Green Building Law Blog : Green Building Lawyer & Attorney : Shari Shapiro: Calliope Communications, LLC

On July 17, 2009, the Senate Energy and Natural Resources Committee approved the American Clean Energy Leadership Act (ACELA),  Senate Bill 1462 . This is a "bipartisan" markup of the House American Clean Energy and Security Act of 2009, also know as the Waxman-Markey Bill. [A summary of the green building provisions of Waxman-Markey from Green Building Law Blog and Green Building Law Update is available here and the Pew Charitable Trusts' resources on all things Waxman-Markey is here. For a primer on getting bills passed in Congress, School House Rock does an excellent job here.]

Among the most significant provisions for green building interests is the National Energy Efficiency Building Codes, Section 241 (it starts at page 228 of the bill).

•  30% improvement in energy efficiency by 2010 and 50% by 2016 for the National Model Energy Efficiency Codes;
• Within 2 years after the passage of ACELA, States must certify whether they have reviewed and updated the building code of the State regarding energy efficiency;
• To certify, States must show that the code provisions of the State at least meet or exceed 2009 IECC for residential buildings and Ashrae 90.1-2007 for commercial buildings (or acheive equivalent or greater energy savings.). 
• Within two years after the Secretary of Energy establishes a modified national energy efficiency code, State must certify that that the code provisions of the State meet the revised code. 
• Within 3 years of certification with the national energy efficiency code, States must certify that they have acheived compliance with the State building energy code or model code or "made significant progress" toward achieving the goal.
• A State is considered to have made "significant progress" if it has developed and is imlementing a plan for achieving compliance within 8 years.
• The Secretary may reduce the energy targets for renovated buildings to "the highest achievable level." 

 To acheive these goals, ACELA appropriates $100,000,000 for fiscal years 2009-2013 for training, enforcement and implementation.

A brief comparison with Section 201 of the Waxman-Markey bill (from the Pew's excellent summary) shows that ACELA's version is a lot softer on the states.

 After enactment, buildings built to a code meeting the national building code energy efficiency target will have a 30 percent reduction in energy use relative to the baseline code. By 2014 (residential) and 2015 (commercial), buildings built to a code meeting the national target will have a 50 percent reduction; an additional 5 percent reduction will be required every three years thereafter, until 2029 and 2030 for residential and commercial buildings, respectively. The baseline codes are the 2006 IECC (residential) and ASHRAE Standard 90.1-2004 (commercial) codes. National targets may be modified to reflect the Secretary of Energy’s determination of the maximum reduction of energy use that is cost-effective on a life-cycle basis or if successor building codes provide greater reductions.

Within one year of the establishment of a national building code, each state is required to certify that it has either adopted the national code or updated its own building codes to meet or exceed the national target, or certify that local governments representing at least 80 percent of the State’s urban population have either adopted the national code or modified their own codes to meet the target. In states and local governments that do not provide certification, the national building code will apply.

States and/or local governments will be required to demonstrate compliance within two years of adoption of a new code; compliance is achieved if at least 90 percent of new and substantially renovated building space in the preceding year meets the code. For the first seven years after enactment, states may instead demonstrate that they have been making “significant progress” toward compliance by developing a plan for enforcement, taking steps to implement that plan, maintaining funding for enforcement, and demonstrating at least 50 percent of new and renovated buildings meet the code.

In short, ACELA's requirements are lower, and the states have longer to comply.  However, the ACELA does not do what I would have liked to have seen--a true cooperative Federalism model in which the Federal government sets the energy efficiency targets, and allows the states to create codes to meet them, much like the State Implementation Plans in the Clean Air Act. 

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Yesterday I was asked whether enough support was being given to develop the green building industry in the United States.  It led me to wonder where the so-called "green" stimulus package had wound up six months later.  I had criticized the stimulus bill for being less green in reality than in rhetoric here.  The answer to where we are now that the bill is being implemented? A light shade of chartreuse, not the deep forest I would have preferred.  By my calculations, a total of $33.2 million has been paid out for green stimulus programs, and an additional $307 million in public transit dollars, of the allocated $119 BILLION.  That is .28% of the total allocation by my calculations. 

Here are the stats in detail:

 The allocations in the Stimulus Bill for categories which include green:

• Infrastructure funding has been allocated $111 billion (this includes transit)
• Energy has been allocated $8 billion. 

