Category Archives: Sustainability

IRS Section 179D Tax Deduction For Energy Upgrades Made Permanent

It took some time, but Congress finally passed and the President signed into law the permanent extension of IRS Code Section 179D as part of the recent COVID relief bill. Owners of commercial buildings can again and permanently receive federal tax deductions for approved, successful energy upgrades. See: https://uscode.house.gov/view.xhtml?req=(title:26%20section:179D%20edition:prelim)

Section 179D first went into being in 2006, offering federal tax deductions for commercial building owners who implement upgrades of interior lighting, building envelope, and/or HVAC systems, at a rate of $1.80 per square foot (sf) for all three or $0.60 per sf for any one of these. The code lapsed at certain points and Congress was slow to reauthorize it several times, resulting in gap years during which such deductions were unavailable and general confusion about its effectiveness. In recent years, this federal tax deduction for energy upgrades was not in effect.

However, effective now the $1.80 per sf tax deduction for energy upgrades is permanent, will not need to be reauthorized, and will grow each year by the inflation rate. This tax deduction is available to owners of existing commercial buildings who upgrade the interior lighting, building envelope, or HVAC systems that reduce the building’s total energy and power cost by 50% or more in comparison to the minimum requirements set by ASHRAE 90.1-2001 (for buildings and systems placed in service before January 1, 2016) or 90.1-2007 (for such buildings and systems after that date). Energy savings must be modeled and calculated using approved software. See: https://www.energy.gov/eere/buildings/qualified-software-calculating-commercial-building-tax-deductions Federal tax deductions of up to $0.60 per sf are available to building owners which meet the criteria for any one of these three areas. And this tax deduction is retroactive to upgrades that occurred before the 179D was reauthorized.

In addition, the ASHRAE standard for which a reduction will be compared will change. A project will be compared to the ASHRAE standard that was in existence 2 years prior to the start of construction.

For more information on Section 179D and any potential tax deduction, speak to your tax professional. CCES has the experts to perform the technical elements of an energy upgrade that may be eligible for the Section 179D tax deductions. Contact us today at 914-584-6720 or at karell@CCESworld.com.

Will 2021 Be the Year Big Finance Goes Forward on Climate Change?

In a recent report, the Board of Governors of the Federal Reserve acknowledged for the first time the impacts of Climate Change on financial markets and overall stability, doubling down on a recent statement by Chairman Jerome Powell that the Federal Reserve is “actively … getting up to speed” on Climate Change risks and its impacts to the financial system. The Federal Reserve distinguishes between sudden shocks to financial conditions and long-term, gradual changes. The recent report notes that Climate Change risk is a combination of shocks that result in economic vulnerabilities over time, which are difficult to research and measure.

In the Federal Reserve’s view, acute hazards, such as storms, floods, droughts, or wildfires, can quickly change future economic conditions or the value of assets which could result in significant financial instability. In addition, public perception of risk could affect perceived values, too.

The Federal Reserve proposes several changes to address Climate Change risk, such as:

• Insisting on increased measurement and disclosure within financial markets and investors to improve climate risk pricing and reduce asset price volatility

• More research on the relationships between climate, the economy, and markets to improve predictability of Climate Change events and effects

• More planning on adapting to the physical effects of Climate Change through technologies and policy changes, to reduce physical risks of Climate Change.

2020 is also the year that momentum rose in the Security & Exchange Commission (SEC) to take more seriously Environment, Social, and Governance (ESG) issues of private companies. SEC Commissioner Allison Herren Lee wrote in an op-ed that the SEC is obligated to consider Climate Change in investment decisions, as it affects “… the livability of the planet.”

The first step in effectively addressing these issues is to develop consistent reporting standards for ESG. Recently, the International Federation of Accountants proposed a board – expected to be formed in 2021 – to develop new international sustainability standards to determine necessary measurements and reporting standards for different industries or company types.

It is likely that President Biden-selections to replace senior officials in the Federal Reserve and SEC in 2021 will likely push this process along more vigorously.

CCES has the experts to help you form and execute a useful Climate Change program to determine goals and progress and inform your stakeholders. Contact us today at karell@CCESworld.com or at 914-584-6720.

