• Ten-Year Plan to Reduce Massachusetts Greenhouse Gas Emissions Affects Real Estate
  • January 7, 2011 | Authors: Jared Eigerman; Matthew J. Kiefer
  • Law Firm: Goulston & Storrs, A Professional Corporation - Boston Office
  • At the end of 2010, departing Massachusetts Secretary for Energy and Environmental Affairs Ian Bowles set a goal to reduce statewide greenhouse gas (GHG) emissions by 25% from 1990 levels by the year 2020, and adopted the “Massachusetts Clean Energy and Climate Plan for 2020,” which describes the policies needed to reach the 2020 goal.  The 2020 Plan includes several measures that affect the real estate industry.

    Reduction Targets for GHG Emissions

    The 2008 Global Warming Solutions Act (GWSA) committed the state to reduce statewide GHG emissions by 80% below their 1990 levels by the year 2050.  The GWSA also instructed the Secretary to set an interim reduction goal of between 10% and 25% for the year 2020, and to formulate a plan to achieve it.

    After two years of study and stakeholder consultation, the Secretary determined that the mix of existing, expanded and entirely new measures studied in the 2020 Plan could reduce GHG emissions by up to 33% below 1990 levels. (http://www.mass.gov/Eoeea/docs/eea/energy/2020-GHG-limit-Dec29-2010.pdf)  The Secretary therefore concluded that setting a 25% reduction goal was “responsible and achievable” for the Commonwealth.

    New Measures Affecting Real Estate

    Because buildings consume more than 50% of the energy used in Massachusetts and are therefore responsible for the greatest GHG emissions of any economic sector, several measures in the 2020 Plan target real estate.

    The 2020 Plan includes a pilot program to rate and label commercial buildings based on their expected energy performance, in order to facilitate “apples-to-apples” comparisons between buildings for potential building tenants, buyers, investors and insurers.  The Massachusetts program would build on programs in New York City and the State of California which are based on actual energy performance. The Department of Energy Resources will accept public comments on its whitepaper describing the pilot program through February 12, 2011.  (See http://www.mass.gov/Eoeea/docs/doer/Energy&under;Efficiency/Asset&under;Rating&under;White&under;Paper.pdf

    Another notable new policy involves the State Building Code.  (See www.goulstonstorrs.com/NewsEvents/Advisories?find=32204)  Under the 2020 Plan, the Commonwealth would go beyond the already adopted International Energy Conservation Code (IECC), which is revised every three years to require greater energy efficiency in new construction, by moving to a purely “performance-based” code.  This would set a maximum energy use criterion for buildings and allow flexibility to meet that criterion, rather than prescribing specific methods.

    The 2020 Plan also proposes to strengthen the Commonwealth’s commitment to its “Sustainable Development Principles” by favoring smart growth projects in the allocation of state monies and by amending planning, zoning and subdivision statutes to encourage smart growth.  (See http://www.goulstonstorrs.com/NewsEvents/Advisories?find=25504)

    Finally, a proposed new pilot program run by electric and gas utilities would provide rebates and technical assistance to install so-called super-insulation in existing residential buildings.

    Several existing measures are also called out in the 2020 Plan as key to reaching the 25% reduction goal.  For instance, under the 2008 GWSA, Massachusetts utilities already provide financial incentives for customers to assess the energy performance of their buildings and to make energy improvements. Also, the plan commends the GHG Policy of the Massachusetts Environmental Policy Act (MEPA) Office, requiring projects undergoing MEPA review to quantify their GHG emissions and identify feasible mitigation measures.

    Few Surprises

    While newsworthy, the 2020 reduction target and plan are consistent with recommendations of the Commonwealth’s Zero Net Energy Buildings Task Force in its March 2009 report, Getting to Zero.  They also reflect a regulatory trend to emphasize disclosure, incentives and choice of performance measures as much as mandates to influence private behavior to further public policy goals.