DecarbNation, Issue 1: Building Decarbonization Legislative Roundup (2022)

Building Decarbonization Legislative Roundup, 2021-22

With the Inflation Reduction Act proposing over $50 billion for building upgrades and decarbonization programs across the nation, the DecarbNation movement has never held so much promise for rapid transformation. According to RMI, the IRA, combined with the Infrastructure Bill and Jobs Act, could reduce pollution from the buildings sector by 33 to 100 million metric tons, enabling us to achieve 10 to 30% of our 2030 goal to cut emissions in half.
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And while the IRA is a historic step forward, there remains an imperative that we all work with the states and Federal government to ensure environmental justice communities are uplifted, not harmed, throughout the implementation of these programs and funds. 

Even without this much needed infusion of federal support, states have been working hard to accelerate their decarbonization policies, reshaping the built environment with their bold legislative goals and budget priorities. This issue of DecarbNation takes a look at the progress we made across the U.S. this past legislative session. While some legislation is still under consideration, this cross-section of successful measures–which together address workforce development, energy justice, resilience, building and energy codes, electrification measures, emissions goals, and financing opportunities–demonstrates the growing momentum of building decarbonization across the nation and offers a template for advocates who are hoping to accelerate their state’s decarbonized future.

In the 2021-2022 legislative session, sixteen states passed (or are still considering) 68 budget items and bills that will accelerate building decarbonization and electrification.

In order of popularity, the bills and budget items address:

1.  Cost: financing, tax credits, incentives 
2.  Goal Setting: the commitment to set up a task force, establish an office of clean energy, and/or modify reporting and monitoring standards
3.  Emissions: including greenhouse gasses, refrigerant emissions, and/or other pollutants affecting air quality
4.  Electrification: actions that call out electric appliances or electrification codes specifically
5.  Resilience: addressing a home or community’s ability to withstand or respond to disasters and environmental crises, including weatherization upgrades to combat extreme heat or cold.  
6.  Energy Efficiency: actions that concern the amount of energy used in a home or building but may not specifically tie this efficiency to electric appliances
7.  Codes: Building and energy code changes as well as appliance standards; and
8.  Workforce Development: addressing job training, job transitions, or other labor-related accommodations and programs
9.  Energy Justice: actions that prioritize and benefit communities that are underserved, energy burdened, located in areas that have a disproportionate amount of pollution or environmental issues, or are classified as historically disadvantaged communities. Note: while one may argue, for example, that some resiliency measures may benefit disadvantaged communities, this category only included bills and budget items that directly call out priorities or funding for environmental justice communities as defined by that state. 

Below is a closer look at the legislative strategies and frameworks of six key states.

State Spotlight
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California
Known for its landmark climate policies–such as the recent decision by the California Air Resources Board (CARB) to end the sale of new gas-powered vehicles after 2035–California has again demonstrated its commitment to accelerating decarbonization and reducing emissions across the economy. For building decarbonization specifically, there has been a huge leap in investment even compared to last year.   

​Last year, the state committed $125M to building decarbonization, including $75M for the BUILD program, $25M for the Low-income Weatherization Program, and $200M for community resilience centers. This year, a broad coalition of environmental justice groups, manufacturers, labor, tenants, and environmental organizations advocated for funding for healthy homes, schools, and communities. The new budget invests $1.4 billion in multi-year funding for equitable building decarbonization, with $332M allocated for the next fiscal year and the lion’s share of the investment—$940M—for 2024. Nearly $1 billion will go towards expanding access to cooling for households through highly-efficient heat pumps and holistic building upgrades such as weatherization, with a priority for low-income and environmental justice communities. The budget also includes critical funding for the nation’s most successful heat pump program, the Technology and Equipment for Clean Heating (TECH) initiative, and constructing or retrofitting community resilience centers and schools with cooling and other clean energy technologies. 
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The budget package was paired with policy direction that was championed by environmental justice advocates, such as Leadership Counsel for Justice & Accountability and Western Center on Law & Poverty, who directed state agencies on regulations for safe indoor maximum air temperature to ensure that tenants have the right to cooling and are protected from extreme heat. As the largest state investment so far to provide cooling and other essential building upgrades, and with a priority for low-income Californians, this budget will support the state in meeting Governor Newsom’s ambitious new targets for climate-ready homes announced last month in a letter to CARB. 

