The Importance of Climate Policy in Cities with Laurie Kerr

Kelly: (00:06)
Welcome to buildings and beyond

Robb: (00:09)
The podcast that explores how we can create a more sustainable built environment.

Kelly: (00:13)
By focusing on efficiency, accessibility, and health.

Robb: (00:18)
I’m Robb Aldrich.

Kelly: (00:19)
And I’m Kelly Westby. Sometimes you have to go backwards to go forwards. Several weeks ago we ran an episode on New York City’s new existing building carbon bill. This bill did not come from nothing and in order to translate this legislation to other cities around the country and the world, we need to look at the series of policies that brought us here. Today, we are going to take a step back to dive into the initial steps towards sustainability policy and then look to the future to see how other cities are or can be getting on the road to carbon neutrality. And I don’t think there’s a better person to take us on this journey than Laurie Kerr. Laurie is a national leader in urban sustainability policy as deputy director for green building policy at the New York City Mayor’s Office of Longterm Planning and sustainability under Michael Bloomberg. Laurie helped develop plan y c New York’s influential sustainability plan and spearheaded the development of New York’s innovative green building and energy efficiency policies. Subsequently, Laurie conceived and launched the city energy project at the National Resources Defense Council, which is assisting 10 major American cities from Los Angeles to Chicago, Houston and Atlanta and developing large scale efficiency projects similar to New York. She is now the president of LK policy lab. Speaking of carbon policy, remember to join us on June 27th 28th at the 2019 North American Passive House Network Conference, which will be at the Metropolitan Pavilion in New York City featuring presentations from industry experts on cutting edge strategies for achieving low carbon, high performance buildings. This year’s conference is gearing up to be the best to date and even includes sessions from my cohost, Robb Aldrich, among other SWA folks. And of course don’t forget to sign up for some of the incredible pre conference workshops. These will take place on June 25th and 26th. I’ll be talking about commissioning, how to make sure your high performance building actually performs. You can also hear the buildings and beyond acoustical director, Dylan Martello and plenty of others. Use the code n a p h n 19 star s w a to receive a 10% discount on the standard two day conference and expo pass for more Info on the 2019 n a p h n conference visit. The show notes page for this episode.

Kelly: (02:47)
Thank you Laurie from for being on this podcast with me today. We actually just had an episode on the basically groundbreaking carbon caps for buildings. But obviously it didn’t come out of nothing. You’ve done a lot of work over the past 13 years, over a decade, looking at what we should do to kind of get on the path to low carbon. So that’s what we want to talk about today. We obviously focus on buildings, our podcast is called buildings and beyond, but can you give us a little background on why New York City has decided to have a pretty big focus on buildings or at least looking at buildings and energy use and what the impact is on the environment?

Laurie: (03:38)
Well, before I went to the mayor’s office, I got a sneak peek of the city’s greenhouse gas emissions inventory and what I saw was really surprising. 75% of the city’s greenhouse gas emissions came from energy used in buildings. We didn’t know that before that and that really focused our mind. I also did the math on our growth rates and figured out that about 85% of our buildings in 2030 were buildings that we already had in 2005. So that meant clearly that if New York wanted to address climate change, it would have to focus on its existing buildings. But there were no models. What do you do? The energy codes are all designed around new buildings, existing buildings, unless they’re making some improvement are allowed to run inefficiently forever. That’s just the way it works. So I remember pouring over the data and trying to figure out what we should do. And Maryland Davenport, who was the doyenne of the real estate industry walked by my desk and started asking me a few questions and I guess my answers were pretty poor because she said, you poor dear, you really don’t know very much do you? But we learned a lot and we did a lot. We eventually came up with the world’s first comprehensive plan to address energy use in existing buildings. It was called the greener greater buildings plan, but we did other things too. We launched a green codes task force to green the city’s laws and regulations related to buildings and we developed a series of policies including the Mayor’s carbon challenge to many different sectors eventually. And then we launched the New York City Energy Efficiency Corporation to help with financing. We launched BEEx to help with training and information. So it was a very broad brush set of programs and policies

Kelly: (05:58)
And BEEx is building energy exchange.?

Laurie: (06:00)
Yes.

