Why NAIOP Cares About the Energy Efficiency Debate
For several years, Congress has been debating the merits of energy efficiency and has struggled to define what role, if any, it should play in advocating for new building codes aimed at increasing energy efficiency in the built environment.
During those debates, NAIOP has educated our elected leaders by showing them that, if done properly, energy efficiency can not only obtain a social good (less energy equates to fewer carbon emissions), but it can also save business and property owners significant amounts of money in terms of operating costs.
However, the idea that saving energy saves money is not necessarily an absolute truth. The theory, if only looked at as a one-dimensional solution, isn’t always applicable in real world situations. To better understand the complexity, let’s look at a couple of questions that arise.
First, if businesses can save money reducing their energy costs, then why does the federal government need to promote better building codes? Similarly, shouldn’t developers that have a vested interest in saving money on their operating costs already be developing properties with the highest level of energy efficiency available?
Since we know the Department of Energy (DOE) is already advocating for the adoption of new codes at the local level, and they help set efficiency targets as these new codes are created, NAIOP believes that some safeguards regarding costs need to be baked into the equation. It’s less of a question of should DOE be involved in the process and more of a response to the fact that their involvement is already reality that can’t be ignored.
Building codes have always been developed by non-government entities, and adopted by local or state governments to suit their individual needs and climates. In practice, DOE has been very influential in not only determining the efficiency levels of codes as they are created, but also in advocating for their implementation across the country. Their advocacy has often been one-sided when it comes to promoting energy efficiency and the costs to adopt strict efficiency codes are rarely considered.
Then there are those who think developers are shortsighted when it comes to employing oftentimes expensive technology to make new buildings and retrofits energy-efficient. Groups whose sole mission is to advocate for higher efficiency building codes rarely seem interested in learning about the actual business model for development. Terms like occupancy demands, return on investment analysis, differing lease agreements (who pays for the electricity bill) and asset valuations are seen as distractions to the conversation, or worse, irrelevant.
These conversations, which have taken place numerous times in formal congressional committee hearings, during staff briefings, and over informal lunches (D.C.’s equivalent of a board room negotiation) between real estate industry representatives and energy efficiency advocates are starting to bear fruit.
Most recently, the House and Senate committees with energy jurisdiction have either passed bills or have scheduled mark-ups that increase DOE’s role in the code writing process, but only after they first determine how much money the new codes will cost developers and then show the return on investment. This isn’t the first time legislation was introduced with those notions embedded, or even the first time that similar legislation moved through congressional committees. What is seemingly different this time around is that there is a groundswell of interested entities, all working to advance energy efficiency in a way that takes into account business realities.
NAIOP stands alongside with Republicans, Democrats, energy efficiency advocates, and environmental groups in promoting legislation that looks at energy efficiency from a combined perspective. While heading into an election cycle has never been a recipe for fast-tracking legislation, we remain hopeful that this Congress will ultimately pass something into law, knowing that our negotiations have led to sound energy efficiency policy.