California’s approved multi-year budget for building decarbonization includes:

• ​ $922 million for healthy and resilient homes to expand access to cooling for households through heat pumps and provide weatherization and other essential home upgrades, prioritizing low-income and environmental justice communities. 
• $40 million to accelerate the adoption of ultra-low global warming potential (GWP) refrigerants used in air conditioning systems and refrigeration to help reduce ozone depletion and its harmful effects on human health.
• $145 million for Technology and Equipment for Clean Heating (TECH) Initiative to focus on transitioning households towards zero-emission appliances, including the deployment of thousands of heat pumps, with 50% of these installations directed to low-income households and environmental justice communities.
• $5 million to create policy recommendations related to indoor air temperatures to ensure that tenants have access to cooling and are protected from extreme heat.
• $270 million for community resilience centers to expand access to cooling, backup power, and other resources by upgrading community-based facilities with clean energy technologies like heat pumps (includes a $100M allocation from previous budget). 
• $20 million for the California Schools Healthy Air Plumbing and Efficiency Program (CalSHAPE) to focus on zero-emissions HVAC replacements. 
• $15 million for the Low-Income Weatherization Program (LIWP) Farmworker Housing Component to provide farmworkers with solar photovoltaic (PV) systems and energy efficiency upgrades at no cost.

These investments represent a huge leap forward for building decarbonization in California. “This funding to provide California households with clean, electric heat pumps couldn’t have come at a better time. Californians are experiencing longer, more punishing heat waves every year and 3.7 million households still don’t have access to cooling,” stated Jose Torres, California Director of the Building Decarbonization Coalition. “We applaud the state for this investment, which will bring much-needed relief to so many households, especially those living in low-income and environmental justice communities.”

In addition to these investments, California saw several supportive policies for building decarbonization approved by the legislature and sent to the governor’s desk. Of the 15 relevant bills that were still under consideration when the legislature broke for summer recess, which together addressed everything from air pollution and extreme heat resilience to financing and emissions standards, eight were passed by the end of session (as of publication, some of these bills await the Governor’s signature). Paired with the budget, California is paving the way for taking accelerated and meaningful action to decarbonize the built environment. 

Notable policies include: Embodied Carbon: Construction Materials (AB 2446), which is the first major bill to address the carbon footprint of construction materials in buildings by giving the California Energy Commission (CEC) the authority to regulate embodied carbon. It also sets a target of 40% net reduction of the carbon intensity in these materials by 2035 with interim targets. While many in the building decarbonization community focus primarily on the operational side of emissions, addressing embodied carbon is an essential piece of the broader decarbonization puzzle. 

Another significant bill for ensuring that the electricity powering our homes and businesses is clean is the Clean Energy, Jobs, and Affordability Act (SB 1020), which updates California’s existing SB100 framework (requiring that renewable energy and zero-carbon resources supply 100% of electric retail sales to end-use customers by 2045) by adding interim zero-carbon electric sector targets and requiring state agencies to purchase zero-carbon electricity by 2030.  

The final bill highlighted here, Clean Energy Financing (SB 1112), will enable the energy commission to work with DOE to bring money from the Infrastructure Bill and IRA for financing programs in CA. For a full rundown of the building decarb bills passed in California (and awaiting Newsom’s signature), check out the spreadsheet here. 

 Finally, though this is a legislation-focused analysis, it is important to mention the complementary proceedings that are currently underway in California. These regulations–covering everything from zero-NOx appliance standards, ending rate-payer subsidies for fossil fuels, and a rapid timeline to increase heat pump sales–would significantly shape the future of building decarbonization in the state and the rest of the country. For more information on the growing momentum for building decarbonization, read BDC’s recent blogpost. These proceedings, combined with the influx of money from federal and state resources, promise to make this a banner year for building decarbonization. Now, we have to ensure that this implementation is equitable, responsible, timely, and affordable.

