GPSOLO March 2010
The Past, Present, and Future of Green Building
One way to distinguish your law firm or practice, your business or brand, or yourself is to tap into the benefits of green building. This article provides an overview of green building by beginning with the U.S. Green Building Council’s (USGBC) Leadership in Energy and Environmental Design (LEED) standards that have advanced over time and helped shape and expand green building throughout the country. Further, the article outlines several states with mandatory green-building laws and examples of green-building incentives that a state or certain jurisdictions within that state may offer to stimulate voluntary green building. Finally, the article outlines the green-building provisions included in the American Recovery and Reinvestment Act of 2009 (Stimulus Package) and how this law may affect the future economy and emphasize or promote green building throughout all states in the near future.
USGBC’s LEED program. The LEED certification program currently includes a four-level rating system (certified, silver, gold, and platinum) that incorporates design, construction, and operation of high-performance green buildings. LEED certification is based on a point system for new buildings, existing buildings’ operation and maintenance, and commercial interiors for tenants, core and shell construction, school, retail stores, health care facilities, and homes. It focuses on five areas to promote a whole-building approach to human and environmental health, including sustainable site development, water savings, energy efficiency, materials selection, and indoor air quality. On April 27, 2009, the USGBC launched the newest and latest improvements to the LEED system, dubbed “LEED v3.” According to the USGBC, LEED v3 brings three enhancements to the current LEED rating system: (1) harmonization, or consistency in credits and prerequisites across all LEED rating systems; (2) credit weightings, which apply different weightings and point awards to factors that have greater positive impacts; and (3) regionalization, which involves identifying regionally specific environmental issues and prioritizing those credits because they address specific environmental issues relevant to the zip code where the project is located. LEED v3 still applies to new construction, core and shell, schools, existing buildings’ operation and maintenance, and commercial interiors.
State and local green-building developments. Although most states provide discretionary guidelines from which one can benefit under the incentives, some include mandatory guidelines at the state or local level. These jurisdictions may provide law, regulations, or an executive order implementing green-building policies that the state has adopted or that jurisdictions within may choose to adopt and enforce. These may be policies that implement only certain aspects of green building, such as the use of energy-efficient appliances or an increase of use in renewable energy. Many mandatory policies apply to new construction and/or major renovations, but certain states may provide that all state or local government buildings become a certain level of “green” at some future date or that buildings reduce energy consumption by certain percentages over time. Certain states have extremely advanced green-building regulations and incentives in place, whereas others simply seek to improve energy efficiency in small amounts. The trend toward mandatory green-building requirements and energy reductions in city and state buildings has grown rapidly. The public sector has definitely taken the lead on promoting the future of green building, and certain states, especially in the West and Southwest, where resources such as solar and wind power are abundant, have taken the lead in the private sector.
Every state offers incentives for the green builder that may include items such as personal tax credits, corporate tax credits, property tax assessments and exemptions, production incentives, and state and/or utility grant, loan, and rebate programs. Not all states have mandatory green-building requirements.
The city of Scottsdale, Arizona, has mandatory requirements for one- and two-family dwellings, as well as townhouses and condominiums not taller than three stories. These requirements include measures such as high-efficiency toilets in 50 percent of the bathrooms or sealing high penetrations and connections in the building envelope. In the public sector, Scottsdale’s standards for new city buildings and renovations were the first to adopt a LEED gold-level requirement. The city of Phoenix recently released a 17-point plan to make the city the “first carbon-neutral city—and the greenest—in the entire country.” It includes bringing all public buildings up to new LEED-equivalent retrofit standards. As for mandatory state policies, the governor issued Executive Order 2005-05, which requires new state-funded buildings to include renewable energy sources and meet energy-efficiency standards. This was reaffirmed in Executive Order 2008-29, which also initiates energy-performance contracts for state agencies that have not met energy-reduction goals.
California is another leader on the green-building front, with standards such as the “Green Building Action Plan for State Facilities” in place. The governor signed Executive Order S-20-04, aimed at improving the energy performance of all public buildings by certain percentages. Further, new and renovated state buildings have to be at least at LEED’s silver level. California cities also have enacted energy standards for public buildings that may contain even more strict requirements than the state requires. California cities have created their own standards for the residential and commercial sectors as well.
Interestingly, in late 2008, the District Court of New Mexico decided to grant a preliminary injunction against the city of Albuquerque. Based on recommendations and options from the Mayor’s Green Ribbon Task Force developed to implement green changes to building regulations, Albuquerque’s Green Building Manager (GBM) drafted an Energy Conservation Code, and the city council adopted a High-Performance Buildings Ordinance. The code included options that exceeded the federal standards and efficiency levels; the ordinance set “prescriptive standards” above and beyond the federal regulations. This case provides an interesting commentary on the development of green-building regulations in states and cities nationwide. It shows that federal regulations may begin to hinder the green-building movement; although certain localities are moving at a quicker pace in developing and implementing stringent green-building law, this case demonstrates that certain areas are preempted by federal law and, therefore, will only expand their regulations as quickly as the federal government does.
Although all states have some type of incentives, not all states have jumped on the green bandwagon with mandatory policies. One such state is Mississippi, which has no law or regulation enforcing green-building requirements. However, Mississippi does have discretionary incentives.
The Obama presidency and the Stimulus Package. The 2009 Stimulus Package provides discretionary state energy grants to a state only if the state’s governor gives necessary assurances. The language in the Stimulus Package sets forth incentives for a state to adopt utility regulatory reform and stronger building energy codes. For example, Section 410(a)(2)(B) calls for a building code for commercial buildings throughout a state that meets or exceeds the ANSI/ASHRAE/IESNA Standard 90.1-2007. The Stimulus Package also provides for the expansion of existing energy-efficiency programs by the state. These incentives, also known as the State Energy Program (SEP), have been allocated $3.1 billion.
The Stimulus Package contains other incentives that support green building, such as an overall $16 billion for the weatherization of homes at the federal, state, local, and tribal levels as well as $4.5 billion to make 75 percent of federal buildings more energy efficient (i.e., to convert such facilities to “high-performance green buildings”). Further, the Stimulus Package provides $3 billion for school improvement grants. However, the Stimulus Package only provides incentives, not mandatory regulations. States and their governors have no obligation to implement SEPs but may choose how much they want or need an influx of cash for these types of programs.