Britian Flunks Climate Changes
With GHG emissions on the rise, this climate advocate needs to learn why-and how to earn a passing grade. Follow the footprint
With GHG emissions on the rise, this climate advocate needs to learn why-and how to earn a passing grade. Follow the footprint
Despite new projections that Australian average temperatures could soar by 6.7 degrees Celsius, the Prime Minister sees GHG controls as a bigger threat. Go anna!
We know there's a relationship between CO2 atmospheric levels and the Earth's temperature and now we have 420 million years of data that point to where we could be heading. Interested?
Congress' new Global Warming Select Committee has the money to do some powerful work. Here's one to-do list. Read it
Grand Rapids Michigan will soon be home to the nation's first LEED gold-rated museum. How artful
Attacking global warming will cost real money. Listen to the price signals
A new report by Environmental Defense finds that over 2 million New Yorkers live within 500 feet of congested roads-while vehicle emissions pose serious health risks. Decongest
Ever wonder what global warming might mean for you? Now you can find out. Just click
What is "one of the things that really surprised" climate scientists? Fade away
What a concept-clean indoor air, healthy people and a lower carbon environment! Read on
Here's one path to high performance affordable homes and neighborhoods. Follow the money
The new issue of Fortune, the venerable business magazine, is devoted to green trends. Get clicking
The Blair government is promoting clean, energy efficient housing with an array of financial incentives. More needed?
A federal judge in Vermont resists auto industry moves for a closed-door trial on regulating carbon emissions. Boston Globe, 3/24/07-free registration
Massachusetts Congress member Edward Markey chairs the new Select Committee on Energy Independence and Global Warming. Hello there
Mayor Bloomberg's PlaNYC 2030 will take a shot at global warming and the maxed-out electric grid by requiring property owners to upgrade energy efficiency before putting their homes on the market. Look into it
Elections do matter, as the ex-chair of the Senate Environment & Public Works Committee learned. Earth wins
A court challenge to Vermont standards that cut C02 tailpipe emissions previews an upcoming California court battle-but right now there's a First Amendment fight. Read on
China leads the way, but it's not alone in building more and more coal-fired power plants. Capture that
"Something has happened in the last five years", says a veteran auto industry analyst and the immovable US auto industry may be moved at last. Get the news
Black and white, blue and green-must find common cause to save the planet and make it righteous. Join in
Exxon Mobil urged the Australian government to consider carbon taxes while criticizing cap and trade schemes. Look into it
At a recent PlaNYC 2030 community meeting, the tensest topic was traffic congestion pricing. Get ignited
From a doubter of carbon regulations comes a call for taxes as the best way to reduce carbon emissions. Keep it simple
The Sierra Club won the consent of a midwestern utility to support energy efficiency and clean power in return for opening a new coal-fired power plant. Read on
65 US financial and corporate giants urge Congress to mandate carbon cuts. Move on
American ranchers and farmers don't see eye-to-eye on corn-based ethanol as a best-bet for fuel. Read more
Ok, here's an piece for students of global warming who still remembers their statistics courses. Go figure
Although there's strong evidence of accelerated global warming, authors of the recent IPCC report lacked the necessary consensus to report on it. Get the facts
Oil-rich Abu Dhabi wants to catch the clean energy wave What's next?
Can't think of a better title for a story about the slug-fest on the Christian right over global warming. Who's winning?
Ever wonder how much cabon it takes to produce your shampoo or snacks? Soon, UK consumers can find out. Track that footprint
A draft IPCC report on the impacts of global warming projects significant harm to plant life, including food production. Oh my
A new MIT study sees clean coal technologies as fundamental for a carbon-constrained world. Read on
Fairfax Virginia announces a multi-prong cool county campaign. Get updated
In a market without rules, buying carbon offsets may not buy much. Caveat emptor
There's something new about the new generation of green businesses. To market
Errors found to riddle a UK climate-skeptic's documentary. Get the facts
Here's a sharp white paper on the raging debate over how to reduce carbon emissions. Read the fine print
After decades of dismal decline, mass transit ridership is up. All aboard
Britain's Labor government has drafted a bill to shrink carbon emissions 60% by 2050. Read more
A sustainable NYC can take root at a neighborhood scale. Consider the Lower East Side
Both Labor and Tories are calling for taxes to fight global warming. As usual, the devil's in the details.
