Senators John Kerry (D-Mass.) and Joe Lieberman (I-Conn.) Wednesday released their long-awaited climate and energy legislation, the “American Power Act” (APA), which they say can achieve the 60 votes necessary to pass the Senate. The legislation sets a mandatory cap on economy-wide greenhouse gas (GHG) emissions and establishes a mechanism for trading GHG emission allowances. The APA promises to cut U.S. emissions of greenhouse gases by 17 percent from 2005 levels by 2020 and 80 percent by 2050, consistent with President Obama’s pledge to the international community in December 2009. It would still allow the EPA to regulate stationary sources under the Clean Air Act.
Transportation would be covered by requiring oil companies to purchase carbon allowances at a set price (established in quarterly auctions), which will result in higher motor fuels costs. AGC estimates these fees would generate at least $19.5 billion in revenue annually. Of this amount, the APA will allocate $6.25 billion annually for transportation improvements: $2.5 billion would go to the Highway Trust Fund, with a mandate to set aside funding for projects that decrease greenhouse gas emissions; $1.875 billion for federal TIGER grants awarded on a competitive basis to states and local governments; and $1.875 for local land-use planning, as laid-out in the CLEAN-TEA bill.
The draft bill gives the U.S. Department of Transportation and the Environmental Protection Agency one year to propose national transportation-related greenhouse gas emissions goals as well as require states and metro areas to develop unified strategies to measure their compliance with those goals, including from reductions in vehicle miles travelled.
Kerry-Lieberman would also require federal contracting agencies and other agencies receiving federal funding for construction of projects authorized by the bill to comply with President Obama’s Executive Order and subsequent rulemaking on PLAs, which was finalized in April 2010 and “encourages” federal agencies procuring construction projects greater than $25 million to “consider” the use of a PLA on the project.
AGC and its transportation stakeholders will send a letter and request meetings with Senators Kerry and Lieberman with the clear message that the amount of funding that they are providing to the Highway Trust Fund will not only fail to keep the trust fund solvent but will make it impossible to find the revenue necessary to pay for a multi-year surface transportation reauthorization bill. AGC issued this statement in response to the bill.