Tuesday, December 2, 2008


As of TODAY! Green Building Law is moving to its new, fabulous site:


All the old content has been migrated over, including your fabulous comments.

No new posts here--reset your google readers and see you at the new site!

Monday, December 1, 2008

Who's Afraid Of The Big Bad Lawyers?

As I mentioned briefly in my Greenbuild post at Green Building Law, legal issues, especially risk and liability associated with building green, were little discussed at Greenbuild.

A bunch of green building lawyers were sitting around and speculating why this might be. The conclusion we came to was that the U.S. Green Building Council did not want to highlight concerns or risks associated with building green at its feel-good festival. This is a mistake.

Lawyers, in their best role, are advisers that help clients avoid potential pitfalls. Someone once said that if you are involved in litigation, you have already lost. Litigation is expensive, time consuming and essentially a zero-sum game. Much litigation could be avoided if clients came to their lawyers and discussed potential legal liability ahead of time and took proactive steps to limit their exposure.

Read the rest of this post at Greenerbuildings.com

Friday, November 28, 2008

Pink Is The New Green

In my summary of my experiences at Greenbuild, I blogged:

The economy tanking may be the push needed to implement basic green changes like energy efficiency and conservation. The next big green thing is likely to be blown insulation, not photovoltaics.

Let's define our terms first. Futurelab has a nice succinct definition of both:

Energy efficiency means that users of powered devices can get the same enjoyment or use out of a more efficient device that uses less energy. Energy conservation is a planful pattern of human action by which energy use is avoided.

In order to effectively reduce our energy consumption, we need to do both.

To date, much of the action in green building legislation has encouraged higher complexity energy efficiency technologies, like tax incentives for photovoltaics. There is nothing wrong with incentivizing solar, but it is not the most efficient use of the first dollar invested in green building.

Instead, green building legislation should include incentives which encourage energy efficiency and conservation measures first, and longer term/higher cost measures later. One regulatory mechanism for acheiving this is to require each project seeking government funding to have an energy audit. The audit would identify a suite of energy efficiency and conservation measures to be implemented, and the cost and savings associated with each. The legislature could then tier its incentives to compensate the highest energy v. cost savings as determined by the audit.

In addition, the federal government could enhance national building standards for energy efficiency. States and local government could incentivize simple energy efficiency and conservation measures--like the afforementioend energy audits, enhanced insulation, cool roofs, efficient HVAC systems, and new windows and doors
[The DOE has a list of short and long term energy efficiency measures]

With fewer dollars, both public and private, available due to the economic crisis, we need to maximize the cost/benefit calculus by identifying the most efficient energy saving techniques. In other words, we need to make pink (insulation) the new green.

UPDATE: Christian Science Monitor had a nice little article on this subject. They did not, however, have many creative ideas about legislating for energy efficiency.

Wednesday, November 26, 2008

ASHRAE 189 Update

Green Building Insider has an article that USGBC is reconstituting the ASHRAE 189 standard committee, but is committed to going forward with the code version of LEED which local governments can incorporate into their regulations.

Green Building Law--Quoted!

I was quoted in an article at buildinggreen.com on the AHRI v. Albuquerque suit.

Happy Thanksgiving everyone!

Friday, November 21, 2008

Listening To Greenbuild

Things have been a bit quiet here at GBL because I went to Greenbuild this week. Greenbuild is a conference of 30,000+ green building professionals.

I decided not to blog or tweet the conference, but rather to try to really listen to what my green industry fellow travellers were saying. So here is what I heard, in reverse order of importance:

10. Green is becoming mainstream. There were lots of green products providers, but the exhibit hall was primarily filled with the usual suspects in the building industry--Turner, Kohler, skanska, etc.

9. Data is becoming available. A lot of the exhibitors brought nice compilations of data on green building stock. The General Services Agency was giving away flash drives with new data on its large stock of LEED building, for example. The quntification of performance on green buildings should benefit the business case.

8. Fireman's Fund is leading the pack of insurers with green products for building green or insuring green replacement in the event of loss. They are also considering creating a risk product for designers of green buildings.

7. NAHB is going after LEED-H in a big way. A new, more robust NAHB green standard for residential should be out shortly which will give LEED-H a run for its money.

6. Green building policy was well covered, but carbon policy got short shrift. The one session dealing with carbon policy at the state and federal level was cancelled, with no explanation.

5. Enacting green building policies in major municipalities requires LEED APs in relevant municipal agencies to act as agents of change.

4. There was remarkably little concern over the economy's effect on getting buildings built, which seemed strange at a conference for the building industry.

3. The economy tanking may be the push needed to implement basic green changes like energy efficiency and conservation. The next big green thing is likely to be blown insulation, not photovoltaics. [Green Decoder has a nice article on green winterization for a head start]

2. Legal issues, especially risk and liability associated with building green, were little discussed. Where legal issues were highlighted, like a seminar on green leasing, the practioners did not appear to have deep understanding of the green legal issues [Caveat--there was a paid additional seminar on green leasing today that I could not attend--did anyone go and want to comment?].

1. There are no bars open after 2 am in Boston.

I will post more on each of these issues over the coming weeks, and I would welcome other greenbuild attendees to submit their thoughts on greenbuild.

Sunday, November 16, 2008

New Green Building Litigation In The Offing--Shade Trees v. Solar Panels

The LA Times had a story about a neighborly spat over shade trees v. solar panels. Apparently, the Shade Control Act in California prevents shade trees from blocking more than 10% of sunlight from a solar array:

It protects homeowners' investments in solar panels, which can cost tens of thousands of dollars. Property owners whose trees block the sun from more than 10% of their neighbors' panels can be fined as much as $1,000 a day if they refuse to trim them.

Although GBL has not heard of this particular strain of litigation before, NIMBY issues are not new to solar installations. See here for a story on local zonign laws which originally prevented Al Gore from installing solar panels on his Tennessee home.

Wednesday, November 12, 2008

Strengthening States' Authority To Enact Tougher Green Building Standards

Treehugger has an article identifying 7 executive orders which Obama should sign to protect the environment.

The one which interested me calls for protecting stronger state laws from weaker federal ones

The next President should [...] should amend the existing Executive Order on Federalism to strengthen provisions setting forth a presumption against preemption; require agencies to provide a written justification for preemption; and require that, when a federal statute allows states to adopt more stringent standards or seek a waiver of statutory preemption (as in EPA's denial of California's Clean Air Act waiver), agencies must provide a written justification to the White House before denying the state's regulatory authority or waiver request. As is the case with the existing Executive Order on Federalism, these recommendations are consistent with the goals of the various statutes under which the environmental, safety, and public health agencies operate, including the National Environmental Policy Act.

The preemption issue has proven to be extremely significant in green building regulatory challenges. In AHRI v. City of Albuquerque, we saw an effective challenge to Albuquerque's green building code based on weaker federal energy standards for HVAC equipment. See my post here for more on the AHRI v. City of Albuquerque case.

