On Thursday, the Environmental Protection Agency (EPA) appeals panel overturned a permit for a proposed coal-fired power station in Utah.  The panel ruled that the EPA’s Denver office had inadequately supported its decision to issue a permit to the plant without considering its carbon dioxide emissions.

In October 2007, the Sierra Club and others filed a request to overturn the permit, which had been issued to the proposed coal-fired power station, because it did not require any controls on carbon dioxide pollution.

The key word in the previous sentence, and the basis for this entire case, is ‘pollution’.  The term pollution, according to a landmark ruling by the US Supreme Court in April 2007, can now be used to describe carbon dioxide, as a consequence of its ability to warm the climate.  This gave the EPA the ability to regulate carbon dioxide through the Clean Air Act, however the EPA, with the help of the Bush Administration, has been slow to act, and does not intend to regulate on the issue while President Bush is in the White House.

The Sierra Club’s David Bookbinder said that the decision will temporarily stop permits being handed out to any coal burning power plants, essentially putting the development of all coal-fired power stations on hold for the moment.

As the President-elect, it falls to Barack Obama to decide the future of carbon dioxide regulation in the US.  In an interview in October, Jason Grumet, a top Obama energy advisor who has been mentioned as a possible candidate for Secretary of Energy, said that Obama would regulate carbon dioxide under the Clean Air Act, “in the absence of congressional action” on climate change.

Yesterday, traders connected the dots and coal stocks plummeted by up to 12.5%.

By setting a precedent for many more lawsuits of a similar nature, Thursday’s ruling hints at the long-term consequences of the Supreme Court decision for carbon-intensive industries in the US.  This is “an issue of national scope that has implications far beyond this individual permitting process,” the EPA appeals panel stated.

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