Cities and states on the West Coast are teaming up to tackle one of the biggest sources of urban emissions: energy use in buildings.
Three governors, six mayors, and the environment minister of British Columbia adopted the Pacific North America Climate Leadership Agreement this month at the Clean Energy Ministerial in San Francisco. The leaders of British Columbia, California, Los Angeles, Oakland, Oregon, Portland, San Francisco, Seattle, Vancouver, and Washington state agreed to work together to address the energy use and greenhouse gas emissions from buildings.
Energy use in buildings is one of the largest sources of emissions in most cities. Buildings account for 52 percent of emissions in San Francisco, and 33 percent in Seattle. Even in smaller cities, the building sector remains a significant source of emissions. If cities can cut energy use in buildings, it can help them deliver on their ambitious climate mitigation commitments.
Since cities are already filled with buildings, improvements must be made to those that are already in use, rather than waiting for newer, more efficient buildings to be constructed.
A place to start is with benchmarking and disclosure policies, which are in place in 15 cities. Cities require building managers to record and report their energy use with the help of EPA tools. The resulting database can help identify opportunities for reducing energy use. And city officials can use the information to guide policy and create long-term strategies to reduce energy use and emissions.
To ensure that buildings achieve reductions in energy use, cities are complementing benchmarking and disclosure policies with additional actions, including: retro-commissioning, a process that assesses buildings to uncover low-cost operational improvements; supporting buildings through retrofit processes; and ensuring that buildings undergoing major renovations are brought up to current code.
Examples of these policies can be found throughout the West Coast and the U.S. at large. Seattle recently required commercial buildings 50,000 square feet or larger to undertake retro-commissioning processes every five years. Los Angeles is supporting property owners and managers to execute building performance upgrades to achieve 20 percent reductions in energy usage. And Washington, D.C., like many cities, requires major upgrades to existing buildings to meet current, more energy-efficient building codes.
With a comprehensive suite of policies aimed at commercial building efficiency, cities can take action to address one of their largest sources of emissions. We are heartened to see that the Western states and cities have committed to work together on this challenge, and look forward to seeing the local progress that might be accelerated with supportive state policies. By working together, cities and states can help shape policy, investment, and behavior change strategies that can become models for broader action.
Policy Considerations for Emerging Carbon Programs
With climate action gaining momentum around the country, policymakers at the city, state, and federal level are all considering policy tools they can use to achieve their goals. Many market-based options exist that can deliver differing co-benefits. Discussions and collaboration with other jurisdictions and with affected businesses can also improve the policy outcome.
What if you held a sale and customers bought hardly any of your product? You might conclude that your product wasn’t very popular. If your product happened to be carbon allowances, essentially permission slips to emit carbon pollution, that lack of popularity sounds like a good thing for the climate.
This is essentially what happened last week when California and Quebec, who have joined their carbon markets, announced the results of their most recent auction of allowances. Companies who must buy allowances decided they didn’t need the full amount being offered, presumably because their emissions are declining.
California and Québec began their carbon markets in 2013, and the partners have held joint auctions of allowances every three months since November 2014. Each jurisdiction sets a limit on nearly all fossil fuel combustion at an amount that declines each year (the cap). Businesses responsible for that fossil fuel combustion have to buy allowances at auction to cover their emissions.
Historically, businesses have bought more than 90 percent of the allowances offered. But at the most recent auction, only about 10 percent of the allowances were sold.
This is great news. It means that carbon emissions are going down, and at a faster rate than the policy requires. If emissions were going up, prices at auction would be high. If emissions were going down at the same rate as the cap, then prices might be low but the auction would still sell out.
Market forces, like declining costs of renewable power, are part of the reason why emissions are declining. Businesses can use cost-effective alternatives to fossil fuels in their operations.
Also factoring into the results are the numerous other policies California and Québec have in place to drive down emissions, including ones aimed at increasing energy efficiency. That means businesses use less energy overall.
Is there any reason this might be considered bad news? Well, if you were counting on the money from the sale, it’s a problem.
California has anticipated generating billions in revenue through 2020 from the allowance auctions. But with few allowances sold, that state revenue source drops dramatically. California’s auction revenue is directed to various clean energy programs across the state, which means those programs could be in jeopardy if auction sales remain low.
