Whether or not there is sufficient evidence to support the theory that human activity is contributing to climate change, there are many reasons for the commercial real estate industry to take an active role, using proven technologies and procedures, in implementing responsible consumption practices that are environmentally and economically sustainable.Decision-makers at all levels of government believe it's very likely that humans are responsible for global warming and climate change, and are poised to make far-reaching policy changes. In the 111th session, which will be under way in early 2009, the U.S. Congress will take action on climate-change legislation that's likely to include a carbon cap-and-trade program as a means of encouraging immediate carbon reduction.
In response to this upcoming congressional debate, BOMA Intl.'s Board of Governors approved a new policy position on carbon cap-and-trade at BOMA's Intl. Conference and The Office Building Show in June. The new policy statement calls for carbon offsets to accrue to those who make the investment in carbon-reduction strategies.
"Cap-and-trade" is an administrative approach used to control pollution by providing economic incentives for achieving reductions in the emissions of pollutants. Regulators would establish a limit, or cap, on the amount of greenhouse-gas (GHG) emissions for each of the largest GHG industrial sectors. Companies that emit more than their allowance must buy credits from those that pollute less. In effect, the buyer is paying a charge for polluting while the seller is being rewarded for reducing emissions by more than what was needed, thus "monetizing" CO2 reductions. In theory, those who can easily reduce emissions most cheaply will do so, achieving the pollution reduction at the lowest possible cost to society. This monetization of energy-efficiency improvements can create another revenue stream for real estate owners and operators.
The most common GHG is CO2, which is believed to represent about 82 percent of the problem. Two of the largest global sources are electricity and heat (36 percent of CO2 emissions). The production of electricity used for lighting is estimated to represent 25 percent of emissions from the commercial sector. As a result, it's not illogical that legislators and regulators have begun to look to the commercial real estate industry, and the energy-efficiency opportunities that buildings represent, as a prospect for cost-effective CO2 reduction.
BOMA Intl.'s new policy position states: "BOMA Intl. believes that the value of GHG reductions will accelerate building energy-efficiency investments (and on-site renewable investments) most efficiently if the party that makes these investments is allowed to accrue the benefit. In other words, buildings—not utilities—need to accrue any credits or offsets in a regulatory cap-and-trade program. Legislation must allow the free market to work by rewarding investors in efficiency or renewables with the financial value of the resulting CO2-emissions reductions. BOMA Intl. also believes that the allocation of carbon credits in any regulatory system must be done in a regionally fair manner, and that the methodology needs to recognize leaders in conservation already achieved by giving credit for those regions of the country—and buildings—that have been leaders in conservation and have invested in renewables."
BOMA Intl., the Real Estate Roundtable, and the U.S. Green Building Council recently supported a joint research project to determine the appropriate role for the commercial real estate industry in a GHG-regulatory program. The research identified many GHG-reduction opportunities that exist outside the industrial sectors typically regulated under cap-and-trade systems. It also cautioned that a green building carbon credit should be included in the earliest stages of cap-and-trade since energy efficiency is most valuable in the earliest stages of climate-change regulation.
During the 110th session of Congress, several climate-change and cap-and-trade bills were introduced. The lead Senate bill, S 2191, more commonly referred to as "Lieberman-Warner" in reference to its two main sponsors, set the groundwork to begin debate. In December 2007, the Senate Committee on Environment and Public Works approved the legislation. In mid May, Sen. Barbara Boxer (D-CA), chairman of the committee, ordered it reported out and placed on the Senate calendar with a substitute amendment, S 3036. The Senate failed to invoke cloture to limit debate (by a vote of 48 to 36), and the issue is not likely to resurface this year. The issue will resurface in the next session of Congress, and both leading presidential candidates have indicated support for carbon-reduction measures.
BOMA Intl. will continue to be an advocate for effective carbon-reduction public policy that rewards leaders in energy efficiency, acknowledges past and present actions implemented to improve energy efficiency, and provides appropriate incentives to those making the investments to implement carbon-reduction strategies for new and existing buildings.
For more information on this and other issues, call BOMA Intl. at (202) 408-2662 or visit www.boma.org.