Bill will increase energy and fuel costs, restrict highway capacity improvements
 
The Senate Environment and Public Works Committee this week conducted three days of legislative hearings with over 50 witnesses providing testimony on S. 1733, the Clean Energy Jobs and American Power Act, a bill that would create a "cap and trade" regulatory program to reduce U.S. greenhouse gas (GHG) emissions to address global climate change concerns.  The bill aims to reduce U.S. GHG emissions by 20 percent below 2005 levels by 2020 and 83 percent below 2005 levels by 2050. 

Late last week, Senators John Kerry (D-Mass.) and Barbara Boxer (D-Calif.) released a 932-page revised "Chairman's Mark" to S. 1733.  Significant in the revisions are the specifications on the distribution of emission allowances under the bill.  Free emission allowances are highly prized by affected industries seeking to keep their costs lower under the cap and trade bill.  The revised bill proposes to distribute up to 75 percent of the total allowances for free, with the biggest chunk set aside to electric utilities to keep consumer electricity costs affordable.  The revised bill would also set-aside about 3 percent of auctioned allowance revenue for "clean" transportation projects.  Additional auction proceeds would be available for states to fund energy-efficient retrofits of existing buildings. 

Friday, the U.S. Environmental Protection Agency (EPA) estimated that the average household cost of S. 1733 would be about $100 per year.  In contrast, the Heritage Foundation has estimated that a family of four's average household expenses would increase by about $4,600 per year. 

The U.S. House of Representatives passed its comprehensive energy and climate change legislation, H.R. 2454, the American Clean Energy and Security Act, in June. Proponents of climate change legislation in the Senate are coordinating at least five committees with jurisdiction over the issue and have signaled their intent to bring a comprehensive bill to the Senate floor as soon as possible following the debate on health care legislation.  The Senate Energy and Natural Resources Committee approved its energy provisions in June.

AGC has been working with stakeholders in the real estate, design, and construction industry to communicate the industry's concerns with energy and cap and trade legislation.  AGC is largely concerned that cap and trade would increase the cost of construction and that its impact on the economy would reduce demand for construction services.  AGC has prepared a document Top Ten Things Contractors Need to Know about Climate Change that summarizes AGC's concerns with energy and climate change legislation. 

AGC and several transportation stakeholders sent a letter to Senate Environment and Public Works Committee Chair Boxer and Ranking Member Senator Jim Inhofe (R-Okla.) Wednesday outlining concerns with the transportation planning provisions in s. 1733 that would make planning for and building highway capacity projects more difficult.

AGC encourages members to express their concerns with the Senate climate change bill by contacting their senators using AGC's Legislative Action Center.

Senate Majority Leader Harry Reid (D-Nev.) and the Senate climate change bill's lead sponsor, Senator John Kerry (D-Mass.), are planning strategies for a comprehensive energy and climate change bill that would impose a Thanksgiving deadline for the remaining five committees to act.

The initial deadline for action set by Reid was late September, but so far only one of the six panels of jurisdiction, the Energy and Natural Resources Committee, has acted. The health care debate has taken longer than many thought, and is drawing the majority of resources and attention presently in the Senate. Senator Boxer (D-Calif.), chair of the Environment and Public Works Committee and co-sponsor of the Senate climate bill, is hoping to get multiple hearings on the Kerry-Boxer bill as well as a markup done shortly after the end of the month.

AGC opposed the House-passed version in June and encourages members to contact their senators in opposition to the bill by using the AGC Legislative Action Center.

Senators John Kerry (D-Mass.) and Barbara Boxer (D-Calif.) Wednesday introduced an 821-page bill (S. 1733) aimed at reducing U.S. greenhouse gas emissions through a cap and trade program, promoting energy independence, and transitioning to a clean energy economy.

Overall, the "Clean Energy Jobs and American Power Act" seeks to cut U.S. greenhouse gas emissions by 20 percent from 2005 levels by 2020 and 83 percent by 2050.  The Senate bill takes a more aggressive approach in the short-term than the House-passed bill (H.R. 2454), which set  its 2020 target at 17 percent below 2005 levels, and President Obama who called for a 14 percent cut. 

