The effect of carbon emissions isn't limited to only the buyers of a vehicle.
The government is interested in welfare of itself, the state and its resources. If vehicular emissions cause a lot of CO2 emissions and hence climate change, the government will want to protect itself, it’s resources and its people. As for making rules or laws - that’s how the government implements such goals or objectives. (This is a slightly broad answer.)
May I ask, what business does the senate have on where I dump my toxic waste?
Take on action on climate change, that's wrong governing! Take action on climate change? Wrong governing!