A federal appeals court on Friday rejected one of President Bush’s clean air policies, saying the government overstepped its authority in regulating certain types of emissions that could cause premature deaths and heart attacks.

The decision by the U.S. Court of Appeals for the District of Columbia Circuit dealt a setback for both critics and supporters of the Clean Air Interstate Rule.

The U.S. Environmental Protection Agency (EPA) instituted the rule in 2005 to cap sulfur dioxide and nitrogen oxide emissions from power plants. It also created a cap-and-trade program for companies to buy and sell emissions allowances.

The rule required 28 eastern states and the District of Columbia to reduce those emissions that cause smog and soot. The EPA said the rule would reduce the sulfur dioxide emissions across the states by over 70 percent and nitrogen oxide by more than 60 percent from the 2003 levels.

The agency estimated that the rule would lead to $85 billion to $100 billion in health benefits each year by 2015.

But North Carolina Attorney General Roy Cooper filed the lawsuit in 2005 after the EPA denied Cooper’s request to force older coal-fired power plants to reduce emissions. Several environmental groups, including the North Carolina chapter of the Sierra Club, supported Cooper in the legal challenge.

The EPA denied Cooper’s request, contending that the Clean Air Interstate Rule would eventually produce the results sought by Cooper.

When Cooper filed the suit to ask the court to close some loopholes in the rule, he said that the loopholes would allow more emissions from power plants in neighboring states to drift into North Carolina and pollute its air.

The court tossed out the rule on Friday, however, saying the Clean Air Act didn’t give the EPA the authority to set the rule.

The court decision to scratch the rule altogether came as a surprise, prompting a spokeswoman for Cooper to tell the AP that Cooper didn’t agree with the ruling.

Also Friday, the EPA Administrator Stephen Johnson said the agency has no authority to regulate greenhouse gases under the Clean Air Act.

Johnson released a lengthy document examining ways to regulate greenhouse gas emissions. The agency prepared the document after the U.S. Supreme Court ordered it to figure out how to tackle the emissions issues using the Clean Air Act.

But Johnson told reporters that the Clean Air Act is not the right tool for regulating greenhouse gas emissions. Congress should draft a legislation to address the issue instead, he said.

The EPA plans to seek public comments on the document, a process that will delay any action on regulating emissions until after the president takes office next year.