Obama Said to Propose Deep Cuts to Power-Plant Emissions

President Barack Obama will propose cutting greenhouse-gas emissions from the nation’s power plants by an average of 30 percent from 2005 levels by 2030, according to people briefed on the plans.

The proposal, scheduled to be unveiled by the U.S. Environmental Protection Agency tomorrow morning, represents one of the boldest steps the U.S. has taken to fight global warming -- and a political gamble.

Obama signaled both the importance of the rule to his legacy on environmental protection and the bruising fight ahead by joining a conference call today with congressional Democrats, EPA Administrator Gina McCarthy and White House counselor John Podesta to rally support.

Obama dismissed complaints that the rule will hurt the economy by driving up electricity prices, and told the Democrats listening: “Please go on offense” to promote the plan’s benefits, said two people who were on the call, including Representative Gerry Connolly, a Virginia Democrat.

Connolly and another person on the call said the president suggested that rather than having an adverse effect on the economy -- as critics say -- his rule to limit carbon pollution will boost the economy by $43 billion to $74 billion.

Efficiency Gains

McCarthy told the lawmakers that the rule will only lead to minimal cost increases for consumers in some areas and families could end up saving money due to efficiency gains, one participant on the call said. She also stressed that states will be able to design their own approaches to meet the targets, the source said.

The proposed regulation will permit states to achieve the reductions in climate-warming pollutants by promoting renewable energy, encouraging greater use of natural gas, embracing energy efficiency technologies or joining carbon trading markets.

The 30 percent reduction represents an average. Individual states may be directed to cut carbon emissions at levels that are greater or less than that overall figure.

‘The president’s plan would destroy jobs and raise costs for families across America, and Congress must listen to these families -- even though the president won’t,’’ Senate Minority Leader Mitch McConnell, a Kentucky Republican, said in a statement in which he vowed to introduce legislation to block the emissions rules.

Obama Legacy

The proposal may be Obama’s last best chance at strengthening his position with environmentalists who were disappointed in his failure in his first term to create a cap-and-trade system for limiting carbon emissions.

It will also give him evidence of America leading by example as he tries to persuade other nations to cut back on their carbon emissions.

“President Obama is right to take decisive action to combat this clear and present danger,” Frances Beinecke, president of the Natural Resources Defense Council, said by e-mail. “The proposed standards will limit -- for the first time in U.S. history -- the unrestricted pollution of our atmosphere by carbon dioxide.”

The proposed rules are among policies “designed to drive out low-cost electricity and replace it with higher-cost, more expensive and less reliable electricity,” Hal Quinn, chief executive officer of the National Mining Association, said today on ABC’s “This Week” program.

Plant Efficiency

The EPA is counting on coal plants being operated more efficiently and states shifting to natural gas from coal to get modest cuts in the next four or five years, the people said. Each state will have a target based on its emissions, and in the next decade the overall electric grid will need to become more efficient and use renewable generation to achieve the reductions, they said.

Some industry observers have said the approach favored by the administration will leave the rule open to legal challenges under the Clean Air Act because it relies on an interpretation of the law that counts emissions reductions that occur outside power plants -- through such things as efficiency measures, greater use of renewable energy and even joining carbon-trading programs. Past regulations have sought to cut pollutants as measured at the smokestack.

Republicans have signaled they intend to make the rule an issue in the House and in campaigns in states where the coal industry is a major employer. Some Democrats have voiced opposition to a plan they worry will hurt them with voters.

The regulations being announced tomorrow will apply to existing power producers. Separate regulations governing new plants have already been proposed.

Before it's here, it's on the Bloomberg Terminal.