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

Happy New Year and welcome to GBLB 2011.  When the clocked struck 12:01 on New Year's, two important green regulations went into effect that may have a long term influence on green building and renewable energy.  If successful, either of these regulations would do more to change the green industry than any legal challenge to LEED's legitimacy (see the continued coverage of the Gifford v. USGBC case here and here): 

1. CALGREEN

As I have said before, green building practices are becoming code, and California has (as usual) taken the lead.  California is the only state to have a state-wide green building code, CALGREEN, which went into effect on January 1, 2011.  If California successfully implements this mandatory green building code without siginificant impact on building rates or building costs, look to other states and municipalities to follow.  Implementing green via building code is being made significantly easier throught the creation of the International Green Construction Code (IGCC) which integrates with the ICC construction codes already in place in most jurisdictions. 

An interesting question that has been bandied about is what a green construction code will do to LEED.  California will be an interesting laboratory.  Will developers still seek LEED certification for their buildings when all new construction must be green?  How sensitive is the customer base to "green" vs. "more green?"

      2.     EPA Regulation Of GHG Under the Clean Air Act

EPA limits on greenhouse gases for power plants which also went into effect January 1 (a quick fact sheet from the EPA is available here).   When cap-and-trade or cap-and-tax died in Congress last year, the EPA continued its plan to regulate GHG via the Clean Air Act. There is significant controversy over these limitations, and legal challenges have been filed.  On Wednesday, December 29, 2010, the Fifth Circuit Court refused to stay the regulations, and on Thursday December 30, 2010, Texas filed a petition to the Court of Appeals in the Federal Circuit to stay the regulations.  If the EPA regulations on power plants remain in place, more GHG regulation of other categories will follow, creating the same massive shift in the priority of green tactics to manage GHG emissions that cap-and-trade would have had.

The reason I started this post by saying that these regulatory efforts may (not will) shift the green building and renewable energy industries is because of the massive efforts being undertaken to derail the regulatory efforts. 

According to the Center for American Progress: 

The 20 biggest-spending oil, mining, and electric utility companies shelled out $242 million on lobbying from January 2009 to June 2010. Trade associations that generally oppose clean energy policies spent another $290 million during this time. This is over $1,800 in lobby expenditures a day for every single senator and representative.

Opponents of GHG regulations were successful in killing cap-and-trade legislation in Congress.  In California, a referendum seeking to overturn California's cap-and-trade regulations was on the ballot in the November election, although it was defeated handily.

In the tug of war over between proponents and opponents of environmental regulations, watch these two hotspots in 2011. 

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According to Business Green, the United Nations suspended its third carbon credit auditing company in 15 months.  Essentially, the auditors failed to follow protocols for confirming that carbon offset projects actually provide the environmental gains they promise:

The executive board in charge of the Clean Development Mechanism (CDM) last week suspended Germany's TUEV SUED and also partially suspended Korea Energy Management Corporation, after spot checks undertaken at their offices revealed procedural breaches.

Why do we care? In order for an effective carbon regulation scheme, the carbon offset program has to be measurable and verifiable.  To do so, there needs to be auditors confirming that the projects are valid. 

On the one hand, the suspensions are a positive sign because they indicate that the UN is maintaining some sort of oversight over the auditors, on the other hand, it is distressing that three of the companies which have been charged with verification have been suspended, including TUEV SUED, "the second largest CDM validator" which "had approved 1,147 renewable energy projects – almost one fifth of the total – by the end of February this year" according to Business Green. 

As the United States builds its GHG regulatory scheme, it needs to take into consideration how to ensure that the guards of environmental validity are properly guarded--that auditing procedures and confirmation of the validity of the audits is build robustly into the system.  Nothing will erode the credibility of a cap-and-trade system faster than discovering that the carbon offsets at the base of the market are fraudulent.

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Today, the EPA briefed Congress on its intent to

formally declare carbon dioxide and other heat-trapping gases to be pollutants that threaten public health and welfare.

This declaration clears the way for EPA to regulate greenhouse gases through the Clean Air Act and other regulatory mechanisms. 

According to the USGBC, in the United States alone, buildings account for 38% of all carbon dioxide (CO2) emissions.  Even if these statistics are wrong by HALF, that is still 20% of carbon dioxide.  Yet many cap-and-trade and other carbon management programs do not incorporate carbon regulation of buildings because they are categorized as "indirect" and therefore more difficult to calculate and regulate.  There is also the argument that the emissions from "direct" sources like power plants are already regulated, and therefore it will be easier to regulate their emissions.

However, the health and safety of buildings is already regulated by energy codes, fire codes,  building codes, zoning codes, etc.  If greenhouse gases are a threat to human health, regulation of greenhouse gas emissions from buildings is as critical as protecting from the risk of fire. Moreover, if a cap-and-trade system is put in place, carbon credits will be very valuable.  If reductions in greenhouse gases can be generated by high performance building practices, this value should be available to those developers who choose to pursue those solutions.

Today's announcement by the EPA will lead to regulation by the executive branch, or spur Congress to act to regulate greenhouse gases.  The regulatory solution must include a regualtory mechanism for managing the greenhouse gas emissions of buildings.

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Today, the EPA briefed Congress on its intent to

formally declare carbon dioxide and other heat-trapping gases to be pollutants that threaten public health and welfare.

This declaration clears the way for EPA to regulate greenhouse gases through the Clean Air Act and other regulatory mechanisms. 

According to the USGBC, in the United States alone, buildings account for 38% of all carbon dioxide (CO2) emissions.  Even if these statistics are wrong by HALF, that is still 20% of carbon dioxide.  Yet many cap-and-trade and other carbon management programs do not incorporate carbon regulation of buildings because they are categorized as "indirect" and therefore more difficult to calculate and regulate.  There is also the argument that the emissions from "direct" sources like power plants are already regulated, and therefore it will be easier to regulate their emissions.

However, the health and safety of buildings is already regulated by energy codes, fire codes,  building codes, zoning codes, etc.  If greenhouse gases are a threat to human health, regulation of greenhouse gas emissions from buildings is as critical as protecting from the risk of fire. Moreover, if a cap-and-trade system is put in place, carbon credits will be very valuable.  If reductions in greenhouse gases can be generated by high performance building practices, this value should be available to those developers who choose to pursue those solutions.

Today's announcement by the EPA will lead to regulation by the executive branch, or spur Congress to act to regulate greenhouse gases.  The regulatory solution must include a regualtory mechanism for managing the greenhouse gas emissions of buildings.

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