The Can't Do Attitude

I had a stimulating (if decaf) coffee with my friend the Green Skeptic this afternoon.  Conversation drifted to how Philadelphia managed to avoid being too overbuilt in the real estate bubble.  Everyone here always complains about how the archaic and endless zoning process and the expensive union labor force hamstring development in Philaldelphia.  And there is no doubt that these factors preclude easy and rapid development and redevelopment of Philadelphia's urban core. 

But, we speculated, did Philadelphia's "Can't Do" Attytood (as they say here) have the unintended benefit of preventing too much over-development that has been seen in places like Phoenix and Miami?  [Today's New York Times even had a story about how Bloomberg's emphasis on development and streamlining permitting may not even have benefited New York. ]

What does all of this Starbuck's infused musing have to do with green building? It stands as a cautionary tale--how fast is too fast?  

In St. Louis, Missouri's "First Green Development" was razed to the ground due to foreclosure:

five banks have started foreclosure proceedings on the project, which was started in August 2006 and appeared to be abandoned during construction.  

Expedited permitting processes for green buildings are an increasingly common non-financial incentive for green buildings, especially for cash-strapped municipalities that can not offer financial incentives or tax credits.  As we seek to encourage green development, does it make sense to ensure that the regulatory process is deliberate enough to prevent overbuilding? Or is that not the appropriate role for building regulation? 


Sunshine Is The Best Disinfectant--SEC Changes Climate Risk Disclosure Rules

Yesterday, the Securities and Exchange Commission issued revisions to Staff Legal Bulletin No. 14E (CF).  Why do we care about an obscure SEC procedural document here at GBLB? According to the RiskMetrics Group Blog, an earlier 2005 version of the document

concluded that resolutions [about climate change risk] could be omitted under SEC Rule 14a-8 (i)(7) as ordinary business matters, not suitable for shareholder consideration, if they involve “an internal assessment of the risks or liabilities that the company faces as a result of its operations that may adversely affect the environment or the public’s health.”

In other words, shareholder resolutions seeking information about companies'  financial climate change risk did not have to be addressed by SEC regulated corporation.

The brand spanking new Legal Bulletin 14E changes the metrics for determining when shareholder resolutions regarding climate change risk need to be included in SEC documents:

Henceforth, the bulletin says, in deciding when a company can omit a resolution, rather than focusing on whether a resolution relates to an evaluation of risk, the staff will instead focus on the underlying subject matter to which the risk pertains.

So, if a company has a large financial risk due to carbon belching power plants or portfolios of resource sapping buildings, it is possible that shareholders will be able to call for an accounting of the risk to their investments. 

As Justice Brandeis said, "Sunshine is the best disinfectant."  By allowing shareholders to demand cliamte risk disclosure, companies may be more inclined to undertake risk management strategies--like green building--to ameliorate their risk. 

Boxer Climate Bill Redraft Adds Nothing To Energy Efficient Building Code Provisions

On Friday, Senator Barbara Boxer released a 923-page climate change and energy bill.  A draft of the bill had been leaked to the media in late September, and I discussed it here

Although the overall bill has swelled from 600+ pages to 900+ pages, there is still just 1.5 pages on the National Energy Efficiency Building Code, first proposed as Section 201of the Waxman-Markey Bill.  In the Waxman-Markey Bill, the House called for: 

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

2. Setting 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. Requiring that states and local governments comply with or exceed the national energy efficiency building code, and providing for enforcement mechanisms for states which are out of compliance.

The original Boxer-Kerry draft backed off of the Waxman-Markey structure entirely, simply mandating that the Department of Energy or "other agency head or heads as may be designated by the President shall promulgate regulations establishing building code energy efficiency targets...beginnning not later than January 1, 2014... "

The exact same language is mirrored in the current version of the Senate Bill at Section 163 (starting at page 200 of the current bill).  No structure, no mandatory energy efficiency targets, no requirments that states adopt energy efficiency codes by a certain date.  

