by Christian Bergland, Building Energy Exchange — May 9, 2019
On April 18, the New York City Council passed the Climate Mobilization Act (CMA), an ambitious legislative package aligned with the City’s 1.5°C Climate Action Plan. This plan represents New York City’s commitment to the carbon draw-down targets set out in the Paris Agreement, pledging the city to carbon neutrality by 2050. Central to the Climate Mobilization Act is Local Law 97, First-of-its-kind legislation placing emissions limits on New York City’s large buildings, both commercial and residential.
A new department, the Office of Building Energy and Emissions Performance, will implement and enforce CMA policies. This department, headed by a design professional, will work in concert with City agencies and offices to realize the CMA’s goals successfully. To this end, Local Law 97 also includes provisions for creating an advisory board tasked with hammering out detailed recommendations on the bill’s effective implementation and enforcement.
Requiring that buildings do their part to meet 80 x 50’s GHG reduction goals, Local Law 97 outlines two introductory compliance phases, with an initial period of 2024-2029. While some CMA specifics are set to be determined by the new department, initial compliance limits are fairly rigid, and are set to target those New York City buildings with the highest emissions intensity levels. Meanwhile, limits for the second compliance period of 2030-2034 are in line with the City’s interim emissions reduction goal of 40% by 2030 (40 x 30). The Office of Building Energy and Emissions Performance will have some discretion in determining the compliance path and the carbon calculation process through the rule-making process, but the 40% reduction limit is explicit in the legislation, with a requirement that any adjustments to emissions limits be at least as stringent as those laid out in the bill.
In addition to Local Law 97, the Climate Mobilization Act includes a number of other laws geared towards moving New York City’s buildings towards the City’s 80 x 50 goals, including:
- Local Laws 92 and 94—Green Roofs & Solar PV: Require green roofs and solar PV systems on certain new construction and renovation projects. Local Law 95—Building Labeling: Adjust the metrics used for letter grades assessing building energy performance.
- Local Law 96 – PACE: Establish clean energy financing tools for building owners (more on below).
- Local Law 98 – Wind Energy: Obliging the Department of Buildings to include wind energy generation in its toolbox of renewable energy technologies.
Thankfully, there are resources to help building owners navigate this evolving regulatory landscape. The NYC Retro Accelerator supports building owners’ efforts to improve their buildings’ energy efficiency. At the state level, NYSERDA has a number of programs geared towards putting buildings on the path to energy efficiency. And, of course, Building Energy Exchange is here to ensure that building owners thoroughly understand options to improve their buildings’ energy usage profiles.
Does Local Law 97 apply to my building?
The bill broadly applies to buildings 25,000 square feet and larger or two or more buildings on the same tax lot that exceed 50,000 square feet. The bill excludes houses of worship, buildings with one or more rent-regulated units, and other forms of affordable housing.
How are emissions limits determined?
Emissions reduction targets align with the roadmap set out in the 1.5°C Climate Action Plan and represent a 40% carbon reduction by 2030 and an 80% carbon reduction by 2050 relative to 2005 levels. Limits are assigned according to building occupancy type, with accommodations made for energy-intensive facilities involved in healthcare. Emissions limits for both the first and second compliance periods may be adjusted through the rule-making process. The table below shows that limits are set to become significantly more stringent during the second compliance period. Local Law 97 allows for these limits to be adjusted by rule-making, it mandates that any adjustments must be at least as stringent as the emissions limits put forth in the bill.
*Limits for the 2035-2050 period will be determined by the Office of Building Energy and Emissions Performance, but the legislation sets out a citywide average emissions intensity target of 0.0014 tCO e/sf/yr for all covered buildings by 2050, a roughly 60% reduction beyond the 2024-2029 limits.
Building emissions are determined according to designated greenhouse gas coefficients for various fuel types. While the bill assigns coefficients for the initial compliance period, the rule-making process will determine those for subsequent compliance periods. Local Law 97’s emissions reduction targets, including its increased stringency from 2030 onward, are premised on New York City’s electric grid becoming much cleaner in the future. A cleaner grid will allow building owners to tap into emission savings by converting from polluting carbon-fueled building systems to cleaner systems powered by electricity from the grid. Large-scale offshore wind farms, increased solar capacity, linkages with Quebec hydro-power, and movement towards a decentralized grid together promise to modernize our grid and increase electrification’s viability as a sustainability measure.
How can I pay for necessary building improvements?
