Reacting to the court ruling, the automakers called for an economy-wide approach to global warming, cautioning that no single industry could bear the burden alone.
Monday's ruling also improved the odds that Congress would take action on comprehensive legislation to reduce global warming, said business groups, environmental advocates and lawmakers. Several measures already have been introduced.
Sen. Jeff Bingaman, D-N.M., chairman of the Senate Energy and Natural Resources Committee urged President Bush "to work with Congress to enact a mandatory cap-and-trade proposal and other programs to reduce our nation's greenhouse gas emissions."
EPA spokeswoman Jennifer Wood said the agency is studying the court's ruling.
In the meantime, she defended EPA's voluntary partnerships to reduce emissions. "These national and international voluntary programs are helping achieve reductions now while saving millions of dollars, as well as providing clean, affordable energy," Wood said.
Many scientists believe greenhouse gases, flowing into the atmosphere at an unprecedented rate, are leading to warming of the Earth, rising sea levels and other marked ecological changes.
Carbon dioxide is produced when fossil fuels such as oil and natural gas are burned. One way to reduce those emissions is to have more fuel-efficient cars.
In handing an almost-total victory to Massachusetts, 11 other states, three cities and 13 environmental groups that sued the EPA, the court adopted many of their concerns and their belief that taking even limited action concerning new American cars and trucks is better than doing nothing.
The court's four conservative justices -- Chief Justice John Roberts and Justices Samuel Alito, Antonin Scalia and Clarence Thomas -- dissented.
"In many ways, the debate has moved beyond this," said Chris Miller, director of the global warming campaign for Greenpeace, one of the environmental groups that sued the EPA. "All the front-runners in the 2008 presidential campaign, both Democrats and Republicans, even the business community, are much further along on this than the Bush administration is."
Democrats took control of Congress last November. The world's leading climate scientists reported in February that global warming is "very likely" to be caused by man and is so severe that it will continue for centuries. Former Vice President Al Gore's movie, "An Inconvenient Truth" -- making the case for quick action on climate change -- won an Oscar. Business leaders are saying they are increasingly open to congressional action to reduce emissions of greenhouse gases, of which carbon dioxide is the largest.
The court had three questions before it.
- Do states have the right to sue the EPA to challenge its decision?
- Does the Clean Air Act give EPA the authority to regulate tailpipe emissions of greenhouse gases?
- Does EPA have the discretion not to regulate those emissions?
The court said yes to the first two questions. On the third, it ordered EPA to re-evaluate its contention it has the discretion not to regulate tailpipe emissions. The court said the agency has so far provided a "laundry list" of reasons that include foreign policy considerations.
The majority said the agency must tie its rationale more closely to the Clean Air Act.
In his dissent, Roberts focused on the issue of standing, whether a party has the right to file a lawsuit.
The court should simply recognize that dealing with the complaints spelled out by the state of Massachusetts is the function of Congress and the chief executive, not the federal courts, Roberts said.
He said his position "involves no judgment on whether global warming exists, what causes it, or the extent of the problem."
Justice Antonin Scalia, in a separate dissent, said the court should not substitute its judgment in place of the EPA's, "no matter how important the underlying policy issues at stake."
Whatever else comes of the decision, "this administration's legal strategy for doing nothing has been repudiated," said David Doniger, counsel for the Natural Resources Defense Council, an environmental group involved in the case.
Other states that have adopted California's standards on emissions of greenhouse gases are: Connecticut, Maine, Massachusetts, New Jersey, New York, Oregon, Pennsylvania, Rhode Island, Vermont and Washington.
The case is Massachusetts v. EPA, 05-1120.
Power Plant Emissions
In a separate ruling, a unanimous Supreme Court set aside a ruling that Duke Energy did not violate clean air laws by modernizing eight coal-burning power plants in North and South Carolina without obtaining a permit.
The case had been closely watched by the industry because it could determine whether U.S. electric utilities must spend billions of dollars on emission-reduction equipment and whether similar lawsuits against other U.S. utilities for alleged noncompliance with the Clean Air Act will succeed.
About half of the nation's electricity comes from coal plants, many of which have been operating for decades and need to be overhauled to stay out of mothballs.
The justices set aside a ruling by the Fourth Circuit Court of Appeals that Duke did not need a permit from the U.S. Environmental Protection Agency because hourly emissions from Duke's plants in North and South Carolina would not increase.