However, an executive order will not go very far to prevent federalism challenges to green building regulation. For example, it would not have effected the challenge to Albuquerque's green building code because 1) the City of Albuquerque never applied for a waiver, so the executive order would not have applied in that case, and 2) Congress specifically preempted state regulation of energy efficiency of HVAC equipment.

See related posts on green building law and federalism here

Tuesday, November 11, 2008

A fun link for you greenlaw buffs!

Vote for the next head of EPA at Grist

China v. US--Top Down v. Bottom Up Green Building Standards

Via @allroads on Twitter, I found an interesting presentation on the difference between green building standards in China and the United States. As I discussed here China takes a top down approach to mandating environmental change. In the United States, it is a more bottom up, market based approach. We will see how/if this changes with a more environmentally interested president in the White House. Do you think top-down or bottom-up is more effective?

Friday, November 7, 2008

Green Laws Make US Competitive In The World Renewables Market

Redgreenandblue.org had an article here that "BP has dumped its plans to build out wind farms and other renewable projects in Britain for projects in the United States" because of the tax incentives for renewables in the United States and Barack Obama's promise to spend $150 billion over 10 years to kick start a renewable energy revolution.

In other words, because of green laws and incentives, the United States is competitive for renewable energy on the world market. What does that mean? More clean energy here, and more green jobs.

Thursday, November 6, 2008

Give yourself (and the earth) $4000

Daily Green had a nice post on how to save $4000 annually and go green available here

Wednesday, November 5, 2008

The Morning After--What Obama Will Mean For Green Building And The Environment

I wrote a column yesterday on Greenerbuildings.com about the need for our next leader to take us from a red America and blue America to a green America.

Now we know that Obama will be the leader to take on that challenge. I was pleased that he spoke of our planet in peril in last night's acceptance speech, and of the opportunity for green jobs to help heal our damaged economy.

Environment and Energy Daily is reporting here that Obama will begin almost immediately working on these issues by going on a listening tour to explore "energy and environmental issues before Inauguration Day in an attempt to build momentum for its policies and legislative plans," allowing California to enhance its automobile standards, setting the stage for cap and trade and investing $15 billion per year to promote the deployment of renewable technologies.

My fellow greenerbuildings.com blogger Leanne Tobias details the Obama plan here

The future looks distinctly brighter, and greener, this morning.

Monday, November 3, 2008

Green Building Law Featured on EcoBuild

The nice folks over at Ecobuild featured Green Building Law today. http://www.ecobuildmedia.com/

They are hosting the EcoBuild Fall Convention in Washington, DC, the most comprehensive event and exhibition with a focus on the ecological aspects of cutting edge IT at the Washington, DC Convention Center, December 8-11, 2008.

Moreover, they run a great blog with lots of green products and resources.

Friday, October 31, 2008

Leveraging The Power Of Wholesale Change Through Governance

I spent yesterday afternoon at a board retreat for the Delaware Valley Green Building Council. Much of the discussion focused on the appropriate level of education/outreach to disseminate green building knowledge and transform our built environment. Should policy influencing bodies focus on wholesale change by targeting education/outreach to thought leaders, or retail change by targeting individuals or households?

One of the elements which has gotten lost in the discussion of small versus big government and government lobbying is government's role in transforming wholesale change into retail change. Policy influencing bodies like the DVGBC, USGBC, etc. can use their limited resources on education and outreach to policy makers, who in turn make laws which change the behavior of innumerable individuals.

Green building laws are an excellent example of this transformation. This election cycle, there are several green initiatives on the ballot. For example, a $17.9billion initiative in Washington for improvements to commuter rail and bus service http://law.lexisnexis.com/practiceareas/Environment-Climate/179-billion-clean-transit-plan-on-Seattle-area-ballot.

Additionally, Oregon and New Jersey have been developing comprehensive green building regulatory initiatives. Oregon--http://www.natresnet.org/resblog/post.asp?iPostID=7105; New Jersey--http://www.njlawblog.com/2008/10/articles/real-estate/green-building/legislative-initiatives-in-green-building-arena-abound/

As a result of these laws, buildings in these states will be greener and the environment cleaner, of course. But builders in these states will develop knowledge and experience with green buildings, a market for green products will be enhanced, and consumers will have more green products and buildings to choose from. In short, the benefits will move from the thought leader level to the grassroots level. At its best, lobbying and government outreach is a tool for educating thought leaders who can change policy, thereby transforming the world for the better.

Tuesday, October 28, 2008

Consumers Coming On Board

Interesting post on Consumers Buying Into Sustainability
on Bulider Online. Builder Online reports that "energy efficiency" garnered an 88 percent favorability rating among consumers. This reflects, I believe, a growing opportunity for green buildings to command higher rents and be more robust in a declining real estate market.

Tackle Risk Early

If the government had stepped in a bailed out foreclosing homeowners, would we be in the credit crisis we are in now? Nicholas Stern, a former British Treasury economist, notes that "inaction on emissions blamed for global warming could cause economic pain equal to the Great Depression."

We are still in a moment when regulation could curb global warming, but not for long. If we think this credit crisis is bad, global warming could be far more economically, as well as environmentally, devastating. Therefore, regulation of carbon, green building laws, etc. cannot get subsumed in short term "cost saving" measures.

An example of this short sighted behavior is being shown in King County, Washington, where $20/month incentives to county officials who bike or walk to work are being threatened. http://sustainable.bizjournals.com/green/King_County_bike-to-work_subsidy_under_fire.html The total cost for the subsidy--$37,000.

Wednesday, October 22, 2008

California Dreamin'

California has been on the cutting edge of climate change regulation, including passing the first state-wide code for green building and a new measure to limit sprawl. http://www.jetsongreen.com/2008/10/california-find.html

I have discussed here before that regulation of environmental issues can have a positive benefit--http://greenlaw.blogspot.com/2007/09/regulation-it-really-works.html--and there has been much discussion on the campaign trail about the healing power of green jobs for the economy. The Berkeley Center for Energy, Resources and Economic Sustainability had a study out today which reveals that California's climate change regulation, and the accompanying reduction in energy use, has been very good for the economy. http://are.berkeley.edu/~dwrh/CERES_Web/index.html

Tuesday, October 21, 2008

New Green Risk Insurance Product

The retail inland marine division of ACE USA has added green building endorsements to its builders risk product offering which should benefit developers, contractors, architects and owners. "The endorsements are designed to address customers' potential financial loss stemming from changes in environmental standards, repairs using green materials, additional debris-removal expenses, and loss of tax credits.


Insurance of this type should help to alleviate some of the risks associated with building green.

Friday, October 17, 2008

The death of ASHRAE 189?

