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There’s going to be plenty of hullabaloo this February when the Supreme Court hears a case on a greenhouse-gas permitting program for industrial facilities. But that’s merely a prelude to a much bigger, far more controversial crackdown that could come this summer—one with substantial implications for the health of humans and wildlife alike. By June the Obama administration plans to put forward rules to limit carbon dioxide emissions from the nation’s 1,600 existing coal- and gas-fired plants. That’s a huge step: They’re responsible for roughly 40 percent of America’s carbon dioxide emissions.

The Supreme Court has already ruled the EPA must regulate carbon dioxide and other greenhouse gases if it finds they endanger public health (most scientists agree they do). Pumping them unchecked into the atmosphere will likely lead to more heat waves and drought. Sea levels will keep rising. Lyme disease and West Nile virus could continue spreading. Given what’s at stake, environmentalists are watching closely to see whether the EPA will tinker at the margins or throw its full force behind the rules. “Climate change is the single greatest threat to birds,” says Mike Daulton, ̽����ѡ’s vice president of government relations. “EPA’s regulation of existing power plants is the single most meaningful thing that can be done now to attack the problem.”

It’s a critical moment, environmentalists say, one that may not come up again—especially under another president. “If we’re going to make any meaningful progress on climate, it very much matters how strong these rules are,” agrees Mary Anne Hitt, director of the Sierra Club’s Beyond Coal campaign.

These rules may also be President Obama’s last chance to fulfill a key promise made in Copenhagen in 2009—to cut U.S. greenhouse-gas emissions 17 percent below 2005 levels by 2020. To date the EPA has tightened fuel-economy rules for vehicles, and set strict limits on carbon pollution from future power plants. Energy emissions have actually fallen nearly 12 percent since 2005, due largely to the economic downturn. But as the economy has rebounded, emissions are rising again. A modest tweak to the existing fleet won’t get us to the 2020 goal.

That’s why everyone is watching the EPA so closely. It could go small and merely ask plants to adopt slightly more efficient technology. Brian Potts, an environmental law specialist at Foley & Lardner, thinks the agency will nudge power plant emissions down just 5 percent by 2020 at the most.

Or it could go all out. There’s a feeling in the environmental community that the time for timidity is long gone. “We think the agency should push for the biggest reductions possible at reasonable cost,” says David Doniger, policy director of the climate and clean air program for the Natural Resources Defense Council. He argues that the EPA has far more flexibility than many observers assume, since it will be working under an untested portion of the Clean Air Act (Section 111(d)). “If their interpretation is reasonable, then it will be upheld.”

The NRDC is pushing a plan that it says will hold up in court and could cut U.S. power plant emissions 26 percent by 2020. The EPA would set overall emissions limits for each state, allowing utilities to meet those goals through various measures, from adopting more efficient technologies to switching over to cleaner sources like solar and wind.

Another option is a carbon tax, says Adele Morris, policy director of the Brookings Institution’s Climate and Energy Economics Project. Under her scheme, the EPA would offer states multiple options to meet standards, including excise taxes on the carbon content of power plant fuels. This would shift the focus from performance targets—like cutting emissions relative to a historic level—to an economic bottom line, which she says would help the rest of the world realize that the United States is serious about climate change. “These regulations are going to be the centerpiece of [Obama’s] whole agenda,” says Morris. “We’re supposed to be negotiating a new climate treaty in 2015, and this could be the highlight of what the U.S. has to offer.”

Whatever the plan, there’s bound to be a backlash. The EPA has come under fire from industry groups and various states for its existing carbon regulations. So far it’s fended off these challenges. But if it gets too aggressive or creative, it runs the risk of losing a future lawsuit. “Pretty much everything the EPA does entails some legal risk,” says Nathan Richardson, a legal scholar at Resources for the Future. “Some approaches are riskier than others.”

It’s a chance the EPA may have to take if it’s serious about combating climate change. Emissions have to peak by 2016 to avoid much of the biodiversity loss associated with rising temperatures, a recent study found. And the U.S. still must persuade China and the rest of the world to salvage the sputtering global climate talks. That doesn’t leave much time.

This story originally ran in the January-February 2014 issue as "Carbon Crackdown."