Seemingly defeating the odds, the U.S. House of Representatives narrowly approved a landmark global-warming bill on June 26 by a 219-212 vote, setting the stage for further action on the bill. But while it has a fair amount of support from a wide range of groups and is a priority of the Obama administration, the bill faces a hurdle in the Senate, where Republicans and moderate Democrats could prevent its passage.
The American Clean Energy and Security Act of 2009, introduced by Rep. Henry Waxman (D-Calif.) and Rep. Edward Markey (D-Mass.), would reduce greenhouse-gas emissions by more than 80% by 2050 compared with 2005 levels through a cap-and-trade system. It would require electric utilities to meet 20% of their electricity demand through renewable-energy sources and energy efficiency by 2020 and invest $190 billion in new clean-energy technologies and energy efficiency. This investment would include $60 billion for carbon-capture and -sequestration research and development.
Construction industry groups say there are some provisions in the massive 1,500-plus-page bill that they like. The bill includes a new program that would provide funding to states for building retrofits and financial assistance to contractors for up to 50% of the costs of retrofits. The bill also would establish new markets for contractors interested in venturing into or increasing their portfolio in the renewable-energy sector.
But there are negative aspects. “When we look at it overall, we find more negative than positive,” says Karen Lapsevic, director of tax, fiscal affairs and infrastructure finance at the Associated General Contractors of America.
According to construction groups, one of the most problematic provisions was added between the bill’s passage by the Energy and Commerce Committee and consideration by the full House: The bill originally included language requiring states and large municipalities to submit plans to the Environmental Protection Agency detailing how they would reduce greenhouse-gas emissions in the transportation sector. The bill approved by the House goes one step further and allows the U.S. Dept. of Transportation to establish performance measures to ensure that reduction goals are being met. “It is our concern that [the provision] is going to steer people away from highway capacity projects,” Lapsevic says.
Nick Goldstein, assistant general counsel and director of regulatory affairs for the American Road and Transportation Builders Association, says the bill tilts too heavily toward transit at the expense of other solutions to reduce congestion, such as adding lanes to highways or expanding capacity. “If you are going to increase funding for transportation, you should allow the states to choose the method that best suits them,” he says.
Critics also contend a carbon-constrained economy could raise the overall cost of energy as well as for building materials as manufacturers face more stringent regulation.
Republicans largely opposed the bill, citing its potential to increase electricity costs and eliminate jobs. A recent analysis by the Congressional Budget Office concludes that, in 2020, the net annual cost of the legislation would be approximately $22 billion nationwide.
Forty-four Democrats also opposed the bill, saying it made too many concessions to the power industry. Dennis Kucinich (D-Ohio), said, “It sets targets that are too weak, especially in the short term.”
But representatives of the power industry say compromises made by the Energy and Commerce Committee enabled more bipartisan support for the bill. “We consider it a good start,” says Pat Hemlepp, spokesman for American Electric Power in Columbus, Ohio. “The allocation of allowances in the cap-and-trade is positive because it will help reduce the cost of compliance that is borne by utility customers,” he says.
All eyes now turn to the Senate. The Senate Energy and Natural Resources Committee has approved an energy bill that includes many provisions similar to language in the Waxman-Markey bill, but does not address global warming. That will fall to the Senate Environment and Public Works Committee, which has jurisdiction over clean-air issues. The Senate bill also would provide federal backstop authority to make transmission-line siting decisions when states fail to do so.
Although the Senate bill’s prospects are uncertain, “greenhouse-gas regulation is inevitable” whether or not the bill passes, says Dan Riedinger, spokesman for the Edison Electric Institute.
ENERGY BILLS: HOW THEY COMPARE House billSenate bill Addresses global warming with a cap-and-trade system Does not address global warming Requires electric utilities to meet 20% of their electricity demand through renewable-energy sources and energy efficiency by 2020 Requires utilities to meet 15% of their electricity demand through renewable-energy sources and energy efficiency by 2021 Invests in large-scale deployment of carbon- sequestration technology Invests in large-scale research and development of carbon-sequestration technology Mandates new energy-saving standards for buildings, appliances and industry Mandates new energy-saving standards for buildings, appliances and industry No federal backstop authority Provides federal backstop authority over electric transmission sitingSources: House Committee on Energy and Commerce, Senate Energy and Natural Resources Committee, ENR.