Buildinggreen.com had this post today stating that the ASHRAE/USGBC committee putting together the code-based version of LEED had been disbanded. http://www.buildinggreen.com/auth/article.cfm/2008/10/17/Uncertain-Future-for-ASHRAE-Standard-189/

I saw ASHRAE 189 as a mechanism for quashing the issue of incorporating LEED into regulations. Many people have voiced concerns over incorporating private standards, like LEED, into public law. This is, in my opinion, an ill-informed critique. The International Building Code is maintained by a private standards organization, the International Code Council, and is incorporated into almost every municipality's building code. I saw ASHRAE 189 as a similar model. In addition, ASHRAE 189 would have eliminated the legal risk to USGBC that the USGBC would be sued for not approving buildings quickly enough by automatically incorporating LEED standards into law without the need for approval of individual projects by USGBC. This is not good news for the regulated community.

Thursday, October 16, 2008

There's No Such Thing As Clean Coal


Finally. Emperor has no clothes.

Wednesday, October 15, 2008

Interesting Green Leasing Post


Don't Know Much About Corporate Valuations...But I Do Know This

Ok, so there is sometimes a great divide in law between the corporate folks (in my office they live on the 20th floor and I see them sometimes rushing around to the printer, whatever that is) and the lit/reg folks that I pal around with. But I do know enough about corporate law to know that a big McKinsey study on how climate change mitigation measures will effect corporate valuations going forward matters. So here is the link to the study--http://www.mckinseyquarterly.com/Corporate_Finance/Valuation/How_climate_change_could_affect_corporate_valuations_2223_abstract

In short, failing to mitigate climate change will decrease corporate valuation and shareholder value. Which could have serious risk implications for the managers and directors in charge of those organizations. Which is another type of potential green legal risk.

Tuesday, October 14, 2008

More on the Impact of The Financial Crisis

It looks like Europe, long the leader in climate change regulation may be getting cold feet on adopting the regulations because ofits financial impact, the Wall Street Journal reports here--http://blogs.wsj.com/environmentalcapital/2008/10/13/changed-climate-meltdown-has-europe-backpedaling-on-climate-caps/.

This is very bad news--and as shortsighted as can be. All estimates of the cost of climate change indicate that we will be getting a bargain by addressing the issues now and not waiting until catastropic effects--Tufts estimated in 2006 that the cost of climate change in the US alone would be as great as US$74 trillion. ase.tufts.edu/gdae/Pubs/rp/Climate-CostsofInaction.pdf

I hope that US regulators in the next administration will be less short sighted, but I fear not.

Sunday, October 12, 2008

More on Green Finance IN A Time of Crisis

Interesting article this morning on green as a haven in times of financial crisis, and an analysis of the green investment market over at Resnet. http://www.natresnet.org/resblog/post.asp?iPostID=7053

Friday, October 10, 2008

Green Building Law--The Credit Crunch Edition

What will the credit crunch mean for green building (and other green laws)? I don't know for sure, but I am willing to prognosticate a bit...

1. Some are saying that the carbon markets will suffer because they are too complicated and too nascent to survive an environment of increased investor skepticism. http://earth2tech.com/2008/10/10/will-the-stock-market-hurt-the-emissions-market/ My verdict--maybe. But if cap-and-trade is mandated, then the carbon markets will flourish.

2. Some are saying that the credit slowdown which is hurting the building market in general will have an even greater impact on green buildings.
Others, like McGraw Hill in their newly released report on Green Home Building (see article with conclusions here http://news.moneycentral.msn.com/ticker/article.aspx?Feed=PR&Date=20081007&ID=9241721&Symbol=MHP and purchase report here http://construction.ecnext.com/coms2/summary_0249-295182_ITM_analytics) conclude that green construction will be more resilient in a down market because of green buildings perception of greater quality and people's willingness to pay more for green construction. My verdict--building in general will slow down, but this may be a good time for municipalities to get their legislative houses in order in terms of drafting and passing sound green building legislation.

3. If the recent "green" bailout is any indication, green will still be a legislative priority. Congress tacked on renewing the tax incentives for solar and renewables onto the bailout bill last week. http://blog.wired.com/wiredscience/2008/10/bailout-bill-ri.html But, some communities may have trouble passing green building legislation that is perceived as costing more to build.

4. In the end, it will all come down to the election. If Obama wins, the environment will be a major priority. If McCain wins, look for incentives for "clean" coal and nuclear, but not much action on cap and trade (even though he claims to be in favor of it) because of the cost it will bring to corporations.

Wednesday, October 8, 2008

Scooped! Decision in AHRI v. City of Albequerque

I've been working too hard lately on other projects, and Steve Del Percio over at Green Buildings NYC did a nice post on the decision in AHRI v. City of Albequerque. Bad news for green building legislating municipalities.

Steve's post is here--http://www.greenbuildingsnyc.com/2008/10/08/district-court-judge-grants-injunction-barring-enforcement-of-albuquerque-green-building-code-legislators-unaware-of-preemptive-federal-statutes/

Anals of Lesser Known Issues--Riparian Rights

I have been reading a lot about offshore wind farms--see for example this article about wind mills off of Portland, http://greenwombat.blogs.fortune.cnn.com/2008/10/06/oregons-floating-wind-farm/ and this one about windmills being built on canals in England. http://www.treehugger.com/files/2008/10/100-megawatts-of-wind-turbines-along-british-canals.php Strikes me that some issues surrounding riparian rights may emerge from this new technology.

A riparian owner is one who owns property with water on it or on one of its boundaries. Riparian rights are the rights that owner has to the use or restrictions on others' use of that water. Riparian issues were very big in the late 19th century when factories were being built on watercourses, and the right to use the water to power factories needed to be allocated. See, e.g. this nifty 1891 book excerpt on riparian rights from Google books http://books.google.com/books?hl=en&id=0KcOAAAAYAAJ&dq=riparian+rights&printsec=frontcover&source=web&ots=Igne8AO5t-&sig=_AqoAnduMjRM-Q4Pn9okgLAZO-c&sa=X&oi=book_result&resnum=4&ct=result#PPP9,M1

In many instances, public entities (states, counties, etc.) have riparian rights. These rights may become very valuable if the water becomes desirable to develop as a wind farm. In other circumstances, the ownership may be private, perhaps inhibiting the development of a wind farm where it will be in the public good. This could cause a public entity to "take" the riparian right from the landowner to build a wind farm. Historically, riparian rights are generally not severable from the land to which the riparian course is attached. If, however, the water becomes a power source, should the riparian rights be severable, like mineral rights or oil leases?

Thursday, October 2, 2008

City of Albuquerque Suit--UPDATE

In July, I first wrote about the HVAC indistry associations suing the City of Albuquerque to invalidate Albuquerque's green building codes in one of the first instances of green building litigation. The HVAC plaintiffs filed a Motion for a Preliminary Injunction to prevent the City from enforcing the green building codes, and a hearing was held yesterday. I spoke with Doug Baker, attorney for the HVAC plaintiffs, who felt the hearing went well. His team of attorneys argued that Albuquerque should be preliminarily enjoined from enforcing the codes because they were preempted by Federal law, and that Albuquerque's attempts to amend the code to circumvent preemption were unsuccessful. Mr. Baker told me that the judge expects to rule on the preliminary injunction motion tomorrow. Stat tuned.