This front page story in the Sunday "Real Estate" section alerts the unaware that fierce storms, linked to global warming, could put New York's trillion dollar real estate at risk. Dip in
Congress has created a brand new Select Committee on Energy Independence and Global Warming. It's even got a budget. Go to it
Now that the world's pre-eminent climate scientists have confirmed in the IPCC 4 Report that global warming is here, that it's caused by human activities and it will produce severe consequences if unchecked, there's no doubt we should be drastically diminishing our greenhouse gas output. We have not been lacking in ideas about how to proceed. Over the last decade there have been many efforts to confront what we are doing to our global climate, under such banners as "sustainability", "energy independence' and "carbon neutrality". First there was the UN Framework Convention that led to the Kyoto Protocol. Then, in 2005, the European Union launched an Emissions Trading Scheme to cap and trade carbon emissions. Nine northeastern US states have agreed to join the Regional Greenhouse Gas Initiative, which will launch in 2009. At the municipal scale, the US Conference of Mayors is pledged to a goal of carbon neutrality, while some 40 cities will be holding a second meeting in NYC in May 2007 to swap ideas about combating climate change.
The full impacts, meaning the complete array of costs and benefits of these and other public and private sector initiatives to reduce the emissions of greenhouse gases, will take decades to determine. But we don't have to wait decades to discover the impacts of every good idea, sometimes we don't know simply because no one's looked.
Consider the New York State Green Building Tax Credit law that was designed to transform the markets for building developers and their supply chains as well as to alter the behavior of building managers and tenants. The initial law was passed in 2000 ("TC-1"); it provided for $25 million in tax credits to support large-scale residential and commercial high performance construction. It got off to a slow start, but all the funds were committed before the State renewed the statute in 2005 ("TC-2"), making an additional $25 million in tax credits available. Developers and tenants alike were awarded tax credits during the first five-year program. A range of building types were supported - including an apartment building in Harlem, an office building in mid-town, an apartment building in Battery Park and another, which rehabilitated an historic building on Roosevelt Island. TC-2 caps the total tax credit that can be awarded to an eligible building at $2 million over a specified time period and the awarded credit can be used by the developer or tenant during any consecutive five years from 2006 - 2014.
TC-1 specified that qualifying projects may include fuel cells, photovoltaic models, and green refrigerants for new air conditioning equipment among other technical innovations. It capped energy use in new construction of a "base building" at 65% of the state building code standard and at 75% for renovated "base" buildings. For new construction, tenant space energy use was capped at 65% of the use permitted under the energy code and a cap of 75% was imposed for tenant space in renovations. The tax credit program, in keeping with both United States Green Building Council Leadership in Energy and Environmental Design ("LEED") requirements and the consensus on best green building practices, required tax credit recipients to properly start up the building systems and to monitor their spaces. This requirement makes sense because it serves as a mechanism for generating good data about those green building designs and operations that have been supported through public policy.
Unfortunately, the data trail starts to dim right here. TC-1 requires tax-credit recipients to maintain records on their buildings' annual energy consumption and indoor air quality monitoring results, among other things. These records must be maintained "for any taxable year for which the green building credit provided for under this section is claimed" and this information must be provided to the New York State Department of Environmental Conservation ("DEC"), in a form and at a time "prescribed by DEC". Following the data trail deeper through DEC's regulations, once the tax credit period has expired, the tax credit recipient no longer has to maintain any performance records.
As a practical matter, it is possible that DEC requests, receives, reviews and retains these records. But there are no public accountings and the data trail is even dimmer. This data dead-end is a costly missed opportunity for good policy making. The purposes of the State's law can be validated only if the data is actually submitted to the State. In turn, the State must aggregate, analyze and publish the results. Only then will we have useful knowledge, based on real experience, on which to assess and improve our public policies. For now, let's look the record and see what have we accomplished with the $25 million in tax credits granted between 2000 and 2005.
