Congress Introduces New "Energy Efficiency" Legislation

Contrary to common belief that nothing is really happening in green building at the Congressional level these days, I provide the following two counterexamples. Of course, neither of these efforts are designed to promote energy efficiency or green building, but that doesn't mean that nothing is happening.

 An amendment to the Senate Appropriations Bill for Energy and Water introduced by Senators Wicker (R-MS), Boozman (R-AR), and Inhofe (R-OK) would essentially eliminate the use of LEED and Energy Star for DOE green building programs.  According to the NRDC:  

This rider would prevent the Department of Energy (DOE) from using strong green building energy rating standards. The amendment limits DOE to using only green building standards that are developed and approved in accordance with American National Standards Institute (ANSI) rules. Such a requirement would effectively limit DOE to using only the National Association of Home Builders (NAHB) and Green Globes building standards.The amendment would disallow the use of many other strong rating systems, including LEED, EPA Energy Star Portfolio Manager, and EPA Energy Star Homes, which have substantially increased the number of environmentally-friendly buildings in our country.
 

In other news, Rep. Charles J. Fleischmann [R-TN-3] introduced a bill yesterday in the House H.R.3441 to repeal the Department of Energy's home weatherization assistance program.  The DOE weatherization assistance program provides funding to states to weatherize the homes of low income households to make them more energy efficient.  According to the WAP website:

During the past 33 years, WAP has provided weatherization services to more than 6.4 million low-income households. Families receiving weatherization services see their annual energy bills reduced by an average of about $437, depending on fuel prices.  

According to a recent release from the National Association for State Community Services Programs, the WAP received $5b in funding from ARRA, which weatherized 534,208 low-income houses through August 2011. This made the WAP seventh out of approximately 200 federal programs funded by American Recovery and Reinvestment Act (Recovery Act) in jobs created or retained, with 14,090 jobs  for the third quarter beginning July 1 and ending September 30, 2011.

The bill is not yet available from the GPO, but it can be followed on Thomas through this link

 

Progress on the Green Appraisal Front--Appraisal Institute Issues Green Appraisal Form

On September 29, 2011, the Appraisal Institute issued a Green/Energy Efficiency Addendum to its standard Fannie Mae Form 1004.  The form has sections for including energy efficient appliances, water savings, energy audit results, energy bills and more.  It can be downloaded here

According to the release by the Appraisal Institute, Form 1004 is "the appraisal industry’s most widely used form for mortgage lending purposes. Used by Fannie Mae, Freddie Mac and the Federal Housing Administration, Form 1004 is completed by appraisers to uphold safe and sound lending. Currently, the contributory value of a home’s green features is rarely part of the equation.

One notable omission is a specific reference to LEED certification.  It includes Energy Star, but not LEED, although there is space for listing "other"  certification. 

This kind of standard form for valuing green features gives specific guidance for appraisers on what to look for and include in the audit.  How the information translates into valuation remains to be seen, but it is an excellent step in the right direction.

A Long Way to the Courthouse: the Region 7 EPA Headquarter Controversy

Yesterday, the City of Kansas and the County of Wyndotte sued the General Services Administration for moving the EPA Region 7 headquarters from an older LEED building in the Kansas City central business district to a former Applebee's headquarters in Lenexa, Kansas. The complaint is available here.

This is a fascinating suit in that it highlights the paradox of a green building on an unsustainable site. Lenexa can only be described as a typical midwestern sprawling suburb, and the proposed new EPA headquarters is in an office park.  A Google earth map of Lenexa is available here and the proposed building is available here

The lawsuit alleges that the GSA violated two executive orders mandating that Federal facilities be sustainable and located in urban cores.

EO 12,072 requires:

Federal facilities and Federal use of space in urban areas shall serve to strengthen the Nation’s cities and to make them attractive places to live and work” and mandates that such Federal space “shall conserve existing urban resources and encourage the development and redevelopment of cities.

and Executive Order 13,514 which mandates, among other things, that

the head of each Federal agency to “advance regional and local integrated planning by . . . (iii) ensuring that planning for new Federal facilities or new leases includes consideration of sites that are pedestrian friendly, near existing employment centers, and accessible to public transit, and emphasizes existing central cities. . . ."

The GSA defends its decision to move from a green building in the central business district to a suburban office park on two grounds--it is cheap and it is green: 

GSA spokeswoman Angela Brees said she could not comment on the lawsuit, but reasserted the agency's claim that the Lenexa building was the cheapest available, even when considering the cost of moving to a new office. [The building] also scored highest on technical criteria that include sustainability and design, she said. The owners of the building, which has been given a Silver rating by the U.S. Green Building Council's Leadership in Energy and Environmental Design program, have vowed to upgrade it to meet LEED Gold standards and get a Platinum rating for operations and maintenance by the time employees arrive.

Putting aside the environmental implications, I would argue (and the Complaint alludes to it as well) that the Lenaxa decision does not hold up on a purely economic basis, let alone an environmental one.   The new site is located outside of the central business district, and has little access to transit.  This means that every time an EPA employee has to go to a  meeting, the courthouse and to other businesses in the course of their official duties, they must do so by car.  

Currently, the Federal government reimburses private vehicle travel at $.51 per mile.  Previously, the distance from the EPA headquarters to the Kansas City Federal Courthouse was .6 miles.  The distance from the Lenaxa facilitiy to the Federal courthouse is 21 miles.

According to the New York Times, the Applebee's HQ rent is more than the current rent.  On top of that, based on the above calculation, the taxpayer will be paying a $20 surcharge for every trip of an EPA Region 7 lawyer, paralegal, witness to the courthouse.  Of course, it will also mean the same $20 surcharge for any other trip of any Region 7 employee travelling to the Kansas City CBD on official business. 

Utilmately, it appears that this will not be a green decision, in either sense of the word.

 

Motion to Dismiss In USGBC v. Gifford Raises The Question: Who Is A USGBC Customer?

On Friday, the USGBC responded to Henry Gifford's amended complaint with a Motion To Dismiss for failure to state a legal claim (Federal Rule of Civil Procedure 12(b)(6)) and for lack of subject matter jurisdiction (Federal Rule of Civil Procedure 12(b)(1)).

In essence, the USGBC's response has two prongs: 1) the Plaintiffs lack standing, as I predicted here; and 2) that the Plaintiffs could not demonstrate that they had been harmed by the USGBC's allegedly illegal conduct. Stephen Del Percio does a nice job of outlining the standing arguments here

In the back of the Memorandum of Law is an interesting discussion of the USGBC's marketing.  In the context of arguing that the New York Consumer Fraud Statute does not apply, the USGBC argues:

USGBC's marketing--which is before this Court on this motion--is directed at businesses and professionals.  The website, which is how USGBC advertises, defines the audience for USGBC's marketing.  LEED users are 'architects, real estate professionals, facility managers engineers, interior designers, landscape architects, construction managers, lenders and government officials...

I think this is a difficult argument, and not one with a lot of factual merit. 

The USGBC website has a link to a website entitled:

U.S. Green Building Council's Green Home Guide Connecting you to ideas, advice and green home professionals.

The purpose of the site is clearly to communicate information about LEED and green building directly to consumer homeowners. The Green Home Guide website offers a tool for homeowners to become acquainted with the LEED for Homes system:

LEED FOR HOMES SCORING TOOL
It's FREE.NEW – The LEED for Homes Scoring Tool


Q: How close is your project to earning
LEED for Homes certification?

A: Probably much closer than you think.

As the building industry evolves, more residential projects already include sustainable features that contribute to certification. The LEED for Homes Scoring Tool will help you assess your project. By answering a few simple questions, you’ll not only learn just how close you are to earning certification, but also various steps you might take to get there. Plus you’ll gain important insight on the LEED for Homes rating system.
 

The USGBC even publishes a brochure for LEED® for Homes™ FAQ for Homeowners available here.

So, it's pretty clear that the USGBC is marketing directly to consumers, contrary to the Memorandum of Law in support of the USGBC's Motion to Dismiss.

The worst part is that there was no need for the USGBC to make this factually unsupported argument. Even if the USGBC advertises to consumers, the consumers that might have been harmed by the advertisement are not included amongst the plaintiffs, and are not represented by the factual misstatements alleged in the Amended Complaint. Making factually unsupported arguments may weaken the punch of the USGBC's clearer grounds for dismissal, and provide a toe hold for the Plaintiffs to plant seeds of doubt about the rest of the USGBC's arguments.

 

Stormy Seas Ahead: Cuts to Budgets and Challenges To Regulatory Authority Will Mean Changes For The Green Economy

The United States is at a precipice with respect to public motivators for the green economy. Essentially, the carrot of public incentives or investment and the stick of potential mandatory regulation of carbon emissions are slated for elimination at the same time. 

Although we cannot know what this two part challenge to the green economy will do, it will certainly change its trajectory for the foreseeable future. 

First, of course, are the proposed revisions to the 2011 budget.  With respect to green building, slated for cuts are most programs that promote green building or which invest Federal dollars in green buildings directly:

  • $3 billion of EPA funding overall
  • $1.6 billion (nearly 20%) of the Federal Building Fund at the General Services Administration (GSA)
  • $786 million (over 35%) of the Energy Efficiency and Renewable Energy (EERE) office at the Department of Energy (DOE)
  • $250 million in funds for the Department of Housing and Urban Development (HUD) HOPE VI program, which leverages private sector dollars to transform existing blighted public housing into vibrant and livable communities.
  • $10 million for the Energy Star program at the Environmental Protection Agency (EPA).

With respect to renewable energy, the proposed Republican budget bill slates for reduction or elimination over $900 million in investment. Among the programs slated for cuts or elimination is the Department of Energy Loan Guarantee Program for clean energy start up companies, established during the George W. Bush administration.  According to Forbes, DOE officials have said that eliminating this program would do away with 20,000 jobs, along with the benefits for the environment.

