Climate & Energy Bill Deal Could Open Race for Clean Transportation Funds

Look out, smart grid — clean transportation projects may give you a run for your money in the climate and energy bill. After a new round of negotiations, House Democrats have struck a deal this week to provide new funding for transportation projects that reduce greenhouse gas emissions. Under the latest version of the Waxman-Markey bill, states can use up to 10 percent of their emission allowances (which can be sold under the proposed cap-and-trade system) to help fund things like public transit systems, alt-fuel buses and bicycle facilities.

With the Congressional Budget Office estimating (PDF) that states will receive about $50 billion-worth of allowances from 2012 to 2016, opening up even a fraction of these funds for transportation (states can only use up to 10 percent of the 10 percent set aside for efficiency investments) and allowing states to use them to receive matching funds from the federal government, could be a boon for the sector.

As Streetsblog notes, the provision is partly a matter of putting money where the mandates are: The bill already includes transit-related emission reduction targets for state and local governments, and this latest revision provides some new resources to make those investments. It also represents an acknowledgment of the transportation sector’s role in climate change. Henry Waxman, one of the bill’s main authors and chairman of the Energy ad Commerce Committee, said in a release about the deal this week:

Transportation accounts for nearly one-third of our global warming pollution. We will be requiring states and metropolitan areas to plan for reducing their global warming pollution from transportation, and this provision will help them reach their goals.

Still, the provision has to make it through the House vote (scheduled for Friday) and into the final legislation (sometime after the Senate passes its own version of the bill, likely this fall).

The efficiency investment program, from which states will be able to pull transportation funds if the provision passes, previously only made allowances for things like green building retrofits, renewable energy projects, and smart grid initiatives, according to a release from the House Energy and Commerce Committee. As a result of the program being opened up to a whole new sector, it could mean heightened competition for public dollars among technologies and projects.

Hopefully, that competition will deliver some innovative projects. Plenty of startups are working in the sector, in particular with greener bus technology, since the bus market, buoyed by stimulus funds in the U.S. and a government push for electric buses in China, is one of the more attractive games in town for clean vehicles in a time when consumer vehicle sales are in the tank. With this latest provision in the climate and energy bill, the U.S. bus market could get an extra bump.

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