Reacting to a lawsuit from 29 states, as well as the energy industry, justices blocked the Environmental Protection Agency's Clean Power Plan from going forward while the rule is challenged in court.
The decision means that Obama now has two major legacy actions -- immigration and climate change -- stuck in the court system with the specter of a Republican taking over the White House in January.
Obama has pushed action on global warming as a key part of his legacy, an effort that reached its peak with the deal at the U.N.-led talks on climate change in Paris in December.
Proponents of the plan did not expect the high court to step in at this juncture , particularly since the United States Court of Appeals for the D.C. Circuit will hold oral arguments in June and neither the industry nor the states would have had to come into compliance for at least two years.. That a divided Supreme Court stepped in at this juncture to block the program after a lower court declined to do so sends a signal that at least five justices are concerned with some aspect of the plan.
"This is an exceedingly uncommon situation for the court to step in, and it jeopardizes the plan all together from going into affect while President Obama remains in office," said Bruce Huber, professor of law at Notre Dame Law school. "The Supreme Court's order signals serious misgivings among some of the justices about the legality of the plan."
The four liberal justices on the court -- Ruth Bader Ginsburg, Stephen Breyer, Sonia Sotomayor and Elana Kagan -- dissented from the order.
White House unhappy with ruling
In a statement, White House press secretary Josh Earnest said "we disagree" with the court's action.
"The Clean Power Plan is based on a strong legal and technical foundation, gives states the time and flexibility they need to develop tailored, cost-effective plans to reduce their emissions, and will deliver better air quality, improved public health, clean energy investment and jobs across the country, and major progress in our efforts to confront the risks posed by climate change," Earnest said. "We remain confident that we will prevail on the merits."
The EPA rule would require states
to meet specific carbon emission reduction standards based on their individual energy consumption. It also includes an incentive program for states to get a head start on meeting standards on early deployment of renewable energy.
"Power plants are the single biggest source of harmful carbon pollution that contributes to climate change," Obama said in a video
released last August. "Until now, there have been no federal limits to the amount of carbon pollution plants dump in the air."
Senior administration officials said Tuesday they were "surprised" by the high court's action. One official called the court's move "extraordinary and unprecedented," saying it's rare for the Supreme Court to grant a stay on a rule whose legality hasn't been reviewed by a lower court.
But officials nonetheless expressed confidence in the president's climate plan moving forward, even as it becomes exceedingly unlikely the litigation process is resolved by the time Obama leaves office.
They said individual states could still move forward with implementing plans to reduce carbon output, and added the court's decision was unlikely to affect the U.S. commitment to the international climate accord agreed to in Paris in December.
"We've always known that this rule was going to be litigated and that there were going to be opponents that were going to challenge the rule under any circumstances. And so I think the bottom line is that this decision is not one that we agree with, but it's a procedural decision and we'll have the opportunity to make the case on the merits," one official said.
As for the administration's strategy using executive actions to advance their agenda, the officials were forceful in defending the White House's methods.
"The President has undertaken to do bold things, but only within the parameters of his authority. And while that's certainly triggered a good deal of litigation, that litigation is going to play out, whether it's immigration, or health care, or anything else," one official said.
"Because he's confident in the advice he gets from the Department of Justice about the legality of his actions, he's going to keep doing what he thinks is appropriate to help the American people," the official continued. "And I don't think there's a single lawsuit, on any issue, that would deter him from doing anything he can to help the American people in whatever time is left in this administration."
Republicans celebrate court's decision
Congressional Republicans have fought the rules
, voting to block the EPA limits on the same day Obama spoke at the Paris talks. And the administration's actions on climate change have been regularly criticized on the campaign trail by Republican candidates.
House Speaker Paul Ryan called the rule "unlawful" in a statement Tuesday.
"This rule should be struck down permanently before coal country is destroyed completely, and American consumers are consigned to higher energy prices," Ryan said.
"Great news for Wyoming & American energy. Republicans will do what we can to keep this rule permanently blocked," Sen. John Barrasso, R-Wyoming, tweeted
Karen Harned, executive director of the National Federation of Independent Business Small Business Legal Center, celebrated the Supreme Court's action.
"What the court said today is that states cannot be forced to comply with a regulation that it may ultimately decide is unconstitutional. This is a temporary but important victory for small businesses, which were facing substantially higher energy costs."
David Doniger, director of the climate and clean air program at the Natural Resources Defense Council, said he is "confident the courts will ultimately uphold the Clean Power Plan on its merits. The electricity sector has embarked on an unstoppable shift from its high-pollution, dirty-fueled past to a safer, cleaner-powered future, and the stay cannot reverse that trend. Nor can it dampen the overwhelming public support for action on climate change and clean energy."
"If there was ever a Supreme Court decision that looked backwards instead of towards the future, this was it," said Jamie Henn of the environmental group 350.org.