In addition to the direct cuts, at least four different proposals are pending (potentially up for a vote this week) restricting or eliminating EPA's ability to regulate greenhouse gases.  If the EPA is restricted in its ability to regulate greenhouse gases, one of the most potent motivators for investment in reducing carbon emissions through renewable energy, green buildings and other carbon reduction techniques will be eliminated.  

 The question will become not whether renewable energy and green building can compete without government subsidy, but rather whether renewable energy and green buildings can compete in the face of continuing subsidy to competing technologies like coal, oil, etc. 

According to the Center for American Progress, the proposed Republican budget will make few changes with respect to the $40 billion+ Government support of these technologies through tax incentives and other mechanisms. Fox News was unable to get a commitment from House Budget Committee Chairman Paul Ryan (R-WI) that tax breaks for oil and gas companies would be eliminated:

WALLACE: A lot of Democrats that are already saying, even before they’ve seen your budget, that you do all of this balancing of the budget on the spending side, and unlike the President’s debt commission, you don’t do it on the revenue side. Do you eliminate tax breaks? Do you bring in new revenue by eliminating, for instance, tax breaks for oil companies?

RYAN: We don’t have a tax problem. The problem with our deficit is not because Americans are taxed too little. The problem with our deficit is because Washington spends too much money. … So we’re not going to down the path of raising taxes on people. […]

WALLACE: But for instance, you will not eliminate tax breaks for Big Oil and Gas?

RYAN: Those are the kinds of details that we’ll come out later with, that the Ways and Means Committee will work on. We’re not going to go into the little details of which tax expenditure goes and which tax expenditure stays.

 [You can watch this portion of the interview on You Tube]

The next few weeks will be historic ones with respect to America's green future.  For better, worse or otherwise, these are interesting times which will mean changes for everyone in the green sector in the United States. 

Redding, CT TOD Green Bond Project Failing To Meet Commitments

Like the Destiny USA project in Syracuse (which is mired in a controversy over whether the tax exempt green bonds issued for the project should keep their tax exempt status despite the project's failure to incorporate any green features--more about that project is available here), the Georgetown Redevelopment Project in Redding, Connecticut was also selected as a demonstration project to qualify for green tax-exempt bonds under the America Jobs Creation Act of 2004.

According to my research, at least $14.5 million in tax exempt bonds were issued for the Georgetown project. For you bond junkies, the details of the bond offer was:

Georgetown Special Taxing District
Nov 16, 2006 $14,450,000
General Obligation Bonds, Series 2006A (book entry)
Dated Nov 22, 2006.
Due Oct 1, 2036.
First coupon Apr 1, 2007.
Callable Oct 1, 2016 at par.
Purchased through negotiation by Banc of America Securities LLC, as
follows:
Due Amount Cpn Reoffered Ins
10/1/36 $14,450,000 5.125% 5.125%
L.O.: Shipman & Goodwin, Hartford, CT.
F.A.: Lamont Financial Services Corp, Wayne, NJ. 
 

Like the Destiny USA project, the Georgetown project stalled, and is having difficulty meeting its bond obligations.

According to the Weston Forum, the deal to sell the site to a developer fell through in mid-2010:

With the advent of the country’s financial crisis in 2008, capitalizing the project became an issue. That, combined with the delay in state approvals, stalled the project, but the intersection work has since been funded and put out to bid.
 

 As of  July 9, 2010, according to Bond Buyer (subscription required) the Georgetown Special Taxing District in Connecticut received a forbearance on $1.5 million of tax anticipation notes after failing to pay them on time.

The district was unable to pay the notes on June 30 because it had not collected property taxes from a stalled mixed-use development. The project and district are located on a 51-acre tract in the town of Redding in affluent Fairfield County.

The forbearance gave the district two months to figure out what to do without defaulting on bond payments. The failure to make the payment by June 30 constitutes a technical default, according to disclosure documents.  It is not clear whether the bonds were paid, but if they were not, another set of green bonds has gone into default. 

Although the two projects are currently in the same boat financially, they are not equivalent projects.  Unlike the Destiny USA project, which was a large mall extension which was going to be fitted out with green features, the Georgetown Redevelopment Project was actually a thoughtful green project.  It was envisioned as a transit oriented, mixed use redevelopment of a 55 acre, contaminated wire mill site.  The master plan includes residential (including 40 units of affordable housing), commercial and light industrial uses, as well as a YMCA, performing arts center and public open space oriented around a transit station.  A powerpoint of the master plan and description of the project is available here.

The project would have encouraged transit use, created a mixed use community, redeveloped contaminated property and (theoretically) integrated green building and renewable energy features. This is exactly the sort of project which should be encouraged and supported.  

The fact that the Georgetown project has not come to fruition is a bad outcome for the Georgetown project in specific, and green bonded projects in general.  First, this is a good project.  Doing transit oriented, mixed use development is positive for communities and the environment.  So, the fact that it had difficulty meeting its financial obligations and may not come to fruition is disappointing.

On a more global level, projects like Georgetown and Destiny USA make bonds for green projects look risky, which may make financial institutions shy away from issuing and underwriting the bonds.  This will make getting financing for green projects harder than it already is.  Second, it makes the public sector more reluctant to support green projects if they fear that they will not be able to meet their financial obligations. 

To end this on a brighter note, it appears that public entities are continuing with the site and transit work on the Georgetown project continue to progress, even though a private developer is not currently doing the mixed-use component.

 

Good Intentions Gone Bad: The Cautionary Tale Of Destiny USA And Green Bonds

covered the messy breakdown of the Carousel/Destiny USA project in Syracuse on Monday.  In short, the Destiny USA project was selected as a green "demonstration" project under the 2004 Green Bonds program.  $255 million in tax exempt bonds were issued on behalf of the project, the revenue of which was supposed to be used to implement the green features of the project.  As of now, none of the green features have been implemented, and the developer has intimated that even if the project is fully built out, the green features will not be included.  The IRS will have to decide whether to rescind the tax exempt status of the bonds for failing to meet the green requirements.

I have written at length about creating effective green incentives and regulations (see my Regulating Green Series here).  For me, the most interesting part of this debacle is what it reveals about a major green incentive program.  The Green Bonds program was developed as a part of the America Jobs Creation Act of 2004.  In theory, the program was intended to: 

 finance environmentally friendly development. The objective is to reclaim contaminated industrial and commercial land (brown fields), and encourage energy conservation and the use of renewable energy sources.

Although the goals of the Green Bonds program were clearly noble, as I see it the program was doomed from the start. No market rate project in 2005 could have met all of these requirements.  Thus, the proponents of the projects had reason to overstate the green components of their projects to access $2 billion in tax free capital for the projects. 

According to the IRS Guidance (available here) $2 billion in AAA tax exempt bonds were authorized by the Federal government to be awarded to four demonstration projects.  To qualify for the bonds, the four projects in aggregate had to:

  1. Reduce energy consumption by more that 150 megawatts annually compared to conventional generation;
  2. Reduce daily sulfur dioxide emissions by at least 10 tons compared to coal generated power;
  3. Expand by 75% the domestic solar PV market in the United States as compared to the expansion of that market from 2001-2002, which was 14.424 megawatts (which means an aggregate increase of approximately 11 megawatts, or an average of almost 4 megawatts of PV power per projects);
  4. Use at least 25 megawatts of fuel cell energy generation.

In addition, each project had to be at least 1,000,000 square feet or 20 acres and: 

  1. At least 75% of the square footage had to be LEED certified;
  2. The wood had to be certified under the Sustainable Forestry Initiative or the American Farm Tree System;
  3. Reclaim a brownfield site

Beyond the green features, the projects also had to create at least 1000 construction jobs and 1,500 full time equivalent jobs. 

In addition to the requirements of the Green Bonds, the Destiny USA project entered into a Memorandum of Understanding with the EPA (available here and summary below from Syracuse.com) committing to: 

  1. Using green building design, construction and operation principles to obtain the highest levels of certification from the U.S. Green Building Council's Leadership in Energy and Environmental Design
    program;
  2. Retrofitting more than 100 construction vehicles with diesel particulate filters and using clean fuel, which will reduce emissions by nearly 85 percent;
  3. Implementing techniques to reduce idling of vehicles during construction
  4. Becoming partners in EPA's Energy Star and WaterSense programs,
    which require the use of energy- and water-efficient appliances;
  5. Using over 3,000 tons of coal ash in place of using newly-manufactured Portland Cement, which will reduce greenhouse gases by over 3,000 tons.
     

As a policy measure, the green bonds were destined to be ineffective.  For a green incentive to be truly beneficial, it needs to set out goals that stretch its recipients to higher levels of sustainability, but not so pie-in-the-sky that they create an incentive to greenwash their projects.  This is a tough balance to strike.  Doing so requires that the regulatory bodies have a good understanding of the state of the green market that they are looking to incentivize. It is not enough to throw public money at any project claiming to be green.  The result is projects like Destiny USA, which give a bad name to green building and public financing of green projects. 

By contrast, good investment in green projects can bring real benefits.  I analyzed the investment of ARRA funds in green projects.  Per public dollar, these investments were among the most efficient ways of creating jobs of all of the ARRA money spent. (See my analysis here).  As Congress debates the value of continuing public investment in green projects and renewable energy, the debate must not only be about whether, but how, the support will be crafted and implemented.  The road to green is paved with good intentions. 

