In a landmarket decision, the Supreme Court last Monday unanimously ruled that the Environmental Protection Agency (EPA) was in error when it rejected a request to initiate a rulemaking to regulate greenhouse gas (GHG) emissions. It remanded the case to the agency to revisit the issue.

A group of private organizations petitioned the EPA to begin regulating the emissions of four greenhouse gases, including carbon dioxide from vehicles, under the Clean Air Act (CAA). But the EPA denied the petition in 2003, claiming that the CAA did not authorize it to issue mandatory regulations to address global climate change. The agency further said that even if it had the authority to set GHG emission standards, it would be unwise to do so at that time because a causal link between greenhouse gases and the increase in global warming had not been established.

The petitioners, which were joined by the state of Massachusetts and other state and local governments, subsequently sought review of the EPA decision in the U.S. Court of Appeals of the District of Columbia, which rejected their bid. But the high court sided with the states.

The “EPA identifies nothing suggesting that Congress meant to curtail EPA’s power to treat greenhouse gases as air pollutants,” said the opinion, which was approved in a 5-4 vote.

“Under the [CAA’s] clear terms, EPA can avoid promulgating regulations only if it determines that greenhouse gases do not contribute to climate change or if it provides some reasonable explanation as to why it cannot or will not exercise its discretion to determine whether they do,” the justices said. “It has refused to do so, offering instead a laundry list of reasons not to regulate, including the existence of voluntary executive branch programs providing a response to global warming and impairment of the president’s ability to negotiate with developing nations to reduce emissions,” it noted.

“These policy judgment have nothing to do with whether greenhouse gas emissions contribute to climate change and do not amount to a reasoned justification for declining to form a scientific judgement,” the high court said.

The EPA’s action was “arbitrary, capricious or otherwise not in accordance with law. On remand, EPA must ground its reasons for action or inaction in the statute,” the court noted.

Sen. Jeff Bingaman (D-NM), chairman of the Senate Energy and Natural Resources Committee, applauded the Supreme Court decision, saying it “leaves no doubt that the federal government has the authority and duty to act to address global warming.” He called on President Bush to address the problem, and to work with Congress to enact a mandatory cap-and-trade proposal and other programs to reduce the nation’s GHG emissions.

But energy analyst Christine Tezak wasn’t as optimistic. “While this will clearly be heralded as a mandate on the agency to promulgate rules on carbon dioxide and other GHGs sooner rather than later, the reality is we do not see it doing much to change the expected pace of the climate change debate on Capitol Hill in the end, because this case does not solve any of the thorny issues of program structures that lay ahead,” said Tezak of Stanford Group Co. in Washington, DC.

“At bottom, we believe this changes the current landscape very little in spite of the barrage of ink that will undoubtedly follow this split decision declaring a great victory for the advocates of GHG regulation. Although the EPA has been directed to revisit its decision, it could, and may very well, use Democratic leadership’s desire to enact climate change legislation ‘soon’ as a reason to not move forward with an expedited rulemaking at this time.”

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