Should green buildings be mandated?
According to an article in today’s Washington Post, the Washington, DC, City Council will require private developers of more than 50,000 sq.ft. of new buildings and major renovations to meet the LEED certification standard by 2012. The Council rejected a request to also include the Green Globes standard in the requirement. According to the Post, the city of Pasadena, California, and Montgomery County, Maryland, have adopted similar standards. This raises a question: should green buildings, implying superior environmental performance beyond building code requirements, be mandated by government, or left to the private sector to decide when and where to build green? Is the specter of global warming significant enough to begin requiring all buildings to improve energy and environmental performance dramatically, no matter what the marketplace says? Or, in attempting to do the “right” thing, are local governments prone to overreact? What happens to a building that doesn’t get LEED registered or LEED certified? Does it not get a building permit to start construction, or at the completion of construction, does it not get a “certificate of occupancy”? These are great questions for lawyers to sort out. What do you think?
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We don’t need more laws and more codes. The thing that really works in our capitalistic society is money incentives. When the price of gasoline goes up, people rush out to buy gas-conserving cars. When the cost of electricity goes up, people build more energy-efficient buildings. Capitalism may not be the most admirable system in the world, but it can be incredibly efficient. You have a problem to solve (i.e. global warming) - get people to willingly, even enthusiastically, solve the problem with financial incentives. Duh.
Posted by (JavaScript must be enabled to view this email address) on 12/08/2006 at 11:35 AM
Your comment brings up many interesting questions. What level of incentives would be required to get developers to do the “right thing?” The issue with development has always been the disconnect between the developer’s economic and financial benefits and the tenants’ benefits. Green building certifications are one way we are trying to bring the two sets of incentives together: you build green, says the tenant to the developer, and I’ll lease/rent/buy from you. The issue has been, and continues to be, how that conversation actually takes place in the market.
Posted by (JavaScript must be enabled to view this email address) on 12/08/2006 at 12:10 PM
It’s really just the old carrot or the stick. Which is more effective? Which is a win/win? The carrot.
The USGBC is already on the right track by marketing LEED as an “in your best financial interest” program. Those builders who are building to LEED standards right now aren’t having their arms twisted to do so. They’re doing it for “selfish” reasons: energy savings (helps the tenant), tax credits (goes to the builder), increased worker productivity (helps the tenant), the ability to market their buildings as “green”, (helps the builder) etc.
Surely Wash. DC can come up with something creative to motivate green building. It costs something to audit and enforce more codes. Use that money to reward LEED builders Voters are often pro-environment. Get a measure passed to give tax incentives to LEED developers. Get the local utility to charge a carbon tax to buildings not built to LEED standards. That way energy hogs subsidize energy savers.
Posted by (JavaScript must be enabled to view this email address) on 12/08/2006 at 01:05 PM
Lindaloo,
I’m very much in favor of market incentives for environmental performance, since the market is generally much more efficient than the government in generating any given result. But the choice is not so clear-cut as you suggest.
For example, trying to drive green building through the cost of energy has a number of serious problems:
1) Time: It takes time for the market to respond to price signals, particularly when they are inconsistent (e.g. the price of oil), even more so with conservative industries like the building industry. And extra time, especially with regards climate change, is something we do not have.
2) Split incentives: The people who build buildings, and the people who occupy them (and pay for utilities) are often as not different people. The spec builder has a direct incentive to reduce first cost, and only an indirect incentive (saleability or renability) to reduce operating costs. The incentive is there, and it will have an impact, but the split incentive will greatly reduce both the magnitude and the immediacy of the effect.
3) Social equity: Increases in the cost of energy effect different groups very differently. A 50% increase in the cost of gas will maybe motivate some minor improvements in the practices of profit-driven owner/builders, if it’s sustained over time. But that same increase can easily break the bank for an elderly person living on a fixed income. The most common response to this issue is, of course, additional government support. Which, in my opinion, is a worse and more market-distorting deployment of government power than simply requiring that people with enough money to impact our built environment do so in a responsible fashion.
My answer to your question It’s really just the old carrot or the stick. Which is more effective? is, Both. If what you want is a revenue-neutral scheme, then deploy a feebate system: charge higher permit or impact fees for conventional buildings, and use the money both to fund enforcement and to offer rebates to builders of green buildings. As this policy shifts standard practice towards greener buildings, raise the fees and reduce the rebates on an ongoing basis, until it’s no longer economical to build conventional buildings at all, and no one does so any more.
Posted by (JavaScript must be enabled to view this email address) on 12/14/2006 at 02:32 PM
Trying to move the situation off dead center often requires more than just tinkering at the margins. Sometimes, it takes dynamite to break a logjam, and this may be one such situation.
Posted by (JavaScript must be enabled to view this email address) on 12/15/2006 at 07:18 PM