President Said to Be Planning to Use Executive Authority on Carbon Rule

WASHINGTON — President Obama will use his executive authority to cut carbon emissions from the nation’s coal-fired power plants by up to 20 percent, according to people familiar with his plans, which will spur the creation of a state cap-and-trade program forcing industry to pay for the carbon pollution it creates.

Mr. Obama will unveil his plans in a new regulation, written by the Environmental Protection Agency, at the White House on Monday. It would be the strongest action ever taken by an American president to tackle climate change and could become one of the defining elements of Mr. Obama’s legacy.

Cutting carbon emissions by 20 percent — a substantial amount — would be the most important step in the administration’s pledged goal to reduce pollution over the next six years and could eventually shut down hundreds of coal-fired power plants across the country. The regulation would have far more impact on the environment than the Keystone pipeline, which many administration officials consider a political sideshow, and is certain to be met with opposition from Republicans who say that Mr. Obama will be using his executive authority as a back door to force through an inflammatory cap-and-trade policy he could not get through Congress.

People familiar with the rule say that it will set a national limit on carbon pollution from coal plants, but that it will allow each state to come up with its own plan to cut emissions based on a menu of options that include adding wind and solar power, energy-efficiency technology and creating or joining state cap-and-trade programs. Cap-and-trade programs are effectively carbon taxes that place a limit on carbon pollution and create markets for buying and selling government-issued pollution permits.

Coal plants are the nation’s largest source of the greenhouse gases that scientists say are the chief cause of global warming.

In his first term Mr. Obama tried to push a cap-and-trade bill through Congress, but it died in the Senate in 2010. Republicans, Tea Party groups and the coal industry attacked Democrats who supported it, criticizing the legislation as a “cap and tax” that would raise energy prices. Cap and trade is now seen as political poison in Washington. But Republicans said that the new rule has created a back door for Mr. Obama to force through a politically inflammatory policy by reviving it in the states. “This E.P.A. regulation will breathe life into state-level cap-and-trade programs,” said Peter Shattuck, director of market initiatives at ENE, a Boston-based climate policy advocacy and research organization.

Many states are already researching how to join or replicate the nation’s two existing state-level cap-and-trade plans, both of which bear the signatures of prominent Republicans: Mitt Romney, the 2012 presidential nominee and former Massachusetts governor, and Arnold Schwarzenegger, the former California governor.

As governor of Massachusetts, Mr. Romney was a key architect of a cap-and-trade program in nine northeastern states, the Regional Greenhouse Gas Initiative. He worked closely at the time with a top Massachusetts environmental official, Gina McCarthy, who today is immersed in the Obama administration’s new rule as the administrator of the E.P.A. Mr. Romney later disavowed the regional cap-and-trade program.

Despite the fierce Republican opposition, a number of officials at electric utilities say they welcome cap-and-trade programs because they offer an affordable and flexible way to comply with the new regulation. “By trading on carbon credits, we’ll be able to achieve significantly more cuts at a lower cost,” said Anthony J. Alexander, president and chief executive of FirstEnergy, an electric utility with power plants in Ohio, West Virginia, Pennsylvania, Maryland and New Jersey. “The broader the options, the better off we’re going to be.”