Green Building Law Potpourri

There are three notable articles on various sites around the blogosphere addressing green building legal issues--

1. Greening of the Bailout Bill--There was a great article over at Earth2Tech (I love those guys) on the greening of the financial bailout--http://earth2tech.com/2008/10/01/senate-passes-greener-financial-bailout/

2. Will Cap-and-trade work--Interesting perspective that cap-and-trade won't work to curb greenhouse gases soon enough over the at Green Skeptic http://greenskeptic.blogspot.com/2008/10/steve-rayner-dear-mr-president-deal.html

3. Southern Builders v. Shaw Development series on Green Building Law Update--Chris Cheathem has a nice series on the Southern Builders v. Shaw Development case in which Shaw Development, L.L.C. (Shaw Development) filed a counter-complaint against Southern Builders, Inc. (Southern Builders) in the Circuit Court of Somerset County, Maryland arising from, in part, the projects failure to achieve LEED Silver certification. http://www.greenbuildinglawupdate.com/2008/10/articles/legal-developments/southern-builders-v-shaw-development-the-most-important-part/

What does all of this mean? A lot of legal action--litigation, corporate and regulatory work--ahead.

Monday, September 29, 2008

Land Use Regulation Necessary For Green

Sustainlane has determined that Portland, OR is the greenest city. http://www.sustainlane.com/us-city-rankings/ Why? Because of the progressive land use restrictions and urban growth boundaries established in the 1970s. "That’s "City-planners in Portland have been thinking green since the 70s, when the rest of the country was still embracing the strip mall. The city enacted strict land-use policies, implementing an urban growth boundary, requiring density, and setting a strong precedent for sustainable development." In addition to "green building" regulations, strong land use regulation that limits sprawling suburban development is necessary to make communities green, as is support for effective infrastructure and public transit. Without these supports for green buildings, all that is going to be developed is more auto-dependent green sprawl.

Wednesday, September 24, 2008

Ninth Time Is The Charm--Senate passes renewable energy tax package

Avoiding an end of year sunset of renewable energy tax credits, the senate finally passed (after nine tries) a renewable energy tax package. Wind power tax credits have been extended for one year; other types of renewable energy such as small-scale hydro or tidal power have been extended for two years. Solar tax credits for businesses and residential installations have been extended for eight years. The entire package amounts to $18 billion in tax credits.
http://www.treehugger.com/files/2008/09/renewable-energy-tax-incentives-pass-in-senate.php. Bill is available in full--http://thomas.loc.gov/cgi-bin/bdquery/z?d110:HR06049:

Today, Chairman of the House Ways and Means Committee, Charles Rangel (D-NY)introduced a bill to offset the cost of the incentives in the Senate bill, which includes a modified version of the previously proposed repeal of the tax exemption for oil and gas producers. In the modified version, the bill would freeze the domestic production deduction for income of taxpayers that is with respect to oil, natural gas or any primary product thereof at 6% (which is current law). Absent this action, this deduction would increase to 9% in 2010. This is a scaled-back version of the provision proposing outright repeal of section 199 with respect to all oil, natural gas or any primary product thereof. http://waysandmeans.house.gov/news.asp?formmode=release&id=691

Event Alert--RGGI Greenhouse Gas Auction TOMORROW

Just wanted to alert my readers that the Regional Greenhouse Gas Initiative, RGGI ("Reggie") will begin auctioning greenhouse gas allowances tomorrow. http://www.rggi.org/about

The States Taketh, The Feds Giveth Away

I have written extensively here on the federalism issues associated with regulating green buildings and climate change in general, which I believe is going to be a major factor in whether the United States can effectively manage climate change. In another example of the states regulating and the feds deregulating (or actually just preventing climate change laws from taking effect), Delaware made revisions to its state implementation plan under the Clean Air Act, making carbon dioxide a regulated pollutant. http://ehscenter.bna.com/PIC2/ehs.nsf/id/BNAP-7JEFLD EPA Region 3 approved Delaware's SIP with the carbon dioxide regulation in place. Now, the EPA is reconsidering the approval of Delaware's SIP.

Wednesday, September 17, 2008

Federalism--Green Building Law Quagmire?

Federalism, one of the founding principals of American democracy by which states (and through the states, cities, counties and municipalities) and the Federal government have there own spheres of governance, may ultimately strangle effective green legislation.

I wrote on the blog earlier this summer about a suit filed by HVAC indsutry associations challenging Albuquerque's green building code claiming that the energy requirements for the HVAC equipment was preempted (i.e. already regulated) by Federal law. http://greenlaw.blogspot.com/2008/07/green-building-litigation-hits-in-new.html

Yesterday, "Following months of debate and squabbling, the House of Representatives just passed a bill that could open America’s coasts to offshore drilling, as well as extend the tax credits for clean energy and offer other incentives for clean power and green transportation." http://earth2tech.com/2008/09/16/house-approves-offshore-drilling-extends-clean-energy-credits/ One of the complaints Earth2Tech noted that the Republicans have voiced about the bill is that "the bill also creates a federal renewable portfolio standard that would require 15 percent of the nation’s electricity to be generated from renewable sources. Going beyond states’ mandates is viewed as a form of “big government” with which Republicans disagree."

In short, the Republicans are saying that the Federal government shouldn't pass sustainability regulations, and certain interest groups are suing to prevent states (and through them, municipalities) from regulating, it could create a quagmire in which no government entity is able to effectively pass sustainability regulations.

Friday, September 12, 2008

Oregon Building Opts For Green Globes Because of Cost

As a followup to an analysis of LEED v. Green Globes posted on Green Building Law, I noted that an Oregon building which had originally been slated to be LEED certified chose Green Globes because of the additional cost of LEED certification. http://www.sustainableindustries.com/greenbuilding/27880834.html

The Threat of A "God Awful Solar Heater" to $300,000 Landscaping

People in the Hamptons are not like you and me. This week Southhampton voted into law a series of green regulations mandating environmental requirements for homeowners. One of the criticisms of the regulations was the following:

“For the existing homeowner this is nothing more than a tax,” Bergenthal said. “I spent $300,000 for landscaping. Why should I have to look at a God-awful solar heating system.”


Granted, given the current state of the economy and the threat of global warming, you may not be feeling much sympathy for Mr. Bergenthal and his $300,000 landscaping, but his criticism of the Southhampton law does bring into high relief the ingrained animosity Americans have towards having their private property regulated--especially their homes. I believe that regulation of government and commercial green buildings will be accepted much more easily (although suits in NM and FL are already challenging some laws) than will regulations targeted at homeowners.

