U.S. President Barack Obama is expected to announce a program that would cut emissions from his country's coal-fired power plants by 20 percent nationwide and would lead to a cap-and-trade program in every state to pay for the right to pollute.
The plan was written by the U.S. Environmental Protection Agency and will be announced June 2 at the White House.
The new rules will be imposed by the president's executive authority alone, not in legislation that would have to be passed by Congress, because it is sure to face fierce opposition from Republicans who control the House and have a strong presence in the Senate. The GOP has already accusing Obama of resorting to executive authority as a subterfuge merely to avoid democratic debate.
Coal plants are the nation's largest source of the greenhouse gases that scientists say are the chief cause of global climate change. Cutting carbon emissions by 20 percent would be the toughest action ever taken by an American president to combat pollution, and Obama is said to view the program as a chief accomplishment of his two terms in office.
A key element of the president's plan reportedly is to let every state develop its own plan to cut coal emissions. A state would have several options for achieving the reductions, including adopting efficient energy technology and adding alternatives, including wind and solar power.
One option also would be initiating a cap-and-trade program, which allows companies with high greenhouse gas emissions to buy emission allowances from companies with fewer emissions in an effort to reduce their combined impact on the environment.
Obama tried to win congressional approval of a cap-and-trade plan in 2010, but it never even came to a vote in the Senate. Democrats who supported such a program came under fierce attacks from mainstream Republicans and the party's more conservative wing, the Tea Party.
Despite opposition in Congress, some states already are looking at ways to adopt their own cap-and-trade programs. Two successful state level cap-and-trade programs already exist. Both are associated not with liberal Democrats but with senior figures in the Republican Party: Mitt Romney, who challenged Obama for the presidency in 2012, and Arnold Schwarzenegger, the former governor of California.
Romney disowned his program during his presidential campaign. But when he was governor of Massachusetts, he was closely aligned with a leading state environmental official, Gina McCarthy, who is now head of the Environmental Protection Agency. McCarthy said the state-level rules will give each state "flexibility to develop plans on how to achieve those reductions in a way that's economically beneficial to them."
Some industries that rely on coal and are most likely to be affected by the plan don't seem as opposed as Republicans.
"Carbon regulation creates challenges for us," says John Brekke, the vice president of Great River Energy, an electricity cooperative based in Maple Grove, MN. But he says Great River Energy has decided to comply with the program, not oppose it. It plans to increase the cost of the power it generates to offset the pollution it generates. He added, "... [G]iven that it's coming, we wanted to be involved in offering an idea in managing that regulation."
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Written by Andy Tully at Oilprice.com.