By J. Cullen Howe, Environmental Law Specialist, Arnold & Porter LLP
In March, The Rockefeller Foundation and DB Climate Change Advisors released a research paper entitled United States Building Energy Efficiency Retrofits: Market Sizing and Financing Models.
Among other things, the report makes the following findings with respect to energy efficiency retrofits in terms of energy savings, greenhouses gases, and job creation.
Energy Savings: The report states that scaling building energy efficiency retrofits in the United States offers a $279 billion dollar investment opportunity. The energy savings over 10 years could total more than $1 trillion.
Greenhouse Gases: The report finds that scaling building retrofits could eliminate more than 600 million metric tons of CO2 per year, approximately 10% of U.S. emissions in 2010.
Job Creation: The report concludes that increased building retrofits could create more than 3.3 million new direct and indirect jobs.
The report also addresses several financing options for retrofits, including Energy Service Agreements (ESAs), Property Assessed Clean Energy (PACE), and on-bill-finance options, all of which have the potential to address historical barriers and achieve scale across different market segments. The report states that PACE has potential as a model for all segments, but it requires significant regulatory support and acceptance from the mortgage industry, neither of which currently exists. On-bill finance could be utilized with enabling regulation or used as a mechanism to enhance other financing models across the three building market segments.
The report concludes that the ESA structure has the potential to scale quickly and meet the needs of both real estate owners and capital providers in the commercial and institutional market, without requiring regulations or subsidies.
Reprinted with permission from Green Building Law Update Service.
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J. Cullen Howe is an environmental law specialist at Arnold & Porter LLP. Much of Cullen's work focuses on climate change, where he attempts to educate lawyers and the public at large on the enormous cooperation necessary to adequately address this problem. In addition to his work on climate change, Cullen is the managing editor of Environmental Law in New York, edits the Environmental Law Practice Guide, Brownfields Law and Practice, the Environmental Impact Review in New York, and has drafted chapters in the Environmental Law Practice Guide on climate change and green building. Mr. Howe is a graduate of Vermont Law School, where he was the managing editor of the Vermont Law Review, and a graduate of DePauw University, where he was a member of Phi Beta Kappa.
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