On April 22, 2019, Earth Day, the City of New York enacted the “Climate Mobilization Act” into law (“Intro 1253”). This law will impose mandatory GHG emission limits for large buildings, beginning in calendar year 2024. This new rule is clearly the most ambitious Climate Change rule taken by a U.S. municipality.

Buildings are responsible for about 70% of NYC’s GHG emissions; half of this comes from large buildings. Therefore, NYC has focused on the building sector to meet their 80% X 2050 emission reduction goals, starting with its own energy code and with local laws requiring benchmarking, energy audits, retro-commissioning, and sub-metering.

Rule Overview

Intro 1253 goes further, containing GHG emission intensity limits on nearly all buildings of at least 25,000 square feet of floor area beginning in 2024. The law defines the term “building emissions” as “GHG emissions as expressed in metric tons of CO2e emitted as a result of operating a covered building.” Thus, the limits on GHG emissions will apply not only to Scope 1 or on-site sources (such as those from a building’s boiler) but also include Scope 2 or off-site sources caused by a demand, such as purchased steam or electricity consumed in building operations. The building emissions intensity limits are tailored to specific Occupancy Groups. They will be be ratcheted down in 5-year intervals after 2029 to reduce GHG emissions from covered buildings by 80% by 2050.

The table in the link below summarizes GHG emission limits from different listed building types. https://energywatch-inc.com/breaking-new-york-city-council-passes-first-of-its-kind-ghg-emissions-cap-for-buildings/

Exemptions

A major category exempt from this law is “rent regulated accommodations”, such as those with rent-stabilized units, lest rents may be raised markedly for needed upgrades. Intro 1253 does require the owners of such excluded rental multifamily buildings to implement several prescriptive energy conservation measures, such as repairing leaky heating systems, insulating pipes for heat and hot water, weatherizing windows and ductwork, and installing timers on exhaust fans. Among the other rule exemptions are public housing and houses of public worship. Not-for-profit hospitals and health-care facilities are not exempted from the rule but will need to meet less stringent standards.

Paths To Compliance

Intro 1253 provides a number of pathways to reduce GHG emissions. Thus, reductions may be credited to an owner for “renewable energy credits” (RECs), so long as the RECs are generated by a renewable source located in or directly deliverable to NYC. For calendar years between 2024 and 2029 deductions for up to 10% of reported annual emissions may also be taken for GHG offsets (offsite emission reductions) purchased by a building owner. Additional deductions from a building’s calculated emissions for the output of a clean distributed energy resource must be located at, on, in or directly connected to the building.

This new law does not allow for emissions trading among covered buildings. However, the City is studying the feasibility of such a trading scheme and will report to the Mayor and Speaker of the City Council by no later than January 1, 2021.

Intro 1253 imposes significant civil penalties for exceeding the annual building emissions limit and the degree of excess emissions. These penalties could run into the hundreds of thousands of dollars annually.

What You Can Do NOW To Reduce The Cost and
Aggravation of Complying

Owners of covered buildings should take advantage of the “head start” before the 2024 compliance date to begin developing strategies for addressing the requirements of Intro 1253. Technical experts can estimate whether a building, as it is operating today, would comply with the 2024 limits and, if not, options to achieve compliance in time. The owner has time to choose the best option(s) to comply, reducing costs and risk if the owner waited longer. And future planning is critical. The technical assessment can anticipate the likely operation and emissions of systems in 2024. This early determination of strategies can save a building owner a lot in avoided compliance costs.

Intro 1253 is reality. Building owners in NYC will need to determine their GHG emissions and possibly modify or upgrade energy systems to comply with the standards. Other cities and states will be watching and Intro 1253 could well be a model that others will emulate. Don’t just push this aside to another time or year. Look into this soon, be active, and take steps soon to comply, saving you money and raising your asset value. Watch out for more CCES blog articles on this rule and how to comply as the City of New York provides more details!

CCES has the experts in both energy engineering and greenhouse gas (“carbon”) emissions to help you assess your covered buildings and their compliance status, and can recommend smart and prudent steps to ensure compliance early on, saving you much money, improving asset value, and reducing the worry about compliance. Contact us today at 914-584-6720 or at karell@CCESworld.com.

Part of a series taking important new concepts and wording it so you can pass basic information to your colleagues and contacts.

Background

With growing public awareness and concern about climate change and environmental peril, upgrading buildings is becoming of greater importance. Buildings play a significant role in our everyday human life. We spend so much of our time inside buildings. They must not only serve our purposes and be comfortable but have a minor impact on our environment. How can we design and operate buildings in this way to be “green”?

What Is “Green Building”?

There is no specific, universal standard for a “green building”, and, sadly, some claims are controversial. The USGBC has a green building standard called Leadership in Energy & Environmental Design (LEED). Any building meeting LEED standards and certified by the USGBC as thus, can certainly claim to be “green”. But meeting strict LEED standards is expensive and takes time, a hardship for some. Owners can benefit from incorporating at least some green building features. Any building improvement resulting in energy efficiency, reduced water usage, better indoor air quality, reduced waste formation (and/or greater recycling rates), and incorporation of innovative technologies, such as green roof systems and renewable power, are positive steps toward being “green”, will likely result in financial benefits, and is worth talking about.

