Senators Introduce Climate Change Bill

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.