Making 80% of your progress on 20% of your problems

As I look towards 2008, I have been reflecting on the importance of the green building movement--where are we, where are we going. There is no question that buildings contribute to environmental damage--the U.S. Environmental Protection Agency reports that up to 48 percent of the greenhouse gas emissions contributing to global climate change are a result of building construction and maintenance projects. In addition, there has obviously been a lot of growth in the Green Building sector--for example, the GreenBuild conference in Chicago had 18,000 attendees, up from 4,200 just five years ago, and some estimates put the growth of LEED-registered and LEED-certified green building projects at rates approaching 70-80% year-over-year. A new study from the American Institute of Architects (AIA) found that since 2003, the number of American cities with green building programs has increased more than 400%.

However, public transit cuts in cities like Chicago, Philadelphia and others threaten to break down essential components of sustainable development. As recently as November, the Bush administration reiterated its opposition to the 1997 Kyoto Protocol, saying that it would damage the U.S. economy. Energy bills at the state and federal levels failed to implement real changes to our energy consumption infrastructure.

Based on the theory, therefore, that you make 80% of your progress on 20% of your problems, I recommend the following areas of focus for the coming year:

1. Integration of green building standards into municipal codes--As I have stated on the blog before, I believe that green building practices need to be like requirements for fire safety--an integral part of the regulaiton that municpalities provide. The completion of the ASHRAE/USGBC/IESNA Standard 189 code project will hopefully provide a set of materials which can be easily integrated into municipal codes.

2. National leadership on public transportation--Without steady and reliable sources of funding and commitment to public transportation, building and growing sustainable development will be very difficult. National figures, including the presidential candidates, need to provide clear, coherent and strong leadership on this issue in the coming year.

3. Acceptance of international climate change protocols--The environment is a global issue which requires a global agenda. The United States needs not just to join, but to lead the world in pursuing an environmental agenda.

Here's to a Happy and Green New Year!

Tom Freidman--Is anyone listening?

Tom Freidman's column in today's NY Times is entitled "It's Too Late For Later"--http://www.nytimes.com/2007/12/16/opinion/16friedman.html?hp. Based on the Energy bills passed this week (see my previous post), our government is not listening.

Does anyone wonder--What are we still doing passing marginal energy bills?

There have been two energy bills passed last Thursday which have caught my attention. First, of course, is the Senate Energy Bill which passed 86-8 (see the nice summary article in Forbes here http://www.forbes.com/business/energy/2007/12/13/energy-senate-bill-biz-wash-cx_bw_1213bizenergy.html), and the Senate of my home state of Pennsylvania passed its version of Governor Ed Rendell's Energy Bill 44-5 (Philadelphia Inquirer article here http://www.philly.com/philly/wires/ap/news/state/pennsylvania/12428436.html). What is notable about both of these bills is that 1) they are extremely watered down versions of the original energy bills proposed, 2) they required the votes of both Democrats and Republicans to pass, and 3) it happened at both the state and federal levels.

The U.S. Senate bill eliminated the extension of existing production and investment incentives for wind and solar power, dropped the tax increases on Big Oil, and dropped the renewable electricity mandate. The only notable remaining provisions was an increase in biofuel production and increased CAFE limits. In short, the bill became less of a comprehensive reexamination of our energy sources and demands, and more about making nibbling changes at the edges.

In Pennsylvania, Governor Ed Rendell had originally proposed a bill which included an $850 million Energy Independence Fund, among other provisions. The bill which passed the Senate provided only $250 million, and provided $25 million subsidy to help utilities comply with mercury regulations. It provides only $5 million for consumer energy efficiency assistance.

What the US and Pennsylvania Energy Bills demonstrate is a remarkable lack of political will. I would have hoped that after the war in Iraq, a scientific onslaught of global warming evidence, higher gas prices, a Democratic Congress, increased awareness of environmental and energy issues and a ridiculously low presidential approval rating that the lawmakers would have the political will to make real change on energy issues. But apparently the time has not yet come.

Apologies

Please excuse the one month absence from the blog. My husband had surgery and I am pregnant (not to mention a full-time lawyer), so the blog had to take a backseat. I hope to be posting with more regularity over the next few months, but the blog will go on hiatus from May (ish) through August next summer for maternity leave.

All my best for a happy and green holiday season and new year.

Reining in McMansions

Further to my post here http://greenlaw.blogspot.com/2007/07/can-state-rein-in-mcmansions.html, MSN has an interesting article on McMansion regulation today. http://realestate.msn.com/buying/Articlenewhome.aspx?cp-documentid=418653

NAHB Weighs in on Regulatory Carrots v. Sticks

Further to my October 21, 2007 post, on October 17, 2007, the National association of Home Builders testified before Congress advocating incentives to promote green building as opposed to mandatory building code changes-- http://www.nahb.org/news_details.aspx?sectionID=148&newsID=5499.

Regulation--It really works

A number of posts have been popping up in the blogosphere about new regulations for green building and global climate change. For example, greenbuildingsnyc have a nice piece about the three green building regulations waiting for Governor Schwarzenegger's signature--http://www.greenbuildingsnyc.com/?p=314-- and Earth2Tech discusses John Doerr's speech at a Silicon Valley conference noting that the high-profile Kleiner Perkins Caufield & Byers partner called for greater participation by the government in driving greentech forward according to Earth2Tech--http://earth2tech.com/2007/09/26/john-doerr-we-need-government-to-drive-greentech/.

