Federal Climate Change Bill May Exceed Transportation Legislation's Influence

The feds influence planning and development in California only indirectly. Environmental regulation such as the Endangered Species Act and the way money is spent, especially on transportation, help shape the landscape.

It has been a long time since that influence has changed. But in the next 12 months, two federal bills are likely to chart the federal course for the next decade or longer.

For starters, there is the transportation reauthorization bill, which comes up every six or seven years. Recent incarnations have been known by some variation of the phrase "TEA." We've had ISTEA, TEA21, or SAFETYLU. Transportation will be up again for reauthorization next year.

Then there's the possibility of federal climate change legislation. Currently, the leading bill is the Lieberman-Warner Act, S.2191. It's being debated this year, but it probably won't become law until 2009 – when there's a new president.

Members of the planning and development community naturally are focused on transportation reauthorization legislation. But people interested in land use might better spend their effort trying to influence the climate change bill, which could have the broader reach.   

Both of these bills are supposedly about policy. The TEA bills lay out federal transportation policy for both highways and public transit. The revolutionary nature of ISTEA in 1991 – though it was signed by President George H.W. Bush as a "jobs bill" during an economic slowdown – was that it de-emphasized new highway construction for the first time. The climate change bill is likely to set a national cap for greenhouse gas emissions, which would definitely be a new policy.

Ultimately, however, both bills are about money – and how they turn out will largely drive the federal role in planning and development (at least on the urban side, if not on the environmental side) over the next several years.

The TEA bill is the gravy train that the entire American system of transportation rides on. The bill typically lays out the policy framework the feds use to hand out billions of dollars of federal transportation dough per year. The last bill directed more than $20 billion to California (see CP&DR Public Development, September 2005), including more than $700 million in earmarks to Kern County. (It was mere coincidence, of course, that Rep. Bill Thomas (R-Bakersfield) was chair of the House Ways & Means Committee at the time.)

This time out, however, earmarks are unlikely because they're out of fashion in Congress. And there's not likely to be all that much in the way of gas tax revenue, either. The higher the price of gas rises, the more gasoline consumption goes down, because people buy higher-mileage cars and drive less. And like its state counterpart, the federal gas tax is a flat amount – 18 cents per gallon or so – which means that it doesn't rise upward with gasoline prices.

As a result, the gravy train isn't likely to have a whole lot of gravy in it over the next few years. In fact, both the Highway Trust Fund and the federal transit program are likely to be many billions of dollars short of what they need to meet even current obligations.

So it might be a little tough to use the next TEA bill to usher in sweeping policy change, as many of the environmentalists and smart growthers would like. Many environmentalists are trying to get the next transportation bill to be named, "GREEN TEA." But that's already been nixed by Barbara Boxer, the California senator who chairs the Environment and Public Works Committee. "If I use the word ‘green,' Inhofe won't support it," she said recently. (The ranking Republican on the committee, Sen. James Inhofe (R-Oklahoma) argues there is no such thing as global warming.)

One possibility that's often kicked around is a "VMT tax" – that is, a tax on driving, rather than a tax on gasoline. That would more accurately serve as a "user fee" and Boxer has expressed interest in it. But environmentalists – especially those focused on energy efficiency and global warming – fear that a VMT tax would eliminate the incentive for consumers to buy fuel-efficient cars.

Which brings us to Lieberman-Warner. Yes, it's a climate change bill that's likely to be policy-based. As written, Lieberman-Warner will cut carbon emissions by 80% by 2050, and it will create a national cap on greenhouse gas emissions in order to achieve the goal. In the process of doing so, however, it will create the next big federal gravy train.

As it is currently written, Lieberman-Warner would not simply give away the "right to pollute." For some sectors, such as electricity generators, the bill would require the federal government to auction off "emission allowances" to the highest bidder. That will bring in billions and billions of new federal dollars per year. One estimate is $4.5 trillion by 2050.

Everybody agrees changing land use patterns is part of the solution in reducing greenhouse gas emissions, but it remains to be seen whether much of the allowance auction money will make its way toward the world of planning and development. Currently somewhere between $500 million and $1 billion per year is earmarked for public transportation – most of it, apparently, for "new starts" of rail lines in large cities.

This is either a lot or not much, depending on how you look at it. Boxer has said that this is an impressive amount. But, as I reported in a recent blog, Beth Osborne, an aide to Sen. Thomas Carper (D-Delaware) warned that transportation and land use are unlikely to get much federal money for climate change because the electric utilities and coal companies are doing a better job of lobbying Congress.

"Impacted industries such as utilities, coal, and manufacturing have been extremely aggressive about making their case to us about the help they need to meet these standards," Osborne told the American Public Transit Association. "We've provided funding support [in the proposed bill] to meet those standards. Noticeably absent from the debate is driving and transit alternatives – transportation interests have not been engaged in this climate change bill."

And it's true that the buzz in Washington, D.C., in transportation and smart growth circles revolves around the TEA bill. All the interest groups are gearing up for a big lobbying effort next year. But considering the fizzle in gas tax revenues – and the trillions emerging from carbon regulation – maybe the planning and development world would be better served by focusing on the Lieberman-Warner bill instead.