The ruling was applauded by attorneys general from Texas and Michigan, who were among the 11 states that filed arguments in favor of the administration's stance, as well as the automobile industry, which also intervened in the case.
However, California officials and other supporters of regulation noted that the court did not offer an opinion on whether the agency had the authority to curtail greenhouse gases if it wanted to, a central issue in the dispute.
Moreover, California officials pointed out that the federal decision did not prevent states from adopting their own measures to combat global warming -- a step many states around the country had begun to take.
"This administration is a lost cause," said Sierra Club lawyer David Bookbinder, who helped argue the case on behalf of environmental groups. "But as long as we can preserve California's authority, that's all we care about right now."
California has passed a groundbreaking law that requires auto makers to reduce greenhouse gas emissions from cars and trucks about 30% by 2016. It is being challenged in federal court by most domestic and foreign car companies.
"Today's decision reinforces the critical importance of states retaining their statutory authority under the Clean Air Act to adopt more stringent vehicle emissions standards, including for greenhouse gases, especially where the federal government is unable or unwilling to act," said Bill Becker, executive director of the Assn. of Local Air Pollution Control Officials in Washington.
The International Center for Technology Assessment initially petitioned the agency to regulate carbon dioxide, methane and other greenhouse gases in 1999. The request came a year after a former EPA general counsel wrote in a memo to President Clinton's EPA administrator, Carol Browner, that greenhouse gases might qualify as pollutants under the Clean Air Act.
The agency reversed its position after Bush took office, and rejected the petition in 2003. The decision came after agency General Counsel Robert Fabricant stated in a memo that agency lawyers had revisited the issue and concluded that Congress never intended to give the EPA the power to address climate change.
In Friday's ruling, two of the three circuit judges on the panel, A. Raymond Randolph and David B. Sentelle, concluded that agency officials had correctly decided not to regulate carbon dioxide based on their interpretation of the evidence at the time, asserting that the link between industrial emissions of greenhouse gases and global warming had not been unequivocally proven.
"In addition to the scientific uncertainty about the causal effects of greenhouse gases on the future climate of the Earth, the administrator relied upon many 'policy' considerations that, in his judgment, warranted regulatory forbearance at the time," the judges wrote.
In a dissenting opinion, David S. Tatel wrote that the agency should not have rejected the petition, arguing that greenhouse gases appeared to fit the criteria of pollutants under the Clean Air Act.
"Although this case comes to us in the context of a highly controversial question -- global warming -- it actually presents a quite traditional legal issue: has the Environmental Protection Agency complied with the Clean Air Act?" Tatel wrote.
