There was a surprising development in the United States on Monday as the Supreme Court – the country’s highest – rebuked the Bush administration, ruling that carbon dioxide and other greenhouse gases emitted by vehicles be classified as pollutants under the Federal Clean Air Act, making them subject to regulation by the national Environmental Protection Agency (EPA).

In a 5-4 decision, the justices sided with 12 states and environmental groups that sought to have the EPA regulate greenhouse gases, overturning the agency’s 2003 policy, which did not include the global warming gases in the Clean Air Act, The Associated Press (AP) reported.

The news agency (and numerous other agencies, newspapers and television news commentators reporting the decision last night) said that, surprisingly, the decision is not expected to negatively affect the US motor industry, at least in the near term, because it does not require the EPA or Congress actually to take any defined action.

According to AP, the justices’ written decision said only that the EPA has the authority to regulate greenhouse gases, including carbon dioxide, as pollutants.

With two years left in the Bush administration, the EPA is not likely to issue new regulations surrounding vehicle emissions, the news agency added.

“This decision is not going to lead to some immediate imposition of tailpipe standards,” Kevin Healy,” a partner with the law firm Bryan Cave and co-chairman of the New York State Bar Association’s climate change group, told the Associated Press.

AP noted that the US automakers seemed hardly rattled by the ruling – in share trading, the stock prices for the Big Three US automakers –General Motors, , Ford and DaimlerChrysler – all closed higher last night than their opening, underscoring the scant effect the court’s decision has on the industry.

The Supreme Court’s ruling will have three major effects on a broader scale, industry experts told AP – the key effect is a blow against the auto industry’s bid to keep states from limiting tailpipe emissions.

In December 2004, the Alliance of Automobile Manufacturers, representing the Detroit Big Three and other automakers including Toyota and Mazda, sued the state of California for trying to regulate tailpipe emissions, AP said. The motor industry said at the time that only the National Highway Traffic Safety Administration has the right to set fuel economy standards, but environmental groups said that regulating emissions and setting standards were not the same thing.

Joan Claybrook, president of the watchdog group Public Citizen, told AP that the states, however, have the right to set higher emissions standards than the federal government.

“What this does is, it moots that case by the auto manufacturers, and it allows the states to set higher standards,” she told the Associated Press.

The state of California (where governor Arnold Schwarzenegger has converted two of his three Hummers to run on alternative fuels, NBC News noted last night), last September sued major automakers, saying that greenhouse gases that cars and trucks emit are a “public nuisance”, the AP report added.

Separately, the Los Angeles Times (LAT) said the supreme court’s ruling had knocked down a legal barrier that kept California and other states from requiring reduced carbon emissions by new vehicles starting in 2009.

Schwarzenegger praised the decision and said he was “very encouraged”, according to the paper.

The LAT said, under the Clean Air Act, California won the right to adopt its own regulations limiting emissions by new vehicles, but only if the EPA issued a waiver saying the state’s rules complied with the law. No waiver has been issued, the paper noted.

Schwarzenegger told the LAT he expected the EPA “to move quickly now in granting our request for a waiver, which will allow California and [the] other states that have adopted our standards to set tougher vehicle emissions levels.”

The paper also referred to the case where motor industry lawyers sued the states in federal court in Fresno, arguing that California’s emissions rules conflicted with the Clean Air Act. The case was put on hold, awaiting the Supreme Court decision issued on Monday, the LAT added.

“We think this is the end of the automakers’ case,” David Bookbinder, a lawyer for the pro-environment Sierra Club told the paper.

Healy told AP that the Supreme Court’s ruling is likely to benefit the state, giving it the right to take a case to court.

In response to the court’s decision, Dave McCurdy, chief executive of the Alliance of Automobile Manufacturers, told the Associated Press that his organisation “believes that there needs to be a national, federal, economy-wide approach to addressing greenhouse gases. This decision says that the US Environmental Protection Agency will be part of this process.”

AP said the decision would also likely push automakers into making more fuel-efficient vehicles. It noted that leaders of the Detroit Big Three last week met with Bush to discuss clean fuel alternatives as the president pushes his agenda to reduce petrol consumption by 20% by 2017.

Very little of the discussion was devoted to improving fuel economy standards, however, AP said, noting that the only way to reduce carbon emissions is to reduce vehicles’ fuel consumption, meaning more fuel-efficient vehicles will have to be brought to market.

Finally, the Associated Press said, the decision puts heat on Congress to develop some sort of national climate change policy.

In response to the court’s decision, the chairmen of the energy committees in both the House of Representatives and the Senate urged greater action on the US government’s part to address climate change, AP added.

”The president no longer has a legal argument that the law prevents him from beginning to address the problem,” Jeff Bingaman, a Democrat senator representing New Mexico, told the news agency.

He has called on Bush to enact a mandatory policy to reduce greenhouse gas emissions, the Associated Press added.