The range of other policy announcements from the speech at Georgetown University in Washington, D.C., aren't yet clear. Bloomberg cited an anonymous source familiar with White House plans.
Although the administration has already proposed limits on greenhouse gas emissions for new plants, this would be the first time it would restrict existing plants, which are thought to emit 40 percent of annual carbon emissions in the U.S., according to the Energy Information Administration.
Environmentalists and the energy industry will be closely watching the president's speech.
Bill McKibben, a leading environmental activist who founded anticlimate change group 350.org, said that after the hottest year in U.S. history, the speech is very timely.
“The world desperately needs climate leadership, and today Barack Obama showed he might turn out to be the guy who provided it,” McKibben said in a statement.
A carbon emissions cap will likely be opposed by coal producers and utilities that use coal rather than natural gas or other sources of energy. Some utilities have argued that regulations limiting coal use will raise energy costs for consumers.
Heather Zichal, Obama’s top energy adviser, said last week that the administration’s plans will include measures that don’t require Congressional approval, such as energy-efficiency standards for appliances and clean-energy rules for public lands.
Even if Congress doesn't take action, top White House spokesman Jay Carney said Obama is prepared to act through executive orders.
In Obama's first term, an administration push to price carbon through legislation failed in the Senate.