The Kerry-Boxer bill is silent on the allocation of emission allowances under a cap and trade program, but reserves at least 25 percent of the emissions allocations every year to be sold at auction, with the proceeds dedicated to the Treasury to keep the bill deficit neutral.  The House-passed bill allocates 85 percent of the emission credits to affected industries to mitigate the costs of cap and trade, leaving only 15 percent up for auction, with the proceeds directed towards low- and moderate-income families.

The Kerry-Boxer bill does not contain AGC-supported language included in the House-passed bill that would prevent the U.S. Environmental Protection Agency (EPA) from using the Clean Air Act to regulate greenhouse gas emissions.  Under the Act, if EPA moves to regulate greenhouse gases under nearly any section of the Act, it would trigger requirements under other provisions of the law that would impact construction, ranging from costly and time-consuming pre-construction permits for building construction and renovation to hurdles for transportation projects.

The bill also includes new metropolitan and state-wide transportation planning requirements that would force states and Metropolitan Planning Organizations to address transportation-related greenhouse gases by including emission reduction targets and strategies to meet those targets in their transportation plans.  AGC has concerns with similar provisions in the House-passed bill that could make approvals for highway capacity projects-despite their benefits to congestion and, thus, emissions-more difficult to obtain. 

The Senate Environment and Public Works Committee is expected to conduct hearings on the Kerry-Boxer bill in October, with consideration of the measure later in the month.  Five other Senate committees have jurisdiction over aspects of the legislation, including the Energy Committee, which approved an energy bill (S. 1462) in mid-July.  It is uncertain whether there are enough votes in the Senate to pass legislation that would create a cap and trade program to regulate U.S. greenhouse gas emissions. 

AGC is working with committees of jurisdiction to address concerns related to provisions in the bill that would impact the construction industry.

The fourth and final installment of AGC's summary of the American Clean Energy and Security Act of 2009 (H.R. 2454) explains the major provisions of Title IV (Transitioning to a Clean Energy Economy) of interest to the construction industry. 

Subtitle A - Ensuring Real Reductions in Industrial Emissions

The purpose of this section of the bill is to safeguard the competitiveness of U.S. manufacturing industries against foreign companies not subject to comparable emissions regulation in two ways.  The first would compensate eligible domestic industrial sectors and subsectors for compliance costs incurred under the bill through an Emission Allowance Rebate Program.  The Environmental Protection Agency (EPA) would determine which facilities should be eligible for rebates through a rule based on an assessment of economic factors, including 1) the energy or greenhouse gas intensity in a sector and 2) the trade intensity in such sectors.  The second would require the president in 2020 to impose on importers a requirement to submit emissions allowances if there is no international agreement in place by 2018 that would ensure globally coordinated reduction of greenhouse gas emissions.  In the absence of an international agreement, the importer allowance requirement could be waived only if Congress passes a joint resolution approving the president's decision to do so.

Subtitle B - Green Jobs

This section would authorize additional funding for the Energy Efficiency and Renewable Energy Worker Training Program from $125 million to $150 million annually.  It would allow the Secretary of Education to award competitive grants to partnerships for the creation of curricula "focused on emerging careers and jobs in the fields of clean energy, renewable energy, energy efficiency, and climate change mitigation, and climate change adaptation."  The bill would establish a publicly-available, web-based information and resources clearinghouse to assist with career and technical education and job training in the renewable energy sector.  Finally, the bill would establish a Green Construction Careers demonstration project "to promote middle class careers and quality employment practices in the green construction sector among targeted workers and to advance efficiency and performance on construction projects…."

Subtitle C - Consumer Assistance

This section would provide an Energy Tax Credit and Energy Refund Program to compensate low-income households for any reduction in purchasing power due to price increases in energy and other goods and services resulting from the bill.

Subtitle E - Adapting to Climate Change

This section would create a National Climate Change Adaptation Program within the U.S. Global Change Research Program.  It would establish a National Climate Service within the National Oceanic and Atmospheric Administration (NOAA) to develop climate information, data, forecasts, and warnings, and to distribute information on climate impacts to state and local decision makers.  The bill would distribute emission allowances to states for implementation of adaptation projects, programs or measures contingent on the completion of an approved State Adaptation Plan.  Eligible projects include those designed to respond to extreme weather events such as flooding or hurricanes, changes in water availability, heat waves, sea level rise, ecosystem disruption and air pollution.

