The decision gives the Environmental Protection Agency two choices. It could develop, implement and enforce rules to regulate carbon dioxide emissions as a pollutant under the Clean Air Act. Or, it can seek to demonstrate, using science (real science, not political science) why carbon emissions do not contribute to climate change or bad air quality.
This ruling should herald the beginning of a carbon-constrained U.S. economy. For a moment last Tuesday I thought President Bush might agree. When he said that "whatever we do must be in concert with what happens internationally," I thought the administration might adopt a position on carbon emissions that would bring us closer to the regulation efforts being made by the rest of the developed world.
Then the president continued, "Unless there is an accord with China, China will produce greenhouse gases that will offset anything we do in a brief period of time." True, China will outpace our emissions level, but there was a time when the United States led the world in environmental protection. I hope we are not following China when it comes to environmental policy-making.
Of course, the president is right that we must find a way to reduce our carbon emissions without cutting back on economic prosperity. However, environmental protection and economic prosperity are not mutually exclusive. Over the past 10 years, for example, United Technologies, on whose board I serve, has reduced its absolute energy use by 19 percent while its revenue has grown more than 80 percent.
For guidance on which to base a policy, we can look to the results from the last time the Clean Air Act was amended, in 1990. Those amendments required substantial reductions in the emissions of sulfur dioxide (SO2), the primary component of acid rain. There was broad agreement that acid rain was seriously damaging our environment. There was less unanimity about the method to be used to achieve the reduction in emissions - a market-based cap-and-trade system.
Controversial among environmentalists and businesses, the trading program had government-set standards for safe concentrations of SO2, a clear timetable for achievement and strict penalties for non-attainment. In a break from previous approaches, the government said it didn't care how businesses reached the goals, only that they do it on time.
In addition, if a company lowered its emissions below the required level, it could keep the difference for future development or sell the credits to others that hadn't met the standards. The government cared only that the air was cleaned to required levels. If the profit motive spurred private-sector actions, fine.
Before I left the EPA, we checked how effective that program had been. The results were startling. Not only had there been nearly universal compliance across all emitters, the levels of SO2 in the atmosphere were lower than the regulation had required, and the feat had been achieved in about half the time called for at much lower cost than anticipated.
This program was a success because there was a national standard set by the government, certainty on timelines and penalties, and flexibility in how the targets were achieved. While voluntary programs are good, they are not good enough, and we need national caps on greenhouse gases.
In January, the leaders of 10 of America's largest energy, manufacturing and financial services companies - including Duke Power, DuPont and Lehman Brothers - held a news conference with leaders of several environmental groups. They called for government-required action to reduce greenhouse gas emissions, using a market-based system similar to that employed in fighting acid rain. Their call has increasingly been echoed.
Back when he was governor of Texas, President Bush enacted mandatory caps on carbon emissions in his state. During the 2000 presidential campaign, he promised to regulate carbon emissions nationwide. Shortly after taking office, though, he backed away from that pledge. There were good domestic reasons at the time, but those reasons are no longer valid.
Neither the American people nor the rest of the world want this debate to be delayed until the 2008 elections. The temptation to preserve the issue will be great but must be resisted.
Over the past several years, calls for mandatory caps on carbon emissions - from environmentalists, scientists, business leaders, evangelical Christians - have grown. Now the Supreme Court has joined in. Delay is no longer an option. The president and Congress must act.
The writer was administrator of the Environmental Protection Agency from 2001 to 2003.