Kelly: (06:00)
Okay. I just like to define all the acronyms here. And so kind of diving in a little bit to that greener, greater buildings plan, you outlined these couple of things, some of them I guess at this stage it sounds like most of those things are still promoting good habits but not necessarily requiring specific things. Like you were talking about building energy exchange that’s educating the market. You talked a little bit about the greenhouse gas inventory that’s just measuring what are we doing here? How did we transition into some laws around what buildings would start to have to do?

Laurie: (06:47)
So the greener, greater buildings plan which was our biggest effort focused exactly on energy in existing buildings, has a couple of features. About half of it is about information. So the benchmarking and the audit piece, which I’ll explain are really about information. And then there are some requirements to reduce lighting energy and to submeter, and to Retro Commission, which are about making improvements. But I want to go back a little bit. Cause it’s partly what we did and partly how we eventually grappled with this very complex industry. New York City actually has a million buildings. There are big ones, little ones, old ones, new ones. It’s just a very complex disorder. And that’s what Maryland Davenport was kind of getting at. Right. And our big kind of key to solving that, at least in the first phases was when I was looking over the, the data and I realized, Hey, wait a minute. Half the square footage is contained in 2% of the buildings, the buildings larger than 50,000 square feet. So that’s how we should start. And those buildings aren’t only a little easier to get to cause there are relatively few of them, 20,000, approximately, but they also are a little more sophisticated. They usually have a professional management companies in charge. So that seemed like the place to start. So the greener, greater buildings plan is focused on those larger buildings.

Kelly: (08:38)
And I want to dive in on that a little bit because I think, and potentially based on recent New York Times headlines, but I think there’s sort of this misconception that, that some, that our industry is focused on these big, big buildings, even though, you know,, there is some efficiency benefit to having a larger building with less envelope per interior area for example. But I think getting to that point of, well, it’s actually just easier to address climate change when you’re talking about 20,000 buildings covering most of the square footage versus the whole million square build a square feet. Well, million buildings that you mentioned that, that have all these individual owners and individual points of points of entry and might have be less cost effective to do anything about.

Laurie: (09:32)
Exactly. I think some of the press coverage on this that seems to imply that big is bad was not our thinking at all. A big as good in many, in many, many respects, density is very good in terms of reduced carbon footprints per capita. So it really was about being effective. Yeah, from a policy point of view. So, you know, one of the things we realized is that you know, you go to buy a refrigerator or a car and you get some information about how efficient that is, but these really huge objects that we have that use so much energy, buildings, people don’t know. There’s no tag on those buildings that tell you whether the building’s efficient, even the building operators and building owners don’t know. So we felt that we needed to start measuring the how much energy buildings used and we needed to make that public.

Laurie: (10:41)
And the idea was that if that you can’t manage what you don’t measure. And so benchmarking, which is the process of doing that measurement was kind of the foundational policy. We didn’t exactly think it would do anything, but we thought we needed it to build on it. It turns out that it actually might do some things. And, and you know, in the reports on energy consumption that are come out every year in New York City from the benchmarking and now the audit ordinances. We see about a 2% energy reduction year on year for buildings that consistently benchmark. So it’s a correlation. It’s not necessarily causal, but it’s very promising. And it, it accords with data from EPA and from other cities that have passed benchmarking ordinances. So that policy may have done somewhat more than we actually anticipated.

Laurie: (11:45)
That’s great. But we also wanted to require cost-effective retrofits even in this first past, so we drafted this ordinance that required that buildings do audits and then they had to do the package of measures that paid for itself in five years. We decided on a payback horizon at that point that seemed fair. But as we delve deeper, we realized it wasn’t fair because building owners would have to pay for retrofits to central systems, but because of a split incentive problem in leases, the tenants would accrue the benefits of the five year horizon wasn’t realistic, wasn’t paying people back. So we had to go back and correct. We came up with the energy aligned lease clause which fix that. And so so we replaced the mandatory upgrades with a requirement that lighting systems be updated to meet code and that commercial tenants be sub-metered for their electrical use.

Kelly: (12:50)
Great. And did we have any results? Was there any other successes besides you mentioned that you saw that even just benchmarking could kind of move the ball forward. Did you see any other successes through the work that you did?