The bill states that it is the policy of the U.S. government to use all practicable means and measures to assist natural resources to adapt to climate change and establishes a Natural Resources climate Change Adaptation Panel, chaired by the White House Council on Environmental Quality, as a forum for interagency coordination on natural resources adaptation.  The Panel would be required to develop a Natural Resources Climate Change Adaptation Strategy, and federal agencies, as well as states, would be required to develop adaptation plans.  The bill would also establish a National Resources Climate Change Adaptation Fund for a variety of adaptation activities consistent with these plans.

What Can Members Do?

• Read the "AGC Looks at Climate Bill H.R. 2454" series, the introduction,Title I summary, Title II summary and Title III summary.
• Take action and write your Senator using the AGC Legislative Action Center. (AGC, its Chapters and members sent over 2,000 letters to Capitol Hill in response to H.R. 2454).
• Explore the potential threats and opportunities for the real estate and construction industries in climate legislation.  This is an evolving discussion draft document resulting from AGC's meetings and discussions with representatives of the real estate and construction industries and other related groups.
• Go to www.congress.gov and search under "H.R. 2454" to read the bill.
• Read information about greenhouse gas emissions associated with the construction industry.
• Learn low-cost ways contractors can reduce greenhouse gas emissions from equipment.

The U.S. Senate is drafting a comprehensive bill to address climate and energy, and it is basing that work on a related bill passed by the U.S. House of Representatives.  The third installment of AGC's summary of the American Clean Energy and Security Act of 2009 (H.R. 2454) highlights the major provisions of Title III (Reducing Global Warming Pollution), which identifies reduction goals and establishes a cap-and-trade program to reduce emissions from major sources.

Under a cap-and-trade program, covered entities are permitted to emit a certain amount of a pollutant during a defined period of time, such as one year.  The amount of pollutant the entity is allowed to emit - allowances — depends on the category of the source (e.g., electric utility industry).  Each category of sources is assigned a limited number of allowances (e.g., the electric utility industry category received 35 percent of the total allowances under H.R. 2454).  The total number of allowances economy-wide also is capped and decreases each year in order to meet the emissions reduction goal set by policymakers.  If a covered entity requires more than its permitted allowances, then it can seek to reduce emissions, offset the emissions and/or obtain the needed allowances from another covered entity.

Subtitle A - Reducing Global Warming Pollution

The bill amends the Clean Air Act to add a new title, Title VII: Global Warming Pollution Reduction Program. 

Reduction Goals and Targets

The bill identifies greenhouse gases of concern as those that induce global warming and "cause and contribute to injuries to persons in the United States."  The bill sets economy-wide gas reduction goals beginning in 2012, aiming to keep emissions below 97 percent of the quantity of emissions in 2005; and reduces the acceptable amounts in subsequent years: 2020 at 80 percent of 2005 levels; 2030 at 58 percent; and 2050 at 17 percent.  The bill further sets nearly identical reduction goals for specific capped sources of emissions.  Part A also establishes a review and recommendation process for Congress to assess the progress towards achieving the intended reductions.

Designation and Registration of Greenhouse Gases

The bill identifies seven categories of greenhouse gases and authorizes the administrator of the U.S. Environmental Protection Agency to designate additional gases as warranted.  The bill then establishes a registry of greenhouse gases for sources that meet specific criteria, such as stationary sources within specified categories (e.g., cement production) and those that emit 25,000 metric tons per year of carbon dioxide equivalent.  It also authorizes the administrator of the EPA to determine whether to include reporting requirements for vehicle fleets in the registry.  Among the logistical instructions to EPA in the bill, Congress requires that EPA provide for immediate dissemination of the reported data on the Internet.

Program Rules, Offsets and Deforestation Reduction

The bill establishes emission allowances for covered entities based on calendar year.  The number of allowances diminishes each year beginning at 4,627 (in millions) in 2012 to 1,035 in 2050 and stabilizes thereafter at the 2050 amount.  The bill further outlines details of the cap-and-trade program including prohibitions for exceeding allowances, methods of demonstrating compliance, the use of offsets and the trading and banking of allowances and offsets.  EPA will issue permits to administer the program.  The bill details the establishment of an offsets program including information on eligible offset projects, requirements, approval, review and audit procedures.  It outlines an international deforestation reduction program. 

