CREDIT: <a href="">Emilie Eagan (<a href="">CC</a>).
CREDIT: Emilie Eagan (CC).

Policy Innovations Digital Magazine (2006-2016): Briefings: Building Sustainability for PlaNYC

Dec 8, 2009

[UPDATE: The New York City Council passed the Greener Greater Buildings Plan on December 9, 2009, and sent it to Mayor Michael Bloomberg for signature into law. The Benchmarking and New York City Energy Code bills passed unanimously, while the Lighting Upgrades bill passed 44-2 and the Audits and Retrocommissioning bill 41-5. In light of current negotiations in Copenhagen, the passage of these bills sets an example of innovative American policy targeting climate change.]

A key New York City Council vote on greenhouse gas emissions from local real estate is scheduled for Wednesday, December 9. The Greener, Greater Buildings Plan stands to lower New York City's overall emissions by 4.5 percent, a reduction equivalent to the city of Oakland, California going carbon neutral.

In 2007, New York City released PlaNYC, an ambitious suite of policies designed to lead the city toward a sustainable future. PlaNYC committed to a 30 percent reduction in greenhouse gas emissions below 2005 levels by 2030. The Greener, Greater Buildings Plan is integral to this agenda and will spur investment in New York's largest source of greenhouse gas emissions—its existing building stock. Building operations in New York account for 80 percent of the city's emissions, spending more than $15 billion on energy annually, or some $2,000 per resident per year.

The Greener, Greater Buildings Plan encompasses four bills and two mayoral initiatives—Green Workforce Development Training and Green Building Financing. One of the bills calls for updating the New York City Energy Code, while another would require phased-in lighting upgrades for all commercial spaces. A third Benchmarking Bill would require all buildings over 50,000 square feet—some 22,000 buildings comprising 50 percent of the built environment—to disclose energy and water usage via the U.S. Environmental Protection Agency's online Portfolio Manager tool. These data would be tied to the Department of Finance's Tax Assessment Roll, where energy and water efficiency would become indicators used to assess property value.

The fourth and most controversial of the bills, the Audits and Retrocommissioning Bill (renamed from its previous title of Audits and Retrofits due to intense lobbying by the Council of New York Cooperatives and Condominiums and the Real Estate Board of New York), calls for a systematic approach whereby the largest, professionally managed buildings in the city would conduct an energy audit every decade, creating customized upgrade recommendations for each building.

The original vision of the bill required implementation of all recommended upgrades that would pay for themselves within five years, but now with the focus on "retrocommissioning" only costless measures such as cleaning boilers and tweaking thermostats will be required by law. A recent New York Times article attributed this softening of the legislation to difficult economic times and a lack of financing. Despite such obstacles, the central integrity of the legislative package has not been lost and the majority of emissions reductions will likely still be realized.

Rohit Aggarwala, Director of the New York City Mayor's Office of Long-Term Planning and Sustainability and a major architect of the bills, spoke at the New York Academy of Sciences last week, claiming the legislation presents the "single most important component" of PlaNYC. There will be approximately 85 percent continuity between the city's buildings today and those in place by 2030. Thus, instead of targeting new construction, Aggarwala has focused city efforts on a systematic policy of better building management.

But the softening of the bill has also clouded its future impact. The city has yet to clearly define "retrocommissioning" in the new bill, and it has been pressured to leave out residential buildings completely. The energy audits will be assigned to buildings via a lottery system spread out over a ten-year period due to understaffing.

Will the promised return-on-investment be enough to encourage building owners to implement energy-saving retrofits? Risk-averse building owners are reluctant to devote scarce capital to conducting expensive energy audits that have no direct payback, installing new technologies with unproven claims, or disclosing operational expenses that could potentially harm their property values.

For true change to occur, several other policies must be implemented along with the green building program. First, an initiative to submeter apartments and commercial spaces would make everyone aware of their energy use and accountable for it directly, thereby encouraging behavioral energy conservation. For spaces that are already submetered, an overhaul of the lease structure is needed to allow for "green leases." These leases include riders that encourage owners to implement upgrades that ultimately lower the utility bills for renters by promoting cost-benefit-sharing.

Finally, job growth cannot be ignored. If building owners are not financially incentivized to conduct energy audits, retrofits, and alternative energy installations, the promised growth of "green collar jobs" will never be realized and current training programs will have been conducted in vain.

If the Greener, Greater Buildings Plan becomes law this week it will be a significant step in the right direction toward economic and environmental sustainability. But it is only the beginning of additional innovative public and private reforms that must be implemented before the PlaNYC model is viable enough to be replicated in other world cities.

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