Wednesday, September 3, 2008

A Bird In The Hand--Anticipating The Value Of Carbon Offset Credits

I read an article a few weeks ago on Europeans snapping up US carbon offset credits on the cheap. See http://earth2tech.com/2008/08/18/us-cap-and-trade-launch-highlights-hurdles/ In short, because the United States does not currently have a mandatory carbon offset program, US carbon offsets purchased on the Chicago Climate Exchange are far cheaper than the mandatory carbon offsets for sale on the European climate market. The theory is, however, that soon the United States will regulate carbon and establish a mandatory cap-and-trade system, and the credits will increase in value.

So...you build a green building now, and have the less valuable carbon offsets which might be worth something more in the future (or to purchasers in Europe). Those ownership rights need to be considered. How should they be valued? At the current US price? Some future estimated value? Who owns them? The builder of the building or the lessee? See an interesting analysis of this situation at http://www.lawofrenewableenergy.com/2008/08/articles/climate-change/when-is-a-green-building-lease-like-a-power-purchase-agreement-avoiding-deja-vu-all-over-again/

In my opinion, the carbon offsets should be valued at the current Chicago Climate Exchange value. Anything else is simply too speculative. However, they should be treated as if they have value, because they do. Therefore, the allocation of the carbon offsets should be treated as an asset in the negotiation of any green project, with ownership rights as clearly established as the physical asset. Legal draftsmen, sharpen your pencils...

Thursday, August 21, 2008

Green Challange to Green Law

The Sun-Sentinal in Florida had this article on the Mayor of Boynton Beach challenging the Florida Governor's mandate for public buildings to go green based on increased cost to taxpayers--http://weblogs.sun-sentinel.com/news/politics/palm/blog/2008/08/going_green_in_boynton_beach_c.html

This is an interesting front--public fisc vs. public health. Which will win out? What is the real "public good"?

Update on Green Law Around the Blogosphere

This week has seen several interesting Green Law posts around the blogosphere:

Earth2Tech had a report on Bill Clinton's speech outlining 10 things the government can do to promote green power--http://earth2tech.com/2008/08/18/bill-clinton-10-things-the-us-government-should-do-for-clean-power/

My friend Stephen Del Percio at greenbuildingsnyc had an excellent post on green building litigation brought in Maryland--http://www.greenbuildingsnyc.com/2008/08/20/the-anatomy-of-americas-first-green-building-litigation/

And Worldchanging had one on Calfornia carbon shares for individual citizens.

New Tool To Tackle Green Sprawl

ICLEI-Local Governments for Sustainability (ICLEI) (a membership association of local governments committed to advancing climate protection and sustainable development) is developing a new tool to rate the sustainability of communities, called the Star Community Index. http://www.iclei-usa.org/programs/sustainability/star-community-index

This, along with LEED for Neighborhoods, and the changes to LEED 2009 which will incorporate more sustainable site mandates are good steps towards tackling "green sprawl"--building green buildings on unsustainable sites, which has, to date, been a problem with the LEED system.

Wednesday, August 6, 2008

Green Consumer Resource

The Green Perspective http://thegreenperspective.com/ has recently launched with a bunch of fabulous green gift baskets. Check it out!

Monday, August 4, 2008

List of Green Regulations

I found a neat resource from the AIA trust--a list with links to all nationwide green building regulations. http://www.theaiatrust.com/goinggreen/2008GreenPaperAppendixA_CurrentSustainabilityLaws.doc

Friday, August 1, 2008

Inspiring Lunch with E3 Bank

Today I had the privilege of having lunch with Frank Baldassarre (President/CEO) and Bill DeFalco (EVP Chief Lending Officer), two of the founders of Philly's own sustainable financial institution, E3 bank. http://www.e3bank.com/

Bill and Frank were nice enough to tell me all about the E3 project so that I could share it with the readers of Green Building Law. And a very exciting project it is--Bill and Frank and the members of the E3 team are establishing a financial institution which not only invests in sustainable projects, but is itself a "triple bottom line" entity. E3, by the way, stands for "Building Sustainable Enterprise, Protecting the Environment, and Investing in Social Equity".

Frank has been in banking--traditional banking--for 27 years, and until two years ago, he had never heard of LEED. Once he was exposed to the green building world, though, it was like "having his eyes opened." he wondered why more people weren't building green and getting involved. "The lack of financial resources and instruments was a big reason people weren't doing it. We are setting out to change that."

Frank sees the opportunity for financial institutions to be a catalyst for change. "I see E3 not only as a resource, but as a facilitator of change on a large scale. Financial institutions have the ability to make change on a large scale. It will be hard to undo the damage to the environment without getting a lot of people involved."

E3 will offer financial products for sustainable projects, like energy efficient constuction and renovation. The instruments will be designed to "continually encourage people to take the next step in sustainability." For example, by providing discounted loan rates for projects which pursue higher sustainable goals, like LEED Platinum ratings, and using carbon offsets as loan collateral. In addition, E3 will provide value added services to their clients, like expertise in leveraging E3 funds with private and public financing sources.

E3 will also offer a deep green savings account where the money invested will go towards the greenest projects. According to Frank, "When you deposit your dollar, it will match your values."

Bill also mentioned the possibility of providing energy audit services to identify the best use of E3 funds.

Bill and Frank are veterans of the banking industry, but they have a lot of green experience behind the E3 project. Sandy Wiggins, the immediate past chair of the USGBC, is the Chairman of the Board of Directors of E3, and Jim Lutz, Senior Vice President of Development for Liberty Property Trust, David Berry, Co-founder of the Sustainable Water Resources Roundtable, Jackie O’Neil, winner of a 2007 Philadelphia Sustainability Award, Joyce M. Ferris, Founder and Managing Partner of Blue Hill Partners LLC, Judy Wicks, Owner and Founder of Philadelphia’s 25-year-old White Dog Cafe, and Gavin Kerr, an experienced health care veteran are all board members.

Throughout lunch, Bill and Frank expressed their optimism for how E3 can change the financial industry and the world by aligning it to the triple bottom line. Frank noted that the single bottom line had not been working well lately for the financial industry, giving the example of the sub-prime lending debacle. If the financial instutitions had taken into consideration the social equity of what they were doing, perhaps it would not have happened.

As Frank says, "The more you learn, the more responsible you become for your actions."

Thursday, July 24, 2008

Washington Green Building Benchmarking Law

On Tuesday, Washington DC Council unanimously passed The Clean and Affordable Energy Act of 2008, which includes a mandate for benchmarking buildings' energy efficiency via the Energy Star program.


Liberty Finds Benefits in Building Green

According to Craig Cope, a local vice president for developer Liberty Property Trust,
"The additional cost [of building green] is certainly more than paid back in terms of quicker renting, keeping tenants longer, charging higher rents," he said. "Every building we do from here on out will be certified." For the full article, see http://hamptonroads.com/2008/07/green-buildings-are-going-so-are-prices.

