Rep. Henry Waxman's Bill to Cap Carbon Dioxide Faces Long Odds
From a bill that would cap the emission of greenhouse gases to the American Recovery and Reinvestment Act to a bill that aims to promote green schools, there are a host of green federal legislative initiatives underway that could dramatically reshape facilities management.
The most far-reaching of the three bills is the American Clean Energy and Security Act of 2009. While many are focusing on provisions that would cap emissions of greenhouse gases, the bill by Reps. Henry Waxman (D-CA) and Ed Markey (D-MA) contains other noteworthy energy provisions.
Among the energy-related provisions in the bill that affect buildings: state energy efficiency (SEED) funds, which would offer low- or zero-interest loans to fund energy efficiency upgrades for buildings. A second, similar program dubbed Retrofit for Energy and Environmental Performance (REEP) would include broader incentives such as audits, technical assistance and training, along with credit support.
The bill would also require creation of an energy labeling program for buildings. It would raise standards for outdoor lighting systems and appliances. In addition, the bill would require research into whether Energy Star products should be made compatible with smart grid technology.
Another provision would dramatically boost energy efficiency in building codes — and create a much stronger role for the Department of Energy (DOE) in establishing model codes. The changes would in effect require the new version of ASHRAE’s 90.1 to be 30 percent more efficient than the 2004 version. By 2016 the code would need to be 50 percent more efficient than the 2004 version.
“Those are very aggressive targets,” says Karen Penafiel, vice president of advocacy for Building Owners and Managers Association (BOMA) International.
The practical effect of the change means that if the ASHRAE committee updates 90.1 and the changes don’t add up to an improvement of at least 30 percent, DOE would have the authority to make a revised code that is more efficient.
The bill would allow DOE to set the code if ASHRAE doesn’t update it every three years. The bill also includes provisions aimed at speeding adoption of new energy codes.
BOMA is opposed to giving DOE power to set energy codes, says Penafiel. “Our position is that we support the voluntary consensus process. The way the draft bill is written really circumvents that process.”
Despite the importance of provisions like giving DOE power to set energy codes, it is the bill’s plan to cap the emissions of greenhouse gases that has grabbed the most headlines.
First, some background: A cap and trade program works by setting a cap on greenhouse gas emissions, forcing companies to buy and sell allowances to emit greenhouse gases. That cap is gradually lowered over time, requiring companies to consume energy more efficiently or pay the price in more allowances. Companies that use fewer allowances than they have can sell the extras.
“There are really quite a lot of topics under negotiation,” says Manik Roy, director of congressional affairs for the Pew Center on Global Climate Change.
Here’s how the cap and trade section of the bill looked after passing the House Energy and Commerce Committee May 21.
Two major pressure points in Waxman’s bill are renewable portfolio standards and how allowances will be allocated. With Republican committee members opposed to Waxman’s bill, Waxman needed the support of southern and moderate Democrats — many of whom have manufacturing and coal plants in their states.
“Fundamentally, the biggest issue is members of coal producing states who are concerned this will be economically devastating to their communities,” says Andrew L. Goldberg, senior director of federal relations for the American Institute of Architects.
Waxman appeared to forge a compromise May 14 following a brief delay with the announcement that the bill would be changed to give many of the allowances away for free to begin. The utility sector, for example, will get 35 percent of the allowances for free until 2026. Gas distribution companies will get 9 percent of allowances. Renewable portfolio standards were lessened as well, compared to the draft version.
Still, it is unclear whether Waxman’s compromise will hold Democrats together for a full House vote.
“I think the question the Democrats need to confront is, do they want to get a narrow party line vote or do they want to build more support?” says Goldberg.
The bill passed the House Energy and Commerce Committee 33-25. It will need at least 218 votes to pass the House. The road to passage becomes more difficult in the Senate. At least a third of the senators represent states with strong manufacturing or coal interests, says Roy.
“The situation in the Senate is very partisan,” Roy says. “If Democrats want to make this climate and energy act happen, they will have to build a bridge to John McCain and his fellow Republicans.”
One incentive for the Senate to act is the Supreme Court decision Massachusetts v. EPA. The decision required EPA to regulate greenhouse gases as a public health threat. If Congress doesn’t regulate greenhouse emissions, EPA will have to.
“I think most folks think this is the hammer that is pushing Congress to get things done,” says Goldberg. “If we get to the end of the year and we’re no closer to getting it done, EPA is certainly going to move forward.”
One sign that the momentum has truly shifted in favor of regulation is that many businesses have decided to lobby various aspects of climate change legislation rather than block it. The most prominent example is USCAP, the United States Climate Action Partnership, a group made up of utilities and manufacturers pressing for CO2 regulation.
“What we are hearing is, ‘Do you want the EPA to do this or Congress to do this?’” says Penafiel. “I’m not sure I know the answer to that, but it’s meant to show that either way, this is going to happen.”