Let's Make A Deal--Top 10 Rules Of Green Project Finance

The first step to any green building or renewable energy project of any size is finding the financing to make it possible.  Since the bottom fell out of the economy, finding investors and financial institutions willing to finance building projects of any sort has been close to impossible.  Real estate finance prognosticators, however, indicate that 2011 will be a year to buy back into the real estate market.   According to a Wells Fargo report:

In 2011, we expect trends in commercial and residential real estate, two areas of the economy that have been significant drags on headline growth, to turn positive for the first time since the beginning of the recession. Despite being near record lows, housing starts will begin to gain momentum breaking 700,000 in 2011. The turnaround in housing is largely attributable to gains in employment, consumer income, as well as favorable demographic trends. Meanwhile, from the financing perspective, mortgage rates remain low and housing affordability remains high. Though broadly positive, these trends do not reflect a return to the boom years, which were characterized by excessive liquidity and perverse incentives.

Commercial real estate should begin to contribute to growth by the second half of 2011. Operating fundamentals for all major property types are either improving or showing signs of stabilizing. Leasing has picked up, rents are rising or stabilizing and sales have increased. Demand for high quality properties in choice locations remains exceptionally strong, which has helped pull prices higher for non-distressed deals. There are still plenty of troubled projects that need to be disposed of, however, and prices for distressed projects are likely to fall further once lenders become committed to cleansing their portfolios.

Green projects are an increasing percentage of new and rehab projects, and renewable energy projects have very attractive balance sheets in certain areas.  However, structuring financing for green building and renewable energy projects requires more legal creativity and effort than financing other types of more traditional projects. 

Let me give you an example.  Banks have been loaning money to companies to buy equipment for hundreds of years.  Every bank has a set of documents designed for this purpose, and a specific set of rules and requirements for deciding when to take on the financing risk, and how repossession would work in the event of default. 

Let's say Company A wants to borrow money from Bank B to buy a truck.  Company A gives Bank B information on the value of the truck, the value of Company A's other assets, and so forth.  Bank B goes to its set of standard form documents for equipment loans, confirms Company A's credit worthiness, and knows that it can repossess the truck and sell it for some known value in the event of default. 

Now let's say Company A wants to borrow money from Bank B to finance a solar array.  First, Bank B has to figure out what, exactly, it is financing.  Is a solar array equipment, like the truck, or construction?  Then, what value can Bank A put on the solar array?  The value of the solar panels on the resale market? The value of the electricity the solar array produces? How about the renewable energy credits (Banker A says to Banker B, "What's a Renewable Energy Credit?") Then comes the issue about how to handle default.  The solar array is worth a lot more in situ than it is as scrap, but Bank B has to figure out how to structure the relationship with its now-defunct borrower which would allow Bank B to get the benefits of the electricity and the RECs. 

The same concept is true for green building projects.  When examining a green building deal, what value, if any, should Bank B put on the potential energy savings from a high performance building?  Will the high performance building command higher rents?  LEED Certified or not certified? What happens in the event of decertification?

 A few rules for green project finance:

  1. Find a bank or financial institution committed to green projects--Some banks now have financial arms that are dedicated to financing renewable projects.
  2. Pick a model--It's easier to tweak an existing project finance model than to create a new one from scratch.  Construction? Equipment? 
  3. Recognize the need for tweaks--Whatever the model (see #2), it will need to be tweaked for the unique features of green building and renewable projects.
  4. Set out the deal terms in advance, particularly the obligations of the parties in the event of default.
  5. Identify and address the roles of the lender and borrower with respect to any incentives or other government financing that is part of the project.  Each incentive has its own requirments regarding transferability and assignment, and ownership status is often an important factor.
  6. Make sure your green project pencils out--Seems simple and obvious, but when seeking financing, it is important that the project actually be a wise investment. 
  7. Provide as much data about the beneficial financial features of the green project as possible--The growing body of data about the financial benefits of green buildings and the balance sheets of renewable energy projects should enable borrowers and lenders to better evaluate the risks and benefits of green projects. 
  8. Where available, use green specific financing tools, like energy efficient mortgages.  A good primer is available here.
  9. Be prepared to cross-collateralize--There is so much risk aversion, that many financial institutions are seeks cross-collateralization of non-green projects to alleviate the fear, real or imagined, associated with financing green projects.  
  10. Acknowledge a longer financing timeline--Getting all parties on the same page regarding the financing deal and the documentation may take longer than traditional projects.  But, as lenders and borrowers get more projects under their belts, this timeline will shorten.

A Star Is Falling--Builders Association of the Twin Cities Sues Minnesota Green Star

 Ahhh holiday time, when the sound of the clerk's stamp on green litigation rings merrily in my ears.  On December 9, 2010, the Builders' Association of the Twin Cities (BATC) sued Minnesota Green Star (GreenStar).  The Complaint and Motion for a temporary restraining order is available here

Most states and local governments have incorporated third party standards, like LEED, into their green regulations, and that has caused no little amount of controversy.  Minnesota, by contrast, created its own green building certification standard for homes.

According to the Star-Tribune:

The program, funded in part with a grant from the MPCA, is voluntary and will have different criteria depending on the type of project. The standards for new construction, for example, will be different from those for a remodeling project. And the standards for an addition will be different from those for a simple kitchen remodel.

GreenStar was the non-profit formed to create the standards and program, and was originally a partnership of the BATC, the Minnesota chapter of the National Association of the Remodeling Industry and the Minneapolis-based Green Institute. 

 With the advent of the downturn in the economy, the partnership fractured into a controversy of green versus green, and the BATC withdrew from the organization.  Again, from the Star-Tribune:

But with the construction market so fragile, any additional costs for green certification can be detrimental, especially when many buyers are wondering whether their home values have hit bottom, said Mike Otto, a home builder and remodeler.

That's the sentiment that was driving the Builders Association to develop a broader range of standards that would allow builders and consumers more choices to earn the GreenStar certification. Dave Siegel, BATC's executive director, said that members want to embrace an "incremental approach" and create various standards, including some low-level certification that doesn't require more-expensive third-party verification.

At the time, the parties said the divorce was "amicable."  Like many families know, divorce is always amicable right up to the courthouse steps. 

In the spirit of "live and let live," the Builders' Association of the Twin Cities (BATC) sued Minnesota Green Star (GreenStar)  claiming that it developed and owns the intellectual property to "Green Homebuilding Guidelines," and Green Star was granted the right to use the Guidelines to further its mission, but did not own the rights to the materials. The BATC also loaned of $306,418.19, and the BATC claims Green Star cannot pay its debts, and therefore the loan is due and payable immediately.

In addition to filing the Complaint, the BATC filed for a temporary restraining order enjoining Green Star from:

[U]sing, in any way altering or damaging, and/or making or attempting to make any transfer, sale, assignment, license, sublicense or grant of rights or interests to any other person or organization with respect to all or any part of the Green Homebuilding Guidelines, including both the New Home User Manual and the Now Homes Checklist.

This week, Judge Gregg E. Johnson of the District Court of Minnesota granted the TRO, but limited its scope to "alteration, destruction, sale or licensing of the new home certification manual and checklist", and excluded the Green Remodeling Guidelines.  The Court also required BATC to post a $150,000 bond by Monday.  Green Star can still use the New Home materials in its ongoing work of certifying new projects.

The withdrawal of funding, participation and, potentially the new home checklist and manual undoubtedly threatens Green Star's existence.  The inititative was partially funded by the State of Minnesota, and so they may have a stake in the ownership and continued existence of Green Star, and may be brought into the matter.  Stay tuned, a temporary injunction hearing is scheduled for January 24, 2011.

It's The Economy, Stupid

One of my loyal readers was kind enough to bring to my attention a troubling article from the Washington Post in which a man who had earned 9 green certifications and sent out hundreds of resumes still has yet to receive a single job offer.

In September, I spoke at a Woodrow Wilson Center event on green jobs for women.  Most of the presenters were from non-profit organizations which trained women for green construction jobs.  They all reported that their graduates were having trouble finding work.

The subject of the Washington Post article had been laid off from his job as a surveyor:

Anton has been out of work since 2008, when his job as a surveyor vanished with Florida's once-sizzling housing market.

He then retrained to do solar installation, green demolition, etc. and still could not find a job. 

The Washington Post article waves a wagging finger at the green stimulus spending and the promise of green jobs:

The Obama administration channeled more than $90 billion from the $814 billion economic stimulus bill into clean energy technology, confident that the investment would grow into the economy's next big thing.

The underlying assumptions of the Washington Post article, and many others like it, are inherently flawed.  You cannot wring blood from a stone. The recovery is happening slowly.  Lending is still very tight, meaning that it is difficult to get building projects--green or otherwise--financed. In other words, it's the economy, stupid.

The problem for Mr. Anton is not that he retrained green.  Indeed, his odds of finding a job actually went up through his retraining.  According to the Pew Charitable trust:

[B]etween 1998 and 2007, clean energy economy jobs—a mix of white- and blue-collar positions, from scientists and engineers to electricians, machinists and teachers—grew by 9.1 percent, while total jobs grew by only 3.7 percent. And although we expect job growth in the clean energy economy to have declined in 2008, experts predict the drop in this sector will be less severe than the drop in U.S. jobs overall.

Mr. Anton, and millions of others like him, are out of work not because the promise of a green economy failed, but because the economy failed.

Articles like the Washington Post piece also claim that the promise of the green economy as a job engine has been over-hyped.  This is not because the idea that green technology and renewable energy is not a potential new source of job growth--just look at China.  Even our own stimulus plan demonstrates that green stimulus projects create the most jobs per dollar of any of the stimulus initiatives. 

Rather, since Obama came into office and pushed a "green" stimulus plan, the public policy initiatives that underpin a successful green economy (not to mention a healthier environment)--like control of carbon through cap or tax, a national renewable energy portfolio, etc.--have been jettisoned.  With no new real economic engine or dynamism, the overall economy is recovering slowly. Yet, despite these obstacles, green job creation is still outpacing other sectors. 

So, perhaps the Washington Post article should have asked a different question: If green is not the next big thing, what did the other $724 billion buy you? 