[Please compare this to the $288 billion for tax relief].

Energy Efficiency/Renewable Energy--Department of Energy

As of 7/17/09 the Department of Energy has paid out $264,457,144.  $16,796,000 has been awared for energy efficiency and renewable energy projects, of which  $3,189,150 has actually been awarded.  BOTTOM LINE: $3 million

High Performance Green Buildings--General Services Administration

As of 7/17/09 overall the GSA has paid out $12,743,040. of available $656,418,268 of which $6,807,468 has been paid out for federal buildings, which includes high performance building projects.

UPDATE: The GSA provided me with specific information on the High Performance Building Program.  According to the GSA, $4,500,000,000 was appropriated by Congress, $318,750,279 obligated to date (contracts awarded) and $230,771 outlayed to date (work completed & paid)

BOTTOM LINE: $230,771

Public Transit--Department of Transportation

As of 7/17/09 the DOT has paid out $773,662,175 of a total available $22,188,399,591. For rail and other transit funding, including Amtrak, obligations of $3,921,784,326.72, outlay of $306,918,718.00 (this includes state block grants).
BOTTOM LINE: $307 million in public transit funding outlaid as of 7/17/09.  

 Everything the EPA Is Doing--Environmental Protection Agency

As of 7/17/09, EPA has paid out $30,515,805 of the $5,713,481,497 it was allocated.  Assuming that all that the EPA does is in some way green related, and this is a big assumption on my part, as much of the EPA funds have been dedicates to water resources and cleanup of hazardous sites, that adds another Bottom Line $30 million. 

So what do all these numbers mean? 

I think, as I did when the ultimate stimulus bill was passed that the overall amount is not enough.  What we know now is that the money is being spent slower than anticipated.  If the concept was to stimulate the economy in 2009, $33.2m probably is insufficient.  The entire practice of architecture is dying on the vine, without help there will be few innovators left to help green the next building wave.  Something needs to be done to facilitate getting the green stimulus dollars to those projects that need them--I have heard of LEED projects which are dying because they cannot access private funds--sooner rather than later.

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Any student of environmental law at some point will be exposed to the seminal work by Garrett Hardin, the "Tragedy of the Commons."  The thesis is essentially the following--if a resource is shared by all, it is in no individual actor's interest to protect it, and it is in each individual actor's interest to maximize his/her exploitation of the resource even though this will result in the degradation of the resource for everyone. 

Over the past few weeks we have seen two examples of the tragedy of the commons in action.  At the G-8 summit, third-world countries were unwilling to agree to reduce their greenhouse gas emissions:

The wealthy nations failed to persuade the leaders of big developing countries to promise to cut their own fast-spreading pollution, unable to overcome arguments that the well-established industrial giants aren't doing enough in the short term.

Then, when Hillary Clinton made a trip to India, she was informed by the Indian Environment Minister Jairam Ramesh

India cannot and will not take emission reduction targets because poverty eradication and social and economic development are first and over-riding priorities...

In other words, the short term benefit of carbon exploitative development to India was more valuable than the long term benefit of global climate management.  A classic example of the tragedy of the commons.

So....now what? How do world leaders convince India, China and the other emitters to prioritize the long term effects of climate change above short term economic gains? There are three possible solutions--regulation, polluter pays and privatization.  It is essentially impossible to privatize climate change, so that is out.  There is no international regulatory body which can generate regulations to rein in unwilling participants.  But, and this will be controversial, countries which are reducing their emissions can do "climate protectionism."  In other words, force goods, power, services, etc. to disclose their carbon emissions and not accept goods, power, services, etc. whose emissions are above a certain threshhold or which have not been offset.  It is essentially a polluter pays system.  If the cost is high enough, savvy entrepreneurs will find a way around a carbon based industrialization. 

Take telephone service for example.  There are very few telephone poles and lines running through many parts of the Third World, yet there is telephone service through cell phones.  It was not necessary to go through the same development of telecommunications that the United States and Western Europe went through to get phone service--Africa and Asia went directly to a more efficient technology.