Laurie: (13:09)
I think that one of the biggest successes was the data that we captured. At the time that we, after we passed the audit ordinance, I started thinking, you know, we shouldn’t really let these audits just pile up at the department of buildings. Why don’t we collect the information systematically and then we can have an electronic database that we can actually study and learn from. And then we brought together all the great brains in New York and created a good matrix of information that we wanted to collect. And that’s turned out to be a gold mine. We now know not only how well our buildings are performing from benchmarking, but we can look under the hood and see why and we can see what systems are more or less efficient. We can see where we have opportunities citywide to make improvements. So that I think was has been a really exciting success. Another one was the Mayors carbon challenge program, which we originally launched for just universities and hospitals. But over the years it’s expanded and it’s now covering 10% of the square footage of the city. I mean, it’s just taken off.

Kelly: (14:31)
So 10% of the square footage is participating in the carbon challenge?

Laurie: (14:35)
Exactly. And those participants are required to reduce their carbon emissions by 30%. So that’s been just a runaway and surprising success.

Kelly: (14:49)
Great. And those those participants are achieving those savings?

Laurie: (14:54)
Some have some achieved them in like five years. Some are on the road. Some of the great success stories have been FIT, NYU, you know, so those are some of the early players who achieved their carbon emissions very quickly and then signed onto a 50% carbon reduction. So some have gone to the next level. So I don’t, we didn’t expect that at all.

Kelly: (15:21)
Yeah, that’s, that’s amazing. And I know those guys have been doing a lot of work, especially the universities we’ve seen making a lot of movement towards this, these goals. So that’s great. And were there any disappointments?

Laurie: (15:32)
Yes, I would say the audit and retrocommissioning ordinance has been a real disappointment. Building owners in general. Sod is a box they had to check and they wanted just to pay less money. So we got to kind of race to the bottom in terms of the quality of the audits and maybe even the retrocommissioning. So, you know, right now there’s a effort underway to improve the retrocommissioning requirements. I think that can be fixed and I think there have been benefits for that piece. But the audit piece, if I had to do it all over again, I wouldn’t put that requirement in. And also in the meantime, people have developed strategies to tease out more actionable information from audit, from benchmarking. So we don’t need to make the building owners go through that trouble and expense anymore, I think.

Kelly: (16:29)
And so I guess there is always this concern with, I’m a little bit going off on a tangent here I think, but with data integrity from the benchmarking data. So how do you see kind of pulling out information on building systems from the pure kind of energy data versus getting it from an energy audit or some other kind of system of someone actually going into the building and looking at the different systems? Potentially both could have data integrity issues, but kind of where are your concerns around that?

Laurie: (17:12)
We studied the data quality issues extensively after the first year of benchmarking. And what we found was that there were a lot of mistakes because people were new at the process. We didn’t see any evidence of large scale manipulation or cheating. It really seemed to be mistakes and people needed to be better trained. That said, my biggest concern on data quality is not inaccurate submissions or fraud, although I’m sure there’s some of that, I don’t think it’s large scale. My biggest concern is the accuracy of building square footage. And I think that data is not good and it’s really important. And I would love to see in new laws going forward, particularly if we’re looking at a per square foot carbon cap that people actually have accurate square footage that really is foundational. Right. And it only needs to be done once, but it needs to be done once.

Kelly: (18:19)
Yeah. That’s interesting cause I was saying to a colleague, even in new construction, it’s hard to tell what the square footage is, that there’s six numbers probably on the first sheet, depending on whether you’re talking about the zoning’s square footage or the residential square footage. And so even internally people might say square footage of a new building and there’s six different answers. So kind of nailing that down.

Laurie: (18:41)
The EPA has a very specific definition. And the reason the EPA matters is that they’re the people that created and run the benchmarking tool that the city uses. So that definition is the definition we need to be using.

Kelly: (18:59)
Great point. So there were some good things, some, some maybe things we would do a little bit differently next time. What are the next steps from, from this?

Laurie: (19:09)
Well five or six years ago when the Bloomberg administration was coming to an end I thought, you know, the next big thing would be to, if we want to have a national impact with what we’ve done here, is to create replicable policies that other cities can use. So, you know, cities are wonderful in that they’re politically proactive. They’re engines of creativity. But the downside is they’re so damn many of them. So if they all try to reinvent the wheel, we’re not gonna get anywhere. So I thought, let’s create basic policies that cities can adapt, but they have kind of a lead like handbook of you can do this policy or that policy, you’re a range of proven policies that you could utilize. So I proposed that we got 10 million in funding through NRDC and cities from Los Angeles to Chicago to Atlanta signed on. And that program was called City Energy Project. And five years later, it’s been re-upped several times. And now 35 cities across America now, including San Jose and Saint Louis, New Orleans, they’re all pursuing some of these foundational policies.