Where Are The Women In Green--Dead Horse Edition

I have written and written on the gender disparity in green building and renewable energy.  Today I am beating that poor horse just one more time, but it is so important to me that I hope you will indulge me.

Today I received the invitation from the American Council on Renewable Energy National Policy Forum, which is scheduled for December 8-9 in Washington. There are 34 speakers at this program, one of whom is female (big shout out to Lisa Frantzis from Navigant Consulting).  The invitation (which you can see for yourself here) makes this disparity visual. 

What is the cause of the gender disparity at this event? Is it ACORE, a very good organization as a general proposition, not being aware of the gender disparity in the program? Is it the lack of women in Congress and other federal leadership positions as a whole, thereby reducing the pool to choose from for this event? Is it a failure of women in this field to promote themselves as speakers to this type of event?  Choice D, all of the above? 

I do not think that including women in a program purely for the sake of gender diversity is a positive outcome of this type of discussion.  Rather, in an industry which is predominantly male dominated,  the organizers of programs like this one should make an effort to identify women who are qualified, which may take a little more effort, but produce a more balanced program. 

By identifying and promoting women in this type of forum, more women are likely to come and to be involved, thereby creating a larger pool of qualified professionals, and beginning to address the gender disparity as a whole.

Green Is Good--Stimulus Shows More Green Funding Means More Jobs Per Public Dollar

I have been tracking the green stimulus spending since June 2009. In November 2009, actual dollars spent on green projects was $1.5 billion.  Now, in November 2010, dollars actually paid to date on green projects is approximately $11 billion.  It amounts to approximately 7% of contract spending from the Stimulus bill (which does not include tax benefits), and 2.6% of the total stimulus money paid to date. 

By agency, the spending on green breaks out as follows:

  Allocated Paid Out Unit % Paid
         
DOE 33.29 9.4 Billion 28.24%
Energy Efficiency/Renewable Energy 16.50 4 Billion 26.06%
EPA (9/30) 7.20 4 Billion 62.22%
GSA 6.10 1.42 Billion 23.28%
Green Buildings 5.50 1 Billion 18.18%
DOT 40.40 22.3 Billion 55.20%
High Speed Rail 3.00 1 Billion 33.33%
Total Agency 86.99 38 Billion 43.22%
Total Green 32.20 11 Billion 33.48%
Total Contract Spending 275.00 156.7 Billion 56.98%
Total Stimulus 787.00 403.4 Billion 51.26%
% Green of Contract Spending 11.71% 6.88%    
% Green of Total Stimulus 4.09% 2.67%    

[I used the same methodology as described in detail here. If you are a data geek like me, you can do your own number crunching at Recovery.gov and the agency recovery sites who do weekly reporting in Excel on the allocation and spending of the Stimulus money.  There is a wealth of information available, and I welcome any input or different statistical or mathematical analyses from the Green Building Law Community.] 

At the initiation of the Stimulus, Obama touted the green components of the stimulus bill.  He has also been very positive on the prospect of green jobs. Opponents of the stimulus bill, and waning support of green initiatives and green jobs in general, has been on the rise.

So the question becomes: what is the value of the 3% of the Stimulus that went to green iniatives, and was the return on investment higher or lower than the other initiatives that were funded by the stimulus? The answer to the ROI question is "yes"-- Agencies tasked with green funding (DOE, EPA, GSA) hold 3 of the top 10 most efficient job creating agencies that were allocated stimulus funding:

 

  Stimulus Funds Paid Jobs Created Dollars Per Job
Department of Justice $2,013,343,173 16330.59 $123,286.62
National Science Foundation $817,277,981 5503.36 $148,505.27
Department of the Interior $1,545,986,174 10047.13 $153,873.41
Department of Education $66,652,472,918 341668.74 $195,079.22
Department of Energy $9,691,290,357 42262.17 $229,313.60
General Services Administration $1,493,185,840 5773.82 $258,613.16
Department of Housing and Urban Development $7,270,460,291 27640.01 $263,041.16
Department of Homeland Security $598,741,846 2137.91 $280,059.43
Environmental Protection Agency $4,608,982,170 16233.68 $283,914.81

  By contrast, the two departments which spent the most money, the Department of the Treasury (tax cuts) and the Social Security Administration only created 188 direct jobs.

Department of the Treasury $8,575,280,379 144.27 $59,439,109.86
Social Security Administration $13,727,406,290
44.75
$306,757,682.46

It will be argued that the tax cuts, etc. indirectly created jobs by pumping more money into the economy.  But there is a direct way to measure the impact of a single green dollar.  To address this, I looked at the statistics for the GSA.  Unlike other agencies which allocate money through states to programs or disperse it to individual taxpayers, the GSA contracts directly with builders and other direct contract fund recipients to build or renovate federal buildings.

As of September 30, 2010, the GSA had saved or created 5773.82 jobs (how you have .82 of a job I can't say). The stat is here. The GSA was 16th in the agencies recieving funding, and the12th net job creating agency.  But on a job per dollar basis, the GSA the 6th most efficient job creating agency at $258,613.16 per job created.   

Do not fall into this statistical trap "$258k per job? We could have created five $50k jobs for that money!"  Remember, this dollars per job includes materials and costs of the jobs involved (bricks, mortar, etc.), which also have downstream job creating effects (brick makers, concrete haulers, etc.).

Tomorrow, I will post an interview I had at Greenbuild with Kevin Kampschroer, the Director of the Office of Federal High-Performance Green Buildings at GSA in which he gave insight not only into the GSA's experience with the Stimulus spending, but also on the long term impacts the Stimulus spending had on the operation of the GSA itself. 

What The Election Of 2010 Means For Green: Not much.

As a self-proclaimed East Coast liberal intellectual who drinks Starbucks Grande Nonfat Decaf Lattes on a regular basis, I woke up this morning after the Mid-term elections of 2010 with a heavy heart.  I thought to myself, as I took public transportation to my office from my energy efficient townhouse in Center City Philadelphia, what will happen to environmental policy in this country? Now that the Republicans have the majority of the House, and spooked the pants off my latte-drinking bretheren on the left, has the green revolution been quashed before it even really got started? Surely cap-and-trade is off the table, and incentives for renewable energy and green building will be scrapped or allowed to sunset without renewal under the guise of "balancing the budget."

Reading the headlines did nothing to cheer me up. Politico calculated the cap-and-trade losses:

Nearly 30 (and counting) who cast ‘aye’ votes for Waxman-Markey were swept away on Tuesday’s anti-incumbent wave.

As I moped through my morning coffee, considering the appeal of starting a hedge fund or opening a high-end craft store (my secret dream), it slowly dawned on me that the mid-term elections had essentially changed nothing.  Even with majorities in the Senate, the House AND the White House, cap-and-trade went nowhere.

Incentives are valuable for renewable energy projects and green buildings, but projects that depend entirely on incentives to pencil out are not sustainable in the long run.  The incentives would have to end eventually, and this way Democrats will not be forced to make the hard decision about when and how to do it.  They will not have to spend political capital and material resources on propping up or renewing stimulus incentives, but can instead devote their energy towards building the political climate which will embrace green. 

Not that this helped my mood, but the world is still warming and there are still terrorists in the Middle East.   The green revolution may have suffered a setback in yesterday's election, but the two essential underpinnings for the green revolution and moving to renewable energy have not changed.  

Finally, perhaps this is a wake up call to recognize how hard the task of creating a green America really is.  The winds of politics are very changeable, and the American people have priorities other than the environment.  If Americans are not electing politicians who prioritize the environment, then the revolution has not come yet.  Moreover, if the success of the green revolution depends entirely on who is in power politically, it is not a revolution at all.  It is a pork project.  To have a revolution, the hearts and minds of the people (to borrow a phrase) have to be changed, one person at a time.  That process is slow, and subject to lots of setbacks.  Just ask Jimmy Carter. 

 

Religion. Politics. LEED.

Guest Post by Stuart Kaplow.  Stuart Kaplow is an attorney, based in Baltimore, with a real estate practice concentrating in green building and sustainable business. His law firm website is www.stuartkaplow.com

Building green is the law in Baltimore City. And while the mandatory requirement for all to build green has been in effect since July 1, 2009, the City has just announced the regulations (that were, arguably, to have been effective July 1, 2009) were promulgated last week, effective September 16, 2010.

Make no mistake, Baltimore City is not green washing. To the contrary, it was an early adopter when it enacted a green building law in 2007 that, today, remains among the most sweeping of that in any major American city.

Baltimore City Building Code, Chapter 37 mandates that all newly constructed, extensively modified non-residential, and specific multi-family residential buildings, that have or will have at least 10,000 square feet of gross floor area, “for which a building permit application is filed on or after July 1, 2009 must achieve a silver-level rating in the appropriate LEED rating system, as certified by the Green Building Council”. (Mandating that privately owned buildings be constructed to a LEED standard is no less controversial than religion or politics.)

”Extensively modified” is a modification that alters more than 50% of the building’s gross floor area (such that many major renovations will have to be LEED silver certified is a big deal).

The City Code further requires that “the Building Official must issue regulations to administer .. [this law and that] those regulations must specify: 1. The LEED rating system, and any equivalent energy and environmental design standard, that applies to each type of covered building.”

As the key component of those regulations, the City has developed its own “equivalent” green building standard, based largely upon the LEED 2009 rating standards, layered with fast, flexible new approaches to sustainability taking advantage of the powerful opportunities and challenges of building in an older urban area. A City checklist of 150 credits (versus 110 credits on a LEED checklist) has been released for new construction.

The game changing regulations create the “Baltimore City Green Building Standards” enabling an applicant to satisfy the law with either at a minimum LEED silver certification or obtain a “2 Star” (on a 5 star scale) City approval under those City Green Building Standards.

Building permit applications are, today, being accepted utilizing the Baltimore City Green Building Standards even in advance of the regulations being final.

