The ruling came in one of the most important environmental cases to reach the Supreme Court in decades. It marked the first high court decision in a case involving global warming.

Greenhouse gases occur naturally and are also emitted by cars, trucks and factories into the atmosphere. They can trap heat close to the earth's surface like the glass walls of a greenhouse.

Such emissions have risen steeply over the past century and many scientists see a connection between this rise and an increase in global average temperatures and a related increase in extreme weather, wildfires, melting glaciers and other damage to the environment.

Justice John Paul Stevens, writing for the court majority, rejected the administration's argument that it lacked the power to regulate such emissions. He said the EPA's decision was "arbitrary, capricious or otherwise not in accordance with law."

In sending the case back for further proceedings, Stevens said the high court did not decide which policy the EPA must follow. "We hold only that EPA must ground its reasons for action or inaction in the statute," he wrote.

The Bush administration has consistently rejected capping greenhouse gas emissions as bad for business and US workers.