AGC Looks at Climate Bill H.R. 2454: Title III Reducing Global Warming Pollution
Senate is drafting a comprehensive bill to address climate and energy, and it
is basing that work on a related bill passed by the U.S. House of
Representatives. The third installment
of AGC’s summary of the American Clean Energy and Security Act of 2009 (H.R.
2454) highlights the major provisions of Title III (Reducing Global Warming
Pollution), which identifies reduction goals and establishes a cap-and-trade
program to reduce emissions from major sources.
cap-and-trade program, covered entities are permitted to emit a certain amount
of a pollutant during a defined period of time, such as one year. The amount of pollutant the entity is allowed
to emit – allowances -- depends on the category of the source (e.g., electric
utility industry). Each category of
sources is assigned a limited number of allowances (e.g., the electric utility
industry category received 35 percent of the total allowances under H.R.
2454). The total number of allowances economy-wide
also is capped and decreases each year in order to meet the emissions reduction
goal set by policymakers. If a covered
entity requires more than its permitted allowances, then it can seek to reduce
emissions, offset the emissions and/or obtain the needed allowances from
another covered entity.
Subtitle A – Reducing Global
amends the Clean Air Act to add a new title, Title VII: Global Warming
Pollution Reduction Program.
Reduction Goals and Targets
identifies greenhouse gases of concern as those that induce global warming and
“cause and contribute to injuries to persons in the United States.” The bill sets economy-wide gas reduction
goals beginning in 2012, aiming to keep emissions below 97 percent of the
quantity of emissions in 2005; and reduces the acceptable amounts in subsequent
years: 2020 at 80 percent of 2005 levels; 2030 at 58 percent; and 2050 at 17
percent. The bill further sets nearly
identical reduction goals for specific capped sources of emissions. Part A also establishes a review and
recommendation process for Congress to assess the progress towards achieving
the intended reductions.
Designation and Registration of
identifies seven categories of greenhouse gases and authorizes the administrator
of the U.S. Environmental Protection Agency to designate additional gases as
warranted. The bill then establishes a
registry of greenhouse gases for sources that meet specific criteria, such as
stationary sources within specified categories (e.g., cement production) and those
that emit 25,000 metric tons per year of carbon dioxide equivalent. It also authorizes the administrator of the
EPA to determine whether to include reporting requirements for vehicle fleets
in the registry. Among the logistical
instructions to EPA in the bill, Congress requires that EPA provide for
immediate dissemination of the reported data on the Internet.
Program Rules, Offsets and Deforestation
establishes emission allowances for covered entities based on calendar
year. The number of allowances
diminishes each year beginning at 4,627 (in millions) in 2012 to 1,035 in 2050
and stabilizes thereafter at the 2050 amount.
The bill further outlines details of the cap-and-trade program including
prohibitions for exceeding allowances, methods of demonstrating compliance, the
use of offsets and the trading and banking of allowances and offsets. EPA will issue permits to administer the
program. The bill details the
establishment of an offsets program including information on eligible offset
projects, requirements, approval, review and audit procedures. It outlines an international deforestation
Subtitle B – Disposition of
lays out the allocation and auction of allowances with programs to benefit
consumers, renewable energy and energy efficiency, trade-vulnerable industries,
Subtitle C – Additional
Greenhouse Gas Standards
amends the Clean Air Act to add a new title, Title VIII: Additional Greenhouse
Stationary Source Standards
charges EPA to publish an inventory of the uncapped sources of greenhouse gas
emissions that emit greater than 10,000 tons per year of carbon dioxide
equivalent. It further directs EPA to promulgate standards of performance for
those sources and corresponding regulations.
EPA may promulgate other standards (design, equipment,
operational-based) in lieu of performance standards “without regard to any
determination of feasibility…”.
Exemptions from Other Programs
exempts greenhouse gases from regulation under several programs in the Clean
Air Act, such as criteria pollutants, hazardous air pollutants, new source
review and title V permits. The bill
amends the Clean Air Act to include hydrofluorocarbons (HFCS) as class II
substances and charges EPA with promulgating regulations to phase down the
consumption of 20 listed HFCS that fall into class II, group II substances.
requires EPA to evaluate black carbon emissions and submit a report to Congress
with -- among other details -- an inventory of major sources, technologies and
strategies for reductions and recommendations of actions to reduce
emissions. The bill then requires EPA to
promulgate regulations to reduce black carbon emissions or to propose a finding
that existing regulations currently address these emissions adequately.
further addresses state programs, Davis-Bacon compliance, biological carbon
sequestration as well as acid rain and mercury pollution reduction.
Subtitles D and E– Carbon Market
Assurance and Additional Market Assurance
amends the Federal Power Act to “promulgate regulations for the establishment,
operation and oversight of markets for regulated allowances…”. It also sets forth numerous conditions on
swapping derivatives and other transactions that involve energy commodities.
What Can You Do?
the “AGC Looks at Climate Bill H.R. 2454” series, the introduction,Title
I summary and Title
action and write your Senator using the AGC
Legislative Action Center. (AGC, its Chapters and members sent over
2,000 letters to Capitol Hill in response to H.R. 2454).
the potential threats
and opportunities for the real estate and construction industries in
climate legislation. This is an evolving
discussion draft document resulting from AGC’s meetings and discussions with
representatives of the real estate and construction industries and other
to www.congress.gov and search under
“H.R. 2454” to read the bill.
information about greenhouse
gas emissions associated with the construction industry.
ways contractors can reduce greenhouse gas emissions from equipment.
information, contact Karen Lapsevic at (202) 547-4733 or email@example.com.
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