But first, consider this message posted by New York State Department of Environmental Conservation.
Important Notice It is anticipated, that based on the delay caused by having to update the regulations, DEC will not be able to accept Period two applications for the initial Credit Component Certificates until the updated regulations are promulgated.
Put bluntly, TC-2 implementation is on hold and the delay is stretching into a second year with no end in sight.
What is going on here? How could a law providing tax relief to energy efficient, high performance builders, which was reauthorized in 2005, not be operational in 2007? A January 29, 2007 headline in Crain's New York Business blared, "NYC developers resist the push to go green" and cited the jejune but persistent view that going green costs too much money. As evidence, the article points to the small number of buildings designed to meet LEED standards, but it is silent about the impact of the $25 million in tax credits distributed to developers as a result of the State's initial green building law, which was intended to be an exercise in market transformation. It is possible that developers just didn't know about the State's green tax credit. Maybe they didn't find the available tax credit financially attractive or found that the transactional costs paperwork, were too onerous. We don't know.
Let's consider a very different hypothesis about the reason for the delay - lack of interest by developers. In response to a question regarding the apparent lack of concern about the current status of TC-2, one New York real estate insider speculated that today there's enough market demand for high performance building so that tax break incentives are no longer needed. This rosy view does not easily equate with the dour view expressed in the Crain's headline about NYC developer resistance to going green, or the still miniscule number of buildings with a LEED rating.
Whatever their accuracy, either view leads to a related reason we should find out what's going on. A February 5, 2007 Crain's New York Business.Com story spotlighted the continued "torrid" growth in New York City residential construction in 2006, but there's no solid evidence that this building market is being "transformed" by the Green Building Tax Credit law. This means we are perpetuating an environmental problem because what is built today will determine energy and fuel consumption levels, as well as their associated greenhouse gas emissions, for fifty years or more. We've got a building surge that is "torrid" in more ways than one - but since it's not on the cutting edge of energy efficiency and high performance it's not capturing the intended value of the State's tax credit policy.
In light of what we know, or more precisely what we don't know about how buildings that used the TC-1 credits performed, it's hard to predict what we should expect from the 2005 reauthorization. TC-1, of course, reflected the knowledge and best practices of its time. Since then, we have witnessed an explosion of high performance building and the maturing of conceptual frameworks like the LEED rating systems. It seems only reasonable that the qualifying threshold for the tax incentives offered by TC-2 be set at a level that meets current best practices in order to support market transformation and to appeal to a range of building developers.
It is possible the delay in delivering on the 2005 law means that the State is reviewing and updating its technical program yardstick or that a bigger, better tax incentive programs would do the trick. The federal Energy Policy Act of 2005 sets uniform national standards for qualified energy efficient buildings and provides for tax benefits measured by the square foot. Surely, state green tax policy can be fruitfully aligned with available federal tax credits to help make high performance building New York's "new normal".
At last, we're ready to return to the record for an assessment of TC-1. Although getting a clear, comprehensive understanding of its value of is not possible at present, some promising anecdotal evidence is available. A recent Sallan Snapshot, written by the Full Spectrum Team, offers some data glimpses about the Harlem apartment building that received a green tax credit. According to the Full Spectrum Team, "We start by instructing our design team to reduce energy consumption by 50% below the state energy code and reduce the cost of construction below the regional index by 20%". Now, each household saves "more than $1,500 per year in energy cost and [the green tax credit] creates a $10,000 average tax credit for each resident". On a larger scale, the Battery Park City Authority, with several high performance apartment and office buildings under its jurisdiction, plans to systematically gather green performance data that will be made public. With some data already on hand, the Authority's Chairman, James Gill, posted a letter-to-the-editor in response to the Crain's story "NYC developers resist the push to green". According to Mr. Gill, Nymex laid out $185,000 to retrofit its property and has projected annual energy cost savings of $250,000.
Evidence of evidence-gathering is a good sign. We need more of it, a lot more. It is precisely the self-reported material like that provided by the Full Spectrum Team and the Battery Park City Authority which underscores the importance of the law's own record-keeping provisions. Still, TC-1 says nothing about how this data must be put to use or what we should expect from the mandated report due out in 2011 and although the law provides that a "first draft" of this report be issued by April 1, 2005, it's whereabouts are unknown.