Kelly: (20:36)
Great. And which of the policies are really taking off among the 35, do you have a sense of that?

Laurie: (20:44)
The biggest uptake is certainly benchmarking. It was required really to be part of the program and to get funding. So you basically had to do benchmarking and a lot of cities that aren’t in this program are also doing benchmarking.

Kelly: (21:00)
And I think I even saw L.A. Is, is kind of going down the path of the carbon emissions caps that we kind of looked at in New York too. So it seems like there are kind of other cities following the footsteps or kind of moving forward in a big way. What, what have you Learned? Your work was really very much focused in New York City and you were working with all of these different cities to develop policies that were replicable. What did you learn and kind of moving beyond New York borders and how other cities might be different or it might be similar?

Laurie: (21:39)
Interestingly, city profiles are surprisingly similar. So in most cities, buildings are the dominant source of greenhouse gas emissions between about 50% and 70%. Even in a sprawling city like L.A. where you might not expect that. The only city I think that falls out of that is Seattle because they have so much carbon neutral electricity. And that varies quite a lot from the national average, which is 38 or 40% coming from buildings. So there really is a city strategy that focuses on buildings or it makes sense. The other thing that was surprisingly similar is that concentration of square footage and energy usage in the largest buildings. So it might not be 2% of the buildings and all the cities, but it’s not more than three or 4% to capture pretty much half the square footage and energy use. So those basic strategies of focusing on buildings and focusing on larger buildings turned out to be, you know, very applicable across most of America’s cities.

Kelly: (22:55)
But with like a different square footage threshold by city?

Laurie: (22:59)
Yes. So we went to 50,000, L.A. Had to go to about 35,000. L.A. Was not able to get to 50% even with that because they really do have smaller buildings. But of the 10 cities in the initial cohort, they were the only one that didn’t really fit that profile that you could fairly easily capture half of the square footage. So I think in terms of differences between cities, of course every city wants to have its own flavor of what it does, but that hasn’t been that dramatic. I think the biggest difference right now is going to be timeline. You know, what has a city already done and where is it now on the path. And that really matters because time’s getting short. So in New York, we started early, we had the luxury to think and study our building stock. And I think other cities don’t have that luxury anymore. The ones that are coming down the pike right now, they probably have to start with the foundational policies, but they’re going to quickly have to pivot to deeper requirements.

Kelly: (24:15)
Okay. And so if I’m a mayor then in one of these cities that maybe hasn’t gotten started, maybe isn’t even on your list yet, what would you recommend for me?

Laurie: (24:28)
Well, I would still start with the foundational policies, such as benchmarking, leading by example programs, so that the city government is, is reducing its energy first carbon challenges. Those are great in terms of engaging the community. And in the course of designing and implementing those policies the real estate community becomes involved, becomes educated, you know, and I just can’t emphasize that enough. I think one of the biggest things that we did in New York and other cities are doing to make this work is really creating a community of educated professionals by and large who understand the issues and are becoming kind of thought leaders in terms of how to solve them. Would you say

Kelly: (25:25)
That is sort of spurred on by the building energy exchange or is there, are there other sort of policies or things you put in that were put in place that kind of moved the industry towards an educational?

Laurie: (25:36)
I would say it’s been a whole range of things, but primarily it’s been the dialogues that have been created. So in developing the greener, greater buildings plan, we brought in industry to advise in creating the, the, in every single thing that we’ve done, we’ve brought in the industry to advise because we didn’t know enough that, I mean quite honestly, we didn’t do it to be a, to create a community. But I realize in retrospect, that’s been a great thing. So, when the Department of buildings wants to change the energy code, it brings in the experts. There’s a dialogue, there’s a conversation. And with every single thing that we’ve done, it’s been that way. And you know, all the nonprofits from urban green to ASHRAE, to the American Institute of Architects to building energy exchange, they all have programs. They all have a conversation. So that conversation building that conversation is critical. And so I think any city has to start with the foundational policies, build the conversation, and then they will be in a position to start to require some of these more ambitious requirements like you know, energy reductions, however they’re shaped. I think you’re not going to do that without building building support and knowledge about what the capabilities are. Otherwise it’s just frightening.

