Yesterday, the House Select Committee on Energy Independence and Global Warming convened a hearing to discuss how green building - the practice of constructing sustainable and energy efficient buildings - can both curb climate change and reduce energy costs.

In his opening statement, Chairman Edward Markey (D-MA) observed that the building sector is responsible for up to 48% of our nation’s greenhouse gas emissions, and an even higher percentage on a local level. For example, 78% of Boston’s heat-trapping gases are attributed to buildings. Nonetheless, only 7% of participants in a recent survey identified buildings as a major source of climate change emissions. The hearing yesterday was intended to change that perception.

Chairman Markey plainly stated, “[e]fficient design, low-emission construction materials, and decreased energy use in buildings can combat global warming and simultaneously reduce the rising costs of lighting, heating and cooling structures…” The overall economic and environmental benefits of more efficient buildings are clear… consumers get a good return on their investment.” Accordingly, Chairman Markey urged the greening of all buildings, “whether they are new or already built, commercial or residential, public or private.”

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This afternoon, the House passed the Farm Bill conference report by a veto-proof margin of 318 to 106.  While the Senate vote will not take place until tomorrow, supporters believe that there will also be more than enough votes in that chamber to override a presidential veto.  At this time, it appears likely that the energy provisions contained in the report will eventually become law.

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On Monday, after months of debate, negotiations, veto threats, and various grass-roots campaigns, the conferees for the 2008 Farm Bill revealed their compromise product. This year’s edition of the legislation has a greatly expanded energy portfolio, designed to put American farms and farmers at the cutting edge of the newly robust biofuels marketplace. Some of the highlights for the Title IX Energy Programs are:

• Authorizes $1 billion for new investments into energy related feedstocks;
• $320 million in loan guarantees for biorefineries;
• Creates a new program, the Rural Energy for America Program (REAP), which will provide $250 million in grants and loans for agricultural producers and rural businesses to purchase renewable energy systems;
• Authorizes $120 million for additional biomass research and feedstock development;
• Funds the Bioenergy program at $300 million which would provide incentives to expand production of biofuels;
• Creates a Biomass Crop Assistance Program;
• Creates a sugar-to-ethanol program.

Interestingly, the Farm Bill was unveiled the same week that committees on both sides of the Capitol are holding hearings examining the relationship between biofuel production and food and commodity prices. The Senate Foreign Relations committee meets on Wednesday morning at 9:30am to evaluate the issues, while the House Agriculture Committee will meet on Thursday.

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Turning his attention to the climate regulation debate, John McCain presented his strategy for confronting global climate change. McCain’s plan:

• Mandates gradual greenhouse gas emissions reductions under a cap-and-trade program to reach 60% below 1990 levels by 2050, with an “increasing fraction of permits for emissions could be supplied by auction.” By comparison, both Hillary Clinton’s proposal and Barack Obama’s proposal commit to reducing greenhouse gas emissions 80% from 1990 levels by 2050 and auctioning 100% of the permits provided under a cap and trade system. Read the rest of this entry »

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Carbon emission regulatory regimes are coming soon in response to rising public pressure for action, according to experts from business and academia who spoke at the recent First Annual Conference-Workshop on Business and the Environment in Philadelphia, hosted by the Initiative for Global Environmental Leadership (”IGEL”), a new Wharton/Penn initiative.

Once seen as the job of government regulators and non-governmental organizations only, in today’s world we are seeing more and more that the biggest pressures to enact measures against greenhouse gas emissions are coming instead from “the community, banks and insurers,” said Patricia A. Calkins, vice president of environment, health and safety at Xerox, and a moderator one of the sessions. Some companies have been voluntarily making dramatic shifts to reduce their carbon footprint by choosing the more efficient Energy Star-rated products or, in the case of leading global toy maker Mattel, simply rearranging the types of inventories carried by each of its two distribution centers and by so doing, reaping a “huge reduction” in energy use. While cost-benefit analyses may play a part in some of these companies’ motivations, Eric Orts, founding director of IGEL, says that this is not always the case. Consumer pressure and worries about being targeted or labeled as a polluter have been moving companies to act.

