This article originally appeared in the Winter 2001 issue of our New Rules Journal.
Bonding With the Next Generation
Sometimes doing the right thing is almost too simple. Requiring publicly funded construction projects to produce no net increase in greenhouse gas emissions is one example: it’s hard to find the down side.
By David Morris
The scientific debate about global warming appears to be over. “There is absolutely no question that the climate is warming, sea levels are rising and glaciers are melting,” Robert T. Watson, the chair of the Intergovernmental Panel on Climate Change(IPCC), told Newsweek in early December 2000. (The IPCC was established in 1985 and reviews the climate situation every five years.) Five out of the six warmest years on record have occurred in the last decade. Small islands in the Pacific are beginning to disappear. Animals are migrating northward.
But the battle against global warming suffered a significant setback at The Hague in November 2000, when the parties failed to reach agreement.
Themajor stumbling block has been the United States’ refusal to accept responsibility for its disproportionate contribution to global warming. The consumption habits of one person in the U.S. result in the release of about 20 tons of greenhouse gases into the atmosphere each year. For a person in China the release is about 2.5 tons and for an Indian only 0.9 tons. In 1997, more than 150 countries adopted a framework for action that requires richer, industrialized countries to take the first significant steps, not only because of their disproportionate contribution but because they have more technological and financial resources available to do so.
Two years later the U.S. Senate voted 98-0 to reject any climate change treaty that does not require poor nations to accept similar pollution reductions. Today attitudes in the White House may mirror those in the Congress, where the reactions range from deep skepticism to outright hostility.
Whichmeans that Americans who want to meet their global responsibility will have to do it themselves – at least in the beginning. This doesn’t mean simply changing individual behaviors, but rather, changing the rules to channel entrepreneurial energy and scientific genius in a direction that meets the needs of future generations.
What should be done?
Manycities and some states and counties have enacted resolutions encouraging greenhouse gas reductions. Most are directed at higher levels of government. None have yet translated rhetoric into significant actions.
Here’s my suggestion for a powerful first step. Every city council, county commission, school board, state legislature and other tax exempt bond-issuing agencies in the country should require that any structure or piece of equipment that is financed with public money must satisfy our global obligation to reduce global warming.
The impact would be considerable and immediate. In 1999, for example, over $160 billion was borrowed by local and state governments for over 10,000 construction projects, ranging from city halls and shopping centers and schools to wastewater treatment and power plants. My home state of Minnesota, population 4.9 million, issued some $4 billion in tax exempt bonds that year.
Municipal bonds (called munis and referring to all tax exempt bonds issued by governmental entities, not only cities), are backed directly (general obligation bonds) or indirectly (revenue bonds) by local taxes. They are tax exempt because they serve a public purpose. Their issuance often requires the approval of local voters either at the polls or through their elected representatives. This makes them an ideal vehicle for initiating a vigorous grassroots conversation about local responsibility in an age of global pollution.
Buildingsand equipment are the single largest generators of greenhouse gases. A bond is a 20-year loan used to finance a structure that will last for 50-100 years. As such it is a compact not only with this generation, but with the next one and the one after that. We should insist that our next generation of structures will not burden the next generation of humans.
How would it work?
Thedesigner of a new structure financed by tax exempt bonds would have to estimate annual and lifetime emissions generated by the operation of the building and its internal machinery. The methodology for doing this is widely available and used today.
Let’s say a new high school is proposed. To keep the example simple, let’s also assume that, if built to the energy efficiency levels contained in the existing building code, the building would add 100 tons of carbon dioxide equivalent greenhouse gases to the environment. (Each greenhouse gas contributes differently to global warming. To compare overall global warming impact, engineers and scientists commonly translate each individual gas’s warming impact into a single comparative statistic: the quantity of carbon dioxide emissions that would have the same impact.)
The builder would have to comply with the performance standard adopted by the bond-issuing agency. That level itself would be the subject of much debate. The least burdensome standard and the easiest to understand would be one that required no net new greenhouse gas emissions as a result of the operation of the new or renovated building or equipment.
Astricter standard would adopt the Kyoto Protocol guidelines. These require that net greenhouse gas emissions be reduced by about 35 percent. (Actually, they require that emissions be reduced by about 5-8 percent below the 1990 level, but emissions have risen substantially since then. Hence the 35 percent figure.) The most challenging standard of all would be one consistent with the consensus of leading atmospheric scientists that to truly stabilize global climatic conditions we need to reduce by 75 percent current greenhouse gas emissions.
For purposes of this discussion, and perhaps as a concession to current political reality, let’s assume the bond issuing agency (city, county, school board, electric cooperative, etc.) adopts the “no net increase” standard.
Is it feasible?
