by: Dominick Weinkam and Robert B. Cimmino, Associates, Watt Tieder
September 8, 2023

Governments across the United States have been increasingly integrating climate considerations into legislation affecting various sectors of the economy. The construction industry is no exception. Recent legislative developments at various levels of government are reshaping construction practices to mitigate the industries’ greenhouse gas emissions and vulnerability to climate-related risks. These developments include incentivizing eco-friendly construction projects, mandating stricter regulations to reduce carbon emissions, and enhancing building resilience to more severe weather events. Contractors must stay abreast of these developments to ensure compliance with new substantive and administrative requirements to remain competitive in a changing environment.

Funding Greener Construction Projects: The Inflation Reduction Act

The federal Inflation Reduction Act (IRA) enacted in August 2022 marked a significant milestone in the pursuit of greener construction. The IRA is widely considered to be the single largest investment into climate change in history, with potential ripple effects throughout the construction industry. The IRA allocates substantial funds for projects utilizing “low-carbon” materials, with an explicit focus on climate-conscious construction. This initiative aligns with the broader goal of curbing emissions from sectors like steel, concrete, and glass, which have been major contributors to the nation’s carbon footprint.

The IRA specifically earmarks $2.15 billion for General Services Administration (GSA) managed buildings, aiming to significantly reduce the embodied greenhouse gas emissions associated with construction materials. See IRA § 60503. Similarly, the IRA earmarks an additional $2 billion for Federal Highway Administration projects, reinforcing the commitment to low-carbon materials across infrastructural development. See IRA § 60506. “Low-carbon” materials include all materials that have “substantially lower levels of embodied greenhouse gas emissions associated with all relevant states of production use, and disposal” as determined by the EPA.

On May 16, 2023, GSA released its Interim IRA Low Embodied Carbon Material Requirements to guide its pilot program for IRA funded projects. As of now, these requirements “are only binding after a contracting officer exercises his or her discretion to incorporate IRA § 60503-qualifying materials or products into a procurement contract.” The requirements include significant compliance documentation, such as obtaining third-party verified Environmental Product Declarations, or EPDs. Contractors should familiarize themselves with these requirements in anticipation of their expansion to other federal agencies and private sectors. Importantly, these pilot requirements do not supersede existing obligations applicable to federal procurements such as the Buy America Act or other trade-related laws.

Limiting Greenhouse Gases Through Electrification In New Construction

States and municipalities across the country are proactively addressing the role of carbon emissions in new construction projects. California, for instance, has emerged as a leader in this effort, with over 76 cities and counties introducing local ordinances discouraging the installation of natural gas appliances in new buildings. The Sierra Club maintains an up-to-date map of relevant California city ordinances to assist tracking new developments.

Cities in New York have taken similar steps. For example, the City of Ithaca, New York set a  goal to transition all buildings to electric-only appliances by 2030. New York City’s commitment to reduce building carbon emissions by 40% by 2030 and 80% by 2050 underscores the urgency in combating climate change. See NYC Local Law 97/2019. A general recognition of buildings as significant contributors to greenhouse gas emissions has sparked a comprehensive effort in some portions of the country to enforce energy-efficient and low-emission standards in construction.

Colorado has instituted its own statewide greenhouse gas reduction bill, focusing on promoting electrification in new and existing buildings. With a target of reducing greenhouse gas emissions by 20% by 2030 and 90% by 2050, Colorado’s legislation follows the state’s Greenhouse Gas Pollution Reduction Roadmap 2.0 released in January 2021.

New York, California, and Colorado are some of the earliest and most aggressive states implementing climate change measures into construction industry practices. Other states and municipalities likely will take similar measures in the coming years. Contractors should remain up to date on requirements for new construction across the country, particularly as more generalized goal-oriented legislation gives way to specific regulatory requirements.

Initiatives To Encourage Adoption Of Hazard Mitigation Building Codes

Climate-conscious legislation reaches beyond general goals such as net-carbon reduction. To combat the intensification of climate-related hazards such as wildfires, hurricanes, and floods, the federal government is leading an effort to encourage greener buildings through its New Building Codes Initiative (NBCI). The NBCI aims to modernize building codes nationwide, bolstering resilience against extreme weather events that climate change is anticipated to exacerbate. A recent analysis from FEMA shows that only about 35% of counties, cities, and towns in the United States have up-to-date codes in place to address these hazards.

Under this initiative, the federal government will empower FEMA to implement its new Building Codes Strategy wherever legally permissible and encourage updated building code adoption. Additionally, the Department of Energy is investing $225 million to support local energy-efficiency codes under the Resilient and Efficient Codes Implementation. The initiative also calls for federal agencies to set higher standards for their own facilities, further incentivizing municipalities to adopt resilient building codes.


The legislative landscape is evolving rapidly as governments align their agendas with the urgency of combating climate change. The construction industry should therefore expect changes and pressure in the near future. The recent legislative developments outlined in this article highlight the dual strategy of incentivizing eco-friendly practices and implementing new regulations to reduce carbon emissions and enhance resilience against natural disasters.

As the construction industry navigates these changes, legal practitioners are poised to play a crucial role in guiding stakeholders through the complexities of compliance, innovation, and risk management. With multiple levels of government moving both independently and in tandem, contractors should anticipate that the legislative and regulatory measures will continue to evolve.

Watt Tieder is one of the largest construction boutique law firms in the United States, with a diverse and experienced team of attorneys representing many of the world’s leading corporations, developers and contractors on both domestic and international projects. We represent more than half of the Top 30 Engineering News Record contractors and most of the nation’s top sureties. With offices in six cities in the United States, the firm is a dynamic, mid-size boutique that provides knowledgeable and practical legal representation to the construction, surety, government contracts and bankruptcy industries world-wide.

The views expressed in this article are not necessarily those of ConsensusDocs. Readers should not take or refrain from taking any action based on any information without first seeking legal advice.