3 Overlooked Areas To Maintain Proactive Systems

Last month, I wrote that having a viable energy program is like going to the doctor. The general practitioner may not solve your problem, but he/she will tell you if you may have a problem which should be addressed early on. Catch a potential problem and solve it before it becomes serious and costly. Have as a goal for 2021 the practice of examining your energy and/or environmental compliance program – even if they seem to be functioning fine and shows you are in control. Such a review may reveal problems that will only get worse, risky for compliance, and costly in the future, if not addressed. Therefore, pay attention and react to:

• Process changes. Even a small change in one area or a need to make more of a certain product in another can have significant impacts on energy and environmental compliance. Many changes in processes impact environmental compliance. For example, changes made to the procedures to make certain chemicals to, say, reduce water usage, may result in changes in emissions of critical air toxics or changes to energy usage. These need to be estimated and, if necessary, modify applicable permits and determine whether compliance is maintained and additional (or saved) energy usage. All probable process changes or new equipment should be evaluated for environmental compliance and energy usage. This should not only go for process changes at the individual step level, but larger impacts, too, such as the number of batches of compound run. While you may focus on controlling big energy or greenhouse gas emitting processes, using a “run of the mill” process more can net out significant reductions made elsewhere, costing you much.

• Regulatory and policy changes. It is tempting to keep your energy and environmental compliance systems which are working well, at the status quo. But things change, and one of the things that affects either the most are new or revised regulations. So, make the time to follow regulatory changes in your jurisdiction. However, do not just follow new regulations, but also new policies and cultural changes that affect requirements and agency or public expectations.

• Technology and infrastructure. It is important to keep up with changes in technology or applications to assure the ongoing effectiveness of your environmental compliance or energy program. Keep track of not only new equipment and its uses, but also their complex relationships to determine potential upheavals when it comes to environmental compliance and energy usage. New technologies are usually “cleaner” than the ones being replaced, but not always so or not in all aspects (for example, some, while reducing air toxic emissions, may use more energy). So perform a thorough analysis of how it affects your current permits and energy usage.

Over time, developing a system to monitor changes in these seemingly “innocuous” areas can help strengthen your environmental compliance and energy systems and ensure that your facility does not unknowingly float into non-compliance or suddenly raise energy usage that might result in shortfalls or higher costs.

CCES has the experts to help you strengthen your environmental and energy systems to detect issues before they become costly and risky. Contact us today at 914-584-6720 or at karell@CCESworld.com.

And the Winner for 2020 Is (Drumroll): Science

I think most people would agree that 2020 was the worst year of our lives. With the exception of some who served in war or dealt with death or suffering, this year was very bad for most of us. We had the largest pandemic in a century kill over 1.6 million people worldwide so far (as I write this), 18% of which live in this country (even though the US has only 4% of the world’s population), in what is supposed to be the world’s most advanced nation. We are in a massive recession coming from the pandemic, causing millions to lose their jobs. According to Fortune Magazine, nearly 100,000 US businesses shut down permanently for reasons related to the pandemic – and that was still in September. We had huge forest fires in the US West – the largest and most intense in recorded history and the largest number of serious storms ever around the Gulf. Plus, we had very contentious and polarizing political races, which certainly upset and depressed many people. A huge whammy of serious problems, if there ever existed.

I don’t mean to talk politics here, but I think the vast majority of us can agree that the leadership to combat these problems at the national level was mediocre to be charitable and really poor. President Trump failed to acknowledge many problems and address them to at least make a dent in them. Nobody could expect of any leader to achieve zero deaths from COVID-19 or no named storms in a year. But instead Trump pretty much ignored the many problems the US had to confront because he saw he could not get a full, quick, and complete victory. So he wished them away and hoped to de-emphasize their impact on the public.

His was leadership by intimidation. And in many cases, it worked. There was solid evidence he committed convictable crimes, yet at his impeachment trial, he used intimidation to keep his party’s Senators in line to acquit. He used Twitter to attack good people who, in almost all cases, accepted their smearing and firing or ended up defending their attacker. What I found particularly amazing was Trump’s humiliation and firing of Jeff Sessions, the first mainstream Republican to support him. He might not have become President without him. But when Sessions made the proper decision to recuse himself from an investigation, Trump not only fired him, but belittled and sullied his name so badly that he could not run successfully in his home state again.

But we learned in 2020 that leadership by intimidation has its limits. President Trump could not bully the coronavirus into submission. He could not intimidate massive storms and wildfires to be less severe or not form or spread. Trump could not control – in fact, he was ultimately controlled by – science. Science prevailed and broke the norms he wanted of life and was the ultimate winner in 2020 – to our pain and detriment ultimately, of course.