Let's end with a regular theme of these Torchlight columns, advocacy for evidence-based environmental policy. As a case study, New York's Green Building Tax Credit law earns a very low grade on any test of evidence-based public policy. TC-1 might have been a great success, but no one can say for sure. Today, there is a rising call for gathering the necessary evidence to make the case in every policy arena. From the perspective of uniform and benchmark professional standards, the US Green Building Council has developed any array of high performance criteria. In an effort to close the data feedback loop, post-occupancy evaluations, which makes use of both objective performance data, such as energy consumption, as well as the subjective views of building occupants, are coming into use now. LEED for New Construction, Version 2.2 requires building owners to survey occupants in order to achieve a LEED point for "thermal comfort". At the University of California's Berkeley Center for the Built Environment, researchers are using internet-based programs to administer green building occupant surveys, and these show promise for reducing the cost while increasing the accuracy of such data gathering.
But New York State neither requires nor supports such things. Presumably, the necessary evidence exists in someone's files to determine whether tax credit recipients met the programmatic and numeric performance goals of TC-1, but it's all been left to gather dust. This is a bad way to carry out a well-intentioned law because we are in urgent need of good evidence and better environmental policy-making since hot times and torrid real estate markets call for cool minds and steady hands.
27 EU states agree to binding targets for using renewable energy. Each state will find its own way forward. Stay tuned
Here's the day to consider the impact of global warming on women and celebrate their role in improving conditions on Mother Earth. 3 cheers
Will the energy future be nuclear, alterative fuel, or clean coal-and at what cost? Grapple with it
According to Flordia's Governor, responding to climate change will be a "monumental challenge". But close your eyes and think Sea level rise
Sharp disagreements over how to combat global warming divide the EU. How awkward
12% of Europe's GHG emissions come from the tailpipes of German cars. Get beeping
The German Chancellor seeks numeric targets in Europe's battle against global warming. Count on it
With a target of installing 500 solar roofs in NYC, CUNY studies the challenges to market growth. Read more
After a long dry spell, there's a boom in green jobs. Help wanted
The Bank of America announced a $20 billion lending plan for companies offering green tech and financial services or developing high performance buildings. Consumers and environmental groups can also qualify. Check in
EU members are wrangling over a mandatory 20% renewable power target. Read more
By next year, China could become the planet's biggest source of GHG's. Just last year, it's consumption of fossil fuel grew a scorching 9.3%. Any suggestions?
Critics of carbon trading say it just moves the problem around, at a profit. Read on
Good: In the UK, scientists actually audit national policy on cutting CO2 emissions.
Bad: The UK will fall far short of its goals. Why's that?
Today, read about a bank that provides green financial services to business and community clients in San Francisco. Aye Aye
The EU is set to approve commercial-scale carbon capture and storage projects. Dig down
Australia gets its first wave-driven power plant and it will light up 500 homes. No worries
If improved energy efficiency leads to consuming more fuel and energy, how do we win? It won't be easy
Wall Street is selling $238 million in green building bonds. That's just the first part of a $2 billion allocation by the US Treasury. We're bullish
Schools are the fastest-growing sector of the green construction industry, according to a new report. Get smart
The Apollo Alliance took its energy independence/good jobs campaign to Capitol Hill, meeting with Senators Clinton and Sanders, along with governors and other legislators. Work it
Scientists find that global warming contributes to fierce Atlantic hurricaines - but not to storms over other oceans. Why is that?
To send wind-farm electric power from upstate NY to downstate means building new transmissions lines. This is a problem. Is there an answer?
You've probably seen GE's Ecomagination campaign. Love it or hate it, that's up to you. But don't ignore it, because the history of how the entire idea came about contains a lesson and potentially a strategy for all of us who believe that corporations can be both profitable and environmentally responsible.
In 2002, concerned religious investors, led by Catholic Healthcare West, asked GE to report on its greenhouse gas emissions. Although the investors owned only a tiny percentage of GE stock, they leveraged that fractional ownership into a formal agenda item at the GE annual meeting, through the use of the shareowner proposal process, whereby investors can place resolutions on corporate proxy statements.