All of this is evidence of what I consider to be a governmental leadership vacuum at the federal level. Despite the historical success of large scale envrionmental regulation, like the Clean Water Act adn the Clean Air Act, and the recent success of requiring sustainable energy sources at the state level--http://sustainablog.blogspot.com/2007/09/maria-energia-numers-are-in-renewable.html-- at the climate meeting last week, George Bush is still pushing the market-based approach to dealing with environmental issues. http://www.thedailygreen.com/2007/09/28/president-bush-technology-and-trade-will-fix-global-warming/7340/

Recently, even the energy industry is seeking regulatory guidance. http://www.worldchanging.com/archives/007333.html Businesses and citizens cannot thrive in a world of uncertainty, and global climate change is creating a lot of uncertainty. It is the government's obligation--indeed its highest use--to use regulation to create a more secure climate for people and business. The federal government has essentially let down its part of the social contract by failing to provide leadership--in the form of mandatory regulations--to address global climate change.

More green sprawl

After Best Buy announced they were doing green stores, I wrote an extensive column on green sprawl for the good folks over at Greener Buildings--http://www.greenerbuildings.com/news_detail.cfm?Page=1&NewsID=35868. Here is more green sprawl development--Staples and Office Depot have decided to build green stores as well-- http://jetsongreen.typepad.com/jetson_green/2007/09/office-depot-st.html.

Similarly, Jetson Green has a piece on a 9,500 square foot "green" home--http://www.jetsongreen.com/2007/09/9800-sf-luxury-.html. Seriously--there is nothing sustainable about a single family home this size.

Green Federalism and The Role of Local Government in Environmental Regulation

Since the end of the Clinton administration, environmental regulation in the United States has largely been the domain of the states and local governments. This eventuality is somewhat counter-intuitive. Environmental damage has traditionally been a prime candidate for federal regulation because of its cross-border effects. The pollution which is generated in Mississippi will blow into Alabama, the water which is used in Colorado is unavailable in California. The first federal regulation of the environment in the 1970s and 1980s was basically established on this premise.

However, the lack of federal action on global warming s has created a well-spring of creative legal experimentation with local control of cross-border problems. For example, California is proposing to triple its greenhouse gas regulations over the next few years, proposing regulations requiring trucks and trailers to be fitted with devices to reduce aerodynamic drag, setting standards to reduce perfluorocarbon emissions in the semiconductor industry and having workers at tuneup and oil-change shops check tires for proper inflation as part of the service. Several states have developed anti-sprawl initiatives, including urban growth boundaries, open space preservation requirements and tranditonal neighborhood development zoning plans. SQUARING THE CIRCLE ON SPRAWL: WHAT MORE CAN WE DO? PROGRESS TOWARD SUSTAINABLE LAND USE IN THE STATESNAME, Patricia E. Salkin, 16 Widener L.J. 787 (2007). Most significant may be the regional and even international accords which are developing, including the Regional Greenhouse Gas Initiative in the Northeast--http://www.rggi.org/-- and the Western Climate Initative--http://www.westernclimateinitiative.org/Index.cfm.

But the ultimate question remains--can a non-federal patchwork of environmental regulations effectively combat global warming? I think not. There will be states and regions that lag behind, failing to regulate pollutants. Companies interested in avoiding the regulations will relocate to those areas with fewer regulations. The federal government maintains its ability to preempt any state or regional regulations, so that the federal government can clip the wings of any local or regional regulatory scheme.

However, state and local action may be responsible for shifting the federal government towards further regulation, and providing a pre-tested set of initatives which could be scaled up to the national level under new leadership.

Fox News' Take On LEED--There really are no words

I was casually going about my business gathering news on green building for greenlaw and came across this bit on LEED from Fox news. http://www.foxnews.com/story/0,2933,295960,00.html

There...really...are...no...words. It is another example of Fox's well documented attack on environmental causes. http://action.sierraclub.org/site/MessageViewer?em_id=24521.0

Essentially, Fox argues that because LEED standards have been proposed as part of the House Energy bill and the GSA has mandated that all new construction projects and substantial renovations must be LEED certified that "Building green" soon may be more about stealthily raking in cash from taxpayers than constructing "eco-friendly" buildings, if the U.S. Green Building Council, or USGBC, has its way in Congress."

That's right--green building is a conspiracy by the USGBC to bilk taxpayers of their money. Only the folks over at Fox could come up with this stuff.

Courts Count

The International Herald Tribune wrote an article here--http://www.iht.com/articles/ap/2007/08/22/america/NA-GEN-US-Global-Warming-Reports.php--about a Northern District of California case which resulted in an Order to the Bush administration to issue two reports on global warming that it had been withholding. An article from Daily Green notes that a Vermont court has upheld a state's right to determine vehicle emissions--http://www.thedailygreen.com/2007/09/13/states-too-can-require-cars-to-cut-global-warming-imapact/6588/. These decisions underscore an important issue --the role of the courts in environmental preservation.

