Green Building Law Blog : Green Building Lawyer & Attorney : Shari Shapiro: Obermayer Rebmann Maxwell & Hippel Law Firm : Environmental, LEED

According to EENews, the Obama administration is trying a last  ditch effort to get a hybrid energy/climate bill passed:

President Obama is striving for consensus on a path forward that can deliver substantial greenhouse gas emissions reductions and satisfy concerns in the Senate about energy security. In an address to the nation's top CEOs at a Business Roundtable meeting scheduled for Wednesday, Obama is expected to discuss his energy plans. According to several sources, one of the proposals under discussion is to find ways to incentivize coal-burning power plants to switch to cleaner-burning natural gas.
 

Economywide cap and trade or carbon tax? Maybe not.  More nuclear, probably and more "clean coal" investment, almost assuredly.  So why pass this watered down, milquetoast version of a climate and energy bill?  

There are times in lawyer's lives when they must adopt a different hat--after all the risk identifying and negotiating and hand wringing is over, there must be a signature on the dotted line.  A lawyer must advise their client that the deal is as good as its going to get, that the settlement is worth the risk.  Because no one can predict the future, there is no absolute guarantee that the deal that is struck in advance of events is as good as what could happen if events are allowed to unfold and decisions are made based on actual events.  But dealmaking has value--it allows parties to have security and allows disparate parties to come to terms that are acceptable to all, if ideal for none. 

But I wonder if this is that deal.  Let's say Obama inks this settlement, shepherded on the Republican side by Senator Lindsey Graham.  The question must be--Will the environment really benefit, not Did We Get Something Passed.  Doing something is not always better than sticking to your guns and fighting on.  The best lawyers--and politicians--know when the deal is as good as it's going to get.  I don't think we're there yet.

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I promised a post on Obama's State of The Union, but in mulling over my response to the speech and several other events which have occurred in the days that followed, I realized that the issue which needs to be addressed is the degree to which the separation of powers between the executive and legislative branches of the government of the United States will serve to delay or derail real regulatory action on climate change (and green building), even where a strong executive seeks to pursue these goals.

The only hope is for Republican and Democratic senators concerned about climate change to form a coalition with the Obama administration.  This will require pressure from a new New Deal coalition--a "Green Deal" coalition of citizens, corporations concerned about the impact of climate change on their businesses, unions seeking new clean energy and green construction jobs, minorities seeking access to the middle class and political machines seeking a big win. If these factions can align behind climate change regulation, real legislative progress is possible.

Our government is one of limited, separated powers.  The Executive Branch has only three real avenues of power--administrative, diplomatic and rhetorical.

Over the past few months, the Obama administration has been using the administrative tools within the delegation of executive power to boost climate change regulation.  On December 7, 2009, The EPA made an endangerment finding with respect to greenhouse gases. On January 7, 2010, the SEC issued guidelines regarding corporate disclosure of climate change risk.  On October 5, 2009, Obama issued an Executive Order requiring all federal agencies to assess their environmental impact, and setting aggressive green building requirements for federal facilities, followed on January 29, 2010 with an announcement pledging  to reduce the federal government's greenhouse gas pollution by 28 percent by 2020. 

Obama also used his diplomatic authority to forge an international accord at Copenhagen, however limited.  All 55 countries, responsible for more than two-thirds of global greenhouse gas emissions, submitted plans to curb their impacts as of 1/31/10.  

Finally, using his rhetorical power, in Obama's State of The Union, he tied investments in clean energy to economic growth, and encouraged the Senate to pass a clean energy bill:

Next, we need to encourage American innovation. Last year, we made the largest investment in basic research funding in history -– (applause) -- an investment that could lead to the world's cheapest solar cells or treatment that kills cancer cells but leaves healthy ones untouched. And no area is more ripe for such innovation than energy. You can see the results of last year's investments in clean energy -– in the North Carolina company that will create 1,200 jobs nationwide helping to make advanced batteries; or in the California business that will put a thousand people to work making solar panels.

