The lead up to this year’s Earth Day has been monumental. While the concept of a Green New Deal reverberates around our nation’s capital, cities and states are actually putting policies in place to greatly curb their greenhouse gas (GHG) emissions and their contributions to climate change.
New York City is leading with the new Climate Mobilization Act, which includes a limit on carbon emissions from larger buildings. But it is not just New York—over 100 cities and states have committed to 100% carbon-free electricity in the coming years, including California, New Mexico, Chicago, Atlanta, Washington D.C., Cincinnati, Denver, Kansas City, and many others. And there is a variety of enabling legislation to help make this all happen, including PACE Financing, Community Solar, and Stretch Codes.
These climate commitments affect the way all of us live in, work in, and operate our buildings. And this rapidly changing landscape is filled with opportunities and pitfalls for real estate businesses.
The first decision that a real estate leader needs to make is how to react. Do you ignore or slow-walk any required changes, and then find yourself in an emergency situation when new performance targets kick in? Or, like many of our clients, do you take a leadership position, and commit to both exceeding the minimum mandates and getting the full economic benefits of realigning your organization towards a more sustainable future?
To maximize the opportunity presented by these new policies, planning is key. For example:
- When rehabbing a building, do not ignore older mechanical systems that are going to cause your building to be out of compliance in a few years.
- When replacing equipment, consider future energy usage. Don’t buy a “replace-in-kind” boiler today that will make it almost impossible for you to hit the coming emissions limits in the future; spend an incremental amount more on something better!
- Similarly, when replacing a facade or roof, take the opportunity to upgrade the insulation, too, and reduce the energy demands of the building.
- When doing a larger rehab or new construction project, do not value engineer out energy-saving measures, especially when there are various financing tools to help pay for them.
Finally, take the time to tell your sustainability story to your tenants, employees, and investors—it will pay dividends and establish your organization as a leader.
I have three small kids, and I want them and their children to have a planet that is at least as habitable as the one that my grandparents left me. The good news is that with the dropping cost of renewable energy, technology enhancements in HVAC and controls technology, enabling financial tools, and the deep knowhow at companies like Bright Power, there are real, economical solutions to greatly curb harmful emissions from buildings.
It will require great effort to deploy these solutions at scale. This will be our challenge over the next decade. But if we work together, we can do it. And these recent policy developments help to prod us in the right direction—towards a cleaner, healthier environment where everyone profits.