Billions in federal funds to make buildings more energy efficient are in jeopardy

As communities around the country try to address climate change, many cities like Boston and Tucson, Arizona, are thinking about how to reduce the amount of energy buildings use and the amount of greenhouse gases they emit by changing how they’re built.

In April, Boston Mayor Michelle Wu required that new buildings install solar panels and include wiring so that they can eventually use only electricity instead of fossil fuels. Wu has also said she’s open to the idea of Boston becoming one of 10 cities that Massachusetts will allow to ban the use of fossil fuels in new buildings under a law passed last year. 

The plans aren’t as far along in Tucson, but Leslie Ethen, the director of the city’s Office of Conservation and Sustainable Development, said the city is planning to work with other communities in Arizona and New Mexico to come up with a model building code where homes and businesses will use less energy despite rising temperatures.

“We are front and center with climate impacts,” Ethen said. “Heat is becoming an increasing threat to people's health. The percentage of people who are dying of heat inside buildings is increasing. And it's just going to continue to get worse.”

However, as House Republicans push to lower what they consider to be an explosion in wasteful federal spending during the Biden administration $1 billion in federal funding to help states and local government revise their building regulations could be taken away.

The deal cut by President Biden and Republican House Speaker Kevin McCarthy to avoid a default on the nation’s debt earlier this month may have called for keeping federal spending roughly the same over the next two years. 

However, Rep. Kay Granger of Texas, the Republican chairwoman of the House appropriations committee, has called the agreement “a ceiling and not a floor,” and said the House will put together a budget proposal that will reduce spending. 

In a partisan vote Thursday night, Republicans on the House Appropriations Committee passed a bill for energy and water programs that would cut spending by $3.9 billion or 6.5% below this year’s amount.

In addition to clawing back the funding for revising building codes that was approved in the Inflation Reduction Act, the measure also cuts $4.5 billion for state grants that are intended to lower the amount of energy the nation uses by retrofitting buildings to be more energy efficient. Under the grants, states could have offered discounts to homeowners to buy energy-saving equipment like heat pumps, drying matches and electric stoves.

Granger said at the hearing that the Republican bill “reduces spending on unnecessary programs.” 

Rep. Chuck Fleischmann of Tennessee, the Republican chairman of the appropriations subcommittee on energy and water, meanwhile, said the bill “would rescind funds intended to pressure states and localities to adopt stringent new international building codes that could add significantly to the cost of new homes. The bill rescinds funds that would be used to subsidize the ‘electrify everything movement,’ which seeks to end the use of gas appliances in the name of climate policy.” 

Ryan Colker, the vice president of innovation for the International Code Council, which creates model codes used around the world, noted, though, that about 40% of greenhouse gas emissions come from buildings.

“So you can't really achieve climate goals without addressing buildings,” he told Route Fifty. “And energy codes are one of the most effective strategies to be able to do that because you can impact all new construction and renovations at one time.”

To illustrate the impact of building codes, Colker points to the group’s work. In terms of residential development, he said cities using the group’s latest 2021 code would reduce energy use by 9.4% and greenhouse gas emissions by 8.7% more than buildings built under its previous 2018 code.

Similarly in commercial developments, the 2021 code will reduce energy consumption by 12% and greenhouse gas emissions by 10% more than under the previous code. (An analysis by the U.S. Department of Energy’s Pacific Northwest National Laboratory estimated how much the reduction would be in each state.)

State and local governments have been taking different approaches toward revising building codes, according to Kate Johnson, head of U.S. federal affairs at C40 Cities, an association made up of 100 mayors from around the world committed to addressing climate change. Some create standards on how much energy and greenhouse emissions buildings are allowed to give off, while others are more prescriptive, like barring the use of fossil fuels such as natural gas.

One way to address Ethen’s concerns about increasing temperatures, she said, is to make sure roofs are painted white—something Washington, D.C., has mandated in its building code. Keeping them cooler also helps them stay cooler when there are power outages, she added.

“If you look out over the rooftops in D.C.,” she said, “you can kind of tell which building has been renovated or built more recently, because it will have a roof that is pretty close to white compared to the black asphalt roofs that were used traditionally.”

Strengthening building codes could mean some more upfront costs, said Amy Boyce, director of technical strategy and federal engagement for the Institute for Market Transformation, a nonprofit that works on building performance. But using less energy ultimately means reducing energy bills in the long run.

“You're going to get money coming back to you over the life of the home,” she said.

According to the U.S. Department of Housing and Urban Development, people living in homes built under the International Code Council’s most recent model code would spend a third less on their energy bills over the lifetime of their home. That would translate to an average of $2,320, but in some areas, depending on climate, the savings could be up to $6,782. 

The federal funds, Boyce said, would be a “huge carrot” to incentivize cities to revise their codes to lower energy consumption. The money would also help cities without the staffing or the expertise to not only develop the codes but to also enforce them, she added.

Ethen said that Tucson and other cities in Arizona and New Mexico have applied for funding from a separate $225 million pot of money created in the bipartisan infrastructure bill to help governments revise their codes. The money, she said, will allow the states and cities to get help from experts like the International Code Council.

It remains to be seen what emerges from the complex budget negotiations with Senate Democrats, who are expected to oppose the cuts. However, the possibility that the money could be taken away has raised the concerns of the nation’s cities and mayors.

“The proposed legislative cuts are misguided and would have a chilling effect on ordinary homeowners trying to invest in energy efficiency and conservation,” said Tom Cochran, CEO and executive director of The U.S. Conference of Mayors, in a statement to Route Fifty. ”It will also delay the transition to renewable energy development for industry, small businesses and local governments,”

The National League of Cities is also “very concerned” about the possibility. “Federal funding to support local building code adoption will help make communities more resilient to extreme weather events and save homeowners, businesses and taxpayers money by improving energy efficiency,” the group said in a statement. “Homeowners themselves are set to benefit from energy efficiency improvements through a rebate program. Together these programs and others from the [Inflation Reduction Act] will help communities meet their greenhouse gas reduction goals.”

Ethen said the cities are waiting to work with experts to figure out what kinds of changes to make. But she said she can see the possibilities while sitting in her adobe home.

“We've got a flat roof that's painted white,” she said. “We have well-insulated windows and things like double panes. We have a really tiny window on the east side. It's in a bathroom. We have a really tiny window on the west side that's in a laundry room. On the south side of the house, we have a back porch. So there's never any direct sun coming in those windows. So it can be 100 degrees and we're comfortable in this house without the AC on.”