Having an environmental resolution on the agenda was nothing new to GE; for years the issue was the clean-up of PCB's in the Hudson River. In the past, however, the typical environmental resolution garnered little management or shareholder support, and the company went about its business-as-usual. In this, GE was no different than the majority of US companies.
So there was no reason to think GE expected anything different this time. But it was different despite the company's recommendation against the proposal, 23% of shares voted for it. Stunned by that result and emboldened by new leadership (Jeffrey Immelt had replaced Jack Welch as CEO not long before), GE decided to re-examine the issue. This is not to suggest that GE is more environmentally responsible than any other multi-national corporation. But, like other corporations, it does tend to react when a large percentage of its owners say they want the company to do something. What they wanted here was straightforward for GE to examine the business case for reducing its greenhouse gas emissions. And that's just what shareholders got.
What the corporation's careful analysis revealed was stunning. Making energy efficiency a core mission not only would burnish GE's reputation, but add at least $10 billion to the company's revenues in just five years. Even to GE, that's real money.
So what changed? Certainly GE's reaction was different this time. But what precipitated the response was the vote total. Large, bottom-line oriented investors rallied to the cause of a small, socially responsible shareowner. For decades, environmental concerns had been marginalized in the corridors of Wall Street as "social issues" the not-too-subtle semantic implication being that they couldn't also be bottom line issues. But that perception is rapidly changing. Environmental concerns are being embraced by global capital as having financial impacts. In other words, owners of the world's corporations are starting to harness their power and use it to promote sustainability, rather than short-termism. Want further proof? Consider the following:
Carbon Disclosure Project. CDP coordinates the world's largest business cooperative project on climate change. How large? More than 1000 major corporations report on their greenhouse gas emissions through CDP. How did CDP get so many corporations to participate? Simple; it first got major institutional investors to sign on to the project. In February 2007, 280 major institutional investors, with aggregate assets of more than $41 trillion (yes, with a "T"), wrote to some 2400 companies asking them to join CDP. Those signatories ranged from "A" to "Z". Literally. The list began with "Aachener Grundvermogen Kapitalanlagegesellschaft mbH" and ended with the Zurich Cantonal Bank. The 278 names in between included some of the largest asset managers in the world. Perhaps more importantly, the corporations who have responded to earlier inquiries are, if anything, even larger and more global. Responses to the latest questionnaire are scheduled to be posted on the CDP website (www.cdproject.net) in September 2007.
Enhanced Analytics Initiative. Begun in October 2004 by a group of large European investors, the members of this collective dedicate at least 5% of their research dollars to brokerage firms and other researchers which focus on "extra financial" issues, including environmental sustainability, in their financial analyses. Five percent may not sound like much, but EAI has grown like wildfire, and, in less than three years, now boasts institutional investors with assets aggregating some $2.4 trillion. Members and associates include money managers like AXA, AGF and BNP Paribas (France), Robeco and SNS REAAL (Netherlands), Hermes and Generation (UK), and Calvert (US), as well as major pension funds from Australia (Unisuper), Canada (Batirente), the US (CalSTRS), Germany (MetallRente), the UK (BT), the Netherlands (ABP and PGGM); and, a Swedish foundation. These are far from fringe players in the global economy. Moreover, the entire idea is that the research induced by EAI will be used by non-EAI members as well, thereby leveraging the entire project across the global financial marketplace. Here is more about EAI.
CERES. The fact that CERES can be considered a respected elder of the environmental/investor collaborative action movement after only 17 years in existence shows just how quickly environmentalism has entered the mainstream of the global capital markets. The Boston-based coalition of 80 environmental, investor and public interest organizations has continuously pioneered new engagement tactics, from some of the first environmental resolutions on corporate proxies, to the first standardized environmental reporting template for corporations, to serving as mid-wife for the Global Reporting Initiative which is now the global standard for companies reporting on their environmental, social and governance activities, to launching the Investor Network on Climate Risks. It continues to innovate. In February 2007, CERES coordinated concerned investors in their efforts to file resolutions at ten "climate watch" companies. It identified those companies as lagging their industry peers in responding to climate change issues. You can track the progress of those resolutions, and 32 other climate-related resolutions, at CERES.