There are opportunities to prosper and thrive in the greening of Baltimore. All are welcome.
 

Interview: Karen Bandheuer on EPA's Sustainable Design and Green Building Toolkit for Local Governments

A few weeks ago, the EPA released its Sustainable Design and Green Building Toolkit for Local Governments. The Toolkit:

is designed to assist local governments in identifying and removing permitting barriers to sustainable design and green building practices. It provides a resource for communities interested in conducting their own internal evaluation of how local codes/ordinances either facilitate or impede a sustainable built environment, including the design, construction, renovation, and operation and maintenance of a building and its immediate site.
 

The toolkit can be downloaded here.

The Toolkit was developed by EPA Region 4, and we are very excited to have Karen Bandhauer, an Environmental Scientist at EPA Region 4 for an interview about the Toolkit.
 

GBLB:  Why did you develop the Toolkit?

KB: The Toolkit was the result of a relationship between the EPA and Roswell, GA. The city approached EPA wanting to develop green, protect natural resources and provide resources for its residents. The Roswell representatives told us that there had been some innovative projects that came into their permitting pipeline, and had run into permitting problems because of green features. They realized they were creating barriers to projects that they wanted to have in their community. The asked us whether we could help them create some resources to help communities identify the barriers in their codes to developing green. Some funding became available through the internal EPA innovation work group, about $50,000 in seed money for innovative projects. This project was put forward as an innovation project in 2008 by Region 4. That got it started. The project ended up being a partnership with Smart Growth and Green Building at [EPA]  headquarters.

GBLB: What does the Toolkit contain?

KB:  The Toolkit has three parts:  an assessment guide that allows users to tak a look at their codes and ordinances under the categories of the LEED process [sustainable sites , water efficiency, energy and atmosphere, indoor air quality, materials & resources]. The assessment tool identifies objective and rationale for each category, and then questions for communities to identify gaps in the current regulatory system, then a list of potential tools and techniques [for addressing those gaps].

There is also an assessment tool—green, yellow and red—to determine how well the community is promoting each practice. Green is where the tactic is either mandatory or incentivized, yellow is where the practice is typically allowed, and red is where the practice is hampered or prohibited [by the current regulations].

There is aslo a resource guide attached to each section which has tools, information and case studies. The resource guide has a compendium of policy tools, best practices and other materials. In some cases it might be an example of a community that has put in a model ordinance, it might be an example of a best management practice guide or a green roof technical specifications. It allows the user to get a good sensse of the existing information in the field without having to spend a lot of time searching around for it.

The last section is a guide for developing an action plan. We had not originally envisioned this section for the project, but the City of Roswell gave us feedback that they wanted advice on next steps. This is a step by step guide for changing the regulatory environment. It helps communities identify things they need to look for and address if they want to implement the changes to their regulations.

GBLB: What are some of the barriers that play out in communities?

KB: A lot are the ones you hear about, and some are community specific. One of the things that we heard about was barriers in the code to installing waterless urinals, reuse of greywater. Others were “unintended consequences”—some communities prohibit groundwater wells which prohibit geothermal. Or specific ordinances which require tree planting, but if there is a drought, there might be issues better addressed by native planting. Or street widths, which [were put in place for fire safety] but might matter in terms of building sustainable communities.

Other barriers are institutional or process oriented—specific to historical legacies like union involvement. We wanted to walk [communities] through from their environmental objective to how they could implement codes and ordinances to achieve those objectives. We tried to flip it—here’s the outcome you are trying to achieve, here are things that you can do through your permitting process to try and achieve them.

In no way is EPA trying to tell localities how to do their permitting process, but to give them resources to help them look at their codes and ordinances, and save some time and money in the process.

GBLB: Who is the intended audience?

KB:  Local government officials, and it could also be useful for developers and other private entities who are looking to develop green projects. We hope it will provide a resource for communities to bring their codes and ordinances in line with sustainable policy efforts.

GBLB: What is the status of the Roswell project?

We have completed the pilot project, and they have provided excellent feedback.
In addition, we held a Lean Kaizan event in Roswell [to identify potential efficiencies] in their land disturbance permitting process. If they wanted to incentivize a specific thing, communities can identify process improvements, allowing them to provide incentives without taxing additional resources. Roswell is continuing to work on that. We are going to work with them over time to promote the project as well as improve it.

GBLB: Have they made any changes to their code yet?

KB: Not yet. Now that the Toolkit is done and the Lean project is done, we will see where they want to take it.

Two Great New Resources For Green Building Regulation

Yesterday, the EPA released its Sustainable Design and Green Building Toolkit for Local Governments.  The Toolkit

The Toolkit is designed to assist local governments in identifying and removing permitting barriers to sustainable design and green building practices. It provides a resource for communities interested in conducting their own internal evaluation of how local codes/ordinances either facilitate or impede a sustainable built environment, including the design, construction, renovation, and operation and maintenance of a building and its immediate site.
 

The toolkit can be downloaded here.

The Toolkit was developed by EPA Region 4, and we are very excited to have Karen Bandhauer, an Environmental Scientist at EPA Region 4 for an interview about the Toolkit on August 4.

Today, the Center for Climate Change Law at Columbia Law School issued for comment a draft model municipal green building ordinance.  The Model Ordinance is available for download here.  According to the Center for Climate Change Law:

Unlike other model ordinances that detail technical specifications, this ordinance presents a framework for the implementation of existing technical standards and a streamlined procedure for their compliance and enforcement. The model ordinance accommodates the rapidly developing field of substantive green building standards by allowing for the adoption of new standards within the ordinance’s framework.
 

Notably the Model Ordinance attempts to deal with the issues related to preemption, non-delegation, and antitrust, and a separate analysis document is available on the site as well.

I look forward to working through these documents and commenting on them further, and looking forward to hearing your thoughts on these resources. 

What We're Reading

Today I am going to highlight a bunch of interesting articles that have come out lately which interest me. Some of these will become future posts, but I want to highlight them as they come out to keep my readers up to date, and give you something to read in your spare time.

1. The USGBC issued a short white paper on Greening the Codes and the compatibility of LEED with green codes.  It is very good, and makes the point that LEED and green codes work together to encourage green building. 

2. The United States Council Of Mayors passed resolutions to promote green building in cities, including encouraging the passing of a clean energy bill by Congress and the adoption of green construction codes.

3. The DOE announced $76 million in green building and energy efficiency technology grants.

So now I want to know...What are YOU reading? 

Green Building Law--Battle of the Blogs

Today, my co-conspirator and green building blog buddy over at Green Building Law Update criticized a post I wrote a few weeks back on Wisconsin governor Jim Doyle vetoing a green building bill that mandated 15% of gross square footage of state space to be LEED certified.  The essence of Chris' piece is that

The Governor properly vetoed spending state funds to certify public buildings as green.

Except, that's not why he vetoed the bill.  He vetoed it because it requires all moneys available for use by the building commission to be devoted to making state buildings green.

In his letter to the senate he stated:

[The requirement that all moneys be used for greening buildings] will result in all current maintenance projects being delayed indefinitely.  In the future, the commitment of all these funds for this single purpose will also sharply curtain the state's ability to build new building or maintain its existing facilities. 

In short, he vetoed it because it was too expensive and that money should be used for building new, non-green facilities or repairing old ones in a non-green manner.

BIA v. Washington State Building Council

On Friday, I posted the complaint for BIA v. Washington State Building Council, filed on May 25, 2010 by the Building Industry Association of Washington to enjoin (or, in regular english, stop) the Washington State Energy Code from taking effect on July 1, 2010.  The case is structured similarly to AHRI v. City of Albuquerque, which I have written about extensively on GBLB.

The foundation of both AHRI and BIA is in essence one of preemption--that the federal government has enacted laws that prevent lesser governmental authorities from passing laws on the same subject.  In BIA, the plaintiffs allege that the requirements of the Washington State Energy Code

in conflict with and preempted by federal law and regulations which govern the energy efficiency of certain residential heating, ventilation air conditioning and plumbing product, including the Energy Policy and Conservation Act of 1975 ("EPCA"), as amended by the National Applicance Energy Conservation Act of 1987 ("NAECA"), Public Law No. 100-12, and the Energy Policy Act of 1992 ("EPACT"), Pubilc Law No. 102-486, 42 U.S.C. Sec. 6297.  As a result, Chapter 9 violates the Supremacy Clause in Article VI of the United State Constitution.

What is most interesting about the BIA suit is that the Washington State Energy Code did not mandate enhanced energy efficiency of the HVAC equipment.  Rather, it allowed for a point system whereby energy efficienct HVAC components were one path for compliance with an overall energy efficiency target.  The BIA complaint alleges that it is essentially impossible to comply with the energy efficiency targets without  installing enhanced HVAC equipment.  This is an interesting twist on the AHRI  case, because here it is possible to comply with the Washington State Energy Code without running afoul of federal HVAC energy requirements. 

Another interesting argument is in a footnote.  One path for compliance with the Washington State Energy Code is to build a house less than 1500 square feet.  The complaint states:

Plaintiffs would submit that a blanket regulation forcing individuals to live in or contruct a home of a certain size runs afoul of constitutional protections against unlawful takings.

Two things are true: 1) the Washington State Energy Code is not a blanket regulation forching individuals to construct or live in a home of a certain size, and 2) even a blanket regulation that did not essentially eliminate all value from a property would not be considered a regulatory taking.  So this argument, while appealing at first glance, is probably not very valid. 

One time is an anomaly, twice is a pattern.  As states and local governments seek to regulate energy efficiency, I believe we will see more suits like AHRI and BIA  until the federal government upgrades HVAC energy efficiency requirements (which they are in the process of doing), or a nationwide energy efficiency building code goes into effect.

