To tackle climate change, the United Kingdom and New York City have implemented ambitious policies to reduce building energy use and encourage retrofits.
Published May 22, 2019
While these policies share a common goal, their approaches vary greatly. On May 30, 2019, experts from both regions discussed the different approaches as part of the Global Exchanges webinar series hosted by UKGBC and Urban Green Council.
The UK’s existing building stock is, on the whole, old, leaky and inefficient—resulting in high energy bills for occupiers, and in the worst cases, cold and unhealthy living conditions for some of the most vulnerable members of our population.
In order to address this, the UK Government has set an ambitious targetClean Growth Strategy to improve ‘as many homes as practical’ to the Energy Performance Certificate (EPC) Band C by 2035 and enable businesses and industry to improve their energy efficiency by at least 20 percent by 2030. However, the government is not currently on track to meet these goals.Committee on Climate Change, Reducing UK emissions: 2018 Progress Report to Parliament Indeed, things are currently going in the wrong direction – home insulation rates are now 95 percent lower than in 2012 due to various policy failures and the stop/start nature of programs.
The good news is that the UK now has some world-leading legislation in place to expand retrofits in the private rented sector, known as ‘MEES’ (Minimum Energy Efficiency Standards). All privately let (leased) properties need to meet a minimum of ‘Band E’ on the EPC scale before they can be let, and this is projected to rise to Band C by 2030.
MEES has been the single most transformative energy efficiency policy in the building sector, and most non-domestic (non-residential) landlords are enthusiastic. They accepted early on that a trajectory for tightening MEES was both inevitable and desirable, and that the certainty provided by a long-term EPC target would underpin energy improvement plans and investment decisions.
However, MEES implementation in the residential and small business sectors has been more challenging. Firstly, there is a lack of awareness of the legislation. Secondly, there is a lack of financial support for small landlords to help cover the upfront costs of retrofits due to the cancellation of the proposed financial support mechanism, the ‘Green Deal’, just a few months after its launch.
In May 2019, the City of New York passed ambitious climate legislation for buildings, placing them on a path to meet the city’s goal to reduce overall carbon emissions 80 percent by 2050.
Like the UK, NYC buildings are also old, leaky and inefficient, and result in high energy bills for tenants. But unlike the UK, NYC’s latest legislation focuses exclusively on 50,000 of the city’s largest buildings, which account for nearly 60 percent of the city’s building area. Carbon emissions limits take effect in 2024 and are designed to produce a net 26 percent carbon cut by 2030. Buildings over the limits will be penalized with tough fines.
To comply with the law, building owners have multiple options: reduce energy consumption through retrofits and operations and maintenance improvements, purchase renewable energy credits (with limitations), and eventually, use carbon trading to offset emissions.
Many details of the new policy are still to be determined. However, it is arguably the largest disruption of the NYC real estate industry, and billions of dollars will be spent to meet the mandate.