This is a fascinating development because of the vast energy savings possible through regulation of new buildings and retrofits of old buildings.  According to a study by McKinsey on energy efficiency,

by 2020, the United States could reduce annual energy consumption by 23 percent from a business-as-usual projection by deploying an array of...efficiency measures, saving 9.1 quadrillion BTUs of end use energy...

The majority of the 900 page bill is dedicated to defining and establishing a cap-and-trade program.  While a worthy goal, I think that the Boxer bill misses the opportunity to grasp low-hanging fruit in energy savings through energy efficient building requirements.


International Day of Climate Action in Philly--This Saturday! has organized an event on Independence Mall (at the Bourse in case of rain), at People's Plaza at the corner of 5th and Market Streets for the International Day of Climate Action. is an international campaign dedicated to building a movement to unite the world around solutions to the climate crisis.  Their mission is to inspire the world to rise to the challenge of the climate crisis—to create a new sense of urgency and of possibility for our planet.

For the Philly event:

12:30 Event sign-in will begin. All attendees are required to sign in. When you do so you'll be assigned to a number: 3, 5, or 0. If we exceed our target number for the formation, additional people will form a border around the 350. If you really want to be part of the numbers, please arrive on time. First come, first served.

1:00 Event Introduction
Katherine Gajewski, Director of the Philadelphia Mayor's Office of Sustainability. Katherine's talk will be followed by a keynote address by Ray Anderson, radical industrialist and environmental heavyweight.

Human Graphic Formation. The 3-5-0 formation will start immediately following the speakers! We foresee getting into formation taking about 30 minutes. We'll then photograph our amazing formation from the top of a neighboring building.

3:00 Ray Anderson Book Signing. Joseph Fox Bookstore is hosting a book signing for Ray Anderson's new book, Confessions of a Radical Industrialist: Profits, People, Purpose--Doing Business by Respecting the Earth, on the main level of the Bourse Atrium - located across 5th Street from Independence Mall. You can't miss it.

3:00-5:00 Afterparty! We'll be heading over to Triumph Brewery on 116 Chestnut, for some great local brews to celebrate!

Come out and support a healthy and sustainable world!

Because I Said So--Obama's Federal Leadership In Environmental, Energy and Economic Performance Executive Order

On October 5, 2009, President Barack Obama issued an executive order entitled "Federal Leadership In Environmental, Energy and Economic Performance." According to the preamble to the EO, the purpose is to:

In order to create a clean energy economy that will increase our Nation's prosperity, promote energy security, protect the interests of taxpayers, and safeguard the health of our environment, the Federal Government must lead by example. It is therefore the policy of the United States that Federal agencies shall increase energy efficiency; measure, report, and reduce their greenhouse gasemissions from direct and indirect activities; conserve andprotect water resources through efficiency, reuse, and stormwater management; eliminate waste, recycle, and prevent pollution; leverage agency acquisitions to foster markets for sustainable technologies and environmentally preferable materials, products, and services; design, construct, maintain, and operate highperformance sustainable buildings in sustainable locations; strengthen the vitality and livability of the communities in which Federal facilities are located; and inform Federal employees about and involve them in the achievement of these goals.

It is further the policy of the United States that toachieve these goals and support their respective missions,agencies shall prioritize actions based on a full accountingof both economic and social benefits and costs and shall drive continuous improvement by annually evaluating performance,extending or expanding projects that have net benefits, and reassessing or discontinuing under-performing projects.

Finally, it is also the policy of the United States thatagencies' efforts and outcomes in implementing this order shallbe transparent and that agencies shall therefore disclose results associated with the actions taken pursuant to this order onpublicly available Federal websites.

 Whoa.  I will analyze in later posts the various programs included in the EO, but first it must be recognized that this is an enormous step.  The EO sets out ambitious goals for every federal agency to pursue sustainable priorities, including developing net-zero buildings, and to report on their environmental performance. 

Can the president do this with the stroke of a pen? The answer is a definite maybe. 

Let's start with the basics.  What is an Executive Order exactly? 