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I had lunch today with an engineer friend of mine, and we were discussing the recent attention to the possibility of de-certification of LEED buildings based on energy and water efficiency performance measures.  As has been discussed here and on several of my favorite blogs (Matt DeVries does a nice compilation here),  the USGBC 's announcement that it was incorporating energy and water usage reporting requirements as a precondition for acheiving LEED v3 has elicited a rash of speculation about the legal and logistical implications of de-certification.  As we were talking, a potential new model emerged--the green building lemon law.

One of the main problems I see with ongoing monitoring of building performance, and many of the legal implications which accompany it, is the distinction between construction and operations/maintenance.  As designed, a building may be very green.  It may have all the appropriate siting, technology and other features the architect and engineers could wish to include.  However, if the building is poorly operated or maintained, the energy or water performance may not measure up.  This is akin to a car's mileage.  You buy a Toyota which has been estimated at 35 mpg.  But if you don't inflate your tires, and you have a lead foot, it probably won't get the 35 mpg.  But it is not a defect of the car, rather the choices of the operator.  By having ongoing building performance as a component of LEED NC certification, construction and operations and maintenance are inexorably intertwined.  

I propose, instead, a green building lemon law.  For LEED NC certification, there can be a requirement of performance within some specified percentage of the energy and water efficiency modelling which would be reflective of the performance of the structure itself, not of it operation.  Is this a green building.    If the building fails, it is a "lemon" and deserves decertification under LEED NC.  Then, using LEED EBOM or other metric, there can be a measure of the green operations and maintenance of the building. 

In order to effectively measure the performance of a building, USGBC needs to decouple the operations issue from the construction one. By doing so, the USGBC would be able to monitor performance, and the liability for performance failure would be easier to attribute to the responsible party. In addition, by creating a "lemon" standard, designers and engineers would be more protected from frivolous suits--evidence of a buildings' "failure" to perform would be subject to what amounts to a higher standard of proof. 

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By now, everyone has heard of "greenwashing"--a term used to describe the practice of companies disingenuously spinning their products and policies as environmentally friendly.  The new wave of anti-environmental action is more devious, and potentially more destructive.  I choose to term it "greenbashing." 

What is greenbashing? The use of seemingly reasonable arguments about catastrophic costs or unforeseen dangers to undermine progressive environmental programs.  There have been lots of examples of greenbashing lately.  Here are a few choice examples:

1.  Green roofs may spontaneously combust.  In challenging Toronto's recent mandatory green roof by-law, Don Marks, executive director of the Ontario Industrial Roofing Contractors Association, warns that

“I don’t believe that the insurance industry has caught up with the increased risk of fire that may result from improperly maintained green roofs...”

According to engineer Rob Diemer, partner with AKF Engineering, this threat does not comport with reality:

This is a new technology and the codes, insurance companies, underwriters and testing agencies are just now catching up. From what I have seen, we should see code language and testing protocols dealing with wind uplift and fire hazard for green roofing in the near future. In the mean time I think the fire hazards are minimal and depend a lot on the type of roof and plants used.

 

On an extensive roof using shallow, lightweight, mineral based growing medium and sedum plants, there is probably little or no fire hazard. Even if the plants should die due to a prolonged drought, the fuel load of the dead plants is minimal and it is likely that any fire would rapidly consume the plants and die out before damaging the building structure. Intensive roofs using deeper growing medium and larger plants may provide a larger potential fuel base; however, most of these roofs need to be irrigated which would tend to mitigate the fire hazard due to drought induced plant death. As with all things in life there are no guarantees; however, it would appear that the potential fire hazard of green roofs is more than outweighed by the many positive benefits they provide.

2. A national energy efficiency code will catastrophically increase housing prices.  The National Association of Home Builders issued a press release on June 29 regarding the national energy efficiency provisions of Waxman-Markey that Chris Cheatham and I discussed here in our Green Building Guide to Waxman-Markey.  According to the NAHB, requiring increased energy efficiency will have catastrophic effects on affordable housing:

The market is not geared up to supply the necessary materials and equipment, and that's going to drive up costs. The result will be fewer working-class families in these new energy-efficient homes. They'll be relegated to older, less efficient housing stock and face ever higher utility bills.

In addition, a national energy efficiency code would apparently impede regional sustainability considerations: 

Usurping states' rights to determine appropriate building efficiency for homes and buildings within their jurisdiction would result in ineffective application of efficiency standards to address varying climate zones and specific needs, he added.

