You might have heard wild-eyed sounding rumors in the past about the European Union legislating net zero buildings. Those weren’t rumors.

A few years ago, the EU parliament required all new buildings to be “nearly net zero” (being defined by each state) starting in 2019. Existing ones that undergo major renovations will have to hit energy performance targets set by the member states. In the UK, new homes need to hit that target even sooner – they need to be carbon neutral by 2016.

Now California (any surprise?) has established a net zero beachhead in North America. Under an executive order issued by Governor Brown on April 25^th, by 2020 half of new State buildings and major renovations will be net zero and all by 2025.

If you’re wondering how they are going to design these buildings, one could look to the net zero projects on the drawing boards in New York City: P.S. 62 on Staten Island (starting this year), Solar 2, and Cornell’s Roosevelt Island campus. And if they can do it, perhaps it’s time that we follow California and the EU’s lead?

That would be a bad idea. The first part of net zero – extraordinary load reduction – is something that all new buildings could and should achieve. We’re seeing it with these projects and we’re seeing it with Passive House. But the second part – generating solar electricity onsite – just isn’t possible for many buildings in New York. It’s no coincidence that all three New York net zero projects have large roof to square footage ratios, and are also in open areas of the city without neighboring buildings to shade their roofs.  A high-rise just doesn’t have enough roof area for PVs to generate its own energy and the only way they could meet a net zero mandate would be to purchase expensive renewable energy credits. According to our research director, Richard Leigh, “for almost any commercial or residential use, even with efficient lighting and appliances, the solar resource to get above three stories and meet net loads with on-site collectors just isn’t there, even out in the open countryside.”

So let’s build super energy-efficient buildings and install whatever onsite renewables we can. But as we look towards the next generation of green buildings, let’s remember that while net zero can be done for low-rises it doesn’t work for high-rises.

Given the stark reality that we are now in a time of deficit spending of the earth’s capital, it is imperative that we regard our economic systems as inextricably bound to ecosystems. The two words, ecology and economy— in fact, are derived from the same Greek root: eco, which means house.  Food systems are a primary example of the interaction of the two disciplines, and a closer look at food through the dual lenses of ecology and economy reveals many startling inefficiencies and even absurdities in how we currently grow, produce, distribute, consume and dispose of food.

Studying the lessons of wild ecosystems provides some valuable direction for redesigning efficient and non-depleting methods and practices for feeding humans.  As clever as we are, we have not yet developed technological processes that are better than nature for renewability.  All human-designed products and processes require a draw-down of the earth’s capital stock.  Wild ecosystems, in contrast, build organic material and resist stresses, performing this work on contemporary sunlight (as opposed to that embodied in fossil fuels) indefinitely and for free.

We have millennia of wisdom – embodied in wild ecosystems and human thought and experimentation – from which to learn.  To cite just one example, the practice of milpa agriculture in Mesoamerica has evolved over hundreds of generations into a mutually beneficial network whereby farmers temporally and spatially shift the growth of maize to feed local populations while sequentially regenerating small forest areas.

In our rapidly urbanizing world, can we design cities that more closely emulate dynamic and productive ecosystems like the milpa?  Perhaps agriculture, reinvented as a form of urban infrastructure, could offer such promise, particularly if combined with the multiple synergies of food production, biomass creation, CO² reduction and sequestration, nutrient recycling, resource renewal and purification, economic revitalization and social vitality.

Author Carolyn Steel will kick-off a day of discussions about these issues at Transforming Cities: How Food Systems Shape Cities on May 2 by explaining her concept of Sitopia (food-place), an integrated design tool with which to address the complex challenges of present and future dwelling. We hope you will join us.

You probably know the drill. Spend money on any number of energy efficiency upgrades and you’ll make it back through reduced operating costs for the life of the retrofit. That’s not to mention improved occupant comfort, an increase in jobs to do the retrofits, reduced greenhouse gas emissions and other benefits.

A no-brainer, right? Well, there’s been a long-standing excuse for not doing upgrades in a lot of commercial buildings, and admittedly it’s a good one. Under a commonly used modified gross lease, building owners pay the upfront costs of energy improvements on base building systems, while the tenants reap the cost savings from reduced energy consumption.  Because of this “misaligned incentive,” building owners resist investing in energy upgrades.