Kelly: (27:16)
Right. Sort of retrofit all of this in the dark with no understanding of how buildings work. That could lead us to down the very wrong path for sure. Okay. So now, if I’m an energy efficiency proponent in a city that hasn’t gotten started yet or maybe hasn’t made a lot of moves yet, I know my friend from Australia complaints that they’re behind us in the U.S. Even, what, what should I do as a proponent to get started? Is there anything I can do to move the industry forward?

Laurie: (27:52)
I think it’d be pretty hard at the individual level. So, you know, I would get involved with a local institution that has some clout, like the local chapter of the American Institute of Architects or US Green Building Council or Boma, any, any one of those groups that convenes. And then I would try to use that that venue really to create a citywide discussion. And, you know, maybe that institution could start inviting people from other cities to come talk about what they’re doing. They could maybe do programs on success stories in the cities. They could invite people from the administration, people from city council to come to those meetings. So you have to kind of create a, you have to create interest. You have to start educating people. You really have to prime the pump.

Kelly: (28:55)
Yeah, that’s a great point. And it’s actually interesting. I think we get stuck in our own bubble in all of the different bubbles that we might be in, whether you’re in la or, or another city or, or New York. I’ve definitely been stuck in my own bubble before. But one thing that was really interesting for me when we were on the advisory committee for the energy code here, we brought in someone from the city of Seattle to explain, because, you know, we, we’ve developed some existing building laws, but actually Seattle’s new construction laws are somewhat ahead of ours. So we brought them into to educate us a little bit about about building blower door testing and a couple of different elements that we were looking at. So I think that’s a really important point to say that the, there’s a global network of people about these things and of cities doing these types of things and, and you don’t have to reinvent the wheel.

Laurie: (29:46)
Absolutely. And there are a number of programs. The city energy project was one, but there’s the C40, which is a large cities around the world sharing best practices. There’s the urban sustainability directors network that is a platform for a lot of exchange of best practices across sustainable urban sustainability policies. But buildings is certainly a big piece of that. And I think there’s all, there are others.

Kelly: (30:26)
Yeah. Great. We’ll throw a couple of links in the show notes. So we talked a little bit about energy efficiency, but after kind of a carbon neutral future, what do you think are a few key elements to getting us towards this carbon neutral future?

Laurie: (30:44)
Well, I’m going to stick with the building sector because it’s what I know. And assume that people working on transportation and wastewill figure their, their pieces out. But within the building sector, you know, I think everybody’s come to a consensus that there are three big things that have to happen. One is pushing efficiency as far as, as reasonably possible. The second is we’ve got to decarbonize the grid. The third is we have to electrify as much as we can. The fuel use. In other words, we have to get off fuel for heating and hot water as much as we it fossil fuel for heating and hot water as much as we can. But that’s very rational. But it’s actually a really tall order and I’m afraid that is not practical to get us all the way there. I think practically we could use those strategies and we could get to maybe 70, 75, 80% reductions particularly in the colder and older regions of the country. So California or Hawaii, which is already highly electrified, they can probably get to carbon neutrality with those methods and they’re probably on the path to do it. But in places of a country that are heavily dependent on fossil fuels electrifying the tens of millions I’m talking tens of millions of buildings would have to be electrified in that swath of the country that goes from North Dakota to Maine and from, and all the way down to, you know, Virginia or even a little further south. That’s gonna cost a fortune and it’s a Herculean job. You know, the other problem with it, the other problem will be in this broad swath of the country, is that even if we achieved full electrification, can the electrical grid support it without massive infusions of cash in order to grow the electrical grid to, to handle the increased load.

Kelly: (33:05)
And adding all the renewables and all these things to get the grid off of fossil fuels as well.