Essentially, only the judiciary can order the executive branch to fulfil its legal obligations. Only the judiciary can determine which laws will be enforced. Therefore, environmental laws are only as strong as the judiciary which is appointed to uphold them. As we saw from the radically conservative opinions which were handed down by the Supreme Court this spring, the highest court of the land is unlikely to uphold or enforce environmental laws which obligate private entities or the executive branch. Therefore, even if the zeitgeist is shifting towards greater governmental involvement in environmental issues, it will be a generation before the judiciary can be changed to ensure that the laws are enforced.

Green Litigation--The Next Wave Of Green Building

As I sit here today, I will guarantee that the next year will bring the first wave of green litigation--litigation over buildings that fail to live up to their green billing. For example, in Australia, the Melbourne City Council's new state-of-the-art office building, which was "green star" certifiied, many of the green features do not work. http://www.theage.com.au/news/national/civic-showpiece-failing-to-deliver/2007/08/28/1188067111145.html The daylighting proved too dim for the workers' needs, a greywater system was not operational. Worse still, some are causing active issues, like allowing legionella into the cooling system.

Who is to blame when the green features fail? Will the contracts among the relevant players--architect, general contractor, developer, commissioner--be robust enough to allocate the liability? I doubt it--and lawyers, judges and juries will be introduced into a brave new world of environmental litigation. With new technology and lots of hype comes broken promises--and with them, litigation.

Update on Las Vegas

The Nevada Appeal provides an update on the debacle over the Nevada green building tax incentives which blew up earlier this summer. http://www.nevadaappeal.com/article/20070831/NEWS/108310109

Interestingly, Nevada Democrats appear to be the ones who are trying to make the incentives available to fewer projects.

More on Mortgages

Yesterday I posted a conclusion that the subprime lending debacle was going to make securing funds for green building projects more difficult. There was one more observation that needs to be made as a result--the tightening capital market puts the onus on the government to keep the green building momentum growing. It is really up to states, municipalities and even the Federal government to mandate green building practices which might otherwise get "value engineered" out in a tight money situation.

Unfortunately, Even Green Buildings Still Have To Have Mortgages

I am always fascinated by the fact that the financial services industry loves ponzi schemes, like the Savings & Loan debacle and the sub-prime mortgage mess. GreenbuildingsNYC has an interesting bit on the effect of the sub-prime mortgage situation on green building here http://www.greenbuildingsnyc.com/?p=287.

I spend quite some time thinking about mortgages, because the governmental framework which supports them has such a significant impact on what--and where--buildings are built. For example, the fact that home mortage interest is tax deductible allows people to build bigger houses. Because that interest deduction is applicable wherever your house is located, there is no disincentive to building ever further out from the urban centers.

Here, I think the subprime mortgage debacle will have a two-fold result: 1) banks will be less likely to lend to projects in general, and 2) to avoid risk, perceived "experimental" green building projects with a less reliable set of financial pro formas may be even more difficult to fund than traditional projects.

What's new is risky, and what's risky in the real estate world is rapidly going out of fashion.
This could put a dent in the nacent green building boomlet, but it will force projects to be sound financially, as well as ecologically.

Rival Green Building Standards, Part II

A month or so ago I posted on the various emerging green building standards. http://greenlaw.blogspot.com/2007/07/proliferation-of-standards.html

There was a nice analysis of the NAHB (National Association of Home Builders) and LEED for Home rivalry in the Sarasota Herald Tribune: http://www.heraldtribune.com/article/20070819/REALESTATE/708190677

Bureau of "Land" Management

The new director of the Bureau of Land Management, the government agency that controls Federal lands, has done something pretty appalling. He has exempted certain activities--like grazing, oil exploration and forestry--on Federal lands from the requirements of the National Environmental Policy Act. See a full article from Daily Green here http://www.thedailygreen.com/2007/08/14/gov-exempts-258-million-acres-from-environmental-review/5194/.

My question--does he have the authority to do so? I think it would certainly be up for legal challenge--can an executive branch official relieve obligations under a legislative branch mandate?

Title IX of the House Energy Bill--The Green Building Provisions

I have spent the last few days parsing the hideously convoluted legalese which is Title IX--Energy & Commerce of the House's recently passed--and much touted--Energy Bill, which I wrote about generally earlier in the week. http://greenlaw.blogspot.com/2007/08/at-long-last-energy-bill-post.html

Title IX contains most of the provisions related to green building. Below is a non-comprehensive tour through some of the provisions of interest to me.

Sections 9001-9020 relate to the energy efficiency of appliances, raising the required energy efficiency for dehumidifiers, washing machines, dishwashers, refridgerators, etc.

Sections 9021-9030 relate to energy efficiency of lighting. There is some neat provisions in this section, including 9021 which requires the Secretary fo Energy to issue regulations prohibiting the sale of 100 watt general service incandescent lamps after January 1, 2012, and specifying ever increasing efficiency ratings for other lamps. However, three way lamps are exempted from the requriements. I have a problem with this--many, many lamps are three-way. What is the point of this exemption? Is there a three-way lamp lobby? Section 9023 mandates the use of energy efficient lighting fixtures and bulbs by the Federal government.

Sections 9031-9040 relate to residential building efficiency. Section 9031 requires states to update their building codes to be more energy efficient. THIS IS A BIG DEAL! It provides funding, support, etc. for the states to do so. Section 9034 provides additional financial assistance to consumers for home weatherization.

