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

On Tuesday, Chris Christie (R) was elected as Governor of New Jersey.  His predecessor, Jon Corzine (D), instituted a number of programs through the state's administrative agencies to promote sustainable practices and green building.  So, what does this change in administration mean for green building in New Jersey, a leader among states in promoting green practices? 

Christie campaigned hard on issues like "controlling spending" and lowering New Jersey property taxes. He also proposed:

• Immediate freeze on proposed new agency rules and regulations.
• Sunset provisions for all new programs after 4 years. 

This will mean that anything in the pipeline of the administrative agencies will be frozen, and new green programs will be automatically sunsetted.

Christie seems to be pro-renewable energy, campaigning that he will:

• Renew NJ and the Choose New Jersey Energy Campaign. Consolidate all renewable energy manufacturing efforts and have New Jersey undergo a brand makeover to market and sell New Jersey’s resources to energy producers, innovators and developers.
• Incentivize energy manufacturing with tax credits. 100% of the corporate business taxes or the insurance premium tax for any wind turbine and manufacturing facility that locates in New Jersey.
• New Jersey will create higher-paying clean energy production jobs in the next four years. Commit to a 5/1 ratio of higher-paying, clean energy production jobs to lower paying, efficiency jobs. While New Jersey has one of the strongest renewable portfolio standards in the country, according to the US Energy Information Administration, the state actually ranks 43rd when it comes to generating renewable energy. 

The most interesting of these is "Commit to a 5/1 ratio of higher-paying, clean energy production jobs to lower paying, efficiency jobs." 

It is energy efficiency jobs which are predominantly blue collar, easy entry to work jobs.  And according to a recent McKinsey study, the economic and job vaue of energy efficiency has huge potential:

[B]etween 2009 and 2020, energy efficiency retrofits could generate between 500,000 and 750,000 direct, indirect and induced jobs through 2020.

Moreover, the low hanging fruit for energy savings and environmental stewardship--not to mention social equity--comes from energy efficiency, not renewable energy. According to the CleanTechies blog:

 A study done by a Lawrence Berkeley National Laboratory scientist claimed that commissioning all of the nation’s commercial buildings would yield the greatest energy savings per dollar spent of any option, including wind and solar energy production. Commissioning involves fine tuning a building’s existing energy systems to improve performance and eliminate wasteful energy use.

 Hopefully, a candidate who campaigned on the concept of fiscal responsibility will realize the value of investment in energy efficiency programs before putting all of New Jersey's eggs in the renewable energy incentive basket.  Stay tuned...

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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.

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Today I will introduce the first of a new series on Green Building Law Blog focusing on mechanisms for regulating green building successfully.  This series incorporates many themes I have been covering here on Green Building Law, but is intended to be a more in depth look at the topic.  

Please feel free to contact me with any comments or suggestions for the series at shari.shapiro@obermayer.com.

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