Washington

Up until a few years ago, climate and energy legislation in Washington, like many other states, focused more on energy efficiency than fuel sources. Natural gas was still a commonly accepted “bridge fuel” and the common approach to buildings was to implement efficiency-centered building performance standards. However, with the passage of the Clean Energy Transformation Act (CETA) in 2019 (SB 5116), which set a goal of an emissions-free electric grid by 2045, several environmental advocacy groups expanded their focus to include electrification. 

Last year, in the 2020-2021 legislative session, Washington advocates capitalized on the state’s transformative emissions goal as well as Governor Inslee’s 2021 State Energy Strategy to introduce the omnibus climate and energy bill: the “Healthy Homes and Clean Buildings Act” (HB 1084). The bill “would require all new buildings in Washington to be zero-carbon by 2030 and seek to eliminate fossil fuel consumption in existing buildings by 2050,” marking a definitive shift toward clean electrification and away from gas (SP Global). Opposition from gas companies and some organized labor groups coupled with lack of policy maker education about the effects of methane led to the bill’s failure. Though the bill did not pass, it taught advocates about existing gaps in public and legislative knowledge concerning electrification while revealing what would become popular counterarguments by gas and industry opponents about the costs of electrification and the stability of the grid. This year, advocates were able to push through a series of bills that might facilitate greater legislative movement in the future. For a summary of these bills, see Shift Zero’s legislative wrap-up. 

According to Kelly Hall, Washington State Director at Climate Solutions, in this upcoming year advocates are looking forward to how the funds generated by the Climate Commitment Act (likely to be around $1B–estimates forthcoming) will be used in the future. Building electrification advocates are hoping to design an incentive program that would benefit low- and moderate- income households, prioritizing disadvantaged communities with the first tranche of funding in order to enable the electrification of existing single and multi-family homes. 

For Ali Lee, a health and equity buildings consultant and advocate in Washington and Oregon and member of the Health and Equity Alliance, priorities for an equity focused decarbonization agenda include addressing indoor and outdoor air quality, especially in “airport communities,” which suffer from the effects of leaded fuel outside and methane from fossil fuels inside (source: personal interview). Environmental justice advocates are working to get indoor air quality monitors for methane which, when paired with exterior air quality monitors, will provide a more holistic picture of the unevenly distributed burden of particulates and poor air quality. Lee has also been spearheading a program called Healthy Kitchens, which demonstrates the benefits of electric cooking compared to gas stoves when it comes to health and indoor air quality.

Funding for weatherization, Lee notes, has been successful in the past and brings together a broad group of stakeholders as it not only addresses existing issues like poor insulation and mold (a major problem in the Pacific Northwest), but ensures that tenants benefit from a property owner’s upgrades by saving on their energy bills or having improved living conditions. In addition, prioritizing resiliency hubs in communities–especially during extreme heat events–is important for enabling an equitable climate adaptation strategy. 

In any legislative action that the state pursues, centering equity is prioritized through Washington’s HEAL Act, which seeks to ensure equitable protection and access, undo institutional discrimination, dismantle environmental racism, and eliminate environmental health disparities. Between incentive program design, state-wide codes (like the recent state-wide electric commercial code), local electrification ordinances, and heat pump incentive programs, there is a lot that Washington will be seeking to enact equitably and responsibly in legislation and beyond. 

A broad coalition of NGOs, non-profits, and environmental justice organizations in Colorado succeeded in advocating for key building decarbonization bills this past legislative session. Perhaps the most significant for codes and emissions is: Building Greenhouse Gas Emissions (HB22-1362). This bill requires jurisdictions to adopt the 2021 IECC along with PV-ready, EV-ready, and electric-ready requirements when adopting or updating any other building codes after July 1, 2023. Then, it requires jurisdictions to adopt a “low energy and carbon code” when adopting or updating any other building codes after July 1, 2026. A new Energy Code Board will identify the minimum EV-ready, PV-ready, and electric-ready provisions and determine the low energy and carbon code language. The bill also includes $25 million funding for disadvantaged and low-income communities along with implementation assistance for energy code adoption and enforcement. 