But to create more of these clean energy jobs, we need more production, more efficiency, more incentives. And that means building a new generation of safe, clean nuclear power plants in this country. (Applause.) It means making tough decisions about opening new offshore areas for oil and gas development. (Applause.) It means continued investment in advanced biofuels and clean coal technologies. (Applause.) And, yes, it means passing a comprehensive energy and climate bill with incentives that will finally make clean energy the profitable kind of energy in America. (Applause.)

I am grateful to the House for passing such a bill last year. (Applause.) And this year I'm eager to help advance the bipartisan effort in the Senate. (Applause.)

I know there have been questions about whether we can afford such changes in a tough economy. I know that there are those who disagree with the overwhelming scientific evidence on climate change. But here's the thing -- even if you doubt the evidence, providing incentives for energy-efficiency and clean energy are the right thing to do for our future -– because the nation that leads the clean energy economy will be the nation that leads the global economy. And America must be that nation. (Applause.)

In short, Obama is doing everything within his delegation of authority to enhance climate change regulation.  But, at the end of the day, the President cannot make laws.  He cannot force corporations or citizens or even states to undertake major changes to their actions which would be necessary to make dramatic reductions in greenhouse gas emissions.  He cannot withhold federal funds from states that fail to regulate or curb their own greenhouse gas emissions.  Those powers remain exclusively with Congress.  Only Congress can cap greenhouse gas emissions. Only Congress can tax greenhouse gas emissions.  Only Congress can enact a national enegy efficiency building code, or compel states through withholding funds to update their building codes to promote green building and energy efficient practices. 

In a system of separated powers, significant social change requires cooperation among the branches of government. So, with the partisan bickering in Washington and the recent election of a Republican senator in Massachusetts, the chances of significant progress on climate change regulation have decreased.  Only the Green Deal coalition can save us.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Here are the stats in detail:

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

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

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

Energy Efficiency/Renewable Energy--Department of Energy

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

High Performance Green Buildings--General Services Administration

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

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

BOTTOM LINE: $230,771

Public Transit--Department of Transportation

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

 Everything the EPA Is Doing--Environmental Protection Agency

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

So what do all these numbers mean? 

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

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Yesterday, the Obama Administration released a study analyzing the potential impact of climate change in the United States. It read like the Ten Plagues at my family's annual seder:

heavy downpours, rising temperature and sea level, rapidly retreating glaciers, thawing permafrost, lengthening growing seasons, lengthening ice-free seasons in the ocean and on lakes and rivers, earlier snowmelt, and alterations in river flows

And if that wasn't enough...

heat stress, waterborne diseases, poor air quality, extreme weather events, and diseases transmitted by insects and rodents

That's right, all that is missing is slaying of the first born. 

This study is very positive in that it is a frank assessment in relatively plain language of what we will have to address in terms of the impact of climate change.  Hopefully, now that the issues have been named, we will be able to be more proactive about enacting market-based and regulatory amelioration, and ideally, solutions. 

The current amelioration mechanism on the table--Waxman-Markey--seems to be in trouble.  First, the bill has not been very effectively communicated or sold to the American public.  Second, it seems to be subsumed beneath the health care media juggernaut.  Finally, agrobusiness interests have been successfully gaining a foothold in tying up the process. 

We need to get on with it.  Cap-and-trade or carbon tax, regulation of GHG under the Clean Air Act, green building market and regulatory programs.  Either that, or be prepared to host a giant tropical cockroach at your next seder.

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This week, I posted an online conversation with James Bedell and Chris Hill about the stimulus package.

On Friday, we sat down and had a lively debate on KCast, a podcast brought to you by Konstructr, the social network for the building industry brought to you by one of the brightest lights in the online work, Vik Duggal.

You can access the podcast here.

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Thanks so much to James Bedell for his thoughtful response to my Senate stimulus package  piece.  You make the point:

Perhaps we should take the president at his word. That the primary purpose of this bill is to get people to work, to stimulate demand in the economy and break the downward trend. Not fulfill the agenda of the liberal left in one massive bill passed within 3 weeks of taking office.

My difficulty is that once you have passed a $1 trillion (there, I said it, everybody ok?) stimulus package, there will be little capital--fiscal or political--left over to apply to other projects.  Obama will have essentially spent all of his favors passing the stimulus package, and not be able to get solid legislation through on energy efficiency, green building codes, etc.