Thefirst step for the building designer would be to make the operation of the structure as efficient as possible. Happily, we have an enormous amount of empirical evidence that proves that new or substantially renovated structures can reduce energy consumption by 25, 50 or even 90 percent below current levels with investments that repay themselves quickly.
There are hundreds of examples. Utah’s 120,000-square-foot Department of Natural Resources building in Salt Lake City beat the energy requirements of the standard building code by 42 percent with investments that were repaid in six years from energy savings. Pittsburgh’s 10-story, 175,000-square-foot Comstock Building uses only half the energy of other similar office buildings in the city, yet because of savings stemming from reduced need for mechanical systems, it cost $500,000 less to build.
Researchershave discovered that the energy savings generated from improved efficiency represent only a small portion of the total financial savings. Researchers at Carnegie Mellon University’s Intelligent Workplace design studio have compiled many examples of how productivity increases have vastly outweighed energy savings.
In Costa Mesa, California, VeriFone, a subsidiary of Hewlett-Packard that makes electronic swipe readers to verify credit cards, renovated a building that housed offices, a warehouse and light manufacturing. Its resulting energy use was 60 percent below that required by California’s strict Title 24 building code, yet paid for itself in seven and a half years from energy savings. More important to the company’s bottom line, however, was the five percent increase in employee productivity and the 45 percent drop in absenteeism after the renovation. Joseph Romm, of the Center for Energy and Climate Solutions, notes, “Workers in the new building no longer complain of end-of-day headaches or end-of-week sluggishness. They loved the extensive use of day-lighting and say the air was so fresh they felt as if they were working in a forest – no mean feat considering the building sits in the lap of the 405 freeway and John Wayne Airport.”
Several North Carolina schools cut energy consumption by 20 to 64 percent by using large southern windows to provide most of their light. The reduced cooling and lighting loads allowed for smaller, less expensive mechanical systems that cut added costs to less than one percent of the total construction budget. The daylighting system paid for itself in less than a year. But more importantly, students outperformed those in non-daylit schools on standardized tests by as much as 14 percent.
Whyare these practices not widely copied today? Because builders try to minimize the first cost, not the operating cost, of structures. Bond agencies reinforce this attitude. They want the most square feet per dollar, not the lowest operating cost per dollar. This results in a modest savings up front and an enormous waste of money over the life of the structure.
If the building were extremely efficient and if it relied solely on renewable energy, it could potentially generate no pollution. That is the ideal, but today we can realistically expect that even the most efficient structure would still require fossil-fueled energy for its lighting, heating, cooling and mechanical requirements.
To satisfy the bond agency’s directive, the builder would have to reduce greenhouse gas emissions outside the building by an amount equal to the additional emissions that would be generated by the building itself. These investments are called emission offsets. Today it is common practice to allow developers to plant trees in another part of the world as an offset. This makes some economic sense, but undermines the responsibility of highly polluting communities to mend their ways.
Thusanother important principle the bonding agency should adopt is that emission offsets must occur only within the geographical area encompassed by that agency. Developers could invest in improving the efficiency of an older school, or office building, or traffic lighting, but only within the community itself.
This is a propitious time for a national campaign entitled, “bonding with the next generation.” One reason is that we have learned what works. Another reason is that this can also be a strategy for tackling the current electricity crisis. Part of the strategy for meeting greenhouse gas emission goals will be to install power plants on-site.
Currentlycentral power plants located far from their customers waste more than 70 percent of the fuel burned to generate the electricity. That means more than two-thirds of the fuel burned adds to greenhouse gases. But a power plant installed on-site can capture the ordinarily wasted heat. More and more big buildings are moving in this direction. Chicago’s McCormick Place Convention Center installed a combined heat-and-power system that saves $1 million a year in energy costs and cuts carbon dioxide emissions in half. And a new generation of library or retail store or even residential-sized power plants is entering the marketplace.
Communities that join the “bonding with the next generation” movement would enjoy many benefits. One, of course, is the ethical satisfaction that comes from knowing that you are a member of a truly “responsible community.” Another is that you will save money. The trivial increased first cost of the project will be paid back many times over during the life of the project. A school district might have to increase its bond issue by $1 million, but over the life of the school might reduce operating costs by $10 million, an expense that also is paid by local taxpayers.
Andfinally, the community would be generating a large internal market that will provide builders, designers and engineers in know-how and experience that will be increasingly attractive. If a state the size of Minnesota were to adopt this do-no-environmental-harm bonding policy, at least a thousand structures would be affected each year.
Communitiesthat bond with the next generation can do well by doing good. It’s a proposition that should attract all political parties and ideologies.
David Morris is vice president of the Institute for Local Self-Reliance and director of The New Rules Project of ILSR
© 2001 Institute for Local Self-Reliance