Obama to unveil tougher climate change plan

By Valerie Volcovici

By Valerie Volcovici

WASHINGTON (Reuters) - President Barack Obama will unveil on Monday the final version of his plan to tackle greenhouse gases from coal-fired power plants, kicking off what is expected to be a tumultuous legal battle between federal environmental regulators and the coal industry.

The revised Clean Power Plan will seek to slash carbon emissions from the power sector by 32 percent by 2030 from 2005 levels, a 9 percent increase over a previous proposal, a White House fact sheet said on Sunday.

The regulation is aimed at ushering in a sweeping transformation of the U.S. electricity sector, encouraging an aggressive shift toward more renewable energy away from coal-fired electricity.

Industry groups and some lawmakers from states that have relied on coal-based energy have vowed to challenge it in the courts and through Congressional maneuvers, accusing the administration of a regulatory assault that will drive up energy prices.

The White House took a defiant stance, saying the release of the plan was "the starting gun for an all-out climate push" by the president and his cabinet.

"My administration will release the final version of America's Clean Power Plan, the biggest, most important step we have ever taken to combat climate change," Obama said in a video posted by the White House.

He said there have been no federal limits to date on carbon pollution from power plants, the biggest source of U.S. greenhouse gas emissions.

If the plan is implemented, coal's share of electric generation in the U.S. will fall to 27 percent by 2030, slightly less than the original proposal which estimated it would account for 30 percent, Environmental Protection Agency chief Gina McCarthy told reporters Sunday.

Coal accounted for 39 percent of electricity in 2014, according to the Department of Energy.

Natural gas' 30 percent share of U.S. electricity generation would remain largely the same in 2030 while renewable energy would account for 28 percent, up from the 22 percent initially envisioned in the proposed rule.

The final rule avoids what the White House called an "early rush to gas" away from coal and encouraged earlier adoption by states of renewable power.

The plan will be central to the United States' contribution to a United Nations agreement to tackle climate change. The Obama administration has vowed to play a leadership role in global climate talks in Paris later this year.

Brian Deese, a senior climate change advisor to Obama, told reporters the tougher climate rule will "enhance" the ability of the United States to meet the target it pledged ahead of the Paris talks to slash greenhouse gas emissions economy-wide by 26 to 28 percent below 2005 levels by 2025 by putting the country on a "deeper decarbonization" pathway from 2020.

Each state will be required to submit a plan to the EPA next year, spelling out how it will meet an emission-cutting goal assigned to it.

The EPA's McCarthy said the revised rule will change the targets that were assigned to each state next year that resulted in disparities between each state's target being narrower, she said. For example, Washington state had to reduce the carbon intensity of its electricity by 72 percent while Kentucky's target was 18 percent.

The EPA will unveil the new state targets on Monday.

Senate Majority Leader Mitch McConnell has called on governors to ignore the rule. So far, five governors said they will not comply and more than a dozen states have signaled they will sue the agency.

Republican presidential candidate Jeb Bush said Sunday the rule "will throw countless people out of work, and increases everyone’s energy prices."

Democratic rival Hillary Clinton, who is trying to use the climate issue as a wedge against Republican candidates with her own Clean Energy Challenge to boost the use of renewable power sources such as solar energy, praised Obama's plan and said "I'd defend it."


The revised rule contains two new measures the administration said will "cut energy bills for low-income families" and drive down renewable energy technology costs, pre-empting arguments by opponents that the plan will be too costly.

It will create a Clean Energy Incentive Program to reward states that take early action to deploy renewable energy projects before the regulation takes effect in 2022.

It will reward states that invest in energy-efficiency projects in low-income communities in 2020 and 2021.

States will be able to get credit for nuclear energy plants that are under construction, as well as for upgrading plants and preserving those at risk of early retirement, the EPA said. Nuclear currently provides around 20 percent of the U.S. energy mix.

The EPA will also create flexibility by allowing states to develop plans to “opt in” to an emission credit trading market with other states taking similar measures, without requiring interstate agreements, a mechanism McCarthy said utilities are used for other air pollutants like sulfur dioxide.

In response to comments by utilities and some states, the EPA created a feature called a "reliability safety valve" in the final rule, which would allow states to get a temporary waiver from the agency on a case-by-case basis if they feel the closure of coal plants will disrupt the steady delivery of electricity.

"I would never accept a scenario where affordability or reliability came into question," McCarthy said.

(Additional reporting by Timothy Gardner; Editing by Catherine Evans, Digby Lidstone and Andrew Hay)