Local Law 96 of the Climate Mobilization Act lays the groundwork for a property-assessed clean energy (C-PACE) program. C-PACE financing is tied to a property rather than property owners, meaning repayment obligations are transferable when a property changes ownership. This distinction helps mitigate property owners’ concerns about upfront costs relative to long-term energy savings.
Does the bill include any alternative compliance pathways?
Yes, the bill includes several alternative compliance pathways to help building owners meet their carbon reduction mandates, including:
Carbon Offsets During the first compliance period, up to 10% of a building’s annual emissions limit can be deducted by purchasing greenhouse gas offsets. Offsets are credits generated in response to greenhouse gas reductions by a given party that can then be purchased by or exchanged with other parties to compensate for emissions in excess of defined emissions limits. New York City’s specific rules surrounding offset purchases will be determined through rule-making, with a mandate for strong consideration of environmental justice concerns. The role of offsets in subsequent compliance periods has yet to be determined.
RECs
In addition to offsets, building owners can purchase unlimited renewable energy credits (RECs), also known as renewable energy certificates, to be deducted from their reported annual building emissions for electricity consumption. Renewable sources generate RECs through energy production, per Local Law 97 and by convention denominated in megawatt hours (MWh). The bill requires that RECs represent energy that is deliverable to the NYC area (meaning no wind power credits from Texas, for example) and generated in the same year as the building emissions for which they are compensating. Local Law 97 also mandates that RECs must only be used for compliance with this particular bill and cannot be used in conjunction with other compliance mandates
(essentially: no double dipping).
Carbon Trading
Carbon trading represents another potential alternative compliance pathway. Local Law 97 mandates that the City study the development of a citywide emissions trading scheme (ETS) focused on greenhouse gas emissions from buildings by 2021. Emissions trading, also known as cap and trade, allows for covered parties – in this case, building owners – to balance their emissions with credits purchased from other parties whose building emissions fall under the emissions threshold. In practice, carbon trading might also allow for property owners with large portfolios –universities and major real estate companies, for example – to offset the poor performance of some of their buildings with exemplary performance from others. Tokyo currently has the world’s only buildings-based emissions trading scheme and might serve as a model for New York City. As with greenhouse gas offsets, Local Law 97 mandates that the study incorporate environmental justice concerns to avoid localized pollution increases.
Hardship Waiver
Buildings facing financial difficulties, defended by applying tax liens or property tax exemptions, may be temporarily exempt from Local Law 97.
Emissions Limit Adjustment
A building facing mandated emissions reductions in excess of 40% of its overall emissions may receive an emissions limit reduction equivalent to 70% of its emissions limits in the 2018 calendar year.
Is everything set in stone?
No. While Local Law 97 establishes guidelines for limiting New York City’s building emissions, many of the specifics have yet to be ironed out. As noted, while the bill includes guidelines for greenhouse gas coefficients during the initial compliance period, subsequent standards will be set through rule-making. In addition, the emissions limits are subject to change and lack specific guidelines for 2035 onward. While there is some ambiguity regarding specific policies moving forward, you can still take concrete steps today to move your building toward compliance.
Where can I find information on how to improve my building’s energy performance?
The Building Energy Exchange has developed a catalog of published reports and case studies illuminating diverse potential compliance pathways for building owners. Specific resources of interest include: Tech Primers offer an introduction to leading-edge efficiency solutions limiting building energy use. High-Performance Retrofit Track: Participant Profiles highlight successful building retrofits completed by some of New York City’s most forward-looking building owners.
Turning Data Into Action utilizes New York City’s building energy usage bench-marking data to assess energy efficiency Pursuing Passive details the theoretical pathways for various building types. Retrofit of an actual mid-century post-war building to the Passive House standard. Better Steam Heat identifies opportunities for improving steam heating systems in large multi-family buildings Lighting the Way offers guidance on commercial lighting system upgrades that can reduce energy use. In addition to our resources, the Building Energy Exchange offers the Passive House Primer, a one-hour seminar on Passive House fundamentals and their application in the NYC market.
Outside of the Building Energy Exchange, other organizations include the New York City Retrofit Accelerator, supplying building owners with free advisory services to streamline the building improvement process. Building owners needing financing assistance can work with New York City Energy Efficiency Corporation, a non-profit specialty finance company that provides custom-tailored solutions to close financing gaps for clean energy projects. For those involved in the construction and building-maintenance trades, GPRO offers training in high-performance sustainability methods.