Saturday, July 19, 2008

Read This

Bob Herbert's column in the Times today says what needs to be said about Al Gore's speech this week challanging us to meet all our energy needs with renewarble fuels within ten years. Yes we can--http://www.nytimes.com/2008/07/19/opinion/19herbert.html?_r=1&ref=opinion&oref=slogin

Friday, July 11, 2008

Albquerque Green Building Litigation--Column on Greenerbuildings.com

I wrote an extended column on the Albuquerque green building litigation which was published by our friends at greenerbuildings.com.

Please read it here--http://greenerbuildings.com/column/2008/07/11/open-floodgates-the-era-green-building-litigation

Thursday, July 10, 2008

Green Building Litigation Hits In New Mexico

Well, I've been writing for a while that the green building litigation wave would hit, and it has. A coalitiion of industry groups and local companies has filed a federal lawsuit claiming that Albuquerque's green building code is pre-empted by federal law. The suit claims, in essence, that Albuquerque's code has set energy requirements for certain appliances like air conditioners "that are already covered in federal law and Energy Department regulations". http://www.abqjournal.com/news/metro/080732metro07-08-08.htm

I am currently gathering intel on the suit and will post more later.

PA Alert

Green Building Alliance (GBA) announced a total of $140,000 in Product Innovation Grants for three projects that seek to develop and introduce new and enhanced green building products. http://www.tristateobserver.com/modules.php?op=modload&name=News&file=article&sid=10238

Doing Well By Doing Good--Cherokee Investments

Cherokee Investments, which is "a private equity firm specializing in brownfield cleanup and sustainable redevelopment", released a report on its sustainable projects yesterday, available at http://www.cherokeefund.com/ (article at http://www.marketwatch.com/news/story/cherokee-report-highlights-its-investments/story.aspx?guid=%7BD55BC51C-630D-4C15-B3AC-A01C7D4D53A9%7D&dist=hppr).

Although the report does not provide hard numbers on their projects, it does highlight some of the community benefits of their projects--like transit oriented development and provide a succinct set of ideas for pursuing sustainability through real estate development.

Sunday, July 6, 2008

State of Climate Change Law

Interesting article on the status of laywers pursuing climate change practices.


The article notes that there really aren't any cases yet. I believe that the first cases will come in the green building area, because of the myriad of local laws that have been springing up in recent years. The laws have been passed quickly, and in many cases mandate the achievement of LEED or LEED-equivalent standards.

Fireman's Fund Starts Green Home Insurance

Fireman's Fund announced it would start to sell a product which would allow homeowners to rebuild green. See http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/07/05/BUTT11JJOU.DTL

Wednesday, July 2, 2008

Great Resource--AIA List of Green Incentives

I have discussed the DSIRE website here before, but the AIA has compiled a report on all sorts of incentives for green building which is available here http://www.aia.org/SiteObjects/files/LLgreenincentives(5-19).pdf.

Tuesday, July 1, 2008

Washington Green School Fails To Live Up To Promise

An interesting article on the Washington Policy Center Blog about a green school that has failed to live up to its promises of reduced absenteeism and higher test scores. http://washingtonpolicyblog.typepad.com/washington_policy_center_/2008/06/another-green-s.html

This is exactly the type of situation which may lead to liability for the professionals involved in the project. Were representations and warranties made regarding the benefits of the green building? By whom? Who is responsible if the building fails to live up to those warranties of performance?

Monday, June 30, 2008

Guest Column--Overview of LEED and Green Globes Rating System

By: Margaret McInerney


As the green building market increases, a growing number of states, cities and municipalities have passed green building legislation. The level of enforcement and certification varies greatly, but most green building legislation references a green building rating system. The two most common green building rating systems in the United States are the Leadership in Energy and Environmental Design (LEED) Green Building Rating SystemTM from United States Green Building CouncilTM (USGBC) and the Green GlobesTM rating system from the Green Building InitiativeTM (GBI).

Both rating systems aim to improve the built environment and emphasize design and construction practices that reduce energy consumption and water use, improve indoor air quality and minimize the impact on the natural environment. These rating systems have many similarities but a few key differences. Both LEED and Green Globes rating systems are structured similarly by awarding four levels of certification and focusing on common aspects of green building design. The LEED rating system is more expensive, but has a more balanced and comprehensive structure. On the other hand, Green Globes is user-friendly and emphasizes unique green building practices. It does not, however, necessarily demand the best green building practices.

Green building policy leaders argue over the extent of these differences when determining the appropriate rating system to reference in green building legislation. There was a recent budget debate in Virginia over whether the Green Globes rating systems should be referenced as an acceptable green building rating system in addition to the LEED rating system.
It should be noted the comparisons in this article consider USGBC’s LEED for New Construction version 2.2 (LEED-NCv.2.2) rating system and GBI’s Commercial Green Building Green Globes v.1 rating system. A new version of the LEED rating system (LEED 2009 or LEED v.3) was released for public comment in May 2008. The requirements of the LEED 2009 rating system are not considered in this article unless noted.

Brief History of Green Building Rating Systems

The first environmental certification system was created in 1990 in the United Kingdom, called the Building Research Establishment Environmental Assessment Method (BREEAM). In 1998, the USGBC introduced the LEED green building rating system, based substantially on the BREEAM rating system. The Green Globes rating system was adapted from the Canadian version of BREEAM and was released by the Green Building Initiative in 2005. There are many other available rating systems worldwide. However, LEED and Green Globes are the most common in the United States.

Today, USGBC has rating systems for new construction, existing buildings, core and shell, commercial interiors, homes, schools, retail, healthcare and neighborhood development. GBI has a rating system for commercial buildings which includes new construction buildings and existing buildings. In addition, GBI partners with the National Association of Home Builders to promote green homes.

LEED and Green Globes Similarities

The LEED and Green Globes rating systems are very similar in structure. Both systems have four levels of achievement. LEED projects can achieve the following four certifications (1) certified, (2) silver, (3) gold or (4) platinum. Similarly, Green Globes projects can achieve either 1, 2, 3, or 4 globes. Both LEED and Green Globes share a common set of green building design practices. There are six focus areas for LEED and seven for Green Globes, but the focus areas are similar in many respects as shown below.

LEED-NCv2.2 [1]
Sustainable sites (14 Points, 20%)
Water efficiency (5 Pts, 7%)
Energy and atmosphere (17 Pts, 25%)
Materials and resources (13 Pts, 19%)
Indoor environmental quality (15 Pts, 22%)
Innovation and Design (5 Pts, 7%)

Site (115 Pts, 11.5%)
Water (100 Pts, 10%)
Energy (360 Pts, 36%)
Resources (100 Pts, 10%)
Indoor environment (200 Pts, 20%)
Emissions, effluents and other impacts (75 Pts, 7.5%)
Project management (50 Pts, 5%)
[1] The United States Green Building Council, www.usgbc.org.
[2] The Green Building Initiative, www.thegbi.org.

