The Climate Change Compromise and Energy Efficiency: Congress and the President Intersect in Your Building Thermostat

    8 July 2013

    As the 113th Congress grows more antagonistic, it seems that energy efficiency is one of the few issues on which almost everybody in the government can agree.  Using energy more efficiently saves money, helps prevent pollution, and often creates jobs.  As Senator Bernie Sanders (I-VT) said in a recent Senate subcommittee hearing, becoming more energy efficient is “the lowest-hanging fruit” in the United States’ effort to save energy and combat climate change.

    This consensus is especially relevant in the context of the Energy Savings and Industrial Competitiveness Act of 2013 (S.761), also known as the Shaheen-Portman energy efficiency bill, and the nine amendments it now faces in the Senate Energy and Natural Resources’ Subcommittee on Energy.  S.761 was widely hailed as a common-sense, bipartisan solution to our nation’s host of energy problems, and its potential amendments strengthen its energy efficiency programs.  The original bill updates many building codes and establishes a federal financing program to retrofit commercial buildings.  Proposed amendments include provisions to:

    • Further improve the energy efficiency of commercial buildings by focusing on tenants (i.e. businesses like law firms) within them;
    • Establish a “Tenant Star” program modeled after the popular Energy Star program;
    • Create a public information-sharing system on commercial buildings’ energy efficiency, which is expected to increase demand for efficient buildings; and
    • Finance retrofit projects for nonprofit organizations, among others.

    The Shaheen-Portman energy efficiency bill is expected to arrive on the Senate floor, with many of these amendments included, by mid-July.

    This White House shares this enthusiasm for energy efficiency, as shown by, President Obama’s June 25 speech on climate change, a speech that disappointed many environmentalists.  Stymied by congressional opposition, the President has shifted his climate change goals away from ambitious ideas (like a carbon cap-and-trade bill) to more realistic short-term goals he can accomplish through executive action —cutting power plant pollution, improving fuel economy, and reducing energy waste in homes, industries, and businesses.  In other words, both Congress and the president have identified energy efficiency as a proactive, attainable, and marketable solution to the many problems of climate change.

    How does this enthusiasm translate in practical terms for the private sector, especially those who own, manage and develop commercial real estate? If you own, lease, or do any sort of business with commercial or federal buildings, you will likely soon be subject to many new federal requirements, both contractual and regulatory, to encourage energy efficiency. 

    While these efforts make good headlines, they may result in new headaches for business, as there has been little effort to harmonize these efforts with other active federal real estate initiatives.  To take one example, major efforts began early in the 2000s to make federal buildings less vulnerable to terrorist attack.  But reconciling the “Fortress America” mindset of the antiterrorism guidelines with increased energy efficiency will take significant effort, given the emphasis in energy efficiency efforts on natural light, large windows, public transit, urban locations, and natural ventilation.  Smart managers and owners of commercial real estate will be well served to identify these conflicts soon enough for Congress and the Administration to make practical accommodations to these potentially costly overlaps in mandates. Otherwise, much of the energy efficiency benefit of the new requirements will be delayed or lost, while compliance costs will be needlessly raised.

    Patton Boggs Intern Joseph Toth contributed to this posting.