As a “home-rule” state, Colorado does not have a blanket building code that affects every jurisdiction in the state; rather, these jurisdictions can choose whether to adopt a building code at all. Most do have a building code, though, and this bill means that anytime those local codes are updated the most recent IECC code will be included. The bill’s sponsor, Rep. Tracey Bernett, stated that “By building right the first time, we’ll save Coloradans money on their utility bills, improve our air quality and reduce harmful indoor air pollution. All Coloradans deserve homes and buildings that are efficient, resilient, healthy and ready for the future….This bill will help the 25 percent of Coloradans who are energy burdened save money on their utilities.” Another building decarb bill, Policies to Reduce Emissions From Built Environment (SB22-051), complements the electrification push in the buildings code bill by providing a 10% tax credit for heat pumps, heat pump water heaters, and electrical panel upgrades in 2023 and 2024.    

To address harmful emissions and pollutants, many of which are associated with buildings, environmental justice advocates fought to pass Public Protections from Toxic Air Contaminants (HB22-1244), which establishes a publicly available report of toxic emissions in the state and prioritizes monitoring in disproportionately impacted communities. According to Conservation Colorado, this bill addresses “a class of deadly air pollutants like ethylene oxide, benzene, and chromium that Colorado previously had no comprehensive program to monitor or regulate. These pollutants have been shown to cause cancer, birth defects, and other serious health impacts. The harm is most acute for Coloradans in proximity to industry, disproportionately people living on lower incomes, people of color, and the workers at these facilities themselves.” By creating a transparent tracking system for air pollution, advocates have laid the groundwork for implementing programs to clean up air quality throughout the state. Coupled with electrification and clean energy bills like HB22-1362, the state is addressing both current and future air toxicity by reducing harmful emissions. 

Finally, the state also passed two bills that support Governor Polis’s Geothermal Initiative, “The Heat Beneath Our Feet.” This project seeks to promote the use of geothermal energy for heating and cooling, which Polis views as key to reaching Colorado’s 100% renewable energy goal by 2040 (source).The Colorado Energy Office Geothermal Energy Grant Program (HB22-1381), which launches in Fall 2022, provides a grant program to support the development and deployment of geothermal projects; the grant application guidelines will also prioritize projects in low-income, disproportionately impacted, or just transition communities. The second bill, Encourage Geothermal Energy Use (SB22-118), builds off of provisions used for solar to direct the creation of a robust geothermal consumer education program as well as projects like “geothermal energy gardens.” As we will see below in New York, many states are working to pass legislation in support of geothermal energy projects, which are becoming increasingly key to both electrification and a just transition for fossil fuels workers. 

New York

Environmental coalitions in New York had high ambitions for this recent legislative session and brought several pivotal decarbonization bills to the table. While some key priorities such as the All-Electric Building Act and the Gas Transition & Affordable Energy Act did not advance, decarbonization advocates spurred important conversations and raised ambitions for the next session with these bold bills. Two exciting building decarbonization bills that did succeed this session are the Advanced Building Codes, Appliance & Equipment Efficiency Standards Act (S9405) and the Utility Thermal Energy Network and Jobs Act (S9422).

The Appliance Efficiency bill will save consumers billions of dollars by updating appliance efficiency standards to reduce energy use. In terms of greenhouse gas savings, this change is equivalent to removing 3,700,000 cars from the road for an entire year and saving 164,000 MWh of electricity–more electricity than the entire state of New York used in 2020! It also authorizes the NYS Codes Council to incorporate greenhouse gas emissions reduction standards into building codes, enables building code changes to phase out fossil fuels from existing buildings, and expands representation on the codes council.

