Throughout 2009, AGC and the media have extensively covered the debate and policy developments related to reducing greenhouse gas emissions and addressing suspected climate change effects from those emissions. The U.S. Congress and the U.S. Environmental Protection Agency (EPA) have been actively pursuing legislative and regulatory options to control greenhouse gas emissions from stationary and mobile sources. This article provides a summary of the major developments this year.
Congress Debates, Drafts and Delays Climate Change Legislation
During 2009, both Houses of Congress moved forward on enacting comprehensive climate change and energy bills to reduce greenhouse gas emissions that would include the establishment of a "cap-and-trade" program. Congress faced considerable pressure to move quickly on legislation. EPA urged Congress to write new legislation to deal with greenhouse gases, rather than leave it to EPA to control those emissions by regulating sources within the confines of the Clean Air Act (see more information below). The upcoming United Nations-sponsored climate talks-scheduled for early December 2009 in Copenhagen, Denmark-set an unofficial deadline for Congress to pass legislation as a demonstration of the United States' commitment to leadership in addressing climate change. In addition, many leaders would prefer for practical matters to address climate change well in advance of preparations for the midterm elections in 2010.
By late June, the U.S. House of Representatives had passed the American Clean Energy and Security Act (H.R. 2454) by a narrow vote of 219 to 212. The Senate then introduced the Clean Energy Jobs and American Power Act (S. 1733) on September 30, which was approved by the Senate Environmental and Public Works Committee on November 5 (bypassing Republicans who boycotted the meetings for three days and without the consideration of amendments). The proposed Senate bill is based on the House bill, but takes a more aggressive approach in the short-term. Many leaders, Democrat and Republican alike, have expressed concern over the potential negative repercussions on the businesses in their states. Republican Senators repeatedly have urged for additional analysis by EPA on the economic impact of the bill.
On November 16, Senators announced plans to delay until spring 2010 any concerted effort to pass a comprehensive climate change and energy bill, though the involved committees will continue their work. The full Senate instead will focus its attention on health care and financial industry issues, and perhaps address energy-related legislation separately from climate change. As the Copenhagen talks approach without the U.S. having a final bill to feature, the Administration earlier this week inferred the upcoming talks would not result in a binding international treaty to address climate change - an effort that likely will resume in mid- to late-2010.
While elements of climate change and energy legislation could create jobs by inducing demand for energy efficiency improvements to infrastructure and energy generation, AGC is concerned that cap-and-trade would increase the cost of construction (e.g., materials, equipment and fuel) and that its impact on the economy would reduce the demand for construction services. AGC has prepared a document, Top Ten Things Contractors Need to Know about Climate Change, to summarize AGC's concerns with climate change and energy legislation.
Although the climate policy debate may move to the background in the coming months, AGC will remain engaged in and report on the issue. AGC also will continue its work with stakeholders in the real estate, design and construction industry to identify common concerns and communicate those concerns to policymakers. AGC encourages members to express their concerns with the Senate climate change bill by contacting their senators using AGC's Legislative Action Center. Additional resources are available on the AGC Energy and Climate Change Web site.
EPA Pushes Forward with Greenhouse Gas Regulatory Controls
Last year, EPA first warned of the possible regulation of greenhouse gases under the Clean Air Act and requested public comment on the implications of such an action. Many organizations, businesses, experts and state and federal governmental agencies cautioned EPA that the Clean Air Act is the wrong tool to regulate greenhouse gas emissions. The Act was designed to address a limited number of controllable air pollutants emitted from a limited number of controllable sources - not to regulate pervasive greenhouse gases emitted from numerous sources. EPA itself admitted a preference for Congressional action on climate change and acknowledged the administrative burden of applying the Clean Air Act to greenhouse gases would be enormous. Nevertheless, even as Congress drafted comprehensive climate change and energy legislation, EPA pushed forward in 2009 to control greenhouse gases using the Clean Air Act.
AGC is concerned that EPA regulation of greenhouse gases under any section of the Clean Air Act would trigger a host of requirements under other sections of the Act (because there are several provisions with similar "endangerment" language), including an increased need for construction and operating permits that would, for the first time ever, apply to hundreds of thousands of sources, many of which are small emitters. In addition, states would need to address greenhouse gases in their implementation plans to meet new National Ambient Air Quality Standards, which could jeopardize federal funding for highway and transportation improvements. To read more about AGC's concerns with using the Clean Air Act to regulate greenhouse gas emissions, click here.
Below are brief summaries of recent EPA actions with links to additional information -
- Proposed Endangerment Finding: On April 24, EPA published a proposed finding that current and projected future concentrations of six key greenhouse gases in the atmosphere threaten public health and welfare. EPA also proposed that combined emissions of certain greenhouse gases from new motor vehicles and motor vehicle engines contribute to the atmospheric concentrations of the key greenhouse gases, and hence endanger public health and welfare. On November 9, EPA sent its final endangerment finding to the White House Office of Management and Budget for interagency review before it is officially finalized. The review must be complete within 90 days.
- Approved California Waiver for Vehicle Emissions Standards: On June 30, EPA announced that it would grant the waiver that California requested to begin regulating greenhouse gas emissions from cars and trucks in the current model year. Under the Clean Air Act, California must receive a waiver from EPA to enforce its own air emissions standards that go beyond federal requirements. Once EPA grants a waiver, other states can identically adopt California's rules. In this case, 13 states and the District of Columbia have opted to adopt California's vehicle emissions standards. In light of the anticipated federal rules covering the same sources (see below), California has agreed to follow the new federal standards through 2016, when the proposed federal standards would expire.
- Proposed National Vehicle Emissions Standards: On September 15, EPA and the Department of Transportation's National Highway Safety Administration (NHTSA) proposed a light-duty vehicle emissions rule that, for the first time, would regulate greenhouse gas emissions from new passenger cars, light-duty trucks and medium-duty passenger vehicles. EPA's proposal would mandate advances in vehicle fuel economy starting with model year 2012 and increasing through 2016 and, for the first time, would establish GHG emission limits. The rule equates to a corporate average fuel economy (CAFÉ) standard of 35.5 miles per gallon by 2016. EPA must finalize the endangerment finding for greenhouse gases (see update above) prior to the proposed emissions rule going into effect.
- Proposed Tailoring Rule To Change Emission Thresholds in Clean Air Act Programs: On October 27, EPA proposed a "tailoring rule" to change the thresholds specific to greenhouse gas emissions that would require compliance with two stationary source permitting programs under the Clean Air Act: (1) new construction and major modification permits and (2) operating permits. EPA proposed this tailoring rule in anticipation of the regulation of greenhouse gases from stationary sources under the Clean Air Act, which is triggered once the Agency begins regulating mobile sources under the Act - as it has proposed with its new standards for motor vehicles (see update above).
- Finalized Mandatory Reporting Rule for Greenhouse Gases: On September 22, EPA finalized its mandatory reporting rule for greenhouse gas emissions. EPA promulgated this rule under congressional direction with the intent to gather data that would inform policymaking. The rule does not control greenhouse gas emissions, rather it is a reporting rule that affects large stationary sources, with minor exceptions.