So a lessen we should learn for 2021 is to respect nature and let us harness the power and knowledge of science for the better for all. There are some good signs. The new COVID-19 task force that President-elect Biden has put together and appears to empower is composed of top notch physicians and scientists and appears to be ready to make decisions based on knowledge of how viruses spread, proliferate, and do damage, not wishing it go away. The new Administration said it will re-enlist the US in the Paris Climate Accords to lead the world in addressing Climate Change based on knowledge and science and will try (within democratic constraints) to pass regulations and incentives to bring down greenhouse gas emissions, which science has demonstrated is its cause and not keep our heads in the sand and ignore the problem. And turn clean, efficient energy into economic prosperity, which it can do. Let’s all hope and support this approach!

CCES has the technical experts that use the best science and knowledge of technology to help your firm prosper when it comes to energy management, usage and reducing waste and to environmental stewardship. We can help you harness the power of knowledge to maximize your bottom line benefits. Talk to us on how we can help you. Contact us today at 914-584-6720 or at karell@CCESworld.com.

Have a healthy, safe, prosperous, and more knowledge-based 2021 for you, your loved ones, and your companies from CCES!

A Goal for the Season: Express Your Gratitude

For many of us, 2020 has simply been a terrible year, the worst year of our lives. A pandemic the likes of which we have not seen in a century, that has killed over 1.5 million people worldwide, as this is written. A related economic slowdown that has sent many good, hard-working people to the poorhouse. A very feisty and divisive national election which exposed US vulnerabilities and even attacked our underlying democracy, with otherwise good people demonized and with families and friends broken apart by the rancor and unable or unwilling to compromise even a little. A year of backtracking on progress toward addressing climate change and clean energy.

What can we do as people and as practitioners of a healthier planet? I wish I had some great philosophical or even practical words of advice to heal the wounds and solve the problems. I doubt they exist. We all have to move forward slowly, in our own way, by becoming better people. One way is to show gratitude, to show others that even if we disagree, we still care, we respect, we realize others values as unique human beings. And a simple way to do this is express this by writing a personal, heartfelt note.

My gosh, for many people (like me) this can be challenging! As an engineer, I stick to data, facts, conclusions, and do not normally express heartfelt thoughts, I admit. How does one approach this? Here are some tips:

• Come up with a list of people to write. Family, friends, people who will be buoyed by receiving such a note of gratitude.

• Think about each person. Note one or two unique, positive characteristics, even if you may not “agree” with his/her philosophy or lifestyle.

• Say “Thank you”. Consider at least one good thing the person has done this year (gave you support during a difficult time, baked a cake, excelled in some activity).

• Think about how to express the respect you have for this person’s uniqueness.

• Express hope for a happy and meaningful holiday season. And consider next year. Be positive. Express your hope that soon there will be a vaccine, people will be immunized from COVID-19, life will return to normal, and we can share and spend more time together in the future. We will all be happier.

Ideally, these should be handwritten notes. While a bit more work, it’s probably a good idea to write out a draft of what you wish to say before writing the final note; review and edit and perhaps even “sleep” on it before writing the final note. Find nice stationary to write your notes or personalize blank sheets to make it unique and bring joy to others.

This may be one of the most meaningful things you do this Holiday season for your family and friends and – in these tough times – may be remembered the fondest. Enjoy.

Happy Holiday Season and make it a great 2021.

Marc Karell

Climate Change & Environmental Services, LLC

Reduce Waste And Make Your Holidays Meaningful, Too

The Holiday season is coming up and this one may be more meaningful than ever given the very rough year we have all gone through in 2020 with the COVID-19 pandemic and the bruising elections. Let’s get together, let’s share, but also be mindful to do so in a way to reduce waste and energy usage and to be Earth-friendly.

This is the time of year for gift giving. But do you really have to buy a gift for everyone? Remember everything you buy will eventually end up in the trash. So, re-think your gift list. Does everyone on your list really need a physical gift? Perhaps you can cut a few? And for those you will give a holiday gift, perhaps instead of a thing, you can give a gift experience. Take someone out on your favorite nature walk. Get a streaming gift card so someone can experience, say, a Broadway play or opera. Pay for classes on Zoom for a loved one, such as online cooking, Zumba, or dance classes. Give to charity in someone’s name. Do the giftee a favor (clean a neglected room, rake the leaves). Or cook or make something, like masks or knitting. Give to a favorite charity of the giftee. There are so many options that exist instead of a physical gift, right?

If you “have” to give a more traditional gift, think about re-gifting something you already have that is not so important to you anymore, but may mean a lot to the giftee. People joke about re-gifting, but it can be meaningful and save your time to shop. If you “have” to shop, buy local, at thrift stores. To reduce waste, consider consumables – things that get used up (i.e., soap). Don’t use gift wrap; use comics or cloth, etc., instead of paper.

