Is There a Role for Public Policy to Drive Market Transformation?

Is There a Role for Public Policy to Drive Market Transformation?

The Building Owners and Managers Association (BOMA) International has always maintained that the move to green our buildings must be driven by the private sector, based on the needs, interests and investment strategy of the building’s owner and tenants. In other words, the private, voluntary marketplace needs to be given a chance to work, and the appropriate role of the federal government is to provide tools and voluntary incentive-driven programs, not mandates.

To date, the commercial real estate industry has done a remarkable job of leading the way to market transformation. We’re not there yet, but we’re on the right path.

Back in 2007, BOMA International issued a challenge to its members: make a commitment to reduce your portfolio’s energy use by 30 percent, in comparison to an “average” building, by 2012. We defined “average building” as one scoring a 50 on the Environmental Protection Agency’s Energy Star Portfolio Manager benchmarking program. BOMA’s 7 Point Challenge, as it became known, gained remarkable acceptance within many of the largest national real estate companies, and smaller ones as well.

The results are in! To date, we have collected usable data from 857 participating buildings representing 184,176,665 sq. ft. of office space. The results show that BOMA members have made great progress on their energy efficiency and sustainability efforts.

·         Average change from baseline: Adjusted Energy Use Intensity (kBtu/sq. ft.): -26.77

·         Average change from baseline: Total Water Use (kGal): -113.34

·         Averaged change from baseline: Adjusted Energy Use (%)-7.51

·         Average Current ENERGY STAR Rating: 77.87

While progress is being made, we do acknowledge that there is a role for the public policy process to help drive this effort. To date, there are many examples of great government tools and public-private partnerships; this is how we believe that government can best utilize its resources. One example of a successful public-private partnership is the Better Buildings Alliance (BBA). Through the BBA, members in different market sectors work with the U.S. Department of Energy's exceptional network of research and technical experts to develop and deploy innovative, cost-effective, energy-saving solutions that lead to better technologies, more profitable businesses, and better buildings in which we work, shop, eat, stay, and learn.

Energy Star’s Portfolio Manager is another great example of a government-created tool that may be credited with being a key driver of energy efficiency. Portfolio Manager is accepted by the commercial office industry as an indispensable tool to benchmark energy performance and help prioritize retrofit opportunities. However, this voluntary federal program is now a mandate in many states and jurisdictions, and we expect to see many more follow suit over the next few years. While BOMA fully supports its voluntary use, we adamantly oppose efforts to mandate it and to impose labeling or disclosure requirements on buildings. These are meant to be useful tools to guide building owners and managers to make good energy-management decisions, not to place a “scarlet letter” on our nation’s buildings and unduly discriminate against older and/or historic buildings.

BOMA also supports improved tax incentives to spur retrofits of existing buildings. Legislation was introduced late last year to revamp the 179(d) tax deduction by increasing the maximum amount of the deduction and implementing a sliding scale with a partial deduction for energy improvements starting at 20 percent over the buildings pre-retrofit baseline. We hope to see that legislation reintroduced in both the House and the Senate soon.

Fear of obsolescence is a powerful driver, and in today’s market, it’s nearly impossible to be considered a class-A building without the attributes of a high-performance building. The voluntary marketplace will continue to be the best incubator for vigorous efficiency improvements.

Karen Penafiel is vice president, Advocacy, Codes and Standards, for BOMA International, and a member of NREI’s Sustainability Board of Advisors.

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