Perhaps the most surprising and monumental bill of the legislative session came at the 11th hour when advocates pivoted to propose a cross-coalition, first-of-its-kind bill: the Utility Thermal Energy Network and Jobs Act. This bill allows gas utilities to legally operate as “thermal utilities,” meaning that gas companies are not obligated to serve a specific type of fuel (i.e. natural gas) but rather to deliver a specific outcome: heat. Decoupling heat and gas opens up a pathway for clean electrification through networked geothermal systems. The bill directs utilities to begin pilots and directs the Public Service Commission to develop regulations for utility thermal energy networks. Furthermore, the bill ensures a huge investment in workforce development–protecting and creating well-paying jobs for local residents. 

The bill is significant not only for this innovative approach to transitioning New York’s energy system away from gas, but for how it was supported by a diverse range of stakeholders that are not frequently aligned on issues related to building decarbonization. These groups include: environmental organizations, environmental justice advocates, organized labor, consumer advocates, and utilities. The bill was so positively regarded that it passed unanimously in the senate and nearly unanimously in the assembly. 

 Lisa Dix, New York Director for BDC, reflects on the significance of this legislation, noting that it positions New York “in the national forefront” of climate action and will “accelerate and build a robust market for clean heating and cooling technologies, decarbonize our built environment with a union workforce at scale, and substantially invest directly into our communities most disproportionately impacted by climate change.”

Massachusetts

In this nail-biter of a legislative session, environmental advocates came out on top, winning significant gains in building decarbonization and clean electricity. The landmark climate bill including these provisions, An Act Driving Clean Energy And Offshore Wind (H.5060), was signed into law at the last minute by Governor Baker after a series of tense negotiations.

Perhaps the most relevant aspect of this bill for building decarbonization is the allowance for ten jurisdictions in the state to pass what are effectively “gas bans.” Only ten are allowed to do so because ten cities already have–though the authority of these bylaws had been previously challenged by the state. The legal controversy over whether local jurisdictions had the authority to ban fossil fuels from new construction came to a head in 2019 after Brookline, Massachusetts became the first city in the state to require building permits for new construction to comply with the town’s new Fossil Fuel Free Infrastructure bylaw. However in 2020 (and again in 2022), the Attorney General’s Office ruled that the building energy code, which is adopted statewide in Massachusetts, preempted any attempt by a municipality to regulate fuel use in new construction.

This climate bill (H.5060), then, grants permission to 10 jurisdictions to implement ordinances to eliminate fossil fuels from new construction and major renovations. This provision is tied to a requirement that the communities come into compliance with the state’s long-standing affordable housing law, Chapter 40B, by meeting a 10% affordable housing guideline. ZeroCarbonMA advocates consider this bill a significant step toward meaningful local climate action, as it “heralds a new chapter in climate history, in which meaningful climate action is accelerating dramatically in cities and towns, pressuring states to address our climate crisis with meaningful action” (David Mendels, a co-founder of ZeroCarbonMA).

The ten Massachusetts jurisdictions that have already passed “gas bans” are: Acton, Aquinnah, Arlington, Brookline, Concord, Cambridge, Lexington, Lincoln, Newton, and West Tisbury, seven of which currently meet the affordable housing requirement and two of which (Aquinnah and West Tisbury) don’t have access to pipeline gas. While only ten jurisdictions are currently allowed to pass gas bans under this law, several other cities and towns, including Boston, are already exploring similar ordinances, setting the stage for a future battle over local authority vs. state authority on climate action (ZeroCarbonMA). While the state has been working to update its “stretch” code, which includes an additional net-zero pathway (that any municipality could adopt), many advocates were not satisfied with early drafts of this code, which did not fully ban fossil fuels from new construction. Local pressure for more ambitious state-level climate goals will continue to shape Massachusetts’ policy landscape in years to come. 

Vermont

Vermont took bold climate action this session by passing three bills supporting environmental justice (S.148), building electrification (H.448), and fuel switching (H.518) and dedicating $200 million to cutting emissions and electrifying transportation and buildings (a significant sum for a state with a population of 630K). Eighty million will go toward weatherization for low- and moderate- income residents, with over half of this funding dedicated to the Home Weatherization Assistance Program, which serves low-income residents. The Vermont Natural Resources Council (VNRC) estimates that “on average, the program makes about $10,000 worth of improvements per home.” 