Mayor Bloomberg overseeing the signing agreement between Silverstein Properties and WilmerHale, the first lease to use the energy-aligned lease language

So the Mayor’s Office of Long-Term Planning and Sustainability brought together a task force to develop new commercial lease language that allows tenants and owners to share in both the costs and benefits of energy efficiency improvements.  Part of the City’s broader sustainability program, PlaNYC, the language is called the PlaNYC Energy Aligned Clause, and it makes good sense.

Problem solved! Well, almost. Actually, not enough people in the commercial real estate industry know enough about it yet, but we’re not going to let that stop us.

At the request of the Mayor’s Office, Urban Green is working hard to get this information out to as many people as possible, with support from the City of New York, the Environmental Defense Fund, the Natural Resources Defense Council,  the New York State Energy Research and Development Authority, and the Real Estate Board of New York.

Going forward, I’ll personally execute the outreach program as Special Consultant with Urban Green. I’ll present the concept to targeted audiences and spearhead a handful of supporting objectives such as introducing the use of the Clause as a pilot credit for LEED certification.

The Energy Aligned Clause is a solid solution, and I’m only too happy to be talking it up. On Thursday March 15^th at Knoll, Urban Green Council kicked off the outreach with a Salon on green leasing. The take-away? Using this language makes good business sense.

Get involved. Reach out to me. And watch the uptake as the oft-used “misaligned incentive” excuse goes by the wayside!

Since the dawn of time (well, OK, since 1979 when Michigan and Princeton Professors Ross and Williams developed the idea of a “house doctor”), energy efficiency enthusiasts have been convinced that retrofitting a residential building to save energy could pay for itself in fuel savings.  It’s been a rocky road since those days, when the prime concern was our dependence on unreliable Mideast oil rather than climate change, and in the energy price valley of 1985 – 2000, it was a lot harder to make the case.

But over the last ten years, subsidized programs all over the country have carried out hundreds, perhaps thousands, of retrofits.  Many were aimed at affordable housing, including the federally funded Weatherization programs, and state efforts like NYSERDA’s Assisted Multifamily Program (AMP, in which I was active) and the current Multifamily Performance Program (MPP). Others focused on coaxing the owners of unsubsidized multifamily buildings, including coops, condos, and market-rate rentals, to upgrade their building systems in the interest of greater efficiency, but always with the carrot of long-term savings. Similar efforts went on in many of the more progressive states.

All these programs were successful in installing efficiency upgrades:  insulate the roofs, add caulking and weather-stripping, switch to fluorescent lights, replace that failing boiler, and add better heating controls.  And because we had used careful analysis and detailed computer models, we were confident the savings were there.  But the fact is, we couldn’t present fuel and electric usage data from any of the early projects to prove that our analysis was accurate. As late as 2008, we had a grand total of 20 buildings from AMP for which we had verified savings, largely of satisfactory magnitude.

Of course this is a problem from a technical perspective – we would like to know we are telling the truth when we claim that savings will be forthcoming.  But there is another, much larger problem:  all the retrofits done under Weatherization or NYSERDA programs are subsidized, one way or another, so the owner could expect a much more substantial return on their own partial investment than they would receive in pure market circumstances. And still it was hard to get them to undertake the projects.  Further, what we need now is a truly massive campaign of energy retrofits, far larger than can ever be subsidized by either NYSERDA or the federal government. And owners rarely have the cash reserves to undertake energy retrofits on their own.  The only way to bring retrofit activities “to scale” is to make them an investment opportunity for lenders, by which I mean banks.

But you know bankers – dour, untrusting, “show me your cash flow” types who want proof that you will have the money to meet your monthly obligations. (We will omit discussion of the unfortunate events of the last few years except to note that now no one will lend any money without ironclad guarantees of credit-worthiness.) If we want bankers to lend money for retrofits based on the use of energy savings to repay the loan, we need tools to convince them that the savings will be forthcoming.  Until now, those tools were not in evidence.

Today, we stand a chance.  Deutsche Bank Americas Foundation and Living Cities commissioned Steven Winter Associates and HR&A Advisors to undertake a massive study of energy retrofit activities in New York City, and to formulate an underwriting approach based on their findings. The just-released report provides both a powerful case that the savings will be realized in enough instances to justify significant investment activity, and an analytic framework that will make investments even more secure.

