The NYC Climate Mobilization Act: How to start preparing for the future now - by David Unger and Marc Zuluaga

 

 

With the recent signing of the Climate Mobilization Act by the NYC Council, building owners and managers need to start planning for the future now.

The Climate Mobilization Act stipulates that as a segment, NYC buildings greater than 25,000 s/f will be required to cut carbon emissions 40% by 2030 (from a 2005 baseline), and 80% by 2050.  In total, approximately 50,000 existing residential and commercial buildings throughout the five boroughs will be impacted by this legislation.

The potential effects on buildings in NYC should not be underestimated, and in some cases the laws could require significant retrofits. On a more positive note, owners and managers can view this as an opportunity to put together a strategic plan that will allow them to convert to more renewable sources of energy over time.

Getting Started

To get ahead of the curve, below are several steps that owners and managers can begin to undertake in the near term:

1. Conduct an energy audit: To understand your building’s energy usage better, conduct an efficiency audit to identify everything that requires energy consumption. The audit will also evaluate how well each of these systems are functioning including HVAC systems, boilers, chiller plants, air handlers for cooling and heating, and lighting.

2. Identify critical problem areas: Based on data from the energy audit, identify the biggest issues to focus on first in your building, and begin to determine the best course of action going forward.

3. Adopt a long-term plan: To meet the Climate Mobilization Act’s goals of eliminating energy waste and increasing efficiency in buildings by the required timelines, it is important to adopt a long-term plan that will allow owners and managers to properly budget their time and resources.

4. Begin to execute your strategy now: By focusing first on solutions that can lower operating costs in addition to reduce carbon emissions, building owners and managers can get a jump-start on meeting the goals of the Climate Mobilization Act.

How It Will Work

The Climate Mobilization Act establishes reduction targets for carbon emissions based on building occupancy class. For example, multifamily buildings, office buildings, schools and storage facilities will all have different target levels. These targets will be strengthened over time as the law is phased in. 

Starting in 2024, buildings will be fined on an annual basis for carbon footprints that exceed their targets.  Based on their performance today, approximately 20% of buildings in NYC exceed the 2024 - 2029 targets, and approximately 75% of buildings exceed the 2030 – 2034 targets.

Instead of a performance-based target, rent regulated multifamily buildings with at least one rent stabilized apartment will be required to implement a prescriptive list of upgrades by 2024. These upgrades include indoor temperature sensors that provide feedback to boilers and apartment thermostatic controls.

Additionally, buildings with some types of affordable housing, properties facing financial hardship, and other specific unique conditions may allow for adjustments to the emissions limit, exemptions, or extensions for time to file. In particular, buildings containing certain types of affordable housing may be able to extend their compliance deadline to 2034, at which time NYC will have developed updated greenhouse gas (GHG) caps. 

What This Means for the Market

The lowest carbon producing buildings today will not be at risk of fines, but higher carbon intensity buildings will have to reduce their carbon footprint to avoid fines of $268 per ton of carbon emissions in excess of the building’s limit. 

The fuel source used by a building will be considered in this carbon-based metric, in addition to the amount of energy used.  For example, #2 oil results in approximately 40% more carbon emissions than gas per BTU.  To meet their 2030 target, older steam heated multifamily buildings will likely need to implement such upgrades as boiler replacements and multi-sensor heat controls.  In office buildings, owners will need to address the tenant electricity demands that dominate their carbon footprint.

It is important to note the Climate Mobilization Act does allow for GHG emissions to be reduced each year through the purchase of clean electricity, GHG offsets, and renewable energy credits. The law will require an advisory group to make recommendations regarding a carbon trading approach, which could allow the market to allocate resources across buildings more optimally.

While the requirements of the new Climate Mobilization Act may seem daunting, creating a thoughtful and organized plan now will go a long way towards mitigating most, if not all, of the potential costs and other burdens associated with this legislation.

David Unger is the CEO of Sentient Buildings and Marc Zuluaga is a managing director, Steven Winter Associates, Inc., New York, N.Y.