U.S. Presidents have issued executive orders since 1789. Although there is no Constitutional provision or statute that explicitly permits executive orders, there is a vague grant of "executive power" given in Article II, Section 1 of the Constitution, and the statement "take Care that the Laws be faithfully executed" in Article II, Section 3. Most executive orders are orders issued by the President to US executive officers to help direct their operation, the consequence of failing to comply being removal from office.

The scope of a president's authority to make law via executive order was analyzed in YOUNGSTOWN CO. v. SAWYER, 343 U.S. 579 (1952)

To avert a nation-wide strike of steel workers in April 1952, which he believed would jeopardize national defense, the President issued an Executive Order directing the Secretary of Commerce to seize and operate most of the steel mills.  

The major distinction drawn in Younsgtown was between law and policy:

The President's power, if any, to issue the order must stem either from an act of Congress or from the Constitution itself. There is no statute that expressly authorizes the President to take possession of property as he did here. Nor is there any act of Congress to which our attention has been directed from which such a power can fairly be implied. Indeed, we do not understand the Government to rely on statutory authorization for this seizure.

So what is the authority under which President Obama issued the Federal Leadership In Environmental, Energy and Economic Performance EO? Um...Um...Um...No specific law or statute is cited, indeed the only legal justification is:

By the authority vested in me as President by the Constitution.

This is not as thin on the ground as it may seem.  When the government acts as a "market participant"--i.e. like a private actor--it has broad flexibility.  For example, government entities acting as market participants are not subject to the same Constitutional restrictions as where the state is governing private entities.  See, e.g. SOUTH-CENTRAL TIMBER V. WUNNICKE, 467 U. S. 82, 93 (1984) (“Our cases make clear that, if a State is acting as a market participant, rather than as a market regulator, the dormant Commerce Clause places no limitation on its activities.”)  The federal government is largely free to make its own requirements for its purchases and projects, which may include setting a standard for its practices, like net-zero.

However, the requirements set forth in the Federal Leadership In Environmental, Energy and Economic Performance EO are likely to be costly, time-consuming and restricting on Federal agencies.  For example, beginning in 2020, all new Federal buildings that enter the planning process are designed to acheive net-zero energy by 2030.  95% of new contract actions must be energy efficient. 

This is not a bad thing--it is very strong and ambitious.  If implemented, it will be a significant step forward in environmental stewardship.  The General Services Administration alone owns and leases over 354 million square feet of space in 8,600 buildings in more than 2,200 communities nationwide.  However, those who seek to challenge this action may argue that it exceeds the authority of the president by putting unacheivable requirements on the Federal agencies, thus preventing them from carrying out their missions. 

Green Building Law--A Constitutional Primer

I hate Constitutional law.  Always have.  I was the only one at the University of Pennsylvania law school that did not want to talk about the "big social issues" that are involved in Constitutional law scholarship.  And yet, here I am. 

There was a piece in the Illinois Construction Law blog entitled "Can Specific Government Implementation of Green Building Laws Violate Due Process?"  The example provided was that the Illinois Capital Development Board has implemented guidelines Green Building Guidelines for State Construction

which do not offer the same “out” language of “or equivalent certification” as the Act and instead mandate LEED NC, with no exception for another standard.

The best Constitutional argument here is not actually one of "due process", but of impeding interstate commerce by favoring one private actor over another through regulation, a violation of the Commerce Clause. 

However, where, as here, the state acts as a market participant, it is not subject to the same Constitutional restrictions as where the state is governing private entities.  For example, where a state sources exclusively in-state materials for its own construction projects, the regulation is not restricted by the Commerce Clause.  See, e.g. SOUTH-CENTRAL TIMBER V. WUNNICKE, 467 U. S. 82, 93 (1984) (“Our cases make clear that, if a State is acting as a market participant, rather than as a market regulator, the dormant Commerce Clause places no limitation on its activities.”)  The state or federal government is free to make its own requirements for its purchases and projects, which may include setting a standard for its practices, like selecting the LEED standard.