President BidenJoe BidenMarcus Garvey's descendants call for Biden to pardon civil rights leader posthumously GOP grapples with chaotic Senate primary in Pennsylvania Trump social media startup receives commitment of billion from unidentified 'diverse group' of investors MORE, under the auspices of his campaign motto “Build Back Better,” is wasting no time in showing us that the next four years of federal energy, environment and climate governance will be markedly different than the last. This is especially true for the transportation and electric power sectors, both of which the Biden-Harris administration plans to rapidly decarbonize and modernize, as indicated by consistent rhetoric, cabinet appointments and executive orders, its responses to climate-related events like the Texas power crisis and, of course, the recently debuted “American Jobs Plan.”
However, some especially steep goals have been established in Biden’s plans for the buildings sector — namely to retrofit and otherwise improve the energy performance of 4 million buildings. While it has not been made clear which buildings are to be improved, indications are that this goal applies to commercial buildings, or approximately two-thirds of the U.S. commercial building stock.
First, some perspective.
Like the power sector, the buildings sector is a major emitter. Despite achieving a 5.2 percent year-on-year reduction in carbon intensity, the sector still generated some 35 percent of the country’s 2019 CO2 emissions. Yet unlike the power sector, whose carbon emissions COVID-induced lockdowns and entrenched market forces have significantly reduced, it’s likely that the building sector’s emissions problem will not fade at the rate needed to achieve Paris Agreement goals without government intervention.
At the time of this writing, the only major legislation to be signed into law wherein such action would be most appropriate — the American Rescue Plan Act of 2021 — is without any significant provisions for implementing the president’s plans to overhaul building energy performance nationwide.
For their part, clean energy and climate advocates and other groups in the “Build Back Better” tent are not discouraged. On the contrary, these groups are closing ranks behind the Biden-Harris administration and setting their sights on a once-in-a-generation infrastructure spending package to effectuate their mantra, similar to the more than $2 trillion agenda the president just unveiled in Pittsburgh at the end of March.
There’s just one problem. And that is Congress’s infamous track record of inertia and gridlock on major infrastructure legislation that, with the slim majorities Biden’s allies have in the House and Senate, may not change anytime soon, especially as arguments for austerity gain traction as the economy continues its recovery.
What’s more, it’s increasingly evident that non-building assets — electric power transmission and distribution lines, broadband, EV charging infrastructure, interstate highways, ports etc. — may attract the most of whatever economic and political resources national policymakers end up directing towards infrastructure. This is what makes charting a clear path forward for building decarbonization so important.
To that end, lawmakers and their constituents must understand that the U.S. government can drive significant building decarbonization without requiring new authorizations to establish, for instance, a first-of-its-kind federal energy efficiency standard for commercial buildings. Among other reasons, this is because roughly one quarter of all U.S. commercial buildings are public facilities, according to the 2012 and 2018 Commercial Buildings and Energy Consumption Survey (CBECS) data from the EIA.
The federal government is the single largest building owner and operator in the country and wields significant capacity to implement equipment and service procurement and building performance standards across its facilities. At the state and local levels, too, the U.S. government can scale and mobilize funding to support the implementation of efficiency-enhancing procurement and performance standards and outcomes of non-federal public facilities through existing cost-shared programs. Legislation that supports or otherwise incentivizes broader use of energy savings performance contracts (ESPCs) among federal, state and local agency directors and public facility managers is particularly relevant — for two reasons.
First, it’s comparatively easy to get through Congress and has the added potential of making more attractive any forthcoming omnibus infrastructure package in which it’s included — because this would mostly be a matter of directing additional funding towards well-established programs, such as the State Energy Program (SEP) and the Federal Energy Management Program’s (FEMP) AFFECT Program, via existing authorizations. More important, public facility managers that engage private sector partners via ESPCs can expect to leverage five times the amount towards energy performance enhancements that would be accomplished through federal funding alone.
But don’t take my word for it. There are emerging signs that support for these pathways is gaining momentum. For instance, House Democrats introduced in March the Open Back Better Act (OBB) of 2021, which supplements existing SEP and AFFECT appropriations with billions of dollars in additional funding over the next several years, with the requirement that grant recipients leverage private financing via ESPCs and similar mechanisms to the greatest possible extent.
Tellingly, the OBB is featured as a subtitle in the CLEAN Future Act (CFA) introduced by House Democrats in March. This not only substantiates the roles that building energy efficiency programs play in any comprehensive climate agenda, but also speaks to the OBB’s potential to mitigate the objectionability of the CFA’s more ambitious provisions — namely the headlining national climate target and clean electricity standard. We saw a similar dynamic play out with the Open Back Better Act of 2020 which was incorporated into the broader infrastructure-focused Moving Forward Act before dying in the Senate.
Evidence that the OBB’s provisions enjoy broad appeal is abundant. In addition to the CLEAN Future Act, the OBB is included as a subtitle in the recently reintroduced LIFT America Act, a sweeping, cross-sectoral infrastructure package that secured bipartisan support in the 116th Congress. A clear recognition of ESPCs as force multipliers for taxpayer dollars is evident in the March introduced Federal Building Clean Jobs Act of 2021, too, and is intended to facilitate the economic recovery of the U.S. construction and clean energy jobs through the use of ESPCs to advance the energy performance of federal facilities.
But the size, scope and, frankly, necessity of the government’s plans to decarbonize the electric power and transportation sectors will probably demand the lion’s share of the Biden-Harris administration’s resources — political and otherwise.
While that may mean the government divulges comparatively little about its plans to decarbonize the buildings sector in the meantime, that does not mean we are without a viable path forward. Lawmakers have at their disposal a variety of incumbent authorizations they can leverage to drive the modernization and decarbonization of our buildings in a timely and cost-effective manner. Let’s hope that’s not soon forgotten.
Dr. Timothy D. Unruh is executive director of the National Association of Energy Service Companies (NAESCO).