Both LEED and Green Globes place an emphasis on energy use. Of the sixty-nine allowable points for LEED, twenty-five percent can be achieved for advanced energy practices and thirty-six percent of the one thousand allowable points for Green Globes can be achieved in the energy category. The common energy criteria for LEED and Green Globes are building energy consumption, proper installation of energy efficient technologies, and on-site renewable energy resources.

The LEED rating system has a balanced point distribution, with four out of the six categories contributing about twenty to twenty-five percent of the potential points. While Green Globes emphasizes energy (over a third of the potential points), site and material resources only account for approximately ten percent of the rating system. This is a potential weakness in the Green Globes system. While reducing a building’s energy consumption is very important, a certified green building should not be constructed without significant consideration to its site and surrounding area.

LEED and Green Globes Differences

The two main criticisms of early versions of LEED were that it was too complex and too expensive. When USGBC first introduced the LEED rating system, the application for certification was long and complicated. All certification forms had to be submitted by mail. This was a contrast to Green Globes’s user-friendly online certification process that any building team member could complete. The newer versions of the LEED rating system are online; however, the rating system is still complicated and each building team member is responsible for different documentation. LEED registration and certification are still more expensive than Green Globes. LEED registration costs approximately $900-$3000 and certification costs approximately $1,875 to $20,000. Green Globes offers a preliminary self-assessment for $500 dollars and the certification is around $3,000-$6,000.

Another criticism of the LEED rating system is that LEED-NCv2.2 does not address life-cycle analysis. Life cycle analysis (LCA) assesses the complete impact of a building on the environment. LCA analyzes a building’s construction materials from pre-manufacturing to post-consumption. For example, the LCA of a building’s insulation would consider the manufacturer’s location, the resources needed to make the insulation and the disposal/recycling of the insulation when the building is torn down. In the current LEED rating system two buildings could achieve a sliver certification, but have very different impacts on the environment when considering life cycle analysis. USGBC has recognized this deficiency and addresses LCA in its latest rating system, LEED 2009. Green Globes incorporates a life-cycle analysis in its current rating system.
The main criticism of Green Globes is that it does not require a minimum performance level. Therefore it is relatively easy to attain the one globe certification level (350 points out of 1000 points). In contrast, LEED requires minimum performance levels in energy use, erosion control, and indoor air quality. For example, LEED requires that all certified projects create an Erosion and Sedimentation Control Plan. Since this plan is required it does not earn any certification points. However, Green Globes awards nine points for a similar erosion control plan. Green Globes does award points for specific best practices that are unique to its rating systems such as, integrating pest management, composting organic waste, monitoring carbon monoxide, and maintaining acoustic comfort.

Another significant difference between the two rating systems is their energy performance measurements. Most LEED certified projects measure energy performance against the ASHRAE/IESNA Standard 90.1-2004 which sets a baseline for building energy performance. LEED points are awarded if the building reduces energy consumption 20% to 60% compared to the standard’s baseline. However, Green Globes projects are awarded points for scores of 75 or better from the Environmental Protection Agency (EPA) Energy Performance Rating. EPA’s rating system compares the project to other similar buildings nationwide. For example, a score of 75 in the EPA Energy Performance Rating system means that the project performs better than 75% of the buildings in the U.S.

Builders have different views which rating system most effectively measures energy performance. The ASHRAE 90.1 standard is the industry accepted standard for building performance. Based on performance modeling, LEED certified buildings save approximately 25-35% on average compared to the ASHRAE 90.1 baseline standard. However, there is still a discrepancy between predicted-modeled energy performance and actual-design energy performance. While some buildings perform better than modeled a significant number perform worse. A number of LEED certified buildings do not meet the Green Globes standard of 75 from the EPA Energy Performance Rating system. In contrast, the EPA Energy Performance Rating system only awards certification to the top twenty-five percent of buildings and does not set a minimum performance level or a baseline for improvement. By using the EPA Energy Performance Rating system, Green Globes is not providing incentives to improve the performance of buildings each year.


The USGBC’s LEED rating system and the GBI’s Green Globes rating system have some differences. However, they share a common core of green building design practices. Both rating systems offer unique benefits and promote good building practices. Referencing the LEED rating system in government legislation will ensure minimum energy performance, good construction practices, reasonable indoor air quality, and basic building commissioning. However, for legislation to completely disregard the Green Globes rating system would ignore a number of good building practices, such as using the EPA Energy Star Performance rating system and having a user-friendly, less expensive incentive for building green. Governments should adopt strong green building legislation that encourages the best green building practices and it may be premature to limit green building certification to only one rating system.

Margaret McInerney is a LEED® Accredited Profession and is a graduate of the University of Virginia School of Engineering and Applied Science. She currently is a Senior Energy Consultant at Navigant Consulting Inc. in Washington, DC. The views expressed in this article are those of the author only and not those of any other company or organization.

Thursday, June 26, 2008

Obama v. McCain--No Real Contest On The Environment

The past couple of posts have focused on the presidential campaigns, and their proposed energy/climate change policies. See Obama--http://www.barackobama.com/issues/energy/, and McCain http://www.johnmccain.com/Informing/Issues/da151a1c-733a-4dc1-9cd3-f9ca5caba1de.htm.

Both candidates propose a cap-and-trade system for greenhouse gases. Obama proposes a cap-and-trade program to reducre greenhouse gases to 80 percent below 1990 levels by 2050. McCain's cap-and-trade program would reduce greenhouse gases to 60 percent below 1990 levels by 2050.

Both candidates also make commitments to research, but very differently structured. Obama has committed to investing $150 billion in clean energy and related efforts, McCain has committed to devoting two billion dollars each year, until 2024, to clean-coal research, development, and deployment, and a prize of 300 million dollars to the creator of a battery package of a size, capacity, cost, and power far surpassing existing technology.

In terms of new sources of fuel, McCain supports drilling f0r oil off America's shores, and building 45 new nuclear reactors by 2030. Obama does not support offshore drilling, and said he wouldn't rule out expanding nuclear power, but he would first require an acceptable way of dealing with the radioactive waste that results.

Obama has made a large place for green building initiatives in his plan. Obama has said he will establish a goal of making all new buildings carbon neutral, or produce zero emissions, by 2030. He has also commited to establishing a national goal of improving new building efficiency by 50 percent and existing building efficiency by 25 percent over the next decade and creating a competitive grant program to award those states and localities that take the first steps to implement new building codes that prioritize energy efficiency.

McCain says that his administration will "the penalties will assure compliance" with fuel standards, whereas Obama will double fuel economy standards within 18 years.

