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.

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."
http://www.enn.com/business/article/38498

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.

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

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.

http://www.insurancejournal.com/news/national/2008/10/21/94835.htm

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

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.

There's No Such Thing As Clean Coal

http://www.huffingtonpost.com/michael-brune/theres-no-such-thing-as-c_b_135103.html

Finally. Emperor has no clothes.

Interesting Green Leasing Post

http://sustainable.bizjournals.com/green/Possibilities_to_think_over_when_negotiating_a_green_lease.html

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.

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.

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

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.

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?

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.