The reality of the situation is, of course, that builders benefit from lack of regulation. Currently,  thirteen states have no statewide commercial building codes, and fourteen states have no statewide residential building code.  A national energy efficiency building code would impose regulations where none existed before, or more stringent regulations in jurisdictions with lagging codes.  The result might be higher costs of construction--but of course lower cost of ownership of homes in the long term.  

3.  A National Energy Efficiency building code will require huge new federal bureaucracy.  Our friends over at Sullivan Kreiss  reprinted a letter that the International Council of Shopping Centers sent to its members warning of the dangers of a national energy efficiency building code: 

The cost and complexity of this federal takeover of state and local building codes forced ICSC to oppose the overall bill. The specific efficiency targets are too aggressive and the deadlines are too short. In addition, there is no trained inspection force to oversee a national building code, so it will require the federal government to retrain state employees and, no doubt, hire a huge number of new inspectors. Supporters of this new federal program simply refused to negotiate or compromise on the language. As a result, ICSC does not support this provision.
 

Of course, the way that Section 201 is written, building codes will be drafted and implemented by code councils and the states/local governments in the same way they are now, unless those entities fail to develop codes that meet the Waxman-Markey efficiency standards.  Also, the ICSC letter fails to identify how retraining code official in energy efficiency and creating additional green jobs enforcing an energy efficiency code would be a bad thing.  

Greenbashing would be a rational approach to protect vested interests if there was vested interest to protect.  However, according to the Census Bureau, new housing starts in May were down over 45% from 2008 and shopping centers are being decimated as well.  Instead, these groups could embrace sustainable programs to create new demand for their products, and to help the climate crisis which will effect us all. 

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Over the past couple of weeks, the USGBC announced that it was incorporating energy and water usage reporting requirements as a precondition for acheiving LEED v3 and Google announced that it will debut a cloud-based operating system some time in the next 18 months.  The answer to how these two entities are similar is simple: both entities announced good ideas perhaps before their time.

Let's take a closer look at the reporting requirements for LEEDv3.  Projects can comply with the performance requirement in one of three ways:

1.  The building is recertified on a two-year cycle using LEED for Existing Buildings: Operations & Maintenance.
2.  The building provides energy and water usage data on an on-going basis annually.
3.  The building owner signs a release that authorizes USGBC to access the building’s energy and water usage data directly from the building’s utility provider.

Currently, accessing energy and water usage data can be very difficult, particularly without submetering.  In addition, I would expect that public utilities would be loathe to turn over water and energy usage data to a third party. Finally, the turnover of operations in buildings from owner to management company and in some cases to the tenants will create layers of reporting and data gathering issues which are intense.  For example, a building is submetered to tenants.  What if one tenant chooses to report, and another does not? 

The reporting issues go beyond the merely logistical.  Ongoing reporting and monitoring by the USGBC will create a new body of work for an institution which has already come under fire due to backlogs in certification.   Not only will the USGBC's new certifying sister agency have to certify new projects, but monitor old ones ad infinitim.  It will create additional issues for states and municipalities which have incorporated LEED standards into their green building regulations and incentives.  What happens to a 10 year property tax abatement if the project loses its LEED certification after 2 years due to failed energy savings? Additionally, as Chris Cheatham points out, there are new legal liability issues which emerge, like risks of suit to architects and engineers. 

All this is not to say that the USGBC should not incorporate ongoing energy reporting into the LEED process.  Like Chrome OS, the idea is a good one.  I believe that a green building that does not perform should not be allowed to continue to benefit from the LEED moniker.  There are a few things which could make it work better:

1. Create differrent levels of certification as time elapses--LEED at construction, different from LEED at 5 [years] or LEED at 10 [years], which reflects the ongoing achievement of green goals.  This eliminates the issue of "decertification", while providing ongoing incentive to report and maintain buildings to the LEED standard.

2. Phase it in--This ensures that the reporting requirements can be complied with, and allows utilities and others to come to grips with the concept of releasing to third parties energy data.  As it stands, projects registering for certification now must comply. 

How can you envision the reporting requirements working more effectively? 

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I wrote last week about the proposed National Energy Efficiency Building codes contained in Section 201 of Waxman-Markey. 