Why are these hybrid investor/environmentalist groups gaining currency today? After all, neither EAI nor CDP even existed at the turn of the millennium. One reason is the unprecedented change in the ownership of the world's largest companies. In 1970, mutual funds, pension funds and other commingled investment funds owned just 19% of America's largest companies. By 2005, that number stood at nearly 70%. As dramatic as that change is, the cold numbers mask a key fact. The Fidelities and Vanguards of the world are not the ultimate owners; You and I are.
When I served as investment advisor to the New York City pension funds, I was very aware that the beneficiaries of those funds were the teachers, firefighters, office workers and other City workers. Multiply that dynamic across the thousands of commingled investment funds, and you realize that the owners of most public companies are not some few rich industrialists and financiers, but, increasingly, a wide swath of society. That phenomenon has broad implications which my co-authors and I explore in our book, "The New Capitalists". One of the most basic implications is that the actions of a company inevitably now affect the owners of the company. For example, consider water or air pollution. On purely economic grounds, it may make sense for a company to act irresponsibly if it can make others pay for those actions. If, for example, a company could pollute without affecting its owners, those owners would have no economic incentive to stop polluting (leaving aside morality, societal responsibility, etc.). Economists call this the ability to externalize costs. However, with an ownership base that resembles society at large, externalization is no longer an option. Owners affected by pollution (whether directly in terms of a degraded environment or indirectly in terms of higher taxes needed to remediate the problems) have an economic incentive to suggest that their companies behave responsibly in the first place. And, through their ownership rights, they have the ability to influence corporate behavior. In other words, if a company's ownership base starts looking like society at large, then the desires of the owners start to resemble the desires of society at large. Let's not overstate the case: Convergence is not the same as being identical. The societal obligations of companies are not unlimited, and the first obligation is to make money. After all, that's why we invest. Nevertheless, the dispersion of corporate ownership through commingled investment funds means that some number of societal demands and constraints upon corporations now are exercised through ownership rights, not merely through regulation and law.
Organizations like CDP and CERES take this ownership phenomenon one step further, by aggregating corporate owners around environmental and sustainability agendas to achieve critical mass. Prompted by that critical mass of owners to examine the effects of major environmental concerns (particularly global warming) companies have come to understand that sustainability and responsibility are not disjointed from creating shareowner value, but integral to it.
This is progress but not nirvana, or even generalized success. As CERES highlighted two weeks prior to this posting, there are innumerable laggards amongst the corporate community. Still, CERES, CDP and EAI have pointed environmental activists towards a very powerful tool some didn't even know was in the toolbox: Money.
So what can you do to harness this newest green tool? Here are several effective strategies. On a personal level, remind the intermediaries managing your money that you care about how they act as environmental stewards. Own a mutual fund? Belong to a 401(k) plan? Write to the fund manager(s) and ask them to vote for the various environmental issues on the upcoming corporate proxies. Suggest they become signatories to CDP. If you're about to invest in a new mutual fund, or want to check out one you already own, review its environmental scorecard. Mutual fund companies are required to report how they vote on the various proxy issues at the companies they own. You can ask for a report from your mutual fund company, or find it on-line through the SEC's search engine. Just type in your mutual fund complex and look for form N-PX.
If you work for an environmental or other NGO, or you belong to a defined contribution pension program, you have organizational options as well. Suggest to management that they explore membership in CERES. As the coalition states, membership "offers, direct access to key corporate decision-makers and the chance to advance environmental and social objectives by establishing long-term relationships between advocacy organizations and some of the most influential and economically significant corporations in the world."
Whatever your method of engagement, remember that making a compelling case for the bottom line results of environmental responsibility is critical. Bottom line arguments attract non-environmentally-centered institutional investors to the cause. That, in turn, gets corporate attention, since it increases the number of owners who support any particular course of action. The good news is that more than ever, those traditional investors are listening, and becoming convinced that there's a reason green is the color of money.