This is the time of the season to host holiday parties. With people locked up because of COVID, getting people out on visits is more important than ever. Send evites, rather than paper, mailed invitations. Give your event a theme by highlighting a charity or local good cause. Use reusable items (forks, spoons, plates, cups, etc). Skip party favors (are they that important?). Give your guests a simple charm or label to put on their dishes or wine glasses so that people don’t lose track of them and have to throw it out.

As for serving food, consider sustainable meal alternatives (less meat, more veggies, more local-grown). OK, you have to serve turkey for Thanksgiving. See if it can be a bird from a regional farm. Buy stuff in bulk (less packaging waste). Set up one simple “recycling” center in your home, with small cans for garbage, recycling, and compost, clearly labelled, such as with children’s illustrations of food, plastics, glass, paper, etc. While you will try to buy the right amount of food for your party, you’ll probably buy more than you need. If so, be prepared for leftovers and think of fun recipes to turn them into good follow up meals for your family for the next few days. Don’t be bashful about offering guests the option to take home leftovers and have reusable containers ready to apportion these to guests, based on what they liked best. They’ll love you for this!

It is not the holidays without decorations. Reuse what you have used before. Will people really remember what you have used year to year? If you need to buy decorations, buy those that use recycled, natural materials (wreaths from a nature area). Lights are an important part the holidays. Make sure your holiday lights are LEDs (they’re safer, too) and make sure they are turned off on sunny days and in the middle of the night.

The holiday season is an important time. Think about their true meaning. Clean out old closets and take still usable products and donate them to local charities. That’s what it’s all about, right? Get together and share with family and friends. But do so in a less wasteful, more sustainable way. Have fun and good spirit, and do good for the Earth.

CCES is here to help you reduce your waste generation and energy usage to be good for the Earth and help the bottomline, too. Contact us today at karell@CCESworld.com or at 914-584-6720. Have a happy, healthy, meaningful Holiday season, everybody!

Variable Frequency Drives Will Save

One area of energy waste is something that a lot of people take for granted. One goes out and buys a fan or motor or it is included in equipment to move air or liquid so that an operation works, whether it is an AC unit or industrial process. We buy it, install it, and don’t think much about it. It works. However, there are several issues:

  • Most fans and motors work on an all on/all off system. It is either working at full load or is turned off. What if operations do not need that much power? You have no choice. The fan or motor operates at the design speed only.
  • To adjust flow, reduce the valve opening. But that takes work to regulate and, as important, the motor is still using extra energy above what is needed.
  • It gets worse. Pumps and fans are often overdesigned (by well-meaning engineers) commonly by 15 to 20%, resulting in even greater energy waste.
  • And also, wasted energy is often in the form of vibrations or dissipated heat, which reduces equipment life and increases maintenance costs.

It is like driving a car that goes so fast that you have to step on the break constantly to get to where you want to go. Wasted energy.

The fix for this problem is to anticipate the highest flow you need, procure a pump or fan whose maximum power meets that flow, and ensure it has a variable frequency drive (VFD) to enable it to operate at lower power during reduced needs with the valve kept fully open. Electricity reductions of over 50% have been achieved. In addition, many utilities offer incentives for some fraction of the capital cost of equipment with motors with VFDs for purchasing and using them.

And this fix particularly makes economic sense because the capital cost of a new motor with a VFD is relatively low (58% of a pump’s life cycle cost is energy usage). So a small increase in capital cost to bring energy costs down goes a long way.

In assessing opportunities to reduce energy usage and cost at your company, space, or building, consider equipment that contains and uses fans and motors, invest in assessing whether it is overdesigned, and replace equipment or just the motor with a new one, right-sized, containing a VFD for good cost savings.

CCES has the experts to help you assess your energy usage and develop energy conservations methods to help you save significant energy usage, peak demand, and costs. We also project manage to help ensure you procure and use new equipment that is properly designed by the vetted suppliers. Contact us today at karell@CCESworld.com or at 914-584-6720.

Updated Future Energy Trends – Oct. 2020

According to several recent articles, investments in energy have been level at about US $2 trillion per year over the last two decades. However, forecasters believe it will rise soon to at least US $2.7 trillion because of the interest in getting reliable energy to the developing world and the interest in clean energy and the major infrastructure changes that would have to be implemented to achieve this.

Studies and recent efforts indicate that coal-fired utility-sized power plants are still relatively economical because the price of coal has declined a lot recently because so much is available as more is mined globally, yet more coal-fired plants are closing or converting to other fuels. However, the most economical way of developing energy, in terms of capital cost of building a utility plant, availability of the source and conversion of the source to electricity, and long-term O&M costs is wind power, particularly offshore wind, even ahead of solar technology.

