Obama Administration's lead

While the United States has emissions standards, its Environmental Protection Agency has announced they will be wound back to make cars more affordable.

The Trump Administration has been reviewing America's carbon emissions standards for cars and utes, and like many things put in place by the previous Obama administration it is now preparing to wind them back.

The AAA said while it supported the introduction of carbon emissions standards, the US should serve as a cautionary tale to the Federal Government.

"Going too hard, too fast is not good for consumers and it's not good for the environment," chief executive Michael Bradley said.

"Any regulation will increase the price of cars. It will likely increase the price of petrol. This will affect every household and every household budget.

"Yes, there are benefits to be accrued through the environmental gains, but the costs are real and getting that balance right will be of interest to every household."

Mr McFadzean says Australia is the only country in the OECD now without vehicle pollution standards. ( AAP: Dave Hunt )

Mr Bradley said Australia already had an older-than-average car fleet "because we pay more for cars than comparable nations."

"And that's largely because the Australian Government still collects about $5 billion every four years on tariffs and taxes, to protect the Australian car makers who no longer exist," he said.

Mr Bradley said an emissions standard that was too strict would do nothing to change consumer behaviour.

"What we don't want is policy which drives up the price of cars so much that people stay in their older, dirtier, less safe cars longer — that's the exact opposite of what we're trying to achieve," he said.

'Follows disturbing trend in the US'

Gavan McFadzean from the Australian Conservation Foundation said while they were astonished by the US's latest move, they were not entirely surprised.

"It follows a very disturbing trend in the US to deny real action on climate change that's occurring everywhere else in the world," he said.

Mr McFadzean was hoping the Australian Government would follow the Obama Administration's lead.

"We've been urging both the Turnbull Government and the Shorten opposition to introduce and commit to vehicle emissions standards equivalent to the US and Canada at least," he said.

"The world's best practice is actually the EU, but as a first step and given that Australia's the only country in the OECD now without vehicle pollution standards of this kind, to introduce standards equivalent to the US.

"The Shorten opposition has actually already committed to that, which is good and we understand the Turnbull Government is due to make a decision in the coming weeks and months."