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Long the city of high crime, poverty and neglect by the federal government which calls it home, Washington D.C. has passed some of the most progressive sustainability regulations in the country since 2006. For example in December 2006, Washington mandated, among other things, that private buildings 50,000 square feet or larger have to submit a checklist of green features by 2009, and meet LEED NC 2.2 standards by 2012. In addition to green building regulations, Washington has enacted comprehensive sustainability legislation, including a Clean and Affordable Energy Act, a Green Summer Jobs bill, a Climate Initiative and stormwater and water quality regulations.

I spend a lot of time counseling legislators on how to get legislation -- often far less comprehensive -- enacted, so I wanted to speak to the team behind the Washington legislation to find out what was working and what was not, and how it all got legislated in the first place. Alan Heymann, public information officer for the District Department of the Environment (DDOE), set up a conference with Brendan Shane, director of the Office of Policy and Sustainability, Shane Farthing, development coordinator, and Stella Tarnay, green building coordinator, for an inside look at the state of sustainability in the nation's capital.
 

Read the rest of this article at Greenerbuildings.com

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Everyone will be watching the inauguration today.  In honor of our new president here is the link to Obama's energy and environment plan now on Whitehouse.gov.

Happy inauguration day!

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I look at a lot of green building regulations, and I have devised the rule of the first dollar--regulators should be putting the first dollar of tax payer money into the most cost-effective initiative, to ensure that those initiatives that have the greatest cost-benefit calculus get funded first and most robustly. 

This week Obama has come out with some of the details of his green financial stimulus plan. In Obama's speech yesterday, as well as in his Obama/Biden plan unveilied during the campaign, he proposed: 

• modernizing more than 75% of federal buildings
• improving the energy efficiency of two million American homes

He also outlined the benefits of these programs

[S]aving consumers and taxpayers billions on our energy bills.  In the process, we will put Americans to work in new jobs that pay well and can’t be outsourced – jobs building solar panels and wind turbines; constructing fuel-efficient cars and buildings; and developing the new energy technologies that will lead to even more jobs, more savings, and a cleaner, safer planet in the bargain. 

Energy efficiency efforts work with the rule of the first dollar--according to Energy Star estimates,

Compared with standard homes, ENERGY STAR qualified homes use substantially less energy for heating, cooling, and water heating-delivering $200 to $400 in annual savings. Over the average 7 to 8 years you may live in your home, this adds up to thousands of dollars saved on utility bills.

In this study, the RAND Corporation analyzed California's energy efficiency initiatives and concluded that

In California, improvements in residential energy intensity and energy prices have reduced the average energy expenditures per capita in real terms since 1980...Low-income households derive the greatest benefit from reduced energy expenditures.

RAND also noted

The most important benefit for California is the impact of energy efficiency improvements on air pollution emissions. If energy intensity in the state had remained at 1975 levels, air emissions from stationary sources in the state would be approximately 50 percent greater than current levels.

Energy efficiency measures equalled savings and environmental benefits.

The analysis with respect to greening federal buildings is similar.  According to the Alliance to Save Energy

The federal government is the nation’s single largest energy consumer and energy waster. In 2005, the federal government consumed about 1.6 quadrillion Btu (quads) of energy at a cost of $14.5 billion. This is 1.6% of all energy used in the U.S. American taxpayers pay about $4 billion annually just to heat, cool, and power the 500,000 federal buildings and facilities.

So, each dollar saved on energy on  public buildings is a taxpayer dollar saved, and a reduction in the quantity of resources requried to heat, cool, and power those facilities.

The analysis on the tax cuts, however, is not as sanguine.  According to Nobel-Prize winning economist Paul Krugman

First, if the government spends money, that money is spent, helping support demand, whereas tax cuts may be largely saved. So public investment offers more bang for the buck. Second, public investment leaves something of value behind when the stimulus is over.   

Krugman argues that tax cuts in the first year may be beneficial in providing a quick hit to the economy, whereas public works projects take time to get started, but Obama's proposal of 40% tax cuts seems like too much. Obama can see similar upfront benefits from providing food stamps and unemployment benefits, for example.  Alternatively, he could provide vouchers for energy efficiency improvements through private vendors. 

In short, green is green, tax cuts not so much.

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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.

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