So, is this an example of cap-and-trade working or not working? I would argue this is how cap-and-trade is supposed to work. The government sets a cap based upon its climate goals, the cap creates a price in the market, and companies incorporate the carbon price into their business decisions. If emissions are low (more accurately, if they are lower than the cap), then businesses don’t buy carbon allowances, pure and simple. Both California and Québec agreed upon rules for handling unsold allowances before their programs started, so businesses know what to expect.
A larger and more difficult question is whether this is an example of carbon pricing working. In both jurisdictions, the cap-and-trade program is only one of many policies aimed at reducing emissions. It’s unclear at the moment to what extent the carbon price is driving down emissions (and allowance demand) versus other policies. A sophisticated statistical analysis is required to answer that question, and as the cap-and-trade program continues there will be observations to enable just such an analysis.
There is often a heated debate around implementing new policies, and it is not unusual to hear predictions that regulating carbon emissions will cause economic doom. But time and again, experience has shown that businesses adapt quickly to new conditions and keep doing what they’re good at – giving us the products and services we want to buy. That they’re doing this while keeping their carbon emissions below a set level is something to celebrate.
Innovation is an essential component to meet the challenges of climate change. Better ways to produce, store, conserve, and transmit energy will help the U.S. and other nations meet the ambitious goals set at the United Nations climate change conference held in Paris in December 2015.
Join the Director of the U.S. Patent and Trademark Office, Michelle K. Lee, and a panel of technology, energy, and climate experts for a discussion on how present and future innovation can change the course of our planet’s future. Questions to explore will include:
- What do we need do more, do differently, do faster, to change course and evolve our energy system to be clean, efficient, accessible, dependable and low-carbon?
- Where do we need breakthroughs in technology to really make a difference?
- What policies would help drive the innovation we need? What business model innovation is needed?
June 29, 2016
1:00 - 3:00 p.m.
Carnegie Institution for Science Auditorium
1530 P St. NW Washington , DC 20005
Hon. Michelle K. Lee
Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office
Dr. B. Jayant Baliga
Director, Power Semiconductor Research Center, North Carolina State University
National Inventors Hall of Fame Inductee, 2016, Insulated Gate Bipolar Transistor
Chief Sustainability & Social Impact Officer, HP
Dr. Kristina Johnson
Chief Executive Officer, Cube Hydro Partners National Inventors Hall of Fame Inductee, 2015, Polarization Control Technology
President, Center for Climate and Energy Solutions
Moderator: Amy Harder
Energy Reporter, The Wall Street Journal
See full bios of speakers
After witnessing the historic signing of the Paris Agreement by 175 nations, we now need to turn our attention to fulfilling its promise.
As its nationally determined contribution to the agreement, the United States set a goal of reducing net greenhouse gas emissions 26 to 28 percent below 2005 levels by 2025. In a new paper, C2ES outlines how expected and in-place policies could get us close to the goal line -- reducing emissions by as much as 22 percent. Getting the rest of the way can likely be achieved through a mix of additional policies, city and business action, and technological innovation.
First, let’s look at how we can get to a 22 percent reduction.
U.S. net emissions are already down more than 9 percent from 2005 levels due to market- and policy-related factors, including a shift in electricity generation from coal to natural gas, growth in renewable energy, level electricity demand, and improved vehicle efficiency.
The C2ES business-as-usual forecast, drawn from a number of analyses, projects an additional 5.6 percent reduction in net emissions through such policies as greenhouse gas standards for vehicles and the Clean Power Plan.
The rest of the anticipated emissions reductions is expected to come from new, higher estimates of future carbon sequestration and additional measures under development, including steps to strengthen fuel economy standards for medium- and heavy-duty trucks, reduce methane emissions in the oil and gas sector, and reduce hydrofluorocarbons (HFCs).
Now, how will we address the remaining gap of at least 270 million metric tons carbon dioxide equivalent?
Additional federal policies would help. For example, greenhouse gas standards could be set for major industrial sectors under section 111(d) of the Clean Air Act, the same section that underlies the Clean Power Plan.
