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The Climate Bill and the Building Industry

For years, scientists have been warning against the effects of global warming and claimed if greenhouse emissions were not reduced by 80 percent within 40 years, the earth would suffer devastating climate conditions and variations. These warnings seemingly fell on deaf ears, until now. The climate bill, or “American Clean Energy and Security Act”, barely squeaked by the House after a 219-212 vote last Friday. This history making piece of legislature proposes regulations intended to reduce the effects of global warming and implement long term energy saving policies.

Companies will be penalized (taxed) for generating an excess of greenhouses gases, such as carbon dioxide; 15% of electricity must come from renewable sources such as wind or solar power; and car companies will be rewarded for developing new energy efficient models. The policies will touch every sector of the economy and is expected to create a flood of jobs in related environmental fields.

Costs of energy and gas prices are also expected to rise as companies invest in new technology.

One of the biggest areas expected to be impacted by the climate bill is the building industry. Automobile emissions may be substantial, but buildings are responsible for more energy consumption in the U.S. than all combined areas of the transportation industry.

The bill intends to establish national energy efficiency building codes for new residential and commercial buildings. Up to three-quarters of existing structures in the U.S. should be new or renovated by 2035. The eventual goal is to reduce energy consumption by 75 percent. Enforcement of these regulations will probably not take place until about 2 years after a policy is put in place. Proposed reductions include:

30% reduction immediately (will not be enforced until 2012)

50% reduction for residential by 2014 and commercial by 2015

55% reduction for residential by 2017 and commercial by 2018

60% reduction for residential by 2020 and commercial by 2021

Increased reductions continue incrementally until 2029 when a 75% reduction is expected for residential and by 2030 for commercial building.

If, however, the Department of Energy decides that any of the above targets are not cost effective, they will set new targets.

How will this new bill effect the building industry?

At least initially, there will be a job boom in the energy industry. There will be a demand for energy advisors who perform blower door air leak tests, energy raters, insulation contractors, high efficiency window, furnace and appliance distributors, and other energy saving home products.

Utility company growth forecasts will have to be drastically reduced. Plans for expansion or budgets for new power plant construction may no longer be necessary.

To achieve the high levels of savings, renewable power sources such as solar or wind will have to be used. This will likely create more jobs, giving this industry a needed boost.

Builders will either sink or swim. If they don’t adapt to the new demands and technologies, they will lose out to others who will. They will be turning to energy building consultants to satisfy a growing need for education and technical advice.

Already we’re seeing a trend where home buyers are shying away from the McMansions and moving toward smaller, energy efficient housing. Energy Star rated appliances are common place as are heat pumps and other energy saving devices. The climate bill still has to pass the Senate, but it’s a beginning, and hopefully a trend toward promoting a more conscientious, building industry.

Lynn Bulmer PhotoAbout Author
View the many Washington D.C. homes for sale at LynnBulmer.com. Let Lynn be your guide to Kent DC real estate.

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