Energy Benchmarking and Transparency Policies Are Driving Efficiency in Urban Buildings

When President Trump announced that the US would pull out of the Paris Climate agreement, many people, particularly those that have advocated for energy efficiency and renewables, were disappointed. Some were plain outraged. But in the wake of that announcement, many states, cities and corporations announced that ‘We Are Still In,’ and established their own carbon emission goals to help meet the Paris goals.

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Currently, 282 cities have signed on to the ‘We Are Still In’ Group, and in support, the C40 Cities initiative (now actually 94 cities around the globe) and American Cities Climate Challenge are just two of the organizations that provide for cities to share best practices.

Among those best practices are energy benchmarking and disclosure laws. Benchmarking signifies measuring a building’s energy use and comparing it to others. It allows building owners and potential tenants to understand the building’s energy performance relative to other buildings of the same type.  Transparency is the practice of making that information publicly available.

Buildings consume 40% of North America’s energy and are the largest energy users in most cities.  They represent a similar fraction of CO2 emissions.

The Institute for Market Transformation has been a leading voice in promoting benchmarking and transparency. On their website, IMT tracks the steady rise of these programs and their adoption across the US. Benchmarking has become an important tool for the cities that have instituted it.

Policies for Exisiting Buildings

Institute for Market Transformation Map of US Benchmarking and Transparency Programs

Take New York City. The City that Never Sleeps has over one million buildings. Those buildings are responsible for two-thirds of the city’s carbon emissions. It is estimated that over 90% of today’s NYC buildings will still be around in 2050, the year that the city targets to lower its emissions by 80%. Using information gathered under the energy disclosure law, New York University has taken the database of reported energy use in the city and has mapped it, as shown below. The user can zoom in to a neighborhood, a street, or a particular building and see energy use data of that building and how it compares to others.

Portland, Oregon provides a similar tool, as does Washington, DC. The nation’s capital has gone even further. To meet its goal of being powered by 100% renewable sources of energy by 2032, DC will require all buildings to meet a minimum standard of performance which could require half of the current building stock to undergo energy efficiency retrofits. This in a city that already has more certified LEED buildings per resident than any other (and was the first LEED-certified city!).

NYC Building Use
NYC Building Energy Use, as mapped by NYU (city view, zoom view, one building’s details)

Do benchmarking and transparency programs work? The pressure of the free market should, all other things being equal, drive tenants to better performing buildings. That same market pressure should force owners of energy hogs to invest in energy conservation measures and mechanical equipment upgrades.

In its 2015 report, The Benefits of Benchmarking Building Performance, the Institute for Market Transformation reported that benchmarked buildings did, indeed save energy. An EPA study of 35,000 benchmarked buildings showed a three-year savings of 7%. Studies in New York and San Francisco showed similar results. Further, energy efficient buildings have been easier to rent out, fetch higher sales prices, and are better investments for lenders, as IMT points out.

Clearly, energy benchmarking and transparency programs are proving to be important policies for driving energy efficiency in the existing building inventory as well as new construction. We can expect their numbers to grow.

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