Subtitle B - Disposition of Allowances

The bill lays out the allocation and auction of allowances with programs to benefit consumers, renewable energy and energy efficiency, trade-vulnerable industries, etc.

Subtitle C - Additional Greenhouse Gas Standards

The bill amends the Clean Air Act to add a new title, Title VIII: Additional Greenhouse Gas Standards.

Stationary Source Standards

The bill charges EPA to publish an inventory of the uncapped sources of greenhouse gas emissions that emit greater than 10,000 tons per year of carbon dioxide equivalent. It further directs EPA to promulgate standards of performance for those sources and corresponding regulations.  EPA may promulgate other standards (design, equipment, operational-based) in lieu of performance standards "without regard to any determination of feasibility…".

Exemptions from Other Programs

The bill exempts greenhouse gases from regulation under several programs in the Clean Air Act, such as criteria pollutants, hazardous air pollutants, new source review and title V permits.  The bill amends the Clean Air Act to include hydrofluorocarbons (HFCS) as class II substances and charges EPA with promulgating regulations to phase down the consumption of 20 listed HFCS that fall into class II, group II substances.

Black Carbon

The bill requires EPA to evaluate black carbon emissions and submit a report to Congress with — among other details — an inventory of major sources, technologies and strategies for reductions and recommendations of actions to reduce emissions.  The bill then requires EPA to promulgate regulations to reduce black carbon emissions or to propose a finding that existing regulations currently address these emissions adequately.

Other

The bill further addresses state programs, Davis-Bacon compliance, biological carbon sequestration as well as acid rain and mercury pollution reduction.

Subtitles D and E- Carbon Market Assurance and Additional Market Assurance

The bill amends the Federal Power Act to "promulgate regulations for the establishment, operation and oversight of markets for regulated allowances…".  It also sets forth numerous conditions on swapping derivatives and other transactions that involve energy commodities.

What Can You Do?

Read the "AGC Looks at Climate Bill H.R. 2454" series, the introduction,Title I summary and Title II summary.

Take action and write your Senator using the AGC Legislative Action Center. (AGC, its Chapters and members sent over 2,000 letters to Capitol Hill in response to H.R. 2454).

Explore the potential threats and opportunities for the real estate and construction industries in climate legislation.  This is an evolving discussion draft document resulting from AGC's meetings and discussions with representatives of the real estate and construction industries and other related groups.

Go to www.congress.gov and search under "H.R. 2454" to read the bill.

Read information about greenhouse gas emissions associated with the construction industry.

Learnlow-cost ways contractors can reduce greenhouse gas emissions from equipment.

The second installment of AGC's summary of the American Clean Energy and Security Act of 2009 (H.R. 2454) explains the major provisions of Title II (Energy Efficiency) of interest to the construction industry. 

Subtitle A-Building Energy Efficiency Programs

The bill would establish national percentage targets for energy use reductions in new residential and commercial buildings as compared to baseline codes (i.e., 2006 IECC and ASHRAE 90.1-2004).  The targets are as follows:

30 percent effective on the enactment of H.R. 2454;

50 percent effective in 2014 for residential buildings and 2015 for commercial buildings; and

5 percent additional effective 2017 for residential buildings and 2018 for commercial buildings, and every year after through 2029 and 2030, respectively.

The bill would direct the Energy Department to establish national energy efficiency building codes for residential and commercial buildings that meet these targets if the consensus code-setting organizations are unable to do so.  Following the establishment of such codes, states and localities would be required to ensure their codes meet or exceed these targets or the national codes would become the applicable energy efficiency codes in those jurisdictions.  If states are determined to be out of compliance, states would become ineligible to receive funding under the bill or allowance allocations.  Funds would be provided to states to support the implementation and enforcement of the updated codes.

