President Obama plans to announce on Monday that he will be using his pen to sign an executive order that would put in place strict regulations on energy producers and have a potentially crippling effect on the economy.
Drafted by the Environmental Protection Agency, the regulations would require coal-fired plants to reduce carbon emissions by up to 20% while also forcing the industry to pay for its emissions through a cap-and-trade system.
The move has the potential to shut down hundreds of coal-fired plants across the nation as well as send energy prices soaring as the cost of producing energy is driven up. People familiar with the regulations say that it will set a national limit on carbon emissions from coal-fired plants as well as allowing each state to come up with its own plan to reduce emissions based on several options such as adding wind turbines, solar power, and other energy efficient technologies or joining other state cap-and-trade programs that specifically tax carbon emissions.
Republicans say that the regulations would effectively be back-dooring Congress since a similar plan failed to pass in 2010.
According to the New York Times:
“Cap and trade was born in 1990 during the administration of President George Bush as a centerpiece of amendments to the 1970 Clean Air Act. Conceived as a business-friendly way to cut pollution without heavy-handed regulation, the idea was that the cap would ratchet down each year, allowing less pollution while market forces drive up the price of permits, creating an incentive for industries to invest in lower-polluting sources of energy. In 2006 in California, Mr. Schwarzenegger signed a pioneering state cap-and-trade law. As the Republican presidential nominee in 2008, Senator John McCain of Arizona pledged to put in effect a nationwide cap-and-trade law.”