Recent activity in Washington, D.C. suggests that the federal government is moving one step closer to regulating greenhouse gas emissions. US EPA has determined that greenhouse gas emissions are pollutants that endanger the public’s health and welfare. US EPA’s endangerment finding could lead to regulation of greenhouse gas emissions under the Clean Air Act. Alternatively, a new cap-and-trade bill has been introduced, which would remove greenhouse gases from regulation under the Clean Air Act, but would require a reduction in greenhouse gas emissions of 85% from 2005 levels by 2050.
What does the potential regulation of greenhouse gases mean for real estate development?
INCREASED ENERGY COSTS !
Energy-utility companies will be greatly impacted by regulation of greenhouse gases. Particularly, in Ohio and other Midwest states, where electricity production is almost entirely dependent upon coal-burning, reducing greenhouse gas emissions could be quite costly. Moody’s has estimated that consumer electricity costs will rise between 15-30% as a result of any cap-and-trade regulation.
With the expectation of increased energy costs, real estate developers should look to energy-efficient building systems or alternative energy sources as ways to reduce these costs. The Ohio Department of Development and the Ohio Air Quality Development Authority offer grants to help offset some of the initial costs for installing alternative energy sources. Additionally, tax credits are available for certain projects.
If you would like to learn more about potential climate change regulation and Ohio funding for alternative energy projects, these topics will be presented at the CREW of Greater Cincinnati 2009 Midwest Regional Conference. The conference will take place April 23-25, 2009 at the Cincinnati Hilton Netherland Plaza. Other topics presented at the Conference include: "Successful Urban Renaissance Developments"; "Diversity by Design: Successful Inclusion Projects"; "Case Studies in Brownfield Redevelopment"; and "Capital Markets — Effects from Washington Decision Making".