The Court on Monday also issued a second significant environmental decision, requiring that power plant operators obtain a federal permit if they plan to increase annual emissions at their facilities. The ruling largely affects older, coal-burning power plants.
But it is the global warming decision that is drawing the most attention. Not only is the decision a stinging setback for the White House, which has rejected participation in the international Kyoto Protocol to reduce greenhouse gases, but a watershed moment in the nation's debate over global warming.
"This is huge," says Daniel Esty, director of the Center for Environmental Law and Policy at Yale University and a former EPA official. "The bottom line is it puts the U.S. on track to regulate carbon dioxide."
The administration had argued that the Environmental Protection Agency, under the Clean Air Act, has no authority to regulate emissions from motor vehicles. The White House has opted to tackle global warming with a policy that promotes technology and development, and voluntary measures to reduce greenhouse gases.
But the Court said the administration offered "no reasoned explanation" for its continuing refusal to act - one way or another - on the question of whether greenhouse gases should be regulated.
The EPA's refusal was "arbitrary, carpicious or otherwise not in accordance with law," wrote Justice John Paul Stevens in the majority opinion.
Environmental groups have long argued that mandatory measures are needed to regulate greenhouse gases. A dozen states, led by Massachusetts, and joined by environmental organizations, sued the EPA for failing to address the issue. They argued that the Clean Air Act compels the agency to regulate car emissions that "cause or contribute to air pollution which may reasonably be anticipated to endanger public health or welfare."
Today's ruling, a split between conservative and moderate-to-liberal members, was hailed by Frank O'Donnell, director of Clean Air Watch, who called the decision "terrific."
California will likely plow ahead with a law that aims to restrict tail-pipe decisions on the state level, much to the dismay of automakers. "It's a green light for states like California to move forward on standards that limit global warming emission from emissions," O'Donnell says.
But this decision still means relatively small in terms of nation-wide action on global warming. The EPA plans to review and decide how best to interpret the ruling, a process that could easily consume the rest of Bush's tenure as president. And, while the Supreme Court's backing certainly provides political cover to supporters of a nation-wide law to cut greenhouse gases, it doesn't change the fundamental nature of the debate. Congress has yet to tackle how such restrictions would be enacted without harming the economy and giving a competitive advantage to unregulated giants, such as China and India.
In the second case, the EPA sued Duke Energy Corp. over its failure to obtain permits for expanding -- and increasing emissions -- at more than two dozen of its coal-burning power plants in North Carolina and South Carolina. Duke Energy argued that it should be able to increase the output of its plants if it proved that the plants' hourly emissions did not increase.
The Court ruled unanimously in favor of the EPA, maintaining that the Clean Air Act gives the agency review authority over plants that increase their annual emissions by lengthening its hours of operation.
The cases: Massachusetts v. EPA (05-1120) and the Environmental Defense Fund v. Duke Energy Corp. (05-848)
By Bret Schulte and Liz Halloran