The U.S. Environmental Protection Agency (EPA) is developing regulations to reduce carbon dioxide emissions from existing power plants. These rules will guide states as they develop their own regulations. This is relatively novel territory for EPA and it must settle several major policy issues, in coordination with states, as the regulatory process moves forward.

This policy brief explains EPA’s authority to regulate carbon dioxide from existing power plants, the roles of EPA and the states, and the major policy issues they face. The brief also discusses the types of measures regulated power plants may be allowed to take to comply with the applicable standard, including the potential role of tradable emission allowances.