The Many Financial Benefits of Green Building

It is important to understand that implementing strategies in some or all of these areas will result in positive financial benefits. Here are some.

• It’s Not So Expensive. Conventional thinking is that adding “green” features to an upgrade will make the project prohibitively expensive. Not true. Most “green” technologies have dropped in price because there is more competition. Also, many utilities and governments have reason to encourage “green” upgrades and will pay part of the upfront cost directly to you in rebates or tax incentives.

• Reduced Costs. Key phrase: if done properly, a green upgrade will reduce your operating costs, such as electricity, fuel, and/or water enough over the lifetime of the change to pay back the initial investment and much more. ROIs equivalent to 20, 30, or 40% or more per year have been achieved. What many people don’t realize is that, for example, for technologies to reduce electricity usage (improved lights, better HVAC, improved insulation), you pay for it one time, but get the cost savings year after year. (It’s not like you are going to yank out the efficient lights and re-install the old ones!) In fact, if you determine that you save, say, $10,000 per year in electricity costs the first year after changes, the savings will not only be another $10,000 the next year, but actually more, as savings are based on your utility rate, and that only rises in time (have you seen a utility lower its electric rates?). This is why such projects – again, if done smartly – should not be thought about as cute or “cool”, but as a very good financial investment, too. According to the California Sustainable Building Task Force (https://www.thespruce.com/benefits-of-green-buildings-1708553), a 2% invest-ment in green building design will save over 10 times that investment in the long run. A $20,000 investment in green features of a $1 million project, will typically result in $200,000 in actual cost savings over 20 years. A question I like to ask: what bank or Wall St. investment pays a return like that?! And with no risk?

• Reduced O&M. Many “green” upgrades result in reduced O&M costs compared to previous. For example, LED lights do not “burn out”. Many LED lights are warrantied for 7 to 10 years, unlike most fluorescents which typically last about 2 years. This means less time for Maintenance to change light bulbs, freeing them to focus on high-priority projects and also reducing accident risk (fall off a ladder).

• Higher Rents, Better Tenants. Having a certified “green” building is known to attract more high-end tenants who want/need the association, allowing the owner to charge higher rates. The resale value of certified “green” buildings is higher because potential buyers know that costs (energy, water, waste) will be lower.

• More Satisfied Tenants (Less Turnover). There is enough experience now that studies have shown that working in a certified green building is good for both physical and mental health, improving the productivity of the tenant company and resulting in the desire to renew the lease for the long-term. Lower tenant turnover and having successful businesses as tenants is good for the building owner. Investment by an owner in such features as better ventilation, no VOC carpets and furniture, no toxic pesticides, green roofs can result in this. A building owner can go further and invest in upgrades for gyms, more bike racks, better furniture, upgrading staircases, etc. to boost the health and well-being of building users. A new standard from the USGBC called WELL codifies such changes. One major study (http://newsroom.ucla.edu/releases/study-certified-green-companies-238203) showed that employees who work in green buildings were 16% more productive than those who work in traditional buildings. Another one (https://www.nationalgeographic.com/environment/urban-expeditions/green-buildings/surprising-ways-green-buildings-improve-health-sustainability/) showed that employees in green buildings were better at making decisions, reaching goals, and completing tasks. Some “green” features helped circadian rhythms, allowing workers to sleep better at night and be more alert.

• Finally, Environmental Progress. While this article has focused on financial benefits, let’s not forget that “green” building results in indisputable environmental benefits, too. By moving toward “green” building, your firm can demonstrate to stakeholders progress which can be tracked through the amount of greenhouse gas emission reductions achieved.

CCES has the experts to help you assess your buildings and determine which green features will provide you with the most direct financial benefits, whether it be a full LEED certification or just upgrading with select features. We can assure you that the features will be incorporated correctly and provide the maximum financial benefits. Contact us today at 914-584-6720 or at karell@CCESworld.com.

Rep. Alexandria Ocasio-Cortez and Sen. Ed Markey on Feb. 7, 2019 each released a framework for prospective legislation called a Green New Deal (GND), an ambitious green and economic policy. The GND proposals may serve as a blueprint for a future climate and energy package or a bipartisan infrastructure bill. Remember, these are not proposed legislation, but, instead, non-binding statements of principle, meant for public release, education, and debate. See: https://apps.npr.org/documents/document.html?id=5731829-Ocasio-Cortez-Green-New-Deal-Resolution and https://www.markey.senate.gov/imo/media/doc/Green%20New%20Deal%20Resolution%20SIGNED.pdf.

