By Anne Cosgrove, TFM Managing Editor
Published in the August 2007 issue of Today’s Facility Manager
Tackling the threatening effects of climate change requires an enormous effort by people throughout the world, and those in cities can play a significant role. In the United States, two-thirds of the population currently live in urban areas, according to the U.S. Conference of Mayors. And a recent report from the United Nations predicted that about half of the world’s population—3.3 billion people—would be living in urban areas by 2008.
Buildings account for more than half of the greenhouse gas emissions produced in cities. The concentration of buildings in cities—and the resulting energy consumption—has set the stage for these structures to play a part in mitigating existing environmental damage and in reducing the potential for more.
For those concerned with climate change, many city leaders (as well as states) are taking a proactive approach to modify their impact. One vehicle is the Climate Protection Act, which was signed by 141 members of the U.S. Conference of Mayors in June 2005. This initiative, introduced by Seattle Mayor Greg Nickels, aims to advance the goals laid out in the Kyoto Protocol, an international treaty designed to address greenhouse gas emissions throughout the world. The overall goal of the Kyoto Protocol is to reduce, by 2012, the collective emissions in participating countries by 5.2% compared to the year 1990.
When it became clear the U.S. would not sign the Kyoto Protocol, Mayor Nickels drafted the Climate Protection Act, a voluntary agreement under which participating U.S. cities are working to reduce their greenhouse gas emissions. Beyond urging the federal government to adopt policies focused on meeting the Kyoto Protocol’s call for reductions, the mayoral agreement states that its signatories will pursue reducing emissions in their cities to 7% below 1990 levels by 2012.
This past May, efforts at the city level came to the forefront again at the C40 Large Cities Climate Summit in New York City. (Formed in October 2005, C40 is a group of cities working together to address climate change through cooperative efforts and resource sharing.) The Clinton Climate Initiative (CCI), which had partnered with C40 in August 2006, announced its Energy Efficiency Building Retrofit Program at the Summit.
The program focuses on reducing energy consumption of existing public and private buildings in 16 of the C40 cities—Bangkok, Berlin, Chicago, Houston, Johannesburg, Karachi, London, Melbourne, Mexico City, Mumbai, New York, Rome, Sao Paulo, Seoul, Tokyo, and Toronto. (These 16 cities volunteered to be initial participants in the program, and other C40 cities can join in the future.)
The announcement at the Summit highlighted the global scale of the retrofit program and the potential of a worldwide framework to foster exponential reduction of greenhouse gas emissions. Additionally, CCI asserts that energy efficiency retrofits in existing buildings around the world are relatively small compared to these efforts in new construction.
As part of this plan, CCI brought together five banks to provide project financing in the form of interest loans. Each of the banks—ABN AMRO, Citi, Deutsche Bank, JP Morgan Chase, and UBS—have committed $1 billion to the funding pool, and resources may expand as other banks join the program.
While there may be some variances, most projects are expected to fall under the category of performance contracting. Under this type of contract, no initial capital is required from the building owner; instead, loans are to be paid back by building owners who can use the money saved through the energy savings realized.
The next step was to include energy service companies (ESCOs) for conducting energy audits and performing the building retrofits. These companies—Honeywell Building Solutions, Johnson Controls, Siemens Building Technologies, and Trane—were approached by CCI for participation and are awaiting the next step. Though the timeline is still forming, the first group of buildings from participating cities is expected to submit applications for the program by the end of 2007.
“Based on what we’ve been told, CCI has a goal, that by the end of the year, approximately half of the 16 cities will have tenders issued to the ESCOs,” says Larry Wash, vice president of Americas services and contracting for Trane. “Or, we expect to see another tangible event indicating forward progress, such as hosting a bidder’s conference or issuing a Request for Information (RFI).”
Administrators of the program will need to determine which buildings are chosen for inclusion, and this will depend on a variety of factors, including building characteristics. While a firm list of criteria has not been created yet, factors for consideration may include size of facility, age of facility and various building systems, intensity of energy consumption, and the remaining expected useful life of the facility.
Bob Dixon, senior vice president and global head of energy and environmental solutions for Siemens Building Technologies, says one approach might be to group buildings geographically, or by city agency. “This streamlined procurement process and partnership with pre-qualified vendors will enable both the cities and the vendors to focus on project implementation—and the reduction in energy consumption and emissions—rather than the procurement process,” he explains.
Darryll Fortune, director of public relations for Johnson Controls, notes that while the criteria for being chosen are still being determined, the retrofit programs are expected to be “consistent with, and work within, city procurement and tendering rules.”
As the program develops, Mike Taylor, vice president of Americas marketing for Honeywell Building Solutions, notes the grand scale of the endeavor. “The Clinton Foundation has the ability to strip many of the costs associated with moving projects through the process to implementation. There are economies of scale with this approach on a level that we never had before,” he says.
Measuring the progress of these projects will be crucial to gauge true achievements. Microsoft has partnered with The Clinton Foundation to develop software and services for cities to monitor greenhouse gas emissions as the program moves forward. Assisting in the development of measuring tools is ICLEI, an international association of local governments focused on addressing environmental problems through local actions. The Center for Neighborhood Technology is also involved. Microsoft will use the knowledge ICLEI has acquired in developing its Harmonized Emissions Analysis Tool (HEAT).
Assuming the program progresses as envisioned and a large scale retrofit of buildings begins, some experts wonder if the impact will be significant enough. In a speech during the C40 Summit where the CCI program was announced, Professor Jean-Pascal van Ypersele of the Université catholique de Louvain in Belgium, touched on the importance of buildings while discussing an assessment report on climate change released this past spring by the Intergovernmental Panel on Climate Change (IPCC).
In his comments, van Ypersele said the IPCC found emissions from buildings (including electricity related emissions) had increased by 75% between 1970 and 2004. As such, the IPCC stated the biggest opportunity for emissions reduction going forward is with buildings.
Those managing facilities located in the 16 initial cities in the Building Energy Efficiency Retrofit Program will want to stay informed of the application timeline. While those cities will be the program pioneers, the opportunity for the other 26 C40 cities—and beyond—to participate may be on the horizon.
Information for this article was based on literature from Clinton Climate Initiative (www.clintonfoundation.org) and interviews with Dixon, Fortune, Taylor, and Wash. To view all C40 cities, visit www.c40cities.org.