Technological advances that lower the cost of emissions reduction will also undoubtedly play an important role. Over the next five to 10 years, battery storage technologies are expected to improve by a factor of 10, which would support the integration of more renewable generation. A promising design for a natural gas power plant with nearly 100 percent carbon capture will enter the demonstration phase next year and could be commercialized soon after. And agricultural advances are leading to more sustainable crops able to sequester more carbon dioxide in their root systems.
Stronger efforts by cities will also be critical to filling the gap. A growing number of cities are working to improve the energy efficiency of residential and commercial buildings, which account for for 41 percent of total U.S. energy consumption. Greater adoption of Property Assessed Clean Energy (PACE) programs, which help finance energy efficiency and renewable energy projects, could significantly reduce city energy demand. Similarly, city programs to build out infrastructure to increase the adoption rate of electric vehicles will, in-time, appreciably lower transportation-related emissions.
Companies, too, will play a key role. Twelve leading companies signed the C2ES statement calling on governments to quickly join the Paris climate pact and pledging to work with countries toward the domestic measures needed to achieve their national emissions-cutting contributions. More than 150 U.S. companies with a combined market capitalization in excess of $7 trillion joined the American Business Act on Climate Pledge – committing to reduce emissions, increase renewable power, or finance climate efforts. And the White House is calling on more companies to join the initiative.
The United States has significantly reduced its greenhouse gas emissions over the past decade. Cutting emissions 26 to 28 percent below 2005 levels by 2025 is a challenging goal. But many options remain untapped, and concerted efforts across multiple fronts can get us across the goal line.
April 26, 2016
Contact: Laura Rehrmann, firstname.lastname@example.org, 703-516-0621
Microsoft joins C2ES Business Environmental Leadership Council
WASHINGTON -- The Center for Climate and Energy Solutions (C2ES) announced today that Microsoft Corp. has joined the C2ES Business Environmental Leadership Council and its efforts to address the world’s climate and energy challenges.
“Microsoft has been a proven leader in addressing climate change,” said C2ES President Bob Perciasepe. “By setting an internal price on carbon, improving energy efficiency, expanding its use of green power, and by working with its customers and partners to leverage technology and data to reduce energy and resource use broadly, Microsoft is setting a strong example for others to follow.”
The center's Business Environmental Leadership Council (BELC), which first formed in 1998, is the largest U.S.-based association of companies solely devoted to climate-related policy and corporate strategies. The council contains mainly Fortune 500 companies representing a diverse group of industries with combined revenues of over $2 trillion and more than 3.5 million employees.
“Individually and collectively, these companies are demonstrating that it is possible to take action to address energy and climate challenges while maintaining competitive excellence,” Perciasepe said.
Microsoft’s global operations have been 100 percent carbon neutral since June 2012. This has been achieved through increased operational efficiency, investments in renewable energy, and through an internal carbon fee that holds business groups accountable for their carbon emissions. In the first three years of the fee, Microsoft reduced its company-wide emissions by 7.5 million metric tons of carbon dioxide equivalent (mtCO2e), purchased more than 10 billion kilowatt hours of green power, and reached more than 6 million people through the purchase of carbon offsets from community projects around the world.
“Our partnership with C2ES is a reflection of our longstanding environmental commitment,” said Rob Bernard, Chief Environmental Strategist at Microsoft. “We believe that technology can empower people and organizations worldwide to achieve a more sustainable future. We look forward to engaging with C2ES and other businesses in the BELC to discover and implement innovative solutions to transition to a sustainable, low-carbon future for our planet.”
More on the C2ES Business Environmental Leadership Council.
C2ES and Microsoft host a discussion on Wednesday, April 27, 8:30-10 a.m. EDT, Beyond Paris: From Agreement to Action on Climate Change.
Watch the live video.
About C2ES: The Center for Climate and Energy Solutions (C2ES) is an independent, non-profit, non-partisan organization promoting strong policy and action to address our climate and energy challenges. Learn more at www.c2es.org.
About Microsoft: Microsoft (Nasdaq “MSFT” @microsoft) is the leading platform and productivity company for the mobile-first, cloud-first world, and its mission is to empower every person and every organization on the planet to achieve more.