New Green Building Litigation--Washington State Builders Sue To Enjoin Green Building Law From Taking Effect

This just in...According to King5.com:

The Building Industry Association of Washington filed a federal court lawsuit in Seattle to stop new regulations that are set to take effect July 1 for the construction of all new homes. It targets the Washington State Building Code Council, which created the new code that requires higher efficiency furnaces and hot-water heaters and other measures that make the home more enviormentally friendly.

This appears to be similar to AHRI v. Albuquerque, wherein the national trade associations for air conditioning, heating, and refrigeration sued the City of Albuquerque to enjoin their green building code.   The complaint is downloadable here.

Anatomy of A Green Litigation Claim

Yesterday I posted about why Gidumal v. Site 16/17 Development LLC was not green litigation. In short, the case incorporates allegations regarding the green components of the project as support for its regular construction claims, not for failure to acheive green requirements. It got me to thinking--what would legitimate claims regarding green construction defects look like? To some extent, it depends on who the parties are and what damages they are looking to require.  But assuming the facts of Gidumal v. Site 16/17 Development LLC (a condo owner suing the developer, architect and engineeer for post-occupancy deficiencies), I think the following claims would be relevant:

  1. Breach of contract--If there was a contractual promise regarding the green nature of the building or the resource (energy, water, etc.) performance of the building, this could be grounds for a breach of contract claim. This is particularly relevant where condo documents or other contractual agreements list "LEED" or "Green" as a component of the offering.
  2. Lanham Act/Consumer Protection violation-- The Lanham Act is a federal claim which prohibits false advertising, but it can only be brought by a competitor.  It requires the plaintiff to prove that there was a false or misleading statement made, the statement was used in commercial advertising or promotion, and the statement creates a likelihood of harm to the plaintiff. Most states, including New York (General Business Law Section 349 and 350), have consumer protection laws which function similarly, and can be brought by consumers for false advertising and deceptive trade practices.  Often such statutes provide for treble damage recovery. 
  3. Fraud/Misrepresentation--To the extent that a plaintiff can plead with specificity that the owner, developer, architect or contractor knew that the building would not be green or was not being constructed to green standards, and intended that the condo owner rely on their representations regarding the green nature of the building, there would be claims for fraud and its cousin, misrepresentation.
  4. Malpractice against architect, contractor or engineer--If it can be proven that these professionals acted outside the standard of care of a reasonable architect in constructing the building, this might be a valid claim.  Evidence of gross disparity between the energy modeling and the energy performance might be used as proof that a reasonable architect or engineer would not have designed or constructed a building in that way.
  5. Construction defect claims against contractor--Certain states have specific laws for hidden construction defects, which may be available in addition to negligence or malpractice claims.
  6. Breach of Warranty or Consumer Protection claim against manufacturer of green components--To the extent that the failure of the green features is due to failure of the components--the heat pump, or the insulation--there may be a claim for breach of warranty, consumer fraud or even breach of contract.  
  7. Breach of Contract against the operator of the building--To the extent that the green failure is due to failure to maintain and upkeep the building, there may be a claim against the company operating or managing the facilities, particularly if their contract specifies that they have to operate the green components.   This claim may not be available to individual condo owners, but rather to the condo association or whomever is in contractual privity with the operating company.

The above is meant for information purposes only, and not to be relied upon as legal advice, as all situations are different.  But perhaps we will see an amended complaint in Gidumal v. Site 16/17 Development LLC that brings in some or all of these concepts.

Construction Litigation Greenwashing--Why Gidumal v. Site 16/17 Development LLC Is Not Green Litigation...Yet

My good friend and savvy LEED litigation sleuth Steve Del Percio uncovered a case filed in New York that involves, among other things, an allegation of failure of the heating system to perform properly.  The luxury condominium building, at One and Two River Terrace in Manhattan was advertised as LEED Gold.  The Compalint alleges that an energy audit conducted by the plaintiffs revealed deviation of "49% over the USGC LEED and BPCA standards in the cumulative size of holes and cracks allowing infiltration of cold air." But this claim is about the performance of the heating system--failure to heat--not its energy performance.  The other claims in the case are similarly basic construction law claims--the failure of a railing to protect from falls and frosted glass windows where there were supposed to be clear glass, for example.

The case incorporates allegations regarding the green components of the project as support for its regular construction claims, not for failure to acheive green requirements.  In the five causes of action against the architects and the cause of action against the engineer, failure to construct a green building is nowhere to be found.  The causes of action against the developer do not include a cause of action for false advertising regarding the green components of the building.  In short, throwing in the energy audit information and noting that the building was LEED certified is the construction litigation equivalent of greenwashing. 

This is not to say that the case could not develop these claims through an amended complaint if more information is uncovered during discovery.  Indeed, with the press that the case is receiving--it got a mention in yesterday's Wall Street Journal--these areas might be developed further. 

Condo Owners In Battery Park City Suing For Green

The Wall Street Journal reported today about condo owners suing The Riverhouse One Rockefeller Park for $1.5 million in damages:

The suit by the Riverhouse tenants alleges various shortcomings.

It says the owners' engineers "found a deviation of 49%" over the LEED standards "in the cumulative size of holes and cracks allowing infiltration of cold air."

The complaint also alleges that air temperature for heating the apartment was too low, which the owners say is a sign that the building isn't maximizing energy efficiency.

More on this today at GBLB!

GBLB Discusses Greening of Corporate America with Ari Kobb of Siemens

GBLB sat down with Ari Kobb, Director of Green Building Solutions and Co-Chair of Sustainability Committee for Siemens Building Technologies Division to discuss the Siemens/McGraw Hill Construction Study on the Greening Of Corporate America.  The study is available for download here.

GBLB: What did Siemens intend to accomplish with the study?

AK: We did the first study in 2006, published in 2007, and our main driver was to see the extent to which green and sustainability was being adopted and embraced by corporate America versus the public sector, because we viewed public sector as mandate driven. We thought the private sector drives the market. They make things more accessible when they embrace it. When the lightbulb goes off, they will develop more products, the service providers will be there, it drives market growth. When we did the 2006 study, the tipping point of sustainability and green buildings would be 2009-2010. We redid the study in 2009 because we thought the market had moved significantly, and we wanted to prove out some trend information. With the emergence of a corporate sustainability officer, we wanted to see what role this played. At the end of the day, we wanted to get away from the "if sustainability is significant" to the part where sustainability is driving the market.

Siemens did the study because we are a thought leader in the industry, we want to be associated with the green topic. At the same time, we embarked on our own internal sustainability movement. The data supports both our continued investment and growth in the green area and our own internal journey to becoming more sustainable. The timing was perfect. We started our own sustainability program in 2007, and at the same time, our customers both institutional and commercial were going green, the timing was right on that aspect.

GBLB: Who did you interview?

AK: We interviewed 203 executives from the C-suite of revenue over $250 million—CEO, COO, CFO, Chief Sustainability officer or someone in this position. This is a change from 2006, because there was no one in that position in 2006.

GBLB: What did you find?

AK: The main thing we found was that corporate America has moved attitudinaly toward embracing sustainability as part of corporate strategy. You are not going to be able to be a Stage 1 or Stage 2 company because of benefits the C-suite sees in sustainability. The alignment between efficiency and sustainability is being identified at the highest levels. We have seen an increase in Stage 4 and Stage 5 companies. Stage 4 and 5 combined increased from 18 to 37%, Stage 4 increased from 15 to 30—it doubled. Stage 3 has stayed the same.

This is an attitude study—we gave them a definition, and asked them to place their company. This measures the attitudes of the highest levels of the organization—it may reflect where they want to be. What we are seeing now 1/3 of the market seeing themselves as a Stage 4 and Stage 5.

Most companies have a dedicated sustainability role—61% have a dedicated sustainability staff.

When we looked at what was driving the sustainability efforts, we found that everyone (almost 80%) view a drop in costs as an outcome of sustainability efforts. A convergence of sustainability as an efficiency and cost-savings tool. Greater productivity was also perceived as an outcome of sustainability. Customer retention and attraction and employee retention and recruitment were also seen as benefits of sustainability. The concept is that there is a drive in the market to differentiate by providing more sustainable products, and also being driven to be more sustainable internally by their customer demands. An example is suppliers to major universities. They like green products. They are looking to the market to develop new green products, and they are also asking what their suppliers are doing to go green. In this economy, if this sliver is what will win you the job, you’ll do it. RFQs are beginning to ask how sustainable the suppliers are. 73% say perceived customer retention and attraction benefit.

There are a lot of people coming into the market who have grown up greener, who have a more ingrained understanding and expectation that where they go to work is in the green space, and is green as well. The two have to be connected.

This study was done in the depth of the recession. Over 60% said sustainability initiatives were continuing or growing. The pace may have slowed down, but it hasn’t gone backwards. It is one of the few bright spots we have seen. You can’t stop it. Even the Stage 1 companies will continue along the sustainability path.
 

GBLB: What is Siemens doing as a result of the study?

AK: We are distributing the information to show that the market has moved—the time to debate the value of embracing sustainability is over. Now, let’s all take it to the implementation level to satisfy what the market wants. The C-Suite are saying that the products, services, solutions are available in the marketplace. The time to say “is this going to take off” is over. The alignment with corporate strategy, profit motive, efficiency tied to conservation is there at the highest level of corporate America. The real question is whether enough is going on. Would you have expected to see more products, more services, etc.? Over 50% studied were providing sustainable products and services to marketplace, over 50% are also seeking sustainability initiatives from suppliers.

 

Legally Green--ICC Releases Green Construction Code For Public Comment

Today the International Code Council released its Green Construction Code for public comment today.  You can download a copy here. The objective of the IGCC is

to develop a Green Building Code for traditional and high-performance buildings that is consistent and coordinated with the ICC family of Codes and Standards.

I have previously posted on the importance of such an effort here.  Public comments can be made on the IGCC until May 14, 2010.

Once finalized, the IGCC can be adopted by local governments, and comport with the already existing building codes. 