The bill would establish a Building Retrofit Program for residential and nonresidential buildings.  The bill would direct EPA and the Energy Department to develop standards for national energy and environmental retrofitting policies to be implemented through programs collectively known as the Retrofit for Energy and Environmental Performance (REEP) program.  Under the program, emission allowances would be provided to states that have adopted the relevant program standards, including certification and training requirements for auditors, inspectors, raters and contractors, and post-retrofit inspection standards for buildings.  States could administer incentives of up to 50 percent of total retrofit costs to owners of residential and nonresidential buildings.

The bill would establish a Building Energy Performance Labeling Program under EPA to label new buildings for their energy performance characteristics.  The program is designed to increase public knowledge of building energy performance.

Subtitle B-Lighting and Appliance Energy Efficiency Programs

The bill would establish new lighting efficiency standards and other appliance standards that states may include in their building codes if certain requirements are met.

Subtitle C-Transportation Efficiency

The bill would require EPA to establish greenhouse gas emission standards for new heavy-duty vehicles and engines and for nonroad vehicles and engines.

The bill would require EPA and the Transportation Department to issue regulations that establish national goals for reductions in transportation-related greenhouse gas emissions and related models and methodologies.  The bill would also require states and metropolitan planning organizations (MPOs) to develop as part of their transportation planning processes reduction targets for surface transportation-related emissions and strategies to meet those targets.  States and MPOs must also demonstrate progress towards stabilizing and reducing transportation-related greenhouse gas emissions.  The targets and strategies must increase public transportation ridership and walking, biking, bicycling and other forms of nonmotorized transportation.

Subtitle D-Industrial Energy Efficiency Programs

The bill would require the Energy Department to establish standards for industrial energy efficiency that would be recognized by the American National Standards Institute (ANSI).  The bill would also establish a Clean Energy Manufacturing Revolving Loan Fund program under which the federal government would provide grants to states to establish revolving loan fund programs to support manufacturers in their efforts to reduce the energy intensity or greenhouse gas emissions of a U.S. manufacturing facility.  Funds would also be eligible to retool, expand or create manufacturing facilities that produce clean energy and energy efficient products.

Subtitle G-Miscellaneous

The bill would direct the EPA to conduct a study regarding the establishment of a national initiative "for measuring, reporting, publicly disclosing, and labeling products or materials sold in the United States for their carbon content…."  The bill would direct the EPA then to establish a voluntary national product carbon disclosure program.

Subtitle H-Green Resources for Energy Efficient Neighborhoods

The bill includes provisions related to residential energy efficiency, including minimum energy efficiency standards for HUD-owned and assisted housing; promotion of location- and energy-efficient mortgages and solar leasing; energy efficiency demonstration projects for HUD-assisted multi-family housing projects; and a residential energy efficiency block grant program that would distribute grants for single-family or multi-family housing projects that are designed to improve the energy-efficiency of the housing.

This first installment of AGC's summary of the American Clean Energy and Security Act of 2009 (H.R. 2454) explains the major provisions of Title I (Clean Energy).  There are 10 subtitles described below.

Subtitle A-Combined Efficiency and Renewable Electricity Standard

This subtitle would require retail electric suppliers-defined as utilities that sell more than 4 million megawatt hours (MWh) of electricity to customers for purposes other than resale-to meet a certain percentage of their load with electricity generated from renewable resources (e.g., wind, biomass, solar, geothermal, hydropower, nuclear) and electricity savings.  The combined renewable electricity and electricity savings requirement would begin at 6 percent in 2012 and gradually rise to 20 percent in 2020.  Up to one quarter of the 20 percent requirement automatically could be met with electricity savings.

Retail electric suppliers would be required to submit federal renewable electricity credits and electricity savings each year equal to the combined target for that year times the supplier's retail sales.  One renewable electricity credit would be given for each MWh of electricity produced from a renewable resource.  Retail electric suppliers would be able to submit, in lieu of a renewable electricity credits and demonstrated electricity savings, an alternative compliance payment equal to $25 per credit (2.5 cents per kilowatt hour).

