Senate Environment Committee Holds Hearings on Climate Legislation, Plans Vote This Week

The Senate Environment and Public Works Committee last 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.  On October 23, 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.  AGC and several transportation stakeholders sent a letter to Senate Environment and Public Works Committee Chair Boxer and Ranking Member Senator Jim Inhofe (R-Oklla.) Wednesday outlining concerns with the transportation planning provisions in S. 1733 that would make planning for and building highway capacity projects more difficult. The U.S. Environmental Protection Agency (EPA) estimates that the average household cost of S. 1733 would be about $100 per year.  In contrast, the Heritage Foundation estimates that a family of four's average household expenses would increase by about $4,600 per year.  The Senate Environment and Public Works Committee may vote on the bill as early as this week. 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 climate change legislation would increase the cost of construction and that its impact on the economy would reduce demand for construction services.  Probable increases in the cost of electricity and fuel used in the commercial sector would affect the cost of materials (e.g., cement, steel) and manufactured products used in construction, and further erode the purchasing power of public and private dollars for construction, let alone that of the consumer's upon whose spending construction services are dependent.  Pending legislation also would require states and localities to adopt federal energy efficient building codes that would also increase the cost of new building construction and renovation. AGC is concerned that cap and trade would lead to significant increases in the prices of fuel-gasoline and diesel-which would not only make construction more costly, but would also make legislative efforts to increase the motor fuels taxes to pay for surface transportation investment all the more difficult.  Furthermore, legislation under consideration would put in place new transportation planning requirements that would force states and localities to reduce GHG emissions through "clean" transportation options designed to get people out of their cars rather than through highway and bride capacity enhancements that would address the worst traffic bottlenecks. Also in the proposals are requirements for new federal GHG emission standards for new heavy duty trucks and off-road equipment used in construction, as well as new black carbon emission standards for engines currently in use.  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 encourages members to express their concerns with the Senate climate change bill by contacting their Senators using AGC's Legislative Action Center.  For more information on pending climate change regulatory and legislative efforts and AGC's activities, please visit AGC's Energy and Climate Change website.