In addition, the passage of the Municipal Energy Resilience Initiatives bill (H.518) sets aside $45 million for the Municipal Fuel Switching Grant Program, which will “provide technical assistance and award grants and loans to municipalities for replacing fossil fuel heating systems with renewable and efficient heating systems” (H.518). Heating for homes and buildings accounts for 34% of the state’s total greenhouse gas emissions according to the VNRC, so a program to convert municipal buildings (excluding schools) will not only reduce emissions but build up the knowledge base in small cities and towns that may not otherwise be able to make the transition to electric buildings. Another bill, known as the Clean Heat Standard (H.715), also sought to incentivize the transition off fossil fuels and toward renewable energy in homes and businesses. While successful in the legislature, this bill was unfortunately vetoed by the Governor. Some advocates hope to take it up again next session. 

 At the local level, the city of Burlington, already a climate leader with its ambitious Net Zero Energy 2030 plan, had voted in March 2021 to amend its charter to include a penalty for residential and commercial properties that continued using fossil fuels for heating beyond a yet-to-be-specified year. The “Thermal Energy Charter Change” was approved this year by the legislature and signed by the governor (a requirement when a local initiative involves revenue), allotting the power to the Burlington city council to now create an assessment that determines the parameters of the penalty. This disincentive to burn gas will help pave the way for Burlington to reach its ambitious net zero goals. With an electrification ordinance for new construction already in place, this two-pronged approach to electrification uses penalties and incentives to simultaneously address new and existing construction. 

 Last but not least, Vermont passed a bill to bolster the state’s commitments to environmental justice. Prior to the passage of S.148, Vermont was one of only eight remaining states in the U.S. to not have an environmental justice policy, according to Renewable Energy Vermont. The passage of the bill was lauded by a broad group of environmental justice stakeholders. Mia Schultz, President of the Rutland Area NAACP and Catalyst Leadership Coordinator with Rights and Democracy Vermont, commented: “It is indisputable that the harmful effects of climate change disproportionately affects marginalized communities, including BIPOC people. The principles of an environmental justice law acknowledge and address the injustices of civil rights and seek to rectify the exclusion of the most vulnerable and affected members of society. It is the necessary path toward ensuring that we all have the right to clean and healthy communities.”
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Environmental groups from around Vermont joined together to support these bills and historic investments and interpret them as a sign of Vermont’s leadership in the mitigation of climate change. Johanna Miller, Energy & Climate Program Director at the Vermont Natural Resources Council says:    “This package of climate strategies is a critical down payment on Vermont’s ability to meet the legally binding requirements of the Global Warming Solutions Act and help all Vermonters – lower-income and historically overburdened Vermonters in particular – power their lives, heat their homes, and get where they need to go with more affordable, cleaner options.”   Ben Edgerly Walsh, Climate & Energy Program Director with the Vermont Public Interest Research Group calls these bills and budget items “the most significant investments Vermont has ever made in climate action.”                                                                                                                                                

Lessons Learned

Legislation is a critical piece of the building decarb puzzle. However, even the best bill cannot address all the challenges of our climate crisis without the accompaniment of equitable implementation and regulations. As we’ve seen in the spread of bills and investments from this legislative session, there is a need to increase designated funding and support for lower-income and disadvantaged communities; a need to introduce more workforce related bills to align with labor and ensure a just transition for fossil fuel workers; and a need to push for efficiency incentives that don’t also fund fossil fuel appliances.   

​We’ve also seen that there’s a logic to which bills pass first and which often follow. Setting clear targets for when the economy will be decarbonized or the grid will be clean is a great way to clear the path for incentive and financing programs. And sometimes, introducing an omnibus climate bill, even when unsuccessful, can wake up legislators, the public, even opposition to the imminent future of electrification. Similarly, pivoting when our ambitious bills don’t pass, as we saw in New York, can lead to creative, collaborative, landscape-shifting bills that open up previously unforeseen opportunities for electrification. By learning from these strategies and pathways, which have their own distinct manifestations in each state, we can accelerate building decarbonization nationwide.