Congress requires the Department of Defense to do a cost-benefit analysis of LEED and ASHRAE 90.1-2010

Many people, including me, have noted that the National Defense Authorization Act (“NDAA”), signed into law by President Obama on December 31, 2011, prohibits the Department of Defense (“DoD”) from using any appropriated funds to achieve the two highest levels of green building certification offered by the U.S. Green Building Council’s Leadership in Energy and Environmental Design (“LEED”) Program – platinum and gold.  The NDAA, however, does provide that the Secretary of Defense can certify a building under LEED gold or platinum standards if certification imposes no additional cost to the DoD, or if the DoD conducts a cost-benefit analysis of the project and there is a demonstrated payback for implementing energy improvements or sustainable design features.

More interesting, upon further reflection, is that the bill requires that by June 30, 2012 the Defense Secretary must provide Congress with a report on the energy efficiency standards the DoD uses for military construction and repair.  The report must include:

  1. A cost-benefit analysis as well an examination of the return on investment and long-term payback of LEED, ASHRAE 189.1 and ASHRAE 90.1-2010; and,
  2.  A new DoD policy on energy efficient construction based on the cost-benefit and ROI analysis.

 The methodology for assessing the "cost-benefit" and return on investment of the standards is not specified.  Given that life-cycle costing makes the ROI of energy efficiency and other green features much more attractive, the standard that is used will be significant.   

The proposed DoD "policy" could also be used by Congress as a model to impose on the other Federal agencies, which mostly use LEED-Silver as their building standard.

Look out for a debate in the middle of the year over whether LEED and ASHRAE 90.1-2010 should be scrapped from DoD (and potentially other agency) requirements because they fail the "cost-benefit" analysis. 

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. 

A "Perfect Storm" For Renewable Energy? Obama Makes Green Energy And Green Buildings A 2010 Priority

In last week's State of the Union address, Obama challenged America to embrace a "Sputnik Moment":

So tonight, I challenge you to join me in setting a new goal: by 2035, 80% of America's electricity will come from clean energy sources. Some folks want wind and solar. Others want nuclear, clean coal, and natural gas. To meet this goal, we will need them all – and I urge Democrats and Republicans to work together to make it happen.  

Today, speaking in State College, PA, Barack Obama is scheduled to make a speech on committing to new programs for energy efficient buildings.

According to Reuters:

As part of that program, Obama will announce a plan to improve energy efficiency in U.S. commercial buildings by offering businesses incentives to help pay for clean energy upgrades of offices, stores and other buildings.

According to the White House, the "Better Buildings Initiative" will: 

achieve a 20 percent improvement in energy efficiency by 2020, reduce companies' and business owners' energy bills by about $40 billion per year and save energy.

Most significantly, the Obama administration announced that the cost of the program would be "paid for by ending tax subsidies for oil, natural gas and other fossil fuels."

Obama faces many challenges in the process.  At a recent American Council On Renewable Energy event on the new political climate in Washington, all of the speakers expressed skepticism that real energy policy moves could be made in 2010. The Republican party does not want to be perceived to approve of any discretionary spending.  The fossil fuel lobby is very strong and the breaks and incentives for fossil fuels very well entrenched.  Finally, states with nonrenewable resources like coal, natural gas and petroleum are loathe to threaten these high value industries, particularly in lean economic times. 

Obama and the Democrats have a few unique elements which could turn into a "perfect storm" for renewable energy policy:  

  • Public interest studies have demonstrated that Americans currently have a positive image of solar and other renewables. 
  • The Gulf Oil Spill is still relatively fresh in the public's mind.
  • The turmoil in the Middle East is increasing by the day.
  • There were record weather patterns again this winter.
  • The ARRA demonstrated the capacity of public investment to grow green jobs.

If these components can be honed into a clear, coherent connection to the value of investment in renewable energy, then it may be possible to achieve a major step forward in energy policy. 

One small step for Obama, one giant step for mankind.


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 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

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. 

Getting To Yes, Maybe

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.

Will The Separation Of Powers Kill Climate Change Action? Call In the Green Deal Coalition

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.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Show Me The Money--The Green Stimulus By The Numbers

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.

Be Afraid. Be Very Afraid. Now Do Something.

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.

Podcast Conversation On Stimulus Package

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.


Reply to James Bedell

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.

For Green Buildings, Change Has Already Come To Washington

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

Obama/Biden Energy and Environment Plan

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

Happy inauguration day!

Obama Stimulus Plan and The Rule of The First Dollar

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.

Obama Makes Federal Green Building Policy A Centerpiece Of Economic Plan, 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.