In terms of their proposed solutions, there is no real contest. McCain's plan is essentially support for so-called clean coal and nuclear power dressed up as an innovative energy plan. There is nothing in his plan to support green building. He makes no commitments to further increase fuel economy standards. In essence, McCain is not taking the bull of climate change and oil dependence on at all.

Obama's policy does a better job of working most of the angles of the problem, and makes proposals for addressing them. However, Obama will have to engage a lot of political will to make his reforms happen. Obama does not say how he will overcome the resistance to most of his plans.

Tuesday, June 24, 2008

Sometimes Totalitarianism Looks Appealing

On Friday, China announced it would " ban more than one million cars from the streets during the Olympics in an effort to curb pollution and ease traffic gridlock." Once the Chinese government decided it wanted to do something about the wretched pollution in Beijing, it simply acted.

This type of massive action in response to an environmental problem is something a democracy has trouble with. For example, the New York state assembly failed to pass congestion pricing for New York City to ease traffic and pollution earlier this year. http://www.edf.org/article.cfm?contentID=6618

Similarly, US politicians in power and candidates have failed to put forward a comprehensive environmental plan which would address climate change in a significant way. Although I do appreciate democracy's many virtues, I sometimes wish that we had a government which could implement major change on the environmental front simply by deciding to act.

Monday, June 23, 2008

Lead or Leave?

I know I'm supposed to be on maternity leave, but Tom Freidman's Sunday opinion column on Bush's lack of leadership on the oil front--essentially he says that Bush's new energy bill is just another hit at the oil crack pipe--http://www.nytimes.com/2008/06/22/opinion/22friedman.html--and the end of the Democratic primary got me to thinking (again) about the lack of leadership on the environmental front.

Freidman excoriates Bush for his energy plan, entitling the column Mr. Bush, Lead or Leave. And Mr. Bush will not lead (that we have 7 years of history to show), but he will inevitably leave in January. Then what? I posit that the environmental stewardship exhibited by the candidates for president have been an inch deep and a mile wide, particularly when it comes to presenting a comprehensive plan which incorporates green building incentives with energy policy and infrastructure development.

McCain and Clinton both fell for the summer vacation from the gas tax gambit. The miniscule savings for the individual consumer is far outweighed by the collective damage of removing a funding source for, among other things, public transportation.

In addition, despite his attempts to distance himself from Bush on the environment and position himself as an environmental steward, McCain has supported Bush's plan to drill for oil offshore in sensitive waters, http://www.washingtonpost.com/wp-dyn/content/article/2008/06/16/AR2008061602731.html
and scored zero out of 100 on the latest League of Conservation Voters Scorecard which rates elected officials on their votes in the most recent Congress. http://www.lcv.org/scorecard/.

Obama has made the right noises about the environment, but still lacks a comprehensive plan to address the environmental trifecta of energy, building and infrastructure.

So, the choice is not lead or leave--but simply lead. The electorate must lead by calling for a comprehensive environmental plan from the next resident of the oval office.

Thursday, May 15, 2008

Maternity Leave

Green Building Law Will Be On Maternity Leave Through September 2008.

Tuesday, March 11, 2008

The Value of Density

Two articles this morning brought to mind the the classic urban theory that the density of urban environments creates cross-pollination and agglomeration benefits. GreenBuildingsNYC had an article about four closely located green businesses in New York City's Lower East Side http://www.greenbuildingsnyc.com/2008/03/05/the-lower-east-side-nyc%e2%80%99s-emerging-green-retail-district/ and another about a proposed green industrial park http://www.greenbuildingsnyc.com/2008/02/29/new-york%e2%80%99s-first-green-industrial-park-breaks-ground-on-long-island/ .

Essentially, the argument goes like this--cities are places where people are densely packed together. As a result of the clustering of people and businesses, innovation increases and there is a benefit in human capital externalities (ie more businesses, more jobs, more money, etc.). If it all seems a bit esoteric, think about fashion. You can get a lot more ideas about what to wear to work on the subway in New York City than alone in your car on a suburban commute.

The same concept should work with green businesses and green building--the more of these entities grow up in a small geographic region, the better they will be able to feed off one another and innovate. This is a good argument for local government incentives to stimulate green building and businesses. One green building is good, but a cluster of greeen buildings with workers in green businesses will foster more carpools, more sharing of ideas, more emulation--in short more innovation which will lead to the afforementioned human capital externalities. With the growing concerns over a faltering economy, fostering dense clusters of green innovation is one way to combat the tide.

Monday, January 21, 2008

Haste Makes Waste--Avoiding Unintended Consequences

My Sunday perusal of the New York Times uncovered a very nice piece on the unintended consequences of legislation brought to you by the same guys who wrote Freakonomics, available here http://www.nytimes.com/2008/01/20/magazine/20wwln-freak-t.html?_r=1&ref=magazine&oref=slogin. The gist of their argument is that beneficial legislation often as the unintended consequence of deterring the very action the legislation was designed to provide--like the Americans with Disabilities Act reducing employers hiring of disabled workers.

The EPA and the Energy Information Administration (EIA) published analyses of Senators Arlen Specter (R-PA) and Jeff Bingaman’s (D-NM) proposed “Low Carbon Economy Act of 2007″ (S. 1766), and declared that the impact on economic growth and prices would be “modest.” Full articles available at Sustainablog, here http://sustainablog.org/2008/01/21/analyses-finds-law-would-cut-carbon-with-modest-impact-on-economy/.

What the bill and the analysis by the EPA and EIA fail to take into consideration is that the reliance of the Low Carbon Economy Act on carbon recapture and nuclear power has the potential to cause vast unintended consequences for the environment and for the economy. For example, a nuclear plant meltdown would have untold environmental cost and economic cost. Carbon capture technology can extend the use of coal fired power plants and the development of new coal fired power plants when such plants might otherwise be replaced with more sustainable forms of energy.

Similarly, green building legislation which is hastily drafted and passed has had embarrassing and counterproductive results. For example, the Las Vegas green building tax cut that threatened such a strong impact on state tax revenue that it had to be hastily rescinded. http://greenlaw.blogspot.com/2007/07/what-happens-in-las-vegas.html

For legislation to be successful in promoting positive environmental change, legislators need to look beyond the obvious and consider the unintended consequences of their actions. One way of doing so is to correctly articulate the desired outcome, and to ensure that the legislation works to promote that goal.

For example, the stated goal of the Low Carbon Economy Act is to "To reduce greenhouse gas emissions from the production and use of energy, and for other purposes." Is this really an accurate assessment of the purpose of the legislation? The purpose was more likely to preserve the environment for future generations by reducing greenhouse gas emissions. Using nuclear energy and coal will reduce greenhouse gas emissions, but it will not necessarily preserve the environment for future generations by doing so. Therefore, the first step to strong beneficial legislation which avoids unintended consequences is to articulate a valid purpose and confirm that the mechanics of the legislation works to positively promote the end goal.