One interesting diversion from prior building codes is the integration of post-occupancy reporting.  According to the AIA:

When the building is complete and the C of O is issued, building owners will be required to submit a commissioning report to the local code official within 18 to 24 months. This report will detail how the building has performed in terms of energy efficiency, building envelope performance, water use, lighting controls, etc. The report can be completed by the primary designing architect, or by a third party designated by the client or building owner. In either case, the local code official must approve the commissioning agent that completes the report. If a building does not meet its performance goals, the commissioning report will document why and prompt the parties involved in its design and construction to improve it.

Such post-occupancy requirements, and performance reporting, will elicit the usual hand-wringing from green building law practitioners like me about what will become of buildings which do not perform to their expected levels, and what enforcement mechanisms will be implemented by local governments to require building owners to fix underperforming green buildings.  Nonetheless, if buildings are going to be required by law to meet green standards, it is important that some mechanism is in place to confirm compliance.

 

 

America's Most Convenient Bank Goes Green

Frank Sherman, U.S. Green Officer at TD Bank sat down with GBLB to discuss TD Bank's announcement that it would be carbon neutral

GBLB:  What is the motivation behind TD Bank's green initiative? 

Frank Sherman: Lack of Federal leadership leaves it up to private enterprise. Right now, the private sector is going to have to pull us through in the short term.  Our green initiative is work we have been focusing on for a year and a half internally. The driver stems from TD Bank Financial Group in Toronto. Their senior leadership made the decision to become carbon neutral as a company. Their initial commitment early last year or late 2008 was to become carbon neutral by end of October of 2010. The US has follwed suit, and because the timing for the creation of TD Bank NA (the combination of Commerce Bank and Bank North) we were running a few steps behind.

GBLB: Were there any roadblocks to becoming carbon neutral? 

Frank Sherman:  We started analyzing the carbon neutral commitment over the past year, right at the time there was a lot of stress in the financial institutions. We had to look at "What is the impact this has on the company?" It made us try to really understand the company to figure out what can be achieved, to take action based on what we have done rather than just promises. It is as much a commitment going forward. We are fully aware that there is a lot we can continually do to improve, but you have to stake your claim and people can hold you accountable and we can hold ourselves accountable.

GBLB: What is TD Bank going to do going forward?


Frank Sherman: We are not doing anything now that is too far outside the norm for progressive corporations. We are making commitments to reduce carbon outputs. Given the trajectory we are on now, first and foremost is to reduce our carbon footprint and buying renewable energy credits and supporting renewable energy in US and Canada, and lastly to invest in carbon offsets.

We understand that we will always be judged by NGOs as not doing enough. It is not always useful to have a conversation when people think two different things. We accept the fact that others choose to go father or define environmental impacts differently. As we grow as a responsible corporate citizen, that is not to say we won’t take responsibility for secondary emissions. But, one step at a time was our way of approaching this.

GBLB:  What sustainable projects are you looking into as an investment for TD Bank?

Frank Sherman:  We are exploring how to balance the economics of buying carbon in quantity with investing in projects that effect our carbon footprints. For example, we bought a block of offsets from RGGI, we have balanced that with one landfill gas capture projects in New Jersey and a waste incineration project in Florida, both in areas where we do business. We are considering getting involved in projects protecting forests. We are looking at a potential carbon sequestration project in Pennsylvania. I look at carbon offsets as an investment project. We are looking to avoid emissions, and the investments we have made are ideally placed in the places where we do business.

We offset 203 million KwH, or 203,000 RECs. We purchased 31,000 metric tons of carbon offsets. That is based our 2008 greenhouse gas inventory. Our 2008 emissions equalled 121,000 metric tons of GHG emissions.

We measured our GHG emissions based on direct emissions of fossil fuels, electricity, fleet vehicles, fossil fuel impact of biz travel, leased space. We used a similar approach based on scope of emission we can control.

GBLB:  What are you doing in terms of green building? 

Frank Sherman: We identified green building as one way of addressing some of our sustainable goals right out of the gate. We began to thign about high performing green buildings as we started the process of reimaging our brand as America’s most convenient bank. We are doing all of our new branches green—but 2010 is a transition year with some in the pipeline. By the end of 2010 and going into 2011 we will be building green buildings almost exclusively.


 

When Good Regulations Go Bad

I have discussed many issues related to regulating green here at GBLB (for the Regulating Green best practices series, go here).  Some communities seeking to regulate green building, clearly with the best of intentions, have gone astray.  The most vivid examples of this were the Las Vegas green tax credit which threatened to bankrupt Nevada and the Albuquerque regulation which the City Solicitor failed to analyze for federal preemption issues.  But small communities are not immune from regulatory snafus: 

Recently, I came across a density bonus regulation for Madison, New Jersey.  The regulation reads as follows (emphasis mine): 

Maximum dwelling units per acre: 12 units per acre base density, with bonuses as follows:

(a) Incorporation of green building/design techniques to achieve at least a Silver level LEED-certified project: bonus of 10% over base density. (NOTE: The applicant shall demonstrate the ability to achieve this standard prior to receiving preliminary approval and shall commit to providing those systems, site improvements and design features consistent with Silver LEED certification.)
 

This regulation would be acceptable if the word "qualify" were substituted for "achieve."  There is simply no way for an applicant to demonstrate their ability to achieve a certification which is in the hands of a third party agency at the outset of the project.  Moreover, what design professional would be able to provide this type of guarantee? 

The Madison, NJ example demonstrates the importance of a good understanding of the LEED system (or other certification system) before utilizing it in regulatory drafting.  Design professionals need to be aware of the obligations they are assuming when a project seeks to comply with local regulations.  Finally, project owners need to ensure that they can comply with the local regulations, or seek legally binding representations by the government entity ensuring that their efforts to comply are sufficient. 

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. 

Missing The Forest For The Trees

Early in my blogging days, I wrote a post on the problem of green sprawl--the practice of developing "green" buildings on unsustainable sites.  Can a building really be considered green if it is built on greenfields in the urban periphery (like green Wal-Marts or Best Buys), or a single family dwelling comprising of tens of thousands of square feet? Twitterer Lauren Glasscock sent along this fabulous link to the 10 dumbest "green" buildings.

I read about a new version of this phenomenon in Chattanooga.  Apparently, Unum Group is: 

[B]uilding a $20 million project that includes a parking garage to hold about 1,450 cars which will attempt to be Leadership in Energy and Environmental Design certified by the U.S. Green Building Council.

So now the big question-- Can a parking lot for 1,450 cars ever be "green"? 

To be fair, the Chattanooga Times reports:

The garage, expected to be completed in the fourth quarter of 2010, will open the way for the sale of much of Unum's 28 acres of surface parking lots.

Mr. Watjen said property will likely be turned into development for downtown, but it is unclear exactly how it will be distributed.

A garage structure is more sustainable than surface parking lots, for the runoff factor alone.  But I question the "green"-ness of erecting infrstructure for 1,450 cars.  Is this something the USGBC should be certifying? Or does it compromise the fundamental credibility of the LEED system? 

Wal-Mart Sponsors Green Job Training For Women

I have written before about the appalling lack of women in the green sector.  Greenerbuildings.com reports that Wal-Mart is attempting to do something about this by sponsoring green job training for women. 

Together the two organizations are launching an initiative called "Moving from Red to Green: Working Women in the Green Economy."

The Walmart Foundation's support will enable the working women's advocacy group to establish a pilot program and provide grants of $60,000 to four organizations to provide the training.

 

Others will **hopefully** follow suit. 

ACE Launches New Green Contractor Insurance Product

ACE announced last week that they have created a Green Contractor Insurance Program.  People in the green building risk world have speculated that insurance companies would begin to offer green professional liability products.  The ACE product does not cover professional liability issues, but instead is a pollution liability insurance product. According to ACE

Contractors Pollution Liability program, which addresses the growing risks and potential exposures faced by contractors as they begin to access federal stimulus dollars and experience increased construction activity. This green-specific insurance program is designed to cover contractor and sub-contractor environmental and pollution-related exposures. The product can also be tailored for Leadership in Energy and Environmental Design (LEED)-certified building projects as an Owner-Controlled Pollution Insurance Program (OCIP); a Contractor-Controlled Pollution Insurance Program (CCIP); or a standalone Contractors Pollution Liability Project placement.

The world is still waiting for a professional liability policy to cover green services by architects, contractors and engineers, but the insurance industry may be closer to determining the parameter of risk that green represents.  I have been in contact with ACE, and will find out more about the parameters of this new product.

My New Pet Project--Web 2.0 For Green Building

I love social media.  I update my Facebook status regularly (Shari is working on a blog post) and I tweet often (I'm @sharishapiro for anyone who wants to read my tweets). 

But recently I have noticed the use of Web 2.0 for effective policy making tools.  For example, the San Francisco Chronicle reported that Google is using its Google Earth tool in conjunction with information from the Natural Resources Defense Council and other environmental groups to map where renewable energy projects should be sited to avoid environmental externalities, like invading endangered species habitats.   Everyone I know uses the DSIRE database for energy efficiency and renewable energy resources.  The Department of Energy has a number of interactive tools on energy efficiency and energy codes.  The NRDC recently created a neat tool which uses 3-D modelling to reenvision dead spaces as vibrant, multi-use places. 

We need a great set of Web 2.0 enabled tools to bring together the activities which are happening in the green building space, and to promote collaboration among the the great green practitioners nation and even worldwide.  My vision is to establish a web portal with green building regulations, green building case studies, best practices, wikis, and many other features.  I have a new mission, to create this policy resources powered by Web 2.0 and bring together the many people doing great work in this area. 

