Existing Buildings, the Elephant in the Room

May 9, 2019
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Quality, Consequences and the Construction Industrial Complex (part 194).

The elephant in the room in any discussion about the built environment’s impact on green house gas (GHG) emissions is the existing building stock.

Existing buildings represent ~99% of the built environment and is a “sunk cost” in terms of GHG impact. The hard truth in this situation includes;

1. Cost of energy is too low to act as an incentive to modify buildings and reduce GHG.

2. Externalities from GHG emissions are real and are everybody and nobodies problem at the same time, a true “tragedy of the commons” situation.

3. Setting targets without consequences and incentives gets you zero action.

So, what to do? As a recovering libertarian it pains me to say this but, New York City (NYC) seem to have had a breakthrough via government legislation i.e. edicts from our rulers!

NYC undertook an inventory of GHG emissions in 2014 (http://www.nyc.gov/html/dem/downloads/pdf/NYC_GHG_Inventory_2014_Released_2016.pdf) and found 70% of GHG emissions are generated by existing buildings. This is a large number which can be significantly impacted by interventions via building retrofits.

On April 18th, 2019 NYC passed a new local law to assist in its target to achieve 80% reductions in aggregate city-wide greenhouse gas emissions by 2050. The law affects over 3 billion square feet of NYC building area, over 50,000 commercial and multifamily buildings that exceed 25,000 sq.ft.

The new law will set up an office to oversee the implementation of building energy and emissions performance and sets limits as follows:

1. Reduce carbon emissions resulting from building energy use, starting 2024.

2. Incrementally reduce carbon emissions with a goal to achieve 40% reduction by 2030 from a 2005 baseline and 80% by 2050.

Any existing buildings that exceed the legislated emissions caps will;

1. Require retrofits;

2. Need to show alternate compliance through mechanisms such as renewable energy credits;

3. Pay a penalty based on the difference between actual and stipulated emissions in tCO2e/yr multiplied by $268.

Building owners that do not play ball can have building permits rejected. This approach could lead to owners with “stranded assets” that will depreciate faster, impacting investment returns and decisions.

So, tip of the hat to NYC. Looks like it is a good time to be in the NYC existing building commissioning, energy analysis and retrofit business!

Imagine the impact if 1,000 cites did the same as NYC. Imagine the net positive economic effect and job creation! How do we influence our rulers to do this world wide?

More info

NYC Sustainability Website: https://www1.nyc.gov/site/sustainability/index.page

NYC Roadmap to 8- x 50 i.e. 80% reduction is GHG by 2050: https://www1.nyc.gov/site/sustainability/codes/80×50.page

NYC Building Emissions Law Summary: https://www.urbangreencouncil.org/sites/default/files/building_emissions_law_summary.pdf

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