Offshore wind technology is becoming more attractive to investors and governments. China and the European Union are moving to install more offshore wind plants. Offshore wind has the highest capacity of any energy technology, about 50% of the energy hitting a wind turbine is converted to electricity, comparable to a gas-fired plant and superior to solar PV panels.

If renewable technologies, such as wind and solar, become more prominent, utility executives understand that this will mean that more upfront investments will be needed for building power plants and the proper infrastructure. These projects tend to be higher cost upfront, but lower costs to maintain and the “fuel” is free. Finding investors for such outlays may be difficult. However, the long-term payoffs could be significant.

CCES has the experts to help you determine whether renewable energy is right for your facility or what your best options are for determining where your electricity and fuels are coming from. We can analyze and provide cost-effective options. Contact us today at karell@CCESworld.com or at 914-584-6720.

Can Clean Technology Be Incentivized With Carbon Credits?

How does someone make money on any technology he/she invents? Well, one gets revenues and, hopefully, profits from selling the technology or get royalties and revenue from licensing agreements – a percentage of future sales. These are ways to make money from selling the technology. But if you really believe your technology will be effective in reducing greenhouse gas emissions and will benefit the buyer financially that way, might there be other ways to profit? Some are considering contract provisions that will enable the owner of a patent to also make money on how the technology functions – how many tons of GHG emissions are reduced or how many credits (and revenue) the equipment can create. In other words, include in the contract a provision for future revenue based on potential future environmental benefits or revenue based on these benefits. Law firms are looking into these questions to potentially help their clients generate significant future revenue from the technology’s future value to the buyer. As a longer term benefit, if this principle becomes commonplace it may create significant new incentives for companies and individuals to develop innovations related to climate change – something that is desperately needed.

Can this work in real life in the US? There are issues, such as the fact that in the US there is no agreement for the price of GHGs. There is no national tax or trading program that might set a price or a baseline price. Who would set the price? In the US, one can set a price based on the Regional Greenhouse Gas Initiative or California’s AB 32, but these are regional and specific programs. Voluntary carbon markets exist but are not regulated and may breed fear of the carbon market and distrust. Also, how do we keep the price reactive to the times and markets, but relatively stable?

Therefore, we need a national policy to regulate the carbon market and provide a value for GHGs. This will not only allow companies to plan their GHG emission reductions, but also unlock innovation in the climate change industry. The results of the US Presidential election soon will tell whether we move toward these principles or stay in denial of the problem. Not only will an aggressive policy toward reduction in GHG emissions be better for the planet and for industry in most cases, but can unleash innovative and creative technologies to aid us even beyond carbon in the future.

CCES has the experts to help you assess your “carbon footprint” and energy usage and develop cost-effective strategies to reduce your GHG emissions and energy usage to maximize the financial benefits. Contact us today at 914-584-6720 or at karell@CCESworld.com.

SEC Commissioner Lee Makes Case For Climate Disclosure

SEC Commissioner Allison Lee has been speaking up about climate change and the need to make communication of climate change and risk factors more transparent to shareholders. Commissioner Lee has written about the need for the SEC to do more to establish specific climate disclosure standards that investors, the consumers of this information, would eventually establish a balance between useful and superfluous information. This has been backed up by many letters and other comments from the investor public, hoping to expand climate disclosures.

However, Commissioner Lee was outvoted and new final rules do not address climate risk communication, ignoring overwhelming investor comment.  The SEC voted to maintain a principles-based disclosure system. Disclosures would be made about climate change only if the topic was material. Investors must trust that each company understands whether issues affect the climate and estimate how greatly. But given the large number of companies that continue to not disclose any information about climate change, can it be assumed that it has no issues on the subject? Commissioner Lee estimates that over 90% of U.S. companies are potentially exposed to material financial impact from climate change. Yet potential investors are not getting that information.

According to Commissioner Lee, much of the private sector accepts climate change and is preparing for a future low-carbon economy given the large potential impact on business by climate change, such as the intensive fire and hurricane seasons. Since this is the future, potential investors need transparent information about businesses’ greenhouse gas emissions and how they are managing climate risks. This can only happen by mandatory public disclosure, which is currently not happening. A secondary benefit of greater public disclosure is this will be a wellspring of information that governments can use to manage their own nation-wide risks. The nation, including companies, must price climate risk accurately to drive investment toward a transition to green energy rather than up and down cycles timed around climate disasters.

CCES can help you determine your greenhouse gas emissions, both direct and indirect and determine cost-saving measures to reduce GHG emissions, which will have added benefits for you. Contact us today at karell@CCESworld.com or at 914-584-6720.