Senate Bill Will Revive Funding For Low-Carbon Construction
Though much of the commercial real estate chatter has centered around a potential hike in taxes for carried-interest income, the Inflation Reduction Act of 2022 being considered by the U.S. Senate would also include $5B in funding for policies aimed at driving aggressive emissions reductions by 2030.
The bill, supported by frequent Democratic holdout Sen. Joe Manchin of West Virginia, would funnel billions into greener affordable housing, federal projects and other construction and comes as commercial real estate companies push toward creating lower carbon emissions in their construction.
The moves could reduce carbon dioxide emissions by 200 million metric tons by the end of the decade, according to nonprofit Building Transparency and progressive think tank Third Way.
Among the bill's provisions:
— $4B for improved climate resilience in affordable housing, including water efficiency, indoor air quality and sustainability.
— $2B for low-carbon transportation grants for Federal Highway Administration work.
— $2.15B for low-carbon General Services Administration buildings.
— $250M for environmental product declarations assistance to support the development and standardization of EPDs for construction materials.
— $100M for low-embodied carbon labeling of construction materials.
The Inflation Reduction Act is the latest incarnation of President Joe Biden's Build Back Better bill, which was scuttled earlier this year when Manchin pulled his support, effectively killing it.
Under a new reconciliation deal supported by Senate Majority Leader Chuck Schumer and Manchin, parts of that bill could be revived, including climate initiatives, as well as a 15% corporate minimum tax intended to close loopholes on large companies and a three-year extension of the Affordable Care Act.
“This agreement marks a milestone in driving decarbonization and sustainable infrastructure development, which underscores the importance of providing funding for low-carbon procurement if we’re going to make real progress in reversing climate change,” Building Transparency Executive Director Stacy Smedley said in a release, adding that the effects could equal taking 51 million gas cars off the road for a year.
There are steps to go before the bill is passed, however. Officials still have to go through the bill to ensure that it's within the Senate's scope, which might lead to some minor changes, according to Politico. Sen. Kyrsten Sinema, who has joined Manchin in votes that otherwise split along party lines, hasn't said whether she'll support the bill.
The construction industry is responsible for 20% of annual carbon dioxide emissions worldwide, Bisnow reported previously, though it has inched toward progress on efforts like low-carbon concrete and liquid-applied roofing technology. That comes despite mixed policy decisions, including the recent U.S. Supreme Court decision that restricts the Environmental Protection Agency's ability to regulate carbon emissions.
"We have industries because there's a planet on which to do commerce," Skanska Senior Director of Business Development for Georgia and South Carolina Jimmy Mitchell told Bisnow.