Are You Ready for the Year of the Retrofit?
You have to have a short memory to write for a blog. There is no point getting attached to a blog post because it will soon be relegated to the archives. With that said, sometimes I am reminded of a blog post that deserves revisiting.
After reflecting on the Waxman-Markey bill over the weekend, I am reminded of a prediction I made at the beginning of the year:
"Green" was the buzz word in 2008. In 2009, Green Building Law Update predicts that green buzz words will become more nuanced and the focus will be on "energy efficiency," "retrofits," and "existing buildings."
One of the three factors cited for the retrofit prediction was cap-and-trade:
Finally, climate legislation in the form of cap-and-trade is coming. Early investments now to reduce energy use through retrofits will pay off for big businesses.
Not bad! But you know what I missed? I never anticipated that the cap-and-trade legislation would be full of financial support for retrofits.
The post last Friday highlighted three different financing mechanisms for energy efficiency upgrades: (1) SEED funds; (2) the REEP program and (3) the GREEN ACT, which establishes a green bank.
Over the next five years, energy efficiency upgrades and retrofits will be big business. How is your company responding?
The GREEN Act was incorporated into the bill as part of the 300+ page manager's amendment. It passed along with the rest of the bill.
I hope that the current version of the bill does not go pass the senate. While the few provisions mentioned in your blog posts represent positive developments, the bill is also laden with provisions that are blatantly protectionist.
The sensible members of the Senate should strip the bill off the protectionist measures while leaving the green build provisions intact. Though, given the way Washington and the Obama administration operates, I won't count on it.
aml - laden with? i have read the bill and i think there is only one protectionist measure - the border tariff. The Obama administration has come out pretty strongly against it. in fact, i think that's the only piece the President has said he opposes. Why won't you count on it being removed in light of the president's objections.?
Another positive aspect to retrofitting existing inefficient buildings is that it is a source of good jobs for lower income workers. At a time when the recession is heavily impacting the poor, retrofits could provide a source for economic recovery from the ground up.
aml - Thanks for the comment. Can you elaborate on the "protectionist measures" in the bill? What sections are you referring to?
Paul H - I agree. It really does seem like a win win situation for all. Thanks for the comment.
Melissa - Thanks for the clarification. This post was written the morning before the bill passed so we did not have time to review the manager's amendment. Did you expect me to stay up until 3 am to get a copy? :)
Hi Chris,
You can find more information on the provision from the following article:
http://www2.macleans.ca/2009/06/24/why-barack-obama-is-bad-for-canada/
The good news is that the measure is not supposed to come into effect until 2020.
aml - Looks like President Obama does not like the provision you are discussing. Don't be surprised if it gets cut from the Senate version of the bill.
Media: One of the provisions that got added very late to this bill that senators had expressed some reservations about was the one that puts tariffs on goods imported from countries that don’t have these sort of restrictions. What do you think of that revision and would you like to see the Senate strip it out?
Obama: At a time when the economy worldwide is still deep in recession and we’ve seen a significant drop in global trade, I think we have to be very careful about sending any protectionist signals out there. There were a number of provisions that were already in place, prior to this last provision you talked about, to provide transitional assistance to heavy manufacturers. A lot of the offsets were outdated to those industries. I think we’re going to have to do a careful analysis to determine whether the prospects of tariffs are necessary, given all the other stuff that was done and had been negotiated on behalf of energy-intensive industries.
So certainly it is a legitimate concern on the part of American businesses that they are not disadvantaged vis-a-vis their global competitors. Now, keep in mind, European industries are looking at an even more ambitious approach than we are. And they obviously have confidence that they can compete internationally under a regime that controls carbons. I think the Chinese are starting to move in the direction of recognizing that the future requires them to take a clean energy approach. In fact, in some ways they’re already ahead of us — on fuel efficiency standards, for example, they’ve moved beyond where we’ve moved on this.
There are going to be a series of negotiations around this and I am very mindful of wanting to make sure that there’s a level playing field internationally. I think there may be other ways of doing it than with a tariff approach.
http://climateprogress.org/2009/07/06/krugman-vs-obama-on-border-adjustments-to-the-waxman-markey-climate-bill/