Natural gas-powered HVAC systems and "net-zero" building codes are among the chief bones of contention in Massachusetts' carbon emissions debate.

Scuttling what looked to be a major session-ending accomplishment for the legislature, Gov. Charlie Baker vetoed ambitious climate legislation on Thursday over his concerns that key pieces of the bill could stymie housing construction, and that the legislature did nothing in the bill to help cities and town adapt to the effects of climate change.

Baker said he supports much in the bill, but believes key components fly in the face of another legislative victory – the passage of his “housing choice” proposal – that he signed on Thursday night as part of a $626 million multi-year jobs bill.

The governor also urged the legislature not to rush into another major procurement of offshore wind power as Massachusetts continues the “massive undertaking” of working with other northeastern states to change the ways clean energy is purchased.

The veto sets up an early confrontation in the new year between the governor and the legislature, where Democratic leaders have signaled a lack of willingness to budge on a bill that was negotiated over the past five months and overwhelmingly approved in the last legislative session. If lawmakers pass the same bill or a similar one in the new session, Baker would be able to offer amendments, an avenue largely closed off with this bill.

The lead Senate negotiator of the bill, Sen. Michael Barrett, said he was “deeply disappointed” by the governor’s action, which he described as “really about politics, not policy.”

Bill Set Emissions Benchmarks

The bill would have locked the state into a goal of becoming carbon neutral by 2050, with interim benchmarks for reducing carbon emissions every decade. It would have also directed utilities to purchase more offshore wind power, set efficiency standards for appliances and increased the amount of renewable sources that feed the state’s electricity supply to 40 percent by 2030.

On the surface, Baker’s energy priorities look to be in harmony with the legislation. He used his executive authority last year to set his own goal of net-zero emissions by 2050, and believes wind power will be key to reaching that goal and issued a climate “roadmap” last week that outlined broadly similar goals, including specific emissions-reduction targets for the commercial real estate industry.

He objected, however, to several components of the bill, including one piece that would have allowed municipalities to update their building codes to require new construction to be “net-zero.”

“One of my big concerns is I’ve gotten a lot of incoming from a lot of folks who are in the building and home construction business who have said that certain pieces of this bill, which remember I can’t amend and send back, literally may just stop in its tracks any housing development in the commonwealth and those words get my attention,” Baker said at a press conference on small business relief Thursday in Boston.

He also criticized the legislature for not providing any resources for municipalities, including economically and environmentally disadvantaged communities, to adapt to climate change. The governor proposed this session to raise more than $130 million a year for climate adaptation projects by raising real estate transfer taxes.

New Fight Looms

The veto came just a day after House Speaker Ronald Mariano and Senate President Karen Spilka pledged that if the governor vetoed the bill, it would be refiled unchanged and passed again in the coming days.

“Climate change is the greatest existential threat facing our state, our nation, and our planet, and so Governor Baker should sign the climate change bill that is now on his desk. Should he not take this important step, the Senate and House are united in our intention to refile and pass the conference committee bill in its entirety and get it onto the Governor’s desk in the coming days,” Mariano and Spilka said in a joint statement.

Mariano pledged earlier this week that he would refile the same legislative language immediately if Baker vetoed it. That could put the House and Senate on a path to take votes as soon as next week, if everyone follows through.

The two Democratic leaders made that commitment hoping to convince Baker to sign the bill, but may have made it easier for him to veto the bill knowing that legislative leaders were determined to take it up again quickly in the new session. Baker said if had more than 35 hours at the end of the session to review the bill he would have offered amendments, but now hopes to work with lawmakers quickly to find common ground.

“What that says to me is that the House and Senate would like to get, quote, a significant bill done on this issue. So would we. So from my point of view, that’s a positive,” Baker said.

Industry Opposition

Groups like the Greater Boston Chamber of Commerce and NAIOP, which represents the real estate development industry, pushed Baker to veto the climate bill because they said it would have made construction of new homes cost-prohibitive to developers by allowing cities and towns to adopt a net-zero “stretch energy code” aggressive enough to bar new homes without some form of subsidy for builders.

Barrett, the Lexington senator who helped write and negotiate the final bill with the House, said legislators had actually worked with the housing construction industry to ensure that there would be a lot of flexibility in the law.

“There is no grounds for the governor feeling activity of any kind is going to stop development in its tracks. His people can read. I am totally puzzled by this latest development,” Barrett said.

The Lexington Democrat pointed to a section of the bill that he said gave the administration the ability to build in exemptions, as well as control some of the timing of the adoption of the new building codes. He said cities and towns would be able to incorporate additional exemptions.

“By design we want to tighten up energy efficiency in buildings without squelching construction. That’s the balance we’ve struck,” he said.

Baker, however, said he heard from the construction industry that it could slow or stop development in some communities. The governor said he supports developing an energy building code that doesn’t negatively impact the development of affordable housing.

The governor also opposed an interim emission reduction target that would have been set by the bill requiring Massachusetts to reduce emissions by 50 percent below 1990 levels by 2030.

The governor’s own plan calls for a 45 percent reduction by the end of the decade, and the administration worries that anything more aggressive would be costly and disruptive to the economy. He said the 5 percent difference in the two approaches would cost residents an extra $6 billion.