Subtitle B-Carbon Capture and Sequestration

This subtitle is designed to address the key legal and regulatory barriers to the commercial-scaled deployment of carbon capture and sequestration (CCS).  The subtitle would establish a Carbon Capture and Sequestration Demonstration and Early Deployment Program and would authorize fossil-based electricity distribution utilities to hold a referendum on whether to establish a Carbon Storage Research Corporation, which, if approved, would be authorized to collect assessments totaling approximately $1 billion annually from retail customers of fossil-based electricity.  The funds would be used by the Corporation to fund the large-scale demonstration of CCS technologies in order to accelerate the commercial availability of the technologies.  The subtitle would also authorize an incentive program that allows the U.S. Environmental Protection Agency (EPA) to distribute allowances to support the commercial deployment of CCS in both electric power generation and industrial applications. 

Subtitle C-Clean Transportation

This subtitle would support the deployment of plug-in electric vehicle infrastructure and large-scale vehicle electrification.  There is also a provision that would allow the Energy Department to provide financial assistance for retooling existing factories for the manufacture of electric vehicles and batteries.  EPA would also be allowed to distribute allowances for these purposes.  This subtitle would also extend the authorization for state grants under the Diesel Emissions Reduction Act (DERA) through 2016.

Subtitle D-State Energy and Environment Development Accounts

This subtitle would create State Energy and Environment Development (SEED) Accounts for each state.  The accounts would serve as a state-level repository for managing and accounting for all emission allowances designated primarily for renewable energy and energy efficiency purposes, including funding to retrofit existing buildings; implementation of the provisions relating to building energy codes; and incentives for retooling, expansion or creation of manufacturing facilities that produce renewable energy.

Subtitle E-Smart Grid Advancement

This subtitle is designed to support the advancement of the Smart Grid.  A Smart Grid delivers electricity from suppliers to consumers using digital technology to save energy, reduce cost and increase reliability and transparency.  The subtitle contains a number of provisions that would: identify Smart Grid benefits and capabilities for consumer products and appliances; increase public information on Smart Grid technologies, practices, and benefits; and expand the energy efficient appliance rebate program to include rebates for efficient appliances with Smart Grid features and capabilities.  There would also be a requirement for a national program for load-serving electric utilities to reduce peak electric demand.

Subtitle F-Transmission Planning

This subtitle would establish a federal policy on electric grid planning that recognizes the need for new transmission capacity to deploy renewable energy as well as the potential for more efficient operation of the current grid through new technology, demand-side management and storage capacity.  Existing regional transmission planning processes would incorporate this federal policy to facilitate transmission planning and siting decision-making to meet these new demands. 

Subtitle G-Technical Corrections to Energy Laws

This subtitle would make technical corrections to existing energy laws.

Subtitle H-Energy and Efficiency Centers and Research

This subtitle would direct funding to higher education institutions for Building Assessment Centers to promote opportunities for building efficiency, including research and training, and promotion of "high-efficiency building construction techniques and materials options."  There would also be a program to create and support Energy Innovation Hubs to promote commercial application of clean energy technologies, as well as an initiative that would establish not more than 10 regional Centers for Energy and Environmental Knowledge and Outreach. 

Subtitle I-Nuclear and Advanced Technologies

This subtitle would promote the domestic deployment of clean energy technologies through the establishment of a self-sustaining Clean Energy Deployment Administration (CEDA).  The CEDA would develop a methodology for assessing clean energy technologies and encouraging their commercial scale deployment and advise on approaches for meeting energy technology deployment goals.  The CEDA would have broad authority to provide direct and indirect support for clean energy technologies, including through the provision of loans, loan guarantees and letters of credit through a Clean Energy Investment Fund.

Subtitle J-Miscellaneous

The final subtitle of Title I includes miscellaneous provisions.  Among them are provisions that would establish a Clean Technology Business Competition Grant Program, a National Bioenergy Partnership, an Office of Consumer Advocacy and a Development Corporation for Renewable Power Borrowing Authority.

What Can Members Do?

• Read the "AGC Looks at Climate Bill H.R. 2454" series, the introduction is posted here.)
• Take action and write your Senator using the AGC Legislative Action Center (AGC, its Chapters and members sent over 2,000 letters to Capitol Hill in response to H.R. 2454).
• Explore the potential for the real estate and construction industries in climate legislation. This is an evolving discussion draft document resulting from AGC's meetings and discussions with representatives of the real estate and construction industries and other related groups.
• Go to www.congress.gov and search under "H.R. 2454" to read the bill.
• Read information about greenhouse gas emissions associated with the construction industry.
• Learn low-cost ways contractors can reduce greenhouse gas emissions from equipment.

