Today, Urban Green launched the Global Climate Efficiency Trading Initiative, a first-ever collaboration between New York City’s leading building and energy stakeholders, the trading community, and global peer cities—New York, Hong Kong, London, Singapore and Toronto. We’re joined by local political leaders, environmental justice and community organizations, academic experts, real estate groups, financial trading professionals, and more.
Climate efficiency trading enables buildings below a voluntary or mandatory carbon cap to trade energy efficiency or carbon credits with buildings above the cap. We chose our words carefully for this initiative. While the common terminology is “carbon trading,” we use the broader name “climate efficiency trading” because it encompasses the potential for trading energy efficiency credits and not just a pollutant like carbon.
Our work will begin this summer with a convening of experts to inform a NYC trading program. We will identify the key questions that are most important for program design, and analyze various ways NYC might develop policy solutions.
We will then shift to the global stage, with peer cities evaluating our NYC policy menu. Led by green building councils and other industry leaders, four peer cities that are also international trading centers will evaluate the same questions we considered. By turning our collective minds to the same problems, we’ll have a truly global discussion on increasing building energy efficiency in cities.
The project was spurred by Urban Green Council’s Blueprint for Efficiency, which laid the groundwork for Local Law 97 of 2019, the new law enacted in New York City that mandates building emissions caps and delivers the largest carbon reduction by 2030 of any city in the world. The law includes Urban Green’s recommendation to require a study on carbon trading for buildings and an implementation plan by 2021.
Why is trading important?
- Trading can be a low-cost way to meet the tough new carbon caps by providing flexibility for building owners to trade within their own portfolios or with other owners.
- Policy design can provide extra credits for energy or carbon savings in lower income neighborhoods. If credits in these neighborhoods are worth more, it could incentivize energy service companies to perform energy efficiency upgrades at reduced cost in order to generate excess, sellable credits.
- Trading can work regardless of political systems, geographies, climates and building stocks. It’s readily exportable to any city or any country. Climate change is a global problem, so we need solutions that can work globally.
This initiative reflects Urban Green’s new mission to transform buildings for a sustainable future in New York City and around the world. As a global city, we have the opportunity and obligation to learn and share on the global stage – and Urban Green will help lead the way for the building community.
Our resource page on LL97, the new building emissions law, can be found here.