Green Building Law Blog : Green Building Lawyer & Attorney : Shari Shapiro: Calliope Communications, LLC

The United States is at a precipice with respect to public motivators for the green economy. Essentially, the carrot of public incentives or investment and the stick of potential mandatory regulation of carbon emissions are slated for elimination at the same time. 

Although we cannot know what this two part challenge to the green economy will do, it will certainly change its trajectory for the foreseeable future. 

First, of course, are the proposed revisions to the 2011 budget.  With respect to green building, slated for cuts are most programs that promote green building or which invest Federal dollars in green buildings directly:

• $3 billion of EPA funding overall
• $1.6 billion (nearly 20%) of the Federal Building Fund at the General Services Administration (GSA)
• $786 million (over 35%) of the Energy Efficiency and Renewable Energy (EERE) office at the Department of Energy (DOE)
• $250 million in funds for the Department of Housing and Urban Development (HUD) HOPE VI program, which leverages private sector dollars to transform existing blighted public housing into vibrant and livable communities.
• $10 million for the Energy Star program at the Environmental Protection Agency (EPA).

With respect to renewable energy, the proposed Republican budget bill slates for reduction or elimination over $900 million in investment. Among the programs slated for cuts or elimination is the Department of Energy Loan Guarantee Program for clean energy start up companies, established during the George W. Bush administration.  According to Forbes, DOE officials have said that eliminating this program would do away with 20,000 jobs, along with the benefits for the environment.

In addition to the direct cuts, at least four different proposals are pending (potentially up for a vote this week) restricting or eliminating EPA's ability to regulate greenhouse gases.  If the EPA is restricted in its ability to regulate greenhouse gases, one of the most potent motivators for investment in reducing carbon emissions through renewable energy, green buildings and other carbon reduction techniques will be eliminated.  

 The question will become not whether renewable energy and green building can compete without government subsidy, but rather whether renewable energy and green buildings can compete in the face of continuing subsidy to competing technologies like coal, oil, etc. 

According to the Center for American Progress, the proposed Republican budget will make few changes with respect to the $40 billion+ Government support of these technologies through tax incentives and other mechanisms. Fox News was unable to get a commitment from House Budget Committee Chairman Paul Ryan (R-WI) that tax breaks for oil and gas companies would be eliminated:

WALLACE: A lot of Democrats that are already saying, even before they’ve seen your budget, that you do all of this balancing of the budget on the spending side, and unlike the President’s debt commission, you don’t do it on the revenue side. Do you eliminate tax breaks? Do you bring in new revenue by eliminating, for instance, tax breaks for oil companies?

RYAN: We don’t have a tax problem. The problem with our deficit is not because Americans are taxed too little. The problem with our deficit is because Washington spends too much money. … So we’re not going to down the path of raising taxes on people. […]

WALLACE: But for instance, you will not eliminate tax breaks for Big Oil and Gas?

RYAN: Those are the kinds of details that we’ll come out later with, that the Ways and Means Committee will work on. We’re not going to go into the little details of which tax expenditure goes and which tax expenditure stays.

 [You can watch this portion of the interview on You Tube]

The next few weeks will be historic ones with respect to America's green future.  For better, worse or otherwise, these are interesting times which will mean changes for everyone in the green sector in the United States. 

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Many months ago I wrote about the need for a floating gas tax to stabilize fuel prices, allow predictability and incentivize eco-friendly developments.  Now Ford chairman Bill Ford agrees.

Earth2tech reported:

“If prices are gyrating wildly,” he said, it becomes extremely difficult to know whether the company is planning the right vehicle or technology (if you’re operating under the assumption that automakers should supply what the market demands, and that there’s a lot less demand for fuel-sippers when gas is cheap). Ford noted that in the EU, diesel fuel “became an easy decision” for drivers after the government decided to make it much cheaper than gasoline.
 

When major environmental regulations were passed in the early 1970s, there was a lot of hand-wringing over how it was going to destroy the economy.  Now, with cap-and-trade, similar arguments are being made. Senator James Inhofe said yesterday, about EPA's declaration of greenhouse gases as harmful to human health:

This move by EPA will unleash a torrent of regulations that will destroy jobs, harm consumers, and extend the agency’s reach into every corner of American life.

But it turns out, in capitalism, the rules of the game don't matter, as long as they are predictable. So Obama should implement cap-and-trade, and those companies that can adapt and thrive in the new regulatory environment will survive.  And those that cannot, will not, but others will take their place.  I predict that with the attitude expressed by Bill Ford, Ford will survive...and the others should not.  

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Today, the EPA briefed Congress on its intent to

formally declare carbon dioxide and other heat-trapping gases to be pollutants that threaten public health and welfare.

This declaration clears the way for EPA to regulate greenhouse gases through the Clean Air Act and other regulatory mechanisms. 

According to the USGBC, in the United States alone, buildings account for 38% of all carbon dioxide (CO2) emissions.  Even if these statistics are wrong by HALF, that is still 20% of carbon dioxide.  Yet many cap-and-trade and other carbon management programs do not incorporate carbon regulation of buildings because they are categorized as "indirect" and therefore more difficult to calculate and regulate.  There is also the argument that the emissions from "direct" sources like power plants are already regulated, and therefore it will be easier to regulate their emissions.

However, the health and safety of buildings is already regulated by energy codes, fire codes,  building codes, zoning codes, etc.  If greenhouse gases are a threat to human health, regulation of greenhouse gas emissions from buildings is as critical as protecting from the risk of fire. Moreover, if a cap-and-trade system is put in place, carbon credits will be very valuable.  If reductions in greenhouse gases can be generated by high performance building practices, this value should be available to those developers who choose to pursue those solutions.

Today's announcement by the EPA will lead to regulation by the executive branch, or spur Congress to act to regulate greenhouse gases.  The regulatory solution must include a regualtory mechanism for managing the greenhouse gas emissions of buildings.

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Today, the EPA briefed Congress on its intent to

formally declare carbon dioxide and other heat-trapping gases to be pollutants that threaten public health and welfare.

This declaration clears the way for EPA to regulate greenhouse gases through the Clean Air Act and other regulatory mechanisms. 

According to the USGBC, in the United States alone, buildings account for 38% of all carbon dioxide (CO2) emissions.  Even if these statistics are wrong by HALF, that is still 20% of carbon dioxide.  Yet many cap-and-trade and other carbon management programs do not incorporate carbon regulation of buildings because they are categorized as "indirect" and therefore more difficult to calculate and regulate.  There is also the argument that the emissions from "direct" sources like power plants are already regulated, and therefore it will be easier to regulate their emissions.

However, the health and safety of buildings is already regulated by energy codes, fire codes,  building codes, zoning codes, etc.  If greenhouse gases are a threat to human health, regulation of greenhouse gas emissions from buildings is as critical as protecting from the risk of fire. Moreover, if a cap-and-trade system is put in place, carbon credits will be very valuable.  If reductions in greenhouse gases can be generated by high performance building practices, this value should be available to those developers who choose to pursue those solutions.

Today's announcement by the EPA will lead to regulation by the executive branch, or spur Congress to act to regulate greenhouse gases.  The regulatory solution must include a regualtory mechanism for managing the greenhouse gas emissions of buildings.

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