When Congress reconvenes after Labor Day, the U.S. Senate will resume its work on a comprehensive energy and climate bill.  In part, those deliberations will focus on a companion bill, the America Clean Energy and Security Act, or H.R. 2454, which the U.S. House of Representatives passed on June 26, 2009, by a vote of 219 to 212. This article begins a series of articles that AGC will publish in AGC's Environmental Observer to keep members informed of the ongoing climate change debate in Congress.  These articles will summarize H.R. 2454 in plain English and include AGC's preliminary reactions.

Majority leaders in the Senate are aiming to vote on their version of the climate change bill as early as October.  After the differences between the two bills are reconciled, the resulting language will need to secure passing votes in both houses of Congress before a final bill can go to President Obama. 

As Congress debates climate change, the U.S. Environmental Protection Agency (EPA) is also laying the foundation to regulate greenhouse gas emissions under the Clean Air Act though both industry groups and several government agencies (including EPA) have expressed concern that regulation under the existing statute is not the best course of action.

Read more here.

AGC Wednesday hosted a meeting of real estate and construction stakeholders to discuss the impacts of legislative and regulatory efforts to regulate U.S. greenhouse gas (GHG) emissions from stationary and mobile sources on the industry.  The meeting is the second AGC has convened with this group in the topic of climate change.

At the meeting, AGC's CEO Steve Sandherr presented a discussion draft of guiding principles for climate change legislation for the real estate and construction industries and related groups to provide the framework for stakeholders interested in forming a coalition on this issue.  The draft document states concern that "new federal legislation and/or regulations intended to control GHG emissions could increase the cost of building operations, or otherwise deter new construction and/or the renovation of existing buildings and other facilities."

In addition to identifying collective concerns with energy and climate change legislation before Congress and with regulatory efforts by the Obama Administration, the group is also working to identify recommendations for Congress to improve the bill.

The U.S. House of Representatives approved the American Clean Energy and Security Act of 2009 (H.R. 2454) by a vote of 219-212 on June 26.  AGC opposed the measure due to the negative impacts the measure would have on the construction industry.  The Senate is expected to consider its version this fall.

Last week, the U.S. House passed H.R. 2454, the American Clean Energy and Security Act, by a vote of 219 to 212 (8 Republicans supported the bill, and 44 Democrats voted against it).  While elements of the legislation could create jobs by inducing demand for energy efficiency improvements to buildings and alternative energy generation, no one is certain of the true impact on the economy.  AGC believes that the bill goes too far too fast and that Congress has not adequately mitigated the impacts. 

Policymakers have acknowledged that the "cap and trade" program in the bill would increase electricity costs with varying regional effects.  A climate change cap and trade bill would significantly increase the cost of energy used in producing construction materials and powering construction equipment.  The bill also includes provisions giving free reign to the U.S. Environmental Protection Agency to regulate small stationary emitters and to implement standards for a variety of mobile sources used in construction-including new heavy duty trucks and off-road equipment.  The increased costs and new regulations would ultimately decrease demand for construction at a time when the U.S. economy can least afford it, especially when one in every five unemployed workers is a construction worker. 

AGC appreciates the response by individuals in the construction industry that answered the call to action and sent over 2,000 messages to Congress in opposition to the bill.  The legislative debate will move to the Senate where a vote could occur as early as September. 

The Senate will likely refer to, or use, the House bill in drafting their legislation.  Meanwhile, the Committee on Energy and Natural Resources approved the American Clean Energy Leadership Act (ACELA) on June 17, 2009.  Some of the ACELA provisions are similar to the House bill, but it does not yet address cap and trade of greenhouse gases, which the Senate Environment and Public Works Committee may consider as early as this month.  The resulting legislation from the Senate will need to secure passing votes in both houses of Congress before a final bill is sent to President Obama to sign.

AGC urges all members and Chapters to weigh in with their Senators and urge them to oppose the House bill as written.  For more information and to send a letter to your Senators, please use AGC's Legislative Action Center.