Proposed climate and energy (cap and trade) legislation includes a number of provisions pertinent to housing.
The House bill is the American Clean Energy & Security Act (ACES). The Senate has several bills addressing climate change including the Clean Energy Jobs and American Power Act, the Carbon Limits and Energy for American Renewal Act (CLEAR) Act, and a “Framework for Climate Action and Energy Independence” presented by Senators John Kerry (MA), Joseph Lieberman (CT) and Lindsey Graham (SC).
Two primary mechanisms are being proposed in current climate legislation: cap and trade, and cap and dividend.
The proposed cap and trade mechanism sets a cap on pollutions allowed, and requires polluters to purchase and trade permits to pollute. Congress can then allocate the proceeds from the sale of permits to fund specific programs. Housing implications include:
- Proposed program beneficiaries include weatherization of publicly subsidized housing.
- Relief for low-income households who will be burdened more than other households by increases in energy costs, since energy costs are a component of housing costs
- House bill (passed in June 2009) uses some proceeds to fund subsidized housing energy improvements.
- The Senate bill also funds retrofits of public and assisted housing and region-wide planning to minimize transportation emissions with revenues from cap & trade, but details are not yet released.
- The Clean Energy Jobs and American Power Act (S. 1733), based on a cap and trade mechanism, was introduced in the Senate on September 30, 2009 by Sens. Boxer (D-CA) and Kerry (D-MA).
- The Carbon Limits and Energy for American Renewal Act (CLEAR) Act, based on a cap and dividend approach, was introduced in the Senate by Senators Maria Cantwell (D-WA) and Susan Collins (R-ME) in December 2009.
- Senators John Kerry (MA), Joseph Lieberman (CT) and Lindsey Graham (SC) presented a “Framework for Climate Action and Energy Independence” in December 2009 to inform the debate on cap-and-trade in the U.S. Senate. The three Senators are working on a climate bill they plan to introduce to the Senate at some point in Spring of 2010.
- The Center for Budget and Policy Priorities (CBPP) and National Low Income Housing Coalition (NLIHC) are promoting an amendment to the House bill which would direct 1% of emission allowance auction proceeds for energy retrofits and green investments in subsidized housing.
- Any climate change legislation should include relief for income eligible households. While the House bill provided full relief for low-income consumers, committing 15% of the total emissions allowance value, the Senate version is funded at a lower level due to deficit reduction requirements. At this level, funds will not fully mitigate the cost burden for low-income households.
- The House bill encourages the Department of Energy to develop standards for point-of-sale disclosure of home energy use. This would require owners to disclose energy usage when a property is put on the market, similar to the Truth in Housing reports now required by Minneapolis and other cities. This would encourage investment in energy efficiency.
- Advocates under umbrella of the Climate Equity Alliance are supporting strengthening the low income provisions of House bill in the Senate companion.
- Senator Lisa Murkowski (R-AK) made a Resolution of Disapproval which would prevent the Environmental Protection Agency from regulating greenhouse gases. The Climate Equity Alliance says this Resolution will block comprehensive climate legislation such as the Clean Energy Jobs and American Power Act.
Funding:
- House-passed bill would make an estimated $65 million available annually for energy retrofits in public and assisted housing. This is based on a 10% set-aside of Retrofit for Energy and Environmental Performance (REEP) funds for energy efficiency improvements in subsidized housing. Senate bill specifies a similar 10% set-aside of REEP funds, but total allowance revenue funds dedicated to REEP has not been determined (was less than 0.6% of total allowances in the House version).
Administration:
- TBA.
For more information on climate change, the status of climate change legislation, and low-income consumer relief go to the Climate Change Resource Page of the Minnesota Budget Project.
Leah Gardner, Minnesota Budget Project and Carl Nelson, Center for Energy and Environment are contributors to MHP's coverage of this issue.
Updated March 12, 2010.