The proposal targets sulfur dioxide, nitrogen oxides and mercury emissions from power plants. It sets up a pollution trading system that would force companies that do not meet pollution reduction goals to buy rights to pollute from other companies that exceed their goals, similar to buying and trading commodities. Pollution trading produced substantial reductions in sulfur dioxide emissions on a smaller scale when applied to the problem of acid rain.

The new pollution trading proposal would require a change in the 1990 Clean Air Act and approval from Congress.

Bush also announced a plan to deal with global warming, setting voluntary targets for cutting carbon dioxide and other so-called greenhouse gases that are tied to economic growth. Instead of cutting emissions outright, the plan would reduce their rate of growth. "Greenhouse-gas intensity," the ratio of emissions to the size of the economy, would be cut by 18 percent over ten years.