On the technical side, they examined 231 buildings for which pre- and post-construction data was available, and developed a strong set of useful conclusions. Just a few examples: expect more substantial and reliable savings from fuel use reduction than from measures aimed at electric usage; the more fuel your building uses, the greater the potential for savings. (Before you say “duh”, this was quantified in way that that will be very useful for underwriting, as we will see.) And because buildings are complex systems, they found that while observed savings tracked projected savings in a statistical sense, there would still be cases where the savings fell short.  How can this risk be minimized, making energy efficiency retrofits an attractive investment for our dour banker?

Here is where the team developed an exceedingly clever analytic approach.  The engineers designing the retrofit will use their models to predict savings.  But from an analysis of the 231 buildings, the team already knew that on average, they could expect savings roughly equal to half of the pre-retrofit fuel use minus a substantial constant. (See the paper for the math!)  The clever approach then is to trust the engineer’s model unless it predicts savings greater than the average found for their data set, adjusted for energy use in the building being modeled. If the model predicts savings greater than the data set average, use the data set average. If the model predicts savings less than the data set average, use the model results. Then go talk to your banker. When this approach was applied to the buildings in the data set, they found that the actual energy savings substantially exceeded these adjusted predictions, a situation that should leave underwriters satisfied.

Can this work?  Will we see a dramatic increase in capital available for energy efficiency retrofits? Only time will tell, but we have made a substantial step forward.  All the buildings in New York City over 50,000 square feet will undergo energy audits, as required by Local Law 87 of 2009, and the proposed measures and their estimated savings will be there for all to see. Now, a robust way to justify financing the measures is also available.

I’ve been ruining family gatherings with this point for years.  But that doesn’t make it any less true.  There are easy jobs to be found with a little nudge from the government.  What’s the holdup?

Bloomberg’s homepage is pretty much what you would expect from the world’s leading financial information firm: the market snapshot…a crawl of all the major indices, and of course the Dow, S&P, and NASDAQ at a glance.  Below the logo, the navigation bar shows all the things relevant to the world of finance: News, Markets, Personal Finance, Sustainability…

Holy cow! “Sustainability”!? Last week, Bloomberg quietly offered up prime online real estate for this critical category. So far, it’s proving to be a fantastic source of national and international environmental news (I used it last week to track the depressing climate treaty discussions). But that’s the smaller point.

The big news here is the message Bloomberg is telling the finance industry: today’s businesses need to understand and track sustainability. One interesting question—is Bloomberg responding to a need voiced by the industry, or are they trying to make a market for it? Hopefully it’s a little of both.

Ellen is the Director of Construction Education at Urban Green Council, and runs GPRO: Green Professional Building Skills Training. GPRO is a series of courses and certificate exams that teach the people who build, renovate, and maintain buildings the principles of sustainability combined with trade-specific green construction knowledge.

Here at Urban Green Council we LOVE data!  At Greenbuild last month Harvey Bernstein, VP of Industry Insights and Alliances at McGraw-Hill Construction, released a new study on the Workforce and Green Jobs.

The upshot is that in construction, green jobs are growing at a faster rate than non-green jobs. Green training is considered valuable to contractors, trades and A/E professionals and is becoming more widespread throughout the industry.

How big is this industry anyway? Globally, construction in 2011 is projected to be a $7.2 trillion industry, representing 11% of global GDP. In 2020 this is expected to rise to $12 trillion (13.2% global GDP), mostly in emerging countries.  Projections for the next 9 years are for growth in single family homes and commercial construction but flat for institutional projects.  As we all know too well, construction and design jobs in the U.S. have been generally declining since 2008, but the good news is that green construction has been rising as a segment of the market.  This year, green jobs make up more than 1/3 of jobs in the A/E and contractor communities.