Barriers to Entry--Analyzing Barriers to Greening Building Codes

Last week was a bit quiet here at Green Building Law Blog as I attended a conference in Atlanta hosted by the EPA on greening building codes.  The invitees to the conference were code officials, EPA personnel, developers, architects, non-governmental organization reps, a couple of attorneys and assorted other municipal and state officials.  It was a great group and a well facilitated conference.

The first day of the conference was devoted to identifying barriers to greening the building codes.  The barriers fell into 7 categories:

1. Procedural--lack of communication among stakeholders, lack of integration among agencies and codes (plumbing codes, etc.), no clear process for obtaining variances to statewide building codes, overextended staff resources, lack of enforcement of current codes

2. Capacity--Lack of experts in green building amongst code staff

3. Education/Perception--Green seen as elitist, expensive, difficult; Lack of certification and training amongst code officials, lack of examples

4. Legal--Standards of proof higher for green buildings than standard buildings for approvals, Federal and state preemption, conflicts with other laws (fire code, historical preservation), LEED not designed to be integrated into codes, risk of liability

5. Technical/Research--Lack of performance data on green systems and technologies, lack of definitions of green terminology, lack of clearinghouse of information on best practices, inaccessibility of financial data and cost/benefit analyses

6. Political--Partisanship, status quo interests, unions, property rights advocates, lack of political champion for greening codes

7. Financial--budget shortfalls (especially because of recession), jurisdiction for funding (state vs. local allocation) for code changes

Some of these barriers are more perception than reality, but perception is reality when it comes to making political change.  In addition, most are very real---code changes require policial will and resources, and good communication among stakeholders both within the government and with the regulated community.

Part 2 of Regulating Green Series--7 Rules For Sound Green Regulations

1.  Have a clear intent

In Going by the Book, authors Eugene Bardach and Robert Kagan state, “A regulation requirement is unreasonable if compliance would not yield the intended benefits…” In other words, a regulation should have a clear intent--like increasing the number of high performance buildings or reducing greenhouse gas emissions or improving indoor air quality--and compliance with the regulation should acheive the intent. 

2. Evaluate extreme outcomes

Las Vegas instituted a tax cut for green buildings so sweeping and easy to qualify for that it threatened to cut a giant hole in the state's budget.  In planning regulatory mechanisms, regulators must look at a likely scenario of compliance and an extreme case to ensure that all outcomes are considered, and the extreme case is prevented. 

3. Carefully analyze utilizing third party green building criteria and certification systems

Many local governments incorporate third party green building criteria (and in some cases, certification) like LEED, NAHB-Green, Green Globes, etc. as the core of their green building regulations.  I will do a full post on this topic as part of this series, but regulators need to examine the pros and cons of choosing a third party system as a component of their regulations.  

4. Create measurement and verfication mechanisms

In conjunction with point number 1 above, compliance with the regulations should be measurable and verifiable.  Looking to decrease greenhouse gas production? Require reporting on energy usage.  Looking to increase green buildings in your municipality? Require receipients of tax credits to indicate what green components the credit enables them to add that they would not have done in the absence of the credit. 

5. Develop valid enforcement mechanisms

Washington DC has come under major criticism for requiring a performance bond which is forfeited in the event that a building fails to comply with the green requirements of the DC green building act.  Essentially, this is not what a performance bond has traditionally been used for, and the surety industry has expressed significant concerns over providing bonds for this purpose.  Another mechanism DC could have used was to levy fines, or withdraw (or refuse to issue) occupancy permits, if the project did not meet its green requirements.  

6. Check for state and federal preemption 

Last year, the HVAC industry associations sued the City of Albuquerque to prevent the city's green building code from taking effect.  They argued that the energy efficiency requirements in the green building code was preempted by federal standards for HVAC equipment.  In the course of the litigation, it came out that the city attorney had not checked for federal preemption. 

In addition to federal standards, many states have state-wide building codes which may preempt local municipalities' ability to require construction to conform to more stringent standards.

7. Anticipate litigation

The first envrionmental legislation was passed in the early 1970s. There is still litigation on the interpretation of sections of the Clean Water Act and the Clean Air Act.  The purpose of the judiciary is to interpret and clarify regulations, and this process is a normal part of new regulatory schemes.

Shortchanging The Environment--Why The New Stimulus Bill Doesn't Get Us Where We Need To Be

Yesterday, the house came out with its allocation of the American Recovery and Reinvestment Plan, or the new stimulus package.  This package was supposed to be "green". It is not.

The best indication of this is that the allocation for public transit, $10 billion, was $5.6 billion less than the allocation for a $500 increase in Pell higher education grants. I do not think that higher education grants are wrong, but a $500 increase in individual Pell grants just isn't going to have the impact that, say, $26 billion in public transit funding would have for the environment, jobs, dependence on foreign oil, etc. 

The total allocated dollars for green programs is $95 billion out of $550 billion in expenditures (and another $275 billion in tax cuts). Of that:

Green Stimulus Allocations $b
Energy Transmission 32
Energy Retrofits 22
Public Infrastructure Energy Savings 31
Public Transit 10
Total 95

As the Green Wombat wrote

It’s a start, but that’s less than 7% of the entire stimulus package (or, about enough to pay for the Iraq war for five months, or somewhat more than what the federal government is spending to bail out Bank of America).

Green Wombat calculated the allocation for green as $54b, but even at my more generous $95b, it is simply not enough to be game changing.

Here is  a handy chart with all of the allocations from the New York Times blog.

Tiny Rays Of Light--Good News For Green Building

Over my first few cups of coffee this morning, I had an odd sensation.  What could it be? That slightly warm feeling eminating from my heart--oh, now I remember, hope! That's what it is.  Not a lot of hope (although as I write this the dow is up 133 points), but certainly a few rays...

1. Industry organizations and utilities are embracing energy efficiency measures, including enhancing building code requirements.  According to Greenerbuildings.com

Environmental and energy groups, including the association that represents almost 70 percent of the country's utilities, are urging swift passage of a stimulus package that includes provisions for energy efficiency programs that they say would help jumpstart an economic recovery through the creation of green jobs.

Most significant from a green building law perspective, is that these groups are advocating for block grants to state and local governments to "be contingent on adoption of regulatory changes that make building codes tougher — and "major investments" in energy efficiency projects by utilities easier. "

2. As I predicted in my post Pink is the New Green, energy efficiency is at the top of the legislative agenda. It is being incorporated into the stimulus package, and local municipalities are embracing it as well.  Washington DC updated its building codes to ASHRAE 90.1 2007 and included some new green provisions. 

3.  The Bicycle Commuter Act passed--A benefit originally proposed seven years ago by .S. Rep. Earl Blumenauer, D-Ore. provides $20/month to those who commute primarily by bicycle.

Of course, we are still waiting to see what the green provisions of the economic stimulus package will be, but these actions are very positive signs of change in our national zeitgeist.  

Obama Makes Federal Green Building Policy A Centerpiece Of Economic Plan

Change.gov, Obama's transition site, had a message from the President-Elect today about his plan for economic recovery. Top of his list was greening federal building stock:

First, we will launch a massive effort to make public buildings more energy-efficient. Our government now pays the highest energy bill in the world. We need to change that. We need to upgrade our federal buildings by replacing old heating systems and installing efficient light bulbs. That won't just save you, the American taxpayer, billions of dollars each year. It will put people back to work.

Interesting that green building infrastructure for the federal government is the first component in Obama's plan.

Role For Attorneys In Building Green

Recently, I wrote at Greenerbuildings.com about how legal issues have largly been ignored by the USGBC.  I first posted an article about the legal considerations for green buildings in July 2007.  Below is an update to that article.

Green building has hit the real estate scene remarkably quickly, but little attention has been paid to the legal implications of this new area. As green building and ecological sustainability considerations are becoming more prevalent, new regulations are being enacted by local governments around the country and old regulations are being adapted to embrace green building practices. State, local and federal dollars are being made available for green building projects through tax incentives and grants. Insurance companies and financiers are making products and instruments for green building projects available. As a result, there are new legal issues to consider when embarking on a green building project, including: drafting construction and design contracts that incorporate green building standards; navigating the local building and zoning approvals processes and securing public financing; negotiating with insurance and financial institutions and resolving disputes over green building projects that fail to achieve their sustainability goals.

Green building projects large and small must obtain permits from local governments, but the regulatory environment is in flux. In many places the zoning and building codes were developed in response to the health and safety issues of a century ago, and certainly not developed with green building in mind. In others, due to lack of action on the federal level, local governments are creating new regulations to encourage sustainable development. As old regulations are being adapted to new technologies and new regulations are developed, attorneys can provide critical guidance on the local regulatory landscape as part of the planning for a green project.

Furthermore, private and government entities are providing significant financial incentives to encourage green building. For example, Gov. Edward G. Rendell's newly released energy independence strategy earmarks $150 million ($50 million for grants; $100 million for loans) for green building projects. Fireman's Fund offers discounted pricing for building owners who commit to greens standards, and provides specialized insurance to allow for repair or replacement of green building projects in the event of a loss. Lawyers have a unique role in identifying and securing access to financial incentives and risk management tools.

Participants in the development process will require new contracts to ensure compliance with green building goals. Most of the entities establishing criteria for the performance of green building are private, nonprofit organizations like the United States Green Building Council (USGBC). Many local regulations and incentives for green building are directly linked to these certifying criteria, particularly USGBC's Leadership in Energy and Environmental Design (LEED) standard. If a project must achieve a certain LEED or similar rating to qualify for funding or approval, the construction and design contracts should reflect that ambition.

Finally, although the green building movement is in its halcyon days, new expectations will inevitably lead to conflict. A multimillion-dollar development project will fail to gain the LEED credits required to secure a government grant, and litigation will doubtless ensue.

These are some of the legal considerations in building green. Considering the legal issues should not be seen as an impediment to green building, but rather as a way to manage risk and to proceed with a smooth development process.

Parts of this post were previously published in the Legal Intelligencer.