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Thursday
Sep042008

How Climate Change Legislation Could Effect Your Club's Bottom Line

IHRSA Public Policy is closely monitoring federal climate change legislation that could have an impact on health clubs, especially those that operate swimming pools, hot tubs or have other high-energy consuming club features.

Both chambers of Congress are considering bills that aim to reduce the amount of carbon emissions and greenhouse gases emitted by the United States. The House version (H.R. 2454 - American Clean Energy and Security Act of 2009), has passed the House chamber and is now waiting on its Senate counterpart (S.1733 - Clean Energy Jobs and American Power Act) to do the same. Many say the legislation will significantly increase the costs of energy for households and small businesses, while others make a more moderate cost analysis.

IHRSA Public Policy has prepared summaries of the two bills and compiled cost analyses from several reputable sources. IHRSA will continue to monitor this legislation and keep you updated on its status.

If you have any questions, please contact Lilly Prince, Public Policy Assistant, at lp@ihrsa.org or (800) 228-4772.


The House Bill: The American Clean Energy and Security Act (H.R. 2454)

Summary: This bill, sponsored by Rep. Henry Waxman (D-CA) and Rep. Edward Markey (D-MA), includes a cap-and-trade global warming reduction plan designed to reduce greenhouse gas emissions 17% by 2020. Other provisions include new renewable requirements for utilities, studies and incentives regarding new carbon capture and sequestration technologies, energy efficiency incentives for homes and buildings, and grants for green jobs, among other things. The bill passed the House on June 26, 2009, by 219-212 vote.

Cost Analysis: The economic impact analyses on the House bill vary greatly. A few estimates are:

  • National Federation of Independent Business (NFIB): 40% increase in energy costs for businesses. For instance, a NFIB member in Pennsylvania runs four athletic clubs and relies heavily on electricity and natural gas to power the heating-ventilating-air conditioning system and lighting the facilities. His energy costs run about $600,000 a year. If it goes up 40% - $840,000 - he says his only choice will be to close his business.
  • Congressional Budget Office (CBO): $175/year per household of 4, by 2020
  • The Heritage Foundation: $1,870/year per household of 4, by 2020
  • Environmental Protection Agency (EPA): $111/year per household of 4
  • Charles River Associates (CRA International): Retail natural gas rates (i.e. the price consumers pay per unit of gas energy used) would rise by an estimated 10% increase by the year 2015, by 16% by the year 2030, and by 34% by the year 2050. Retail electricity rates are estimated to increase by 7% relative to baseline levels in 2015, by 22% in 2030 and by 45% in 2050.
The Senate Bill: Clean Energy Jobs and American Power Act (S. 1733)

Summary: This bill, sponsored by Sen. Barbara Boxer (D-CA) and Sen. John Kerry (D-MA), is very similar to the House bill, but differs in several important areas. While the House bill is a comprehensive clean energy and climate bill, the Senate bill focuses primarily on reducing U.S. greenhouse gas (GHG) emissions. It aims to reduce greenhouse gas emissions by 20% of 2005 levels by 2020, whereas the House bills aims for 17%. It also includes a cap-and-trade policy.

Cost Analysis: There is no official cost estimate on S. 1733, but since it aims to reduce a greater amount of greenhouse gases by 2020 than the House version, it's likely that its more stringent requirements will make it slightly more costly.


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