Christie announced in 2011 that the state would withdraw from the Regional Greenhouse Gas Initiative (RGGI), a consortium of nine Mid-Atlantic and Northeastern states seeking to limit carbon pollution by power plants.
After the governor's announcement, the Department of Environmental Protection posted a notice on its website that said power plants would no longer have to abide by regulations adopted in 2008 limiting carbon emissions.
Environmental groups then sued the department, arguing that it had not taken proper steps to repeal the regulations.
In its ruling Tuesday, the appellate court said the state needed to follow a process outlined by state law to formally repeal the regulations, or specify that they apply only if the state is part of a program like RGGI.
"You cannot govern by fiat - or website," said Doug O'Malley, director of Environment New Jersey, which sued the state over the regulations. "You have to go through a public process."
U.S. Sen. Robert Menendez (D., N.J.) and state Senate President Stephen Sweeney (D., Gloucester) praised the decision for letting New Jerseyans provide input on the carbon regulations, which the Democrats said they support.
While the state could still repeal the regulations, residents "will get their first chance to officially weigh in on the governor's decision to pull out of" RGGI, O'Malley said. "We expect there to be a strong public outpouring calling for New Jersey to stay in this program."
Leland Moore, a spokesman for the Attorney General's Office, said the decision "is under review in consultation with the client [DEP]." He declined to comment further.
In announcing his intention to withdraw the state from RGGI, Christie criticized the cap-and-trade program as ineffective.
The program, which requires that power plants buy allowances to release carbon, provides financial incentive for curbing emissions, proponents say. The money paid by the plants is then invested in clean-energy projects.
Christie - who has said human activity does play a role in climate change - said the program did not do enough to influence the behavior of power plants.
"The whole system is not working as it was intended to work," Christie said in 2011. "It's a failure."
Environmental groups say RGGI has succeeded in reducing pollution. A statement released Tuesday by Environment New Jersey and the Natural Resources Defense Council - which also sued the state - credited the program with contributing to a 30 percent reduction in "regional climate-change pollution" since 2009.