General suggestions of a GND have been around going back to the Obama Administration, but took a turn to become more serious with the House returning to the Democrats following the 2018 midterm elections and the election of several Congresspeople whose election centered on climate issues, such as converting the U.S. to 100% carbon-free energy, revert to more aggressive environmental regulation, and make “green”-oriented investments in infrastructure and climate adaptation. Until earlier in February, there was no written structure to the recommendations.

The frameworks begin with the arguments about why green change is necessary, referring to the findings of the October 2018 report of the Intergovernmental Panel on Climate Change and of the November 2018 U.S. government National Climate Assessment Report. The documents use these findings to state their goals of avoiding the worst impacts of climate change by reducing GHG emissions by 40 to 60% below 2010 levels by 2030 and to net-zero global emissions by 2050.

However, these proposals go beyond just green goals by tying them to other issues of importance in the U.S., such as public health, environmental degradation, income inequality, and lack of access to healthcare, which affect of way of life and security. In addition, the documents propose major infrastructure, land management, afforestation, and public transportation investments to raise employment, improve productivity of land, and adapt to impacts of climate change. Few specifics are provided in terms of funding and economic output; however, this would result in major changes to the U.S. economy.

Neither GND resolution provides specifics on how this would be achieved. There is no suggestion of whether a price or tax on carbon emissions would be created or whether cap and trade policies would be used. There is nothing that would eliminate nuclear power as an option or carbon capture and sequestration.

Neither resolution has come up for a vote in either chamber, and whether either will is unknown. GND has garnered a lot of press attention, and there will likely be much debate throughout the country. There is growing press about recent extreme events (forest fires during “off-season”, polar vortex pulling apart, hurricanes, etc.) tied in part to climate change that worries a large portion of the U.S. population and the realization that reduced GHG emissions is necessary. On the other hand, it is anticipated that the GND will require a large injection of public money during a period of high deficits, potentially risking damaging the overall economy. Plus, there is the reality that much of the U.S. population is unfamiliar with these issues and technologies, and can be made to be fearful of change they are not familiar with and worried about future unknowns.

Polls and feedback from constituents may ultimately dictate its success. This will likely lead to the ultimate number of co-sponsors which will lead to an up or down vote or lead to further discussions by Presidential and other candidates in the 2020 election cycle. Might GND become an official plank of the Democratic party? If a vote can be held (more likely, the House), then whether it wins or loses in a close vote, may inform politicians of a growing green popularity in the U.S.

Should GND prove popular in public polls or in a vote, it is possible that some legislators will take some GND provisions and create new legislation based on them relativey soon, which could mean impacts of GND sooner than anticipated.

In the meantime, the public discussions of GND, its need, implementation, and potential impacts are occurring.

CCES has the experts to assist you in “greening” your operations in conjunction with or independent of the GND resolutions. We can recommend “green” options that will also benefit your bottom line (reduce costs, improve productivity, etc.) and project manage these changes to solidify the benefits. Contact us today at karell@CCESworld.com or at 914-584-6720.

In December 2018, the Massachusetts Dept of Energy Resources released a new Comprehensive Energy Plan. (https://www.mass.gov/files/documents/2018/12/11/CEP%20Report-12122018_0.pdf).

It may serve as a model for other states or regions of the country. Massachusetts’ two-fold goal is to reduce its greenhouse gas (GHG) emissions consistent to what is called for by the United Nations and reduce energy usage substantially. It calls for the state to both electrify and to conserve energy usage as much as possible.

According to the Department, in 2016, only 17% of Massachusetts’ energy demand of over 1 quadrillion BTUs was from the electric sector. Transportation uses 44% of its energy and buildings (thermal) use about 39%. Therefore, significant upgrades need to be made in these two areas.

To achieve progress in transportation, the Plan recommends the following 3 changes:

1. Improve electric charging infrastructure

2. Establish a “goal” to require all new cars, light duty trucks, and buses sold in Massachusetts beginning in 2040 to be electric or have equivalent emissions

3. Establish a RGGI-style reduction credit trading system for transportation GHG emissions with other Northeast and Mid-Atlantic states.

As for buildings (thermal), many buildings are switching fuels to natural gas, which results in solid GHG emission reductions. However, to meet the necessary climate change goals, a significant portion of buildings must do better. Because it is not likely in the foreseeable future that thermal load will become decarbonized, reductions can only work by reducing amount of fuel needed to be combusted. In other words, improve energy efficiency. The Plan has numerous references to improved efficiency, such as frequent testing and upgrading of boilers, improved insulation, smarter building, etc. But just as important, it has recommendations to get the information out and incentivize building owners and tenants to invest in energy and carbon reduction.

Together, this Plan could well be a model for what other states select as their way to reduce energy usage within their state and of GHG emissions in the future.

CCES has the experts to help your firm reduce energy usage in a smart way, to reduce costs and GHG emissions. Economical strategies, for you to get the best payback possible and to maximize other benefits, such as improved equipment and worker productivity, reduced O&M costs, no/minimal disruptions, etc. Contact us today at 914-584-6720 or at karell@CCESworld.com.