April 20, 2016
Contact Laura Rehrmann, email@example.com, 703-516-0621
Major companies support Paris Agreement
Urge governments to move quickly to formally join climate pact
WASHINGTON – Twelve leading companies based or with major operations in the United States voiced strong support today for the landmark global climate agreement to be signed this week and urged governments to move expeditiously to formally join it.
In a statement organized by the Center for Climate and Energy Solutions (C2ES), the companies said they recognize rising climate risks and welcome the agreement reached in December at the U.N. Climate Change Conference in Paris “as an expression of the strong governmental leadership needed to smoothly transition to a low-carbon, sustainable future.”
The Paris Agreement, to be signed Friday in New York by more than 150 countries, establishes “an inclusive, pragmatic and, hopefully, durable framework for progressively strengthening efforts globally to address the causes and consequences of climate change,” the statement says.
The statement was endorsed by Berkshire Hathaway Energy, Calpine, HP Inc., Intel, LafargeHolcim, Microsoft, National Grid, PG&E, Rio Tinto, Schneider Electric, Shell, and Siemens.
“These companies have real skin in the game – either they’re big energy producers or users,” said C2ES President Bob Perciasepe. “They know emissions need to come down and are taking action on their own. But they also believe the low-carbon transition requires government leadership to ensure that all major economies are doing their fair share.”
The statement says the Paris Agreement will help facilitate and strengthen the role of the private sector in the low-carbon transition by providing long-term direction, promoting transparency, addressing competitiveness, and facilitating carbon pricing.
“Allowing, and ensuring the environmental integrity of, international emissions trading will help facilitate the growth and credibility of carbon markets, a critical tool for cost-effective emissions reduction,” the statement says.
Many of the companies joining the statement were among the hundreds that pledged specific climate actions in the lead-up to the Paris conference.
"We encourage governments to move expeditiously to formally join the Paris Agreement,” the statement says, "and pledge to work with countries to enact and implement the domestic measures needed to achieve their national contributions.”
The full statement is at: http://bit.ly/Biz4Climate
- Q&A: Answers to Key Questions about the Paris Agreement
- Summary of the Paris Agreement
- Business Resilience report: Major companies see climate impacts as a business risk.
- Sampling of pledges of action by non-state actors
About C2ES: The Center for Climate and Energy Solutions (C2ES) is an independent, nonprofit, nonpartisan organization promoting strong policy and action to address our energy and climate challenges. C2ES works to galvanize business and public support for policies to reduce greenhouse gas emissions and increase resilience to climate impacts. Learn more at www.c2es.org.
Key Insights on Collaboration for a Resilient Anchorage
C2ES held a two-day Solutions Forum workshop in March 2016 in Anchorage, Alaska, focusing on opportunities for collaboration in building a climate-resilient Anchorage. About 50 business leaders, city, state, federal and tribal officials, nonprofit organizations, and other experts shared their experiences addressing climate change impacts and enhancing resilience. Discussion focused on the role each stakeholder group can play in planning for resilience. This paper summarizes the key insights of the meeting and areas of focus moving forward.
Beyond Paris: From Agreement to Action on Climate Change
Hosted by: Microsoft and the Center for Climate and Energy Solutions
The historic Paris Agreement represents not only the culmination of years of negotiations, but also a unique moment in which businesses, cities, and heads of state from over 150 countries gathered to make their own commitments and discuss solutions to climate change.
Please join Microsoft and the Center for Climate and Energy Solutions (C2ES) for a lively discussion on Wednesday, April 27, 8:30-10 a.m., with senior representatives from various sectors to discuss innovative and proactive climate solutions, what Paris means four months later, and how to move from agreement to action on climate change.
Special Assistant to the President and Director of Private Sector Engagement,
The White House
Executive Vice President, Center for Climate and Energy Solutions
Corporate Vice President, U.S. Government Affairs, Microsoft
Tamara “TJ” DiCaprio
Senior Director of Environmental Sustainability, Microsoft
Global Director, Environment and Energy Policy, Intel
Global Environmental Executive, Bank of America
Senior Vice President, Environmental Services and Chief Environmental Counsel
Berkshire Hathaway Energy
President, Center for Climate and Energy Solutions (C2ES)
Additional panelists may be announced.
Follow the discussion on Twitter: #MSFTClimateAction