President Barack Obama will unveil on Monday the final version of his plan to tackle greenhouse gases from coal-fired power plants as he aims to cement his legacy on climate change, a senior administration official said.

The revised Clean Power Plan will seek to slash carbon emissions from the power sector 32 per cent from 2005 levels in 2030, a 9 per cent increase over a previous proposal.

The regulation will usher in a sweeping transformation of the US 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 said they will 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 was defiant, and said 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 Sunday at midnight.

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

The plan will be central to the US’s contribution to a United Nations agreement to tackle climate change, in which the Obama administration has vowed to play a leadership role.

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

Five governors who have opposed the rule have already said they will not comply.

"CUTTING BILLS"

The final version will accelerate the deployment of renewable energy based on updated projections that the share of renewable energy generation capacity in 2030 will be higher at 28 per cent, compared to 22 per cent in last June's version.

The Obama administration also changed its projection about the share of natural gas in the US power mix in 2020, avoiding what it said would be an “early rush to gas” away from coal.

“Instead, the rule drives early reductions from renewable energy and energy efficiency, which will drive a more aggressive transformation in the domestic energy industry,” according to a senior administration official.

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 plan will be too costly.

It will create a Clean Energy Incentive Programme to reward states that take early action to deploy renewable energy project before the regulation kicks in 2022.

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