Considering that in the U.S. alone, buildings drive nearly 40 percent of greenhouse gas emissions, Los Angeles has taken a hard look at its carbon footprint and is committing to reach 100% net-zero building emissions and 100% renewable energy by 2050. Some of the greatest minds in commercial real estate sustainability just convened at the Town Hall Los Angeles to discuss the importance of reducing wasted energy in buildings (and the financial implications if we don’t), LA’s new green deal and what the future holds for commercial real estate’s role in climate change.
Sara Neff, Senior Vice President of Sustainability for Kilroy Realty led a discussion with Hilary Firestone, Senior Policy Advisor on the City Energy Project for Natural Resources Defense Council and Carbon Lighthouse CEO, Brenden Millstein. Here are a few of the highlights from the discussion:
- Regulation Is Good, But It’s Not Enough – Ten years ago government legislation only addressed new buildings, but today cities are focusing on new and existing eco-friendly buildings. These updated regulations have helped spur change, but it is not enough because this does nothing to address the thousands of existing buildings in Los Angeles. Major U.S. cities including Washington, D.C. and New York and now LA, have taken more aggressive measures by setting high goals in reducing carbon emissions in each city and exploring new solutions to help reach those goals.
- Technology + Financial Engineering = WINNING – Technology has made tremendous advances over the last 15 years. As a result, the price of solar energy has dropped by 85%, making it a more profitable and sustainable option than fossil fuels – with or without subsidies. Additionally, cloud computing has become widely available and affordable, which has allowed new solutions to be developed and deployed more broadly. However, the reality is that most of the technology needed to reduce carbon emissions has existed since the early 2000s. What will help leapfrog energy management in the coming years is contract innovation and financial engineering. Contracts must be restructured to yield actual financial gains to incentivize adoption of the strategies and technologies supporting energy management. That is when we’ll see the biggest impact.
- Invest Now Or Pay More Later – Investments in technology and energy management is often met with resistance due to cost. However, the price for the consequences of neglecting better energy management is exponentially higher. Brenden points out that we, as taxpayers, are already paying for the lack of investments with the high cost of natural disasters and health issues directly resulting from climate change – devastating hurricanes and fires, healthcare costs due to increased cases of mosquito-borne illnesses and asthma, for example. For commercial real estate, there’s an added bonus – if done right, investing in energy savings can be profitable for building owners while increasing the value of the building.
- Everyone Can Take Action – Building owners and local, state and federal governments can do a lot to reduce and eliminate the wasted energy from commercial buildings. But it’s also important to remember that each of us can play a role as well. Sara concluded the panel by tasking every office worker to ask their building managers what the Energy Star Score of the building is. This, she notes, will set off a chain reaction among building management to learn about this rating system and will drive a shift toward positively impacting the energy efficiency of the building.
Climate change is a big issue and can seem challenging to take on. But cities like LA are taking the lead and showing that it simply makes business sense to take action. We have the technology and incentives right now to make a positive impact today. Hopefully their successes will motivate others to follow suit and join the mission of saving the planet, one city at a time.