Sections 9041-9060 relate to commercial building efficiency. Section 9042 establishes an Office of Federal high-Performance Green Buildings to, among other things, coordinate the green building activities in various Federal agencies, identify and develop Federal high performance green building standards to be used for Federal facilities and research budget and contracting practices that affect achievement of green buildings. In an effort to employ more of us green-building types, Section 9043 establishes an Office of Commercial High-Performance Green Buildings. This Office is tasked with managing a public-private partnership program (Section 9043 (f)) which shall, among other things,further development of green buildings, study and refine a national goal to reduce commercial building energy use (Section 9044), and create a national high-performance green building clearinghouse of information. Sounds like a nice job, perhaps they will hire me. Section 9052 provides up to $100,000,000 for loan guarantees for renovation projects that will result in a building achieving LEED "certified" level. Several other provisions in these sections provide funding for the establishment of various green building pilot programs.

All in all, there are many good-sounding programs in Title IX, but we shall see what remains when the House and Senate bills are reconciled.

Green Sprawl

I have a problem. My problem is green sprawl--green buildings in acres of impervious parking lot, located in far flung suburban locales. There have been two recent articles that exemplify this issue: PNC Bank is developing green bank branches http://www.philly.com/philly/business/20070815_GREEN_are_its_BRANCHES.html and Best Buy is developing green stores http://masshightech.bizjournals.com/masshightech/othercities/twincities/stories/2007/08/13/focus3.html?b=1186977600%5E1504926. Much though I appreciate the goal of building green, without a larger perspective on the context for the buildings, it is nothing more than greenwashing. A green big box store on a greenfield requiring miles of infrastructure is simply not sustainable. The USGBC is attempting to remedy this situation through its LEED for Neighborhood Development, but all LEED rating systems should incorporate prohibitions on developing in an unsustainable fashion. In addition, green building regulations from government entities must also incorporate context into their requirements.

Nice Article On Infrastructure

The Christian Science Monitor had a nice piece on infrastructure funding. http://www.csmonitor.com/2007/0810/p03s01-usec.htm

At long last--The Energy Bill Post

I apologize, readers, for the 10 day hiatus in posts, but I have been on vacation, and then thinking about what to say about the Energy Bill passed in the House on August 4, 2007.

Earth2Tech has a nice summary of the features of the bill here http://earth2tech.com/2007/08/05/house-passes-energy-bill/.

I want to disuss what the bill doesn't do. The Bill does not remotely address our dependence on fossil fuel and coal. It basically just nibbles around the edges, establishing programs like the Advanced Research Projects Agency-Energy, for energy research, and requiring the Department of Energy to establish a green building clearinghouse, and providing funds and incentives for alternative fuel research and use. An increase in the fuel efficiency standards for cars, for example, was removed from the bill.

What really needs to happen is large scale, expensive change--a carbon tax, and a cap-and-trade program for emissions. The Federal government needs to create legislation to build the actual cost of environmental damage into each and every energy transaction to effect real change. Now that Democrats have some governmental power, they must push for the large scale change that will really make a difference, as opposed to wasting political capital on band-aid pallitives.

The bill does have some positive aspects--it cuts the $16b subsidy to Big Oil, and it creates milestones for the Federal government to reduce its carbon footprint. But we need to stop playing around, global warming is not a problem that lends itself to partial solutions. It requires large scale political change which will impact large corporate players. The Democrats in Congress do not appear to be ready to think big.

A word about infrastructure

I have posted before about the need for the 2008 presidential candidates to develop an infrastructure plan. http://greenlaw.blogspot.com/2007/07/i-want-hillary-clintons-50-billion.html

This country simply cannot go on allowing our infrastructure to age and fail, as has happened twice in the past two weeks--the explosion in New York and the bridge collapse in Minnesota. Years and years of cutting taxes and underfunding capital infrastructure like sewage, rail, etc., is going to create more failures--and potentially more tragedies--until the issue is addressed.

Considering Global Warming In Environmental Review of New Projects

As of September 1, 2007 King County, Washington is "requiring County agencies to consider climate change impacts as part of their project review under Washington’s State Environmental Policy Act (“SEPA”)." http://www.metrokc.gov/exec/news/2007/pdf/climateimpacts.pdf

In short, King County is on the leading edge of local governments starting to mandate consideration of global warming as part of development projects. A good, in depth article on the King County legislation is available from the Marten Law Group. http://www.martenlaw.com/news/?20070801-climate-sepa-review

Effective Green Incentives

Sunnyvale, California, home to Yahoo! Headquarters, among other big tech compannies, has enacted regulations which allow builders who decide to build green to increase the allowable height of their buildings. http://www.mercurynews.com/realestatenews/ci_6501546

The Sunnyvale incentive, like fast-tracking permitting for green buildings, is an effective way to encourage developers to build green.

Experiments in Open Space

I read an interesting article in today's Dayton Daily News about a township which allows private open space conservation easements. http://www.daytondailynews.com/n/content/oh/story/news/local/2007/07/29/ddn072907easement.html
Essentially, the concept is that an individual homeowner commits, via easement, to preserve a certain portion of their property as open space (pastureland, farmland, etc.). This is an innovation insofar as most open space preservation schemes reserve the open space in a public or semi-public entity, like a townshuip or homeowners association. Here, the preservation is private, and, as the article states, is essentially a very large backyard.