Laurie: (33:11)
I think, I think that maybe is a little bit easier, although maybe not, I’m not a grid person, but absolutely there has to be a lot of storage. I think that goes without saying that we have to decarbonize the grid or mostly decarbonize the grid. But it’s really the growth of the grid that worries me the most with these new strategies, particularly if we’re looking at electrifying vehicles, which I think we are. So so I’m going to go out on a limb here. I’m going to say that we need a fourth strategy and that, or we might need a fourth strategy in our back pocket and we should be looking at carbon neutral fuel. And I don’t mean by this, you know, waste to energy, although that needs to be a piece of it. And that could be a starting piece. Like the Newtown Creek wastewater treatment plant that takes New York’s waste and turns it into methane and now is, is selling that methane or using it. That’s a start, but it’s not going to be enough for what we need. There are scientists working at the national labs and in universities and some entrepreneurial situations that are looking at creating methane from water and carbon dioxide using sunlight or carbon neutral electricity. And right now, of course it’s very expensive, but solar energy and wind energy were very expensive. So before we really started to make the policies that supported investment in, in those areas. So I think we should start going down the road with carbon neutral fuels on that, you know, promoting the science, promoting the early technology, and maybe even starting to layer in a carbon a renewable energy standard for fuel.

Laurie: (35:19)
So we did that with electricity, so a renewable portfolio standard for fuel means that the grid has to have a certain percentage of carbon neutral energy. And we did it for electricity, I think it helped fund, you know, a lot more solar and wind in that brought the price down. So if we started to do that with fossil fuel, we could start, of course, with waste to energy and then expand as these other strategies hopefully are developed. The reason I think this makes sense is that, look, we already have billions invested in our gas grid. Our buildings have billions invested in terms of their fossil fuel burning equipment. So, you know, reutilizing that for low carbon or, or no carbon fuel is, you know, in terms of the infrastructure a very cheap way to do this. So as I say, I’m going out on a limb. I don’t know that this is the answer, but I’m very worried that the other solutions won’t get us there. So all of that’s to say we, we should be exploring this, but it shouldn’t be something that deters us from aggressive action on the big three that we know we have to do.

Kelly: (36:48)
Right. And you know, that’s an interesting point. It reminds me, I actually, fun fact, when I was at Columbia, did research in waste to energy and one thing that people thought about is, well, if we have a lot of waste to energy plants, will it deter people from recycling? Now I think there’s some new information from different places. I haven’t been in the industry for a decade, but but at the time when we looked at waste to energy versus recycling cities across the world, that there was actually a positive correlation. If you recycled more, you also did more waste to energy. So there wasn’t this negative. Yeah, that’s a little fun fact. I’ll have to see if there’s any new information on that and link to the show notes. So that was a a great and funny twist at the end there. But in, in terms of kind of everything we talked about from everything that you, you know, from your deep bench of experience and buildings, what do you think we’re going to be talking about in five years when we have you back on the podcast?

Laurie: (37:53)
That’s a good question, which I’m going to dodge. I am gonna say that I’m more optimistic about us getting to these goals than I used to be. And I think that’s for at least two reasons. One is how how quickly the a net zero electricity revolution has moved forward. I just, I didn’t see it coming. And suddenly New York state is in a position to commit to 100% carbon neutral electricity by 2040. That’s just fantastic. And Yeah, none of us saw it coming. So that’s, that’s a great thing. The other great thing is I think the political winds have changed on this subject over the last and over the last year or two. I think, you know, the IPCC report really got people frightened in a good way. And I think AOC throwing out the idea of the green new deal, there might be pros and cons, but I think the energy that she spurred by doing that has been a really positive thing. So, you know, I’m, I’m seeing a lot of positive movement. A lot of players getting into this who weren’t there before, who are, you know, coming up with great ideas and moving this along at a nice fast clip. So that’s exciting.

Kelly: (39:31)
That is a wonderful note to end on. And I just want to thank you for being on our podcast today.

Laurie: (39:38)
You’re welcome. It’s been a pleasure.

Speaker 4: (39:43)
Thank you for listening to buildings and beyond. For more information about the topics discussed today, visit www.swinter.com/podcast and check out the episode show notes buildings and beyond is brought to you by Steven Winter Associates. We provide energy, green building and accessibility consulting services to improve the built environment our professionals have led the way since 1972 and the development of best practices to achieve high performance buildings. I’ve production team for today’s episode includes Dylan Martello, Alex Martello, and myself. Heather Breslin, thank you for listening and we’ll see you next week.