Is there a shortage of green-qualified construction workers? 69% of AEC firms expect work force shortages of qualified construction workers during the next decade.  The MH survey tried to determine the reasons why.  Major reasons cited are:

• Lack of interest in the construction industry among high school students because its perceived as not being high-tech enough
• Retirement of senior staff
• People leaving the workforce during the downturn and concern that they won’t return
• Licensed trades (MEPS) expect the worst shortages.  Contractors expect shortages in carpentry, millwork, electricians, concrete/cement workers, HVAC workers and boilermakers

What does green really mean?: The survey asked what “green” meant to each individual.  Top responses included: energy use reduction, reduction of use of natural resources, and installation of renewable energy (this response was higher for trades).

Is specialty knowledge valued? Formal training is prized by the trades and by decision makers.  80% of trades surveyed said that unions and associations were highly valued sources of training for trades.  Happily we seem to be moving towards higher levels of teamwork in the industry – the survey reported that General Contractors are looking to improve their collaboration skills and value employees who are proficient with technology and have good people management skills.  From the perspective of A/E firms, GC’s and subcontractors, certified employees help them win projects and increase competitiveness across the board.

What are the benefits of green training as seen by those in the industry?

• More job opportunities: Training is key to getting and maintaining better jobs. 30% of green job workers said they needed major training when they started, and most reported that formal education and training programs will continue to be needed. 71% of hiring decision-makers believe that having green skills increases an individual’s competitiveness

• Higher compensation:
  • 58% of the entire survey estimated a 4% higher salary for green skilled workers;
  • 38% of trade contractors said they valued green skills at 7% or higher salary;
  • 14% of AE firms said they valued green skills at a 10% or higher salary

• More job security and opportunities for advancement. Trades (carpenters, HVAC/boilermakers, electricians, concrete/cement masons and plumbers) are expected to see the greatest growth in green jobs. The survey found 15% of trade jobs today are considered green jobs, and this is expected to increase to 25% in three years.

• Outside sources of training are surpassing on-the-job training for green skills.  The number of people who responded that they can get training on the job was lower as compared to those who stated a need for outside sources of training as more specialization and technology takes effect – this response rate was similar for trades and AE professionals.

How many green jobs are out there? One oddity of this survey is how it defined “green jobs”:  Green construction or installation job in building construction involving installation of a uniquely green system or requiring different skills to meet green goals.  This definition does NOT include administrative or non-construction professions such as manufacturing or producing green products.   Hmm…and I thought I had a green job.

• Of the design professionals surveyed:  there was a steep increase in those that stated that more than 50% of their projects are green.  The rate of increase is less steep for GC’s but still climbing.
• Of the responses from the unemployed (mostly architects): 17% are seeking an exclusively green job, 60% are seeking a green job and 31% said they were not as interested in non-green jobs.

Photo credit: Linh Do

The results are in!  The American Council for an Energy Efficient Economy (ACEEE) has released its annual State Energy Efficiency Scorecard, and New York has edged out arch-rival Oregon for the #3 slot.  We’re still substantially behind the two big dogs, but there was drama in the top bracket as well, as Massachusetts lapped California to become #1.

How we did it: Of course the first thing you’re wondering is how we managed to outdo Oregon and become #3.  The most likely answer might be that we grabbed free agent David Bragdon, who directed much of the greening of Portland, and brought him here to head up Mayor Bloomberg’s Office of Long Term Planning and Sustainability.  That, however, was a city-to-city maneuver, and the Scorecard, based on statewide performance, shows no indication that it was a factor.  Rather, New York scored 1.5 points higher on “Utility and Public Benefit Fund Efficiency Programs and Policies” and Oregon beat us out by half a point on “Building Energy Code,” leaving us a net lead of 0.5 points. (We were tied in the other four categories.) This is way too close for comfort, and we’ll have to grow the advantage substantially to ensure continued dominance.

The Big Picture: To put all this in perspective, the Scorecard allocates a total of 50 possible points among six categories.  Massachusetts won with a total of 45.5; California was second with 44.0, we were third at 38.0, and Oregon is now fourth with 37.5.  Yes, we would have to span a substantial 6-point gap to compete in the top rank.