The article seems a tad outraged at the concept of private preservation of open space. However, in its current context as farmland it is open space belonging to a private owner. Therefore, to the extent that open space can be "sold" as part of private development, I believe it could be an effective tool in balancing development and open space. However, to what extent people will pay to be obliged to maintain part of their property as open space remains to be seen.

Resources on Green Regulations

Today's post seeks to answer a question which I have received numerous times--where do I go for information on green building regulations. The answer is simple--there is no one place. I keep my eye peeled for announcements by municipalities--see new ones in Portland--http://www.cleanedge.com/story.php?nID=3570, West Hollywood--http://www.buildinggreentv.com/keywords/green-building/1068, and Baltimore--http://legistar.baltimorecitycouncil.com/detailreport/?key=3289.

But there are a few resources which have lists of relevant laws and regulations:
A favorite resource of mine is DSIRE's list of incentives and regulations, available here http://www.dsireusa.org/library/includes/map2.cfm?State=ca&CurrentPageId=1&EE=0&RE=1.

Another is Smart Communities Network--http://www.smartcommunities.ncat.org/buildings/gbcodtoc.shtml. The Smart Communities list is nice, if a little dated.

The USGBC has a list as well, which is hard to find directly on their website--http://www.usgbc.org/DisplayPage.aspx?CMSPageID=76&#12.

Certain cities and states list their incentives and regulations in a user friendly fashion, especially Seattle--http://www.seattle.gov/dpd/GreenBuilding/OurProgram/PublicPolicyInitiatives/DevelopmentIncentives/default.asp.

Chicago has a nice website with green resources--http://egov.cityofchicago.org/city/webportal/portalEntityHomeAction.do?entityName=Chicago+Center+for+Green+Technology&entityNameEnumValue=161.

I would advocate that the Council of Mayors or similar organization should create a resource which consolidates green building regulations of various municipalities in one place. For now, I will try to be on the look out for more lists and keep up to date on green building laws as they come to my attention.

Economic Value of Sustainable Communities

Individual green buildings are important, but the long term goal should be to develop sustainable communities. A new report by the Price of Wales' foundation demonstrates the economic and social value of walkable, mixed use and mixed income communities. The report is available here http://www.princes-foundation.org/index.php?id=8.

Among the most interesting analyses is a comparison among new urbanist communities in different supply and demand markets. The report concludes that the new urbanist model "appears to provide the greatest value enhancement where development is taking place in a moderate demand market." However, it records a 30% premium for the new urbanist community in a high supply market, which may be an even more important conclusion.

I Want Hillary Clinton's $50 Billion

On Monday, Hillary Clinton reiterated her proposal to "establish a $50 billion 'Strategic Energy Fund' that would create a research agency focused on reducing the threat of global warming." Among other things, Clinton proposed "spending $1 billion a year to improve energy efficiency in schools and other public buildings." http://www.boston.com/news/nation/articles/2007/07/24/clinton_proposes_1_billion_green_building_fund/

According to the Boston Globe, Senator Clinton proposed paying for the initiative by taxing oil company profits. "Oil companies...would face a choice: invest $20 billion in alternative fuel technology and build cleaner refineries or pay taxes on some of their profits."

As I have said many times before, the government's spending power is a powerful thing, and I support the Senator's plan. And I am also in favor of creating a economic system under which the true cost of petroleum products is included in the price, including taxes and environmental impact.

But I am concerned that I haven't heard anything about changing the investment in infrastructure. The government must not only stop subsidizing the oil companies, but must also decrease investment in highway building and increase investment in alternative transportation mechanisms to reduce our oil dependency. It is absurd that it takes 1.5 hours and $100+ to travel 94 miles from New York to Philadelphia by train.

The presidential candidates need to examine the built environment and build a comprehensive plan, including legal and economic components, to address the global warming/sustainability issue

Leonardo DiCaprio Needs Me

I read in today's Inhabitat that LEONARDO DI CAPRIO to Build “Eco-Town” in Kansas. It appears that the actor is filming a 13-part reality series about creating an environmentally sustainable community in Greenburg, Kansas which was devastated recently by a tornado. I wonder whether Leo and friends have sufficiently taken into consideration the legal issues facing the development of an ecologically sustainable community.

1) Has Leo considered the zoning code of the town? As many of you are aware, zoning may make it impossible to have a town which does not depend largely on automobile transportation due to prohibitions on the mixing of uses. The zoning code may also prohibit the use of green technologies, like photovoltaics or waterless urinals. The zoning code also must ensure that future building endeavors are done sustainably, by at least providing for mixed-use development and facilitating green buildings, and preferably by requiring environmentally friendly building techniques and typologies.

2) Has Leo analyzed whether the building code prohibits the use of green technologies or mandates the use of environmentally unfriendly products, like certain fireproofing and insulation materials?

3) Has Leo interfaced with the Kansas Department of Health and the Environment? Has he analyzed the state and local environmental laws he may encounter when doing large scale rebuilding?

4) Has Leo considered the risks associated with sustainable development and adequately provided for insurance of the new projects in the event of loss?

5) Has Leo developed effective short and long term public transportation plans, interfacing with the Kansas Department of Transportation?

I am waiting for Leonardo DiCaprio's call.

