New Carbon Regulations will Cut Coal Emissions by 20 Percent

The 'war on coal' continues as President Obama is set to cut greenhouse gas emissions

The Obama administration is gearing up to reveal a new rule that will allow states to use cap-and-trade systems to force the coal industry to pay for pollution it generates.

The President plans to bypass congress by using his executive authority to cut emissions from the nation’s coal-fired power plants by up to 20 percent. It will be the strongest action ever taken by an American president to combat climate changes.

The plan is expected to be unveiled at the White House on Monday.

The administration’s goal to reduce pollution over the next six years could eventually shut down hundreds of coal-fired power plants across the country. The 3,000 –page rule is expected to spark outrage, lawsuits and claim jobs.

"Carbon policy is going to impact our business, and we have to be prepared for that," said Robert C. Flexon, chief executive of Houston-based Dynegy. "It can be a threat or an opportunity. I'd rather make it an opportunity."

The new rule will set a national limit on carbon pollution from coal plants. States will be allowed to come up with its own plan to cut emissions based on a slew of options that include adding wind and solar power, energy-efficiency technology and creating or joining state cap-and-trade programs. Essentially carbon taxes, these cap-and-trade programs place a limit on carbon pollution and create markets for buying and selling government-issued pollution permits.

EPA is expected to finalize the directive by mid-2015 and present a plan to implement the rule by end of the year.   

In the past, the EPA has ordered individual power plants to cut specific pollutants by set amounts. That approach, however, doesn’t work for carbon dioxide. The technology that would be used to allow coal plants to cut those emissions is not currently cost-effective.

According to environmental group Sierra Club, 165 of the U.S.’s 600 coal plants are already set to be closed in the next few years as they cannot comply with toxic metal regulations.  

Coal plants are the nation’s largest source of greenhouse emissions and scientists believe it’s the main cause of global warming.