Section 201 of the Waxman-Markey Act calls for the development and adoption by state and local governments of a national energy efficiency code. A summary of the main provisions are as follows:

1. Establishes a “national energy efficiency building code” for residential and commercial buildings, sufficient to meet each of the national building code energy efficiency targets.

2. Sets energy efficiency targets for the national building code: “on the date of enactment of the American Clean Energy and Security Act of 2009, 30 percent reduction in energy use relative to a comparable building constructed in compliance with the baseline code…effective January 1, 2014, for residential buildings, and January 1, 2015, for commercial buildings, 50 percent reduction in energy use relative to the baseline code; and…January 1, 2017, for residential buildings, and January 1, 2018, for commercial buildings, and every 3 years thereafter, respectively, through January 1, 2029, and January 1, 2030, 5 percent additional reduction in energy use relative to the baseline code.”

3. If consensus based codes provides for greater reduction in energy use than is required under the ACESA, the overall percentage reduction in energy use provided by that successor code shall be the national building code energy efficiency target.

4. Requires that states and local governments comply with or exceed the national energy efficiency building code, and provides for enforcement mechanisms for states which are out of compliance.

The federalism issue looms lage with this provision of Waxman-Markey.  Building codes have historically been a state and local concern, not a national one. Advocates of state and local governance are already objecting  to this proposed transfer of authority.  On the other hand, state and local governments have failed to maintain current building and energy codes, in some cases imposing no building codes whatsoever. How to resolve this situation? 

 The answer, I believe, is form based energy codes. Form-based zoning codes:

are keyed to a regulating plan that designates the appropriate form and scale (and therefore, character) of development rather than only distinctions in land-use types.
 

By analogy, the Senate version of Waxman-Markey could maintain the targets for energy efficiency of building codes, and allow states and local governments to meet them through any means that fits the state and local needs.  This allows for continuing control of building codes at the state and local level, but mandates that state and local governments must have updated codes.    

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I have written here before about the ag lobby, homeowner associations and other under the radar foes of green regulation.  The Alternet has a great article on the role of financial lobbies in seeking lax oversight of carbon offsets and other regulatory tools.

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You may have noticed that my posts were thin on the ground last week. I was suffering from terrible back pain, and so I had to take a bit of a hiatus.  Fortunately, many of my colleagues posted useful information on the relevant happenings of the week.  Here are some notable ones and my take:

• Rich Cartlidge and Chris Cheatham wrote about LEED incorporating ongoing energy reporting in LEEDv3. I believe that this will lead to long term uncertainty--for example, if the LEED building fails to realize energy efficiency which will lead to litigation.  As I said here, one of the reasons that we may not have seen litigation thus far is that building owners are too afraid to measure their energy efficiency.  Now, they won't have a choice.
• Cleantech had a report on Climate Change and the Midwest. This matters because the agricultural middle has been causing all kinds of havoc with trying to pass climate change legislation.
• Buildinggreen.com reports that ASHRAE Standard 189 is close to complete. I wonder whether this standard will be good enough to meet the advanced energy efficiency targets proposed by Waxman-Markey.

Thanks for your patience, we should be back on track now.  Look out this week for a post on form based energy efficiency codes for implementing Waxman-Markey!

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You may have noticed that my posts were thin on the ground last week. I was suffering from terrible back pain, and so I had to take a bit of a hiatus.  Fortunately, many of my colleagues posted useful information on the relevant happenings of the week.  Here are some notable ones and my take:

• Rich Cartlidge and Chris Cheatham wrote about LEED incorporating ongoing energy reporting in LEEDv3. I believe that this will lead to long term uncertainty--for example, if the LEED building fails to realize energy efficiency which will lead to litigation.  As I said here, one of the reasons that we may not have seen litigation thus far is that building owners are too afraid to measure their energy efficiency.  Now, they won't have a choice.
• Cleantech had a report on Climate Change and the Midwest. This matters because the agricultural middle has been causing all kinds of havoc with trying to pass climate change legislation.
• Buildinggreen.com reports that ASHRAE Standard 189 is close to complete. I wonder whether this standard will be good enough to meet the advanced energy efficiency targets proposed by Waxman-Markey.

Thanks for your patience, we should be back on track now.  Look out this week for a post on form based energy efficiency codes for implementing Waxman-Markey!

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