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The Congress will spend most of its remaining time before the Memorial Day recess completing its work on the Iraq-Afghanistan Emergency Supplemental Appropriations bill, the FY2009 Budget, and a reauthorized Farm Bill. Following the recess, every indication points to the Senate bringing up the Lieberman-Warner climate change bill for debate (whether there are the 60 votes to invoke clouture and have a vote on the bill itself is anyone’s guess).

This week, the following hearings are scheduled:

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Paul Gutermann and Kenneth Markowitz presented at Carbon Expo 2008 in Cologne, Germany. Mr. Gutermann discussed the ongoing battle in the United States between state and federal authorities over climate change initiatives. Mr. Markowitz presented on the challenges associated with ensuring compliance across market-based systems.

Mr. Gutermann’s presentation explored how states like California and the members of regional initiatives in New England, the West, and the Midwest run the risk of conflicting with federal programs or entering areas of exclusive federal power. Regional cap and trade programs are most susceptible to challenges under the Commerce, Compacts, and Supremacy Clauses of the U.S. Constitution.

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The Bay Area Air Quality Management District (BAAQMD) proposed one of the nation’s first carbon taxes to be assessed on stationary sources of greenhouse gas emissions. Over 2,500 district-permitted facilities would be subject to the tax, which would be computed by multiplying the total carbon dioxide equivalent (CDE) emissions from the permitted facility by the unit fee of $0.042 per metric ton of CDE. The proposed tax would raise about $1.1 million annually to help cover the cost of the District’s Climate Protection Program activities. BAAQMD estimates that most facilities with relatively low greenhouse gas emissions would have annual fees under $1. The largest emitters, however, would have annual fees in excess of $50,000 (i.e., the five Bay Area petroleum refineries and the two largest Bay Area power plants).

Several industry groups oppose the proposed carbon tax. These groups have raised concerns about the financial burden of the tax and the potential interference with a state-wide initiative to address greenhouse gas emissions. BAAQMD staff disputes these claims, explaining that the fees should have a minor financial impact on businesses. Moreover, the fees - not a “carbon tax” according to District staff - represent a modest step to recover the District’s costs and would not lead to inconsistencies or confusion with a state-wide program. A public hearing is scheduled for May 21, 2008 to consider adoption of the proposed fees.

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In a recently released “Dear Colleague” letter, Senator Corker (R-TN) questioned the number of carbon credits that would be auctioned under the Lieberman-Warner climate bill (S. 2191), which is scheduled to be debated in the Senate in early June.

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The House Energy and Commerce Committee’s Energy and Air Quality Subcommittee convened a hearing yesterday to examine the Renewable Fuels Standard (RFS) provisions of the Energy Independence and Security Act of 2007 (EISA). The RFS requirements in EISA substantially increase those contained in the Energy Policy Act of 2005, mandating renewable fuel use of 9 billion gallons by the end of 2008 and 36 billion gallons by 2022. Subcommittee Chairman Rick Boucher (D-VA) opened the hearing by noting recent calls for a “reexamination” of the RFS in light of rising food prices and the national debate on carbon emissions.

Full Committee Ranking Member Joe Barton (R-TX) contended that the higher RFS mandate contained in EISA “cannot be met” and said he will introduce a bill to repeal the RFS mandate contained in the new law. Full Committee Chairman John Dingell (D-MI) did not attend the hearing, but submitted a statement for the hearing record suggesting, in part, that amending the RFS “would be unwise and could lead to unintended consequences.”

Subcommittee Democrats, joined by Rep. John Shimkus (R-IL), generally characterized the RFS as a success, suggesting that greater ethanol use was helping to lower gas prices and increase U.S. energy supplies. Republican Members of the Subcommittee generally advocated revisions to the RFS mandate.

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