President Barack Obama and the Environmental Protection Agency have called for tougher rules on greenhouse gas emissions and a greater target for renewables. However, clean energy exchange traded funds continued their downward slide as cheap fossil fuels weigh on the industry’s outlook.

Since Monday when the government announced the new carbon emissions targets, the PowerShares WilderHill Clean Energy Portfolio (NYSEArca: PBW) and First Trust NASDAQ Clean Edge Green Energy Index Fund (NasdaqGS: QCLN), which focus on U.S. clean energy companies, fell 2.8% and 1.8%, respectively.

Meanwhile, the Guggenheim Solar ETF (NYSEArca: TAN) dropped 4.0% and Market Vectors Solar Energy ETF (NYSEArca: KWT) declined 4.8% since Monday’s open.

On Monday, President Obama announced a revised Clean Power Plan that will increase the required cuts in carbon emissions from the power sector to 32% from 2005 levels by 2030, up from the 30% requirement in the original draft, reports Everett Rosenfeld for CNBC.

“Right now our power plants are the source of about a third of America’s carbon pollution—that’s more pollution than our cars, our airplanes and our homes contribute combined,” the President said. “That pollution contributes to climate change, which degrades the air our kids breathe, but there have never been federal limits on the amount of carbon that power plants can dump into the air.”

The greater regulation on fossil-fuel power plants should be a boon for the alternative, clean energy industry. However, the continued weakness in green ETFs suggests that Wall Street believes poor fundamentals over the short-term currently outweigh the long-term benefits of the new proposal.

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