How Can New York Prevail? The areas in which we can most easily rack up additional points are the “Utility and Public Benefit Fund” area, where we got 15/20, and “Transportation,” now at 6/9.  Looking at the detailed breakdown of the first category (p. 6 if you’re reading along), we got 4.5/5 for Electricity Program Budgets, but only 2.5/5 for actual Savings.  So we spent the money, but we need meters on almost everything!  And our Gas Program Budgets were deemed weak and only rated 1/3. This stems from all the years when the PSC and NYSERDA functioned off a System Benefit Charge that was initially structured around electric efficiency, and is only now being fully extended to include gas.  We scored the maximum in the other two subcategories for “Utility and Public Benefit Fund,” so no room for improvement there.

On “Transportation,” I’m from New York City, where we probably rate a 9/9, so it really falls to those upstate SUV and pickup truck drivers to give us an assist. But 3 big points are just waiting to be picked up, if only we could extend rail and bus service.

For Building Energy Codes, we only scored 6/7, while four states got 7 and Georgia got 6.5 (?!?).  What was our problem?  Well, to get 7, your code had to exceed the 2009 IECC or ASHRAE 90.1-2007, and the authors deemed that we had only met those codes. Clearly, New York State should adopt the New York City energy code, which by definition exceeds the NYS code, and therefore meets the ACEEE requirements for a 7.  Alternatively, we could plead that since almost half the population of NYS is now governed by the more stringent NYC code, on average the state deserves a 7.  I’m sure a highly-paid lobbyist would be able to make this case clearly to the ACEEE  staff over an expensive lunch.   

California Strikes Back: Clearly outraged at being pushed off the high podium, the California Air Resources Board started the 2012 competition early by adopting a statewide cap and trade system for greenhouse gasses on October 20th. This was a shrewd move by California, since Massachusetts had already scored 7/7 on “State Government Initiatives” and can’t go any higher, while if California can push their 5.5 up to a 7, which this ambitious effort certainly deserves, they can tie Massachusetts on that basis alone.

Race from the Bottom: Three states – Mississippi, Wyoming, and (dead last) North Dakota – have total scores of less than 5/50.  They should consider it a growth opportunity – Alabama went from 3 to 9/50, and Nebraska from 4 to 10/50, earning both of them commendations for “most improvement.” I’m not so sure they deserve praise at this level – some state will always be ranked 51^st (DC is a state in the Scorecard), but even the lowest ranked state could have a score of 20 or 30/50 if they were trying at all.  How about “still fails to meet expectations”?

Full Disclosure: OK, the Scorecard is a little dense, I haven’t read the whole thing, and you probably won’t either.  But it is a lot of fun to dip and skim through, with great gobs of detail for the items that interest you most.  I especially recommend Chapter 3 on Building Codes – a very clear explanation of different vintages of codes from the IEC and ASHRAE90.1, the role of the DOE and ARRA, and all that confusing stuff.

With federal climate change policy at a standstill, and with federal agencies creating road blocks for retrofit programs in the residential sector, it is great news to see a consortium of private and non-government organizations throwing themselves into the breach to kickstart retrofit programs in the commercial sector.  The principal broker in this consortium is Richard Branson’s group, the Carbon War Room.  They have a solid promo video here, and  you can find a great survey of recent developments in the NYT here.

Meanwhile, NRDC has launched a related effort to document best practices for commercial tenant retrofits over the next three years.  The initiative was recently announced as a Clinton Global Initiative commitment. See here.  (Full disclosure: My firm, YR&G, is a partner in the NRDC/CGI initiative.)

Fingers crossed that these and related initiatives can keep the ball rolling forward in the absence of broader guidance on the national or international level.

Bill Clinton is on the cover of Newsweek and he can’t stop talking about green building.

The former President offers Newsweek 14 ideas to get the economy moving forward, and he doesn’t get past #4 before he places green building front and center.  In this item he proposes the country use the Empire State Building retrofit project as a model.  The Clinton Climate Initiative was heavily involved in the project, which provided a 38% reduction in energy use and provided Newsweek with their cover quote:

“We could put a million people to work retrofitting buildings all over America.” – Bill Clinton

In subsequent items he advocates for energy efficiency retrofits of single family homes financed by the utilities, financing of government and institutional building retrofits guaranteed by left-over TARP (Troubled Asset Relief Program) funds, and mobilizing the un- and under-employed to paint roofs white all across the country.  All in all, more than a quarter of his recommendations revolve directly around green building, and at least another quarter deal with the directly related issue of clean energy investment.  Read the whole piece here.