More environmental concerns with green projects

Green Wombat had a nice piece today on wrangling over the rights to build wave power plants. http://blogs.business2.com/greenwombat/2007/07/pge-san-francis.html

The use of wave power will undoubtedly threaten coastal environments. I blogged last week about the high output solar plants being developed, which would require power lines through park land. Some legal compromises will need to be made between current environmental laws and the proliferation of new power plants.

What Happens In Las Vegas...

Although what happens inVegas is supposed to stay in Vegas, what has happened to tax incentives for green building in Las Vegas could spell trouble for the rest of the nation as state and local governments use tax incentives to encourage green building.

In 2005, the Nevada legislature established sales tax exemptions and a property tax exemption -- worth up to 50 percent of the property value for up to 10 years -- to projects that qualify under the Leadership in Energy and Environmental Design standards. Projects meeting the silver level of certification were eligible for a 35 percent property tax break.

Two years later it became clear that so many projects qualified for exemptions that the state budget was going to be severly impacted. There was a good deal of legal hand wringing while it was determined whether the tax break could be repealed. On May 3, 2007, the Nevada legislature voted to put the breaks on hold. On May 14, 2007, the governor vetoed the suspension bill. http://vegaspundit.typepad.com/vegas_pundit/files/greenvetodocs.pdf

On June 4, a compromise bill was passed. According to the Nevada Appeal, "AB621 preserves substantial tax breaks, between 25 to 35 percent in property taxes for up to 10 years, but requires that developers meet higher standards for energy efficiency. The breaks also do not apply to money owed to school districts. The bill also gets rid of sales tax exemptions on construction materials provided by the 2005 law." http://www.nevadaappeal.com/article/20070604/ELECTIONS/106040094&SearchID=73287969383746

More politics, more lobbying, and the the tax panel is now set to consider a proposed regulation to implement the new law on Aug. 6. According to at least one commentator, the new law is likely to have as large loopholes as the original one. http://www.lasvegassun.com/sunbin/stories/commentary/2007/jul/18/566616784.html

So what happened here? Clearly the idea was a good one--use the government's fiscal levers to encourage green building. But hurrying to implement a law before the implications could be thoroughly investigated may have done more harm than good. Now the lawmakers are having to find a way to scale back the incentives, and crushing any further progress for green building intiatives in Las Vegas for some time to come. And there are few places in the country who need to be concerned about conservation--especially water conservation--more than Las Vegas.

I believe that this is only the first legal explosion in the green building area--there are so many new laws and regulations being passed as government bodies seek to jump aboard the green building bandwagon. Financial incentives for green building have a surface appeal--they don't mandate anything, so opposition is generally limited, and they can be counted as "doing something" about environmental concerns. But all incentives are not good incentives--the key is for governments to develop careful, measured incentives by asking two key questions: what will the full fiscal impact be and will the incentive cause changes in behavior which could not be acheived by other, less costly methods. Governments cannot abdicate their responsibility to make good, effective laws which will encourage and enable green building for decades to come by passing easy, ill-thought-out tax breaks.

Kudos to Wells Fargo Bank

Today Wells Fargo Bank announced that "it has surpassed the $1 billion mark in loans for Leadership in Energy and Environmental Design-certified buildings. " according to the Milwaukee Business Journal. See full article here http://milwaukee.bizjournals.com/milwaukee/othercities/eastbay/stories/2007/07/16/daily47.html?b=1184558400^1494032

Green Financing

Building Green had an interesting post today about Green Financing organizations. http://www.buildinggreentv.com/blog-location/workshop-home/945

In addition to financing, of course, insurance is another key component in effective green building. Fireman's Fund has a product called Green Gard. http://www.firemansfund.com/servlet/dcms?c=business&rkey=437 In addition to providing insurance specifically for green buildings, it allows insureds to rebuild green in the event of a loss.

No Good Deed Goes Unpunished

Green Wombat had the following post about a proposed high voltage solar power project in Southern California. http://blogs.business2.com/greenwombat/2007/07/high-voltage-so.html
In short, the problem is that "SDG&E (SRE) needs to build a $1.3 billion, 150-mile transmission line through a state park and other environmentally sensitive lands to get the renewable energy to its customers. " Green Wombat.

The comments on Green Wombat focus on the viability of the high voltage solar power technology, but what interests me more (of course) is the impact of new power plants of any kind on the existing environmental law structure. Wind farms require vast expanses of land, and threaten birds and other animals. As this case indicates, large scale solar will require 1) the power plants themselves, and 2) the transmission lines to get the power to the grid. There will be an inevitable conflict between the Endangered Species Act, inter alia, that will result from what is essentially the construction of new power plants.

The question I pose is the following: should there be different standards applied to "green" power facilities?

Green Life Tip

Discovery Television is launching a 24-hour green channel. See http://planetgreen.discovery.com/ for details.

Can the state rein in McMansions?

Although slightly off the strict green building theme, an interesting intiative in Colorado caught my attention. http://www.time.com/time/nation/article/0,8599,1643151,00.html

In short, Boulder, Colorado wants to institute a McMansion tax. Homeowners who are willing to sign away the right to build larger homes will get a tax credit, and those who want to build bigger homes will have to purchase credits.

My questions are: 1) Is this an illegal restraint on the use of property, and 2) what will its ultimate benefit be?

