In the 5-4 decision (PDF), the court agreed with Massachusetts, 11 other states, and environmental groups who argued that the EPA was bound by the Clean Air Act to regulate greenhouse gases as air pollutants. A buildup of these gases, such as carbon dioxide, has been said to lead to global warming.
The EPA had argued that it did not have to issue mandatory regulations to address global climate change. It also claimed regulation by the EPA would conflict with the administration's approach to climate change, which favors technology investment and voluntary emissions reductions.
"In short, EPA has offered no reasoned explanation for its refusal to decide whether greenhouse gases cause or contribute to climate change," wrote Justice John Paul Stevens in the majority opinion, which Justices Anthony Kennedy, David Souter, Ruth Bader Ginsburg and Stephen Breyer joined.
The court did not specifically order the EPA to set mandatory limits but said the agency has not shown adequate reasons for declining to do so.
"Under the Act'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 opinion stated.
The decision,of last year, is a victory for advocates of regulating greenhouse gases, an idea that has gained favor among U.S. politicians and businesses over the past year.
"We've now broken a major legal logjam on this issue, and this will be the year that the political logjam is broken, too," said David Doniger, who was attorney for the National Resources Defense Council in the case, in a statement.
The dissenting opinion was filed by Chief Justice John Roberts and joined by Justices Antonin Scalia, Clarence Thomas and Samuel Alito.
"Apparently dissatisfied with the pace of progress on this issue in the elected branches, petitioners have come to the courts claiming broad-ranging injury, and attempting to tie that injury to the government's alleged failure to comply with a rather narrow statutory provision," Roberts wrote.
He wrote his conclusion "involves no judgment on whether global warming exists, what causes it, or the extent of the problem."