According to Thomson Reuters Point Carbon, US President Barack Obama is expected to announce the guidelines of his biggest emissions reduction initiative today.

The initiative will aim to curb carbon dioxide emissions from existing coal and natural gas-fired power plants throughout the US.

The announcement is set to be part of President Obama’s Climate Action Plan and its aim is to combat global warming through executive powers, in absence of Congressional action in passing cap-and-trade legislation.

The guidelines for states on how to reduce carbon dioxide emissions, prepared by the US Environmental Protection Agency (EPA), are expected, in part, to provide the reductions necessary for the US to achieve President Obama’s goal of reducing greenhouse (GHG) emissions by 17% below 2005 levels by 2020.


The mechanisms to reduce emissions – whether they be industry-wide or specific to a generating unit, as well as the emissions rate, or the baseline for reductions – will define the stringency of the regulations, and will be the determining factor in whether significant reductions in emissions can be achieved by regulating power plants.

Analysts from Thomson Reuters Point Carbon suggest the regulations may be flexible, and involve an array of policies that allow ‘maximum elasticity’ for emission reductions in each state.

“The regulations will most likely be flexible – the kitchen sink of ways for coal- and gas-fire power plants to reduce emissions”, said Olga Chistyakova, Senior Analyst at Thomson Reuters Point Carbon. “We are likely to see a variety of policies that will allow maximum elasticity for each state to reduce emissions from its coal and gas-fired power plants, as long as it meets EPAs guidelines.”

“Everyone is waiting to see what the emissions reductions baseline will be, or whether it will be an emissions rate approach, as this will determine the stringency of the regulations and how effective they will be in helping to meet the 17% target. It will also determine how much legal opposition the EPA is going to encounter from coal-heavy states and industry in general.”