There is little doubt in my mind that this McMansion tax will fail to withstand legal scrutiny. Since the main objections to McMansions are moral and aesthetic--as well as environmental and economic--I think it might be wiser (and more likely to withstand legal challenge) to tie a fee to ameliorate the impact the house will have on the community and the environment. For example, if there will be additional sewage draw, or roads, or fire protection needed, the inidividual homeowner will need to compensate the community.

Show Me The Money

Another good article on the financial benefits of green building. http://www.theglobeandmail.com/servlet/story/LAC.20070717.PRPROPERTY19/TPStory/Business

Event Alert For Washington DC--Celebrate the first green building on Capitol Hill!

What: Bi-partisan Congressional Delegation Celebrates FCNL "Green" Building When: Thursday, July 12 from 5-7 p.m. Where: FCNL Headquarters (across the street from Hart Senate Office Building) 245 Second Street NE, Washington, DC, 20002

Action by Federal and Municipal Representatives

There have been two actions taken recently which reflect the interest in green building at both the federal and municipal levels. On March 27, 2007 Senators Clinton and Kerry the "Zero-Emissions Building Act of 2007." The bill directs federal agencies to immediately require that all new federal buildings or major renovations reduce carbon dioxide emissions by 50 percent as compared to a 2003 baseline. In 2010, and every five years after that, the emissions reduction level would increase by 10 percent, until new federal buildings become "zero-emissions" buildings in 2030. The legislation would also apply to major renovations of existing federal buildings. The Act is available here--http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=110_cong_bills&docid=f:s1059is.txt.pdf.

On the municipal level, mayors are banding together to support green building. For example, at their 75th annual meeting in Los Angeles recently, the 1,100-member U.S. Conference of Mayors (USCM) unanimously voted for a green schools resolution. The resolution urges Congress to support K-12 green school demonstration projects. The resolution is available here--http://usmayors.org/75thAnnualMeeting/resolutions_full.pdf. The Conference also passed a resolution pledging local totake local action to significantly reduce greenhouse gas
emissions and to support stronger federal policy and action on climate change.

These two actions are largely symbolic--it is unlikely the Clinton/Kerry Bill will be passed, and the USCM resolution has no legislative impact. However, they represent a recent change in the zeitgeist where the environment is a priority, and green building initiatives are a mechanism for acting to improve the environment.

Today's topic is money. One of my collegues recently told me that until developers see profit in building green, they will not be interested. It appears that day has come, and that REITs and developers are beginning to respond.

The New York Observer published an article on June 26, 2007 about the new Bank of America tower in New York City, which is striving for LEED Platinum. The interesting thing about the article is the dramatic premium developer Douglas Durst is getting for his office space. The Observer article states "Asking rents for each [remaining] floor will start at $185 per square foot annually, a source said, which are among the highest asking rents in any American office building ever. Average asking rent in Class A office space in midtown is $70 per square foot, according to the brokerage Cushman & Wakefield." The possibility of getting a 38% premium will certainly attract the attention of developers considering embarking on new projects.

A study made available today entitled "Responsible Property Investing: A Survey of American Executives" (available at http://www.uli.org/AM/Template.cfm?Section=Research&CONTENTFILEID=27159&TEMPLATE=/CM/ContentDisplay.cfm) explores the interest of REITs, developers, pension plans and other institutional investors in socially responsible property investing.

The study revealed that about 57% of survey respondents were implementing management strategies around conservation (promoting energy conservation, water conservation or recycling in your assets), and 36% were investing in Green Buildings. The sample size was small, only 189 respondents, but it reflects a growing interest among real estate investors in sustainable development.

The Importance Of Government Leadership

Happy 4th Of July! In honor of the founding of our nation's government, I would like to discuss the importance of government leadership in promoting green building. There are basically three ways in which the government can do it: 1) new laws; 2) new incentives and 3) investment of state/federal/local money in green building projects.

Passing new laws related to green building is the most obvious way that the government can promote green building. For example, earlier this spring Boston passed amendments to its zoning code to require all projects over 50,000 SF to be designed and planned to meet the “certified” level using the US Green Building Council’s Leadership in Energy and Environmental Design building rating system. New laws have both benefits for green building and some drawbacks. The major benefit is that the laws make adoptinng green building practices mandatory. In turn, this will lead to an increase in the use of green building practices and products, which will make them more accepted, available and reduce the cost. On the other hand, new laws comes with new challenges. If the laws are not well thought out, they can lead to dramatically adverse consequences. For example, Nevada passed a new tax incentive (more on these below), but later had to repeal it because it was so poorly drafted that it threatened the state budget. (I will write more on the Nevada debacle in a subsequent post, but for more information see http://www.lasvegassun.com/sunbin/stories/nevada/2007/may/02/050210067.html). Further, new laws are open to new interpretation and challenges at the administrative level and in the courts. The uncertainty this creates adds transaction costs to the green building endeavor. Despite these drawbacks, however, I believe that new green building regulations are necessary to create a tipping point where all construction incorporates green building practices, at least to some degree.

Incentives are another means for governments to incentivize specific behavior. This has been very popular--many states have created tax incentives for green building, and the federal government offers a variety of energy efficiency and renewable energy incentives as well. (For a good listing of state and federal programs, see http://www.dsireusa.org/index.cfm). Tax incentives use market forces to make green building practices more financially desireable. I think that there is certainly a benefit to these incentives, but, in speaking to several developers, if the deal is a good one, the tax incentives are not likely to factor into the analysis that significantly.

Finally, I want to discuss my personal favorite, government spending. Facilities now owned by the Federal Government are valued at over $300 billion. The Federal Government also spends over $25 billion per year for acquisition, renovation, and upkeep. If you add the state and municipal investment in facilities, its an enormous amount of resources, which can substantially influence the proliferation of green building practices and products.

Together, these three tools make government action vital to promoting green building practices, and I believe that the government will only become more influential in green building as the need and demand for environmental stewardship grows.

Proliferation of Standards

To date, the "platinum" standard for evaluating green construction has been the LEED performance rating system propogated by the United States Green Building Council (USGBC). (NOTE: I highly recommend the USGBC website, www.usgbc.org and the Delaware Valley local chapter www.dvgbc.org). However, there are a two standards available in draft form (and available for public comment) which add
new dimensions to the Green Building standard arena.

Of interest are two standards being developed by heavy hitters in the code world--ASHRAE Proposed Standard For The Design Of High-Performance Green Buildings Except Low-Rise Residential Buildings (available at http://www.ashrae.org/technology/page/331#july), and the International Code Council/National Association Of Home Builders National Green Building Standard (available at http://www.nahbrc.org/technical/standards/NGBS_Working_Draft_2007-03-22.pdf).

The ASHRAE standard is very similar to LEED, and was developed in conjunction with USGBC. The big distinction with the ASHRAE standard is that it is written for inclusion in municipal building codes, and includes a greater degree of detail and specificity than the LEED rating system.

The ICC/NAHB standard provides criteria for rating the environmental performance of
residential construction practices. Like the LEED standard, it allocates points towards a level--bronze, silver or gold--and provide criteria for earning the points.

I think that teaming with ASHRAE for the building code standard is a good pairing. Many of the LEED points already referenced ASHRAE standards to demonstrate compliance. In addition, to the extent that the slightly vague and amorphous LEED points can be honed to more specific requirements, it will be easier for local governments to adopt.

As for the ICC/NAHB standard, it appears to compete with the USGBC's LEED for Homes, which is currently in pilot version. It will be an interesting test case to see if the USGBC can retain its premier status as the regulator of green building, or whether other standards will become relevant for different kinds of construction.

The Role For Attorneys In Building Green

Green building has hit the real estate scene remarkably quickly, but little attention has been paid to the legal implications of this new area. As green building and ecological sustainability considerations are becoming more prevalent, new regulations are being enacted by local governments around the country and old regulations are being adapted to embrace green building practices. State, local and federal dollars are being made available for green building projects through tax incentives and grants. Insurance companies and financiers are making products and instruments for green building projects available. As a result, there are new legal issues to consider when embarking on a green building project, including: drafting construction and design contracts that incorporate green building standards; navigating the local building and zoning approvals processes and securing public financing; negotiating with insurance and financial institutions and resolving disputes over green building projects that fail to achieve their sustainability goals.

Green building projects large and small must obtain permits from local governments, but the regulatory environment is in flux. In many places the zoning and building codes were developed in response to the health and safety issues of a century ago, and certainly not developed with green building in mind. In others, due to lack of action on the federal level, local governments are creating new regulations to encourage sustainable development. As old regulations are being adapted to new technologies and new regulations are developed, attorneys can provide critical guidance on the local regulatory landscape as part of the planning for a green project.

Furthermore, private and government entities are providing significant financial incentives to encourage green building. For example, Gov. Edward G. Rendell's newly released energy independence strategy earmarks $150 million ($50 million for grants; $100 million for loans) for green building projects. Fireman's Fund offers discounted pricing for building owners who commit to greens standards, and provides specialized insurance to allow for repair or replacement of green building projects in the event of a loss. Lawyers have a unique role in identifying and securing access to financial incentives and risk management tools.

Participants in the development process will require new contracts to ensure compliance with green building goals. Most of the entities establishing criteria for the performance of green building are private, nonprofit organizations like the United States Green Building Council (USGBC). Many local regulations and incentives for green building are directly linked to these certifying criteria, particularly USGBC's Leadership in Energy and Environmental Design (LEED) standard. If a project must achieve a certain LEED or similar rating to qualify for funding or approval, the construction and design contracts should reflect that ambition.

Finally, although the green building movement is in its halcyon days, new expectations will inevitably lead to conflict. A multimillion-dollar development project will fail to gain the LEED credits required to secure a government grant, and litigation will doubtless ensue.

These are some of the legal considerations in building green. Considering the legal issues should not be seen as an impediment to green building, but rather as a way to manage risk and to proceed with a smooth development process.

Parts of this post were previously published in the Legal Intelligencer.

Welcome!

My name is Shari Shapiro, and I am an associate with the law firm of Obermayer Rebmann Maxwell & Hippel LLP in Philadelphia. I am a member of the Environmental and Litigation Departments, and I am spear-heading Obermayer's Green Building Initiative.

Obermayer has hosted several educational events, and I have published a number of articles on the legal issues concerning green building, but the information changes daily. The goal of this blog is to provide timely, in-depth information and to serve as a forum for discussions on this emerging area.

I hope you will find this blog both informative and entertaining.

Best,
Shari