It’s time for buildings to stop using a third of US energy, some states say

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PORTLAND, Ore. — That building looming on the corner? With a few tweaks, it might help with climate change.

States with big commitments to reduce greenhouse gas emissions are beginning to require that the owners of large buildings track how much energy they use and improve their efficiency. It’s part of a state, local and federal effort to lower greenhouse gas emissions from office buildings, big-box stores, hotels, apartments and other large commercial structures responsible for gulping down energy.    

Buildings “just sit there,” said Colorado Democratic state Rep. Cathy Kipp, who helped write the state’s 2021 building performance law, scheduled to take effect later this year. “But you don’t think of them as giving off energy or consuming energy.”

Buildings are one of the five largest sources of greenhouse gas emissions in Colorado, the state’s energy office estimates. And nationwide, commercial and residential buildings account for 13% of greenhouse gas emissions and 28% of energy consumption, according to federal energy estimates. Buildings rank not far behind the transportation sector, often considered the most obvious source of energy use and planet-heating emissions. In Washington, D.C., buildings account for an estimated 75% of the city’s greenhouse gas emissions.

Oregon just became the latest state to join Colorado, Maryland, Washington and the District of Columbia in approving what are known as building performance standards.

Other states, including California, Rhode Island, Minnesota and New York, are considering similar legislation, according to the Institute for Market Transformation, a nonpartisan group that advocates for building efficiency. Many cities, including Boston, New York and St. Louis, have already established their own performance standards for buildings, and have joined a White House-led coalition of cities and states committed to enacting such standards.

In some states, building owners who meet their energy targets early may be eligible for incentive payments.

“How we build is how we live,” Oregon Senate Majority Leader Kate Lieber, a Democrat and one of the sponsors of the building performance standards measure, said in a statement. The provision is part of a climate package awaiting the governor’s signature.

In recent years, extreme heat domes, more intense wildfires, ice storms and power outages have made it clear that many of Oregon’s homes, workplaces and energy systems aren’t built to withstand the challenges of climate change, Lieber’s statement said.

Oregon’s proposed standards, passed in late June in the final days of the legislative session, were packaged with other environmental and climate change initiatives aimed at meeting the state’s commitment to greenhouse gas reductions. The package also sets energy efficiency standards for new construction and encourages more energy efficient public buildings.

The state’s new building performance standards would, if signed into law, apply to many commercial buildings larger than 35,000 square feet. In general, the standards call upon buildings to reduce their energy use and cut emissions in line with the state’s climate goals to achieve levels by 2050 that are at least 75% below 1990 levels. Like many states with emission targets, meeting them has proven elusive. Oregon fell short of its 2020 greenhouse gas reduction goals by 13%.

Lieber and other Democratic lawmakers said they hoped passing the building performance standards and other climate legislation would let Oregon tap hundreds of millions of dollars from the federal Inflation Reduction Act and the Infrastructure Investment and Jobs Act.

Slow to catch on

In Oregon and beyond, most of the new statewide building performance standards require property owners to begin with an energy audit to benchmark how much energy the building consumes compared with similar structures, and measure emissions. Once big building owners know how much energy they’re using, they can find ways to reduce it, such as by adding insulation and installing more efficient windows, lighting, and heating and air-conditioning systems.

Building performance standards differ from LEED certification, a voluntary rating system demonstrating that a structure meets certain green building and maintenance — and energy efficiency — goals.

The performance standards have been slow to catch on outside of states with ambitious climate goals. In Oregon, the legislation passed largely along party lines, with few Republicans supporting the overall climate package. In Washington, D.C., some building and apartment owners supported the mayor’s proposal to slow enforcement of its new standards, in part because so many commercial building owners face high office vacancy rates.

The standards have broad support from green building groups, however. It’s fairly simple for buildings to meet climate and health standards, said Ashley Haight of the ZERO Coalition, an organization working in Oregon to decarbonize buildings. Solutions include better insulation and more efficient heating and cooling systems, more efficient lighting and windows, and software to control temperature fluctuations and to measure energy use.

“Investing in building energy efficiency is the most cost-efficient way to significantly reduce greenhouse gas pollution,” Haight said. “That’s something that we’re trying to teach everyone all the time, that energy efficiency is the cheapest way to meet our goals.”

Washington state, which passed its Clean Buildings Act in 2019, created performance standards for commercial buildings larger than 50,000 square feet. Mandatory compliance begins in 2026. Seattle recently announced plans to develop its own legislation for commercial and multifamily buildings larger than 20,000 square feet. It’s a standard that could reduce building emissions 27% by 2050 from a 2008 baseline, said Mayor Bruce Harrell.

In Colorado, the building performance standards apply to commercial, multifamily and public buildings larger than 50,000 square feet. The Colorado Energy Office estimates that the standards could help the state meet greenhouse gas reduction targets of 7% by 2026 and 20% by 2030 for the buildings covered in the program.

Maryland’s standards, which apply to buildings 35,000 square feet and larger, are aimed at a 20% reduction in net direct greenhouse gas emissions by 2030, and n​et zero emissions by 2040 for covered buildings.

To imagine a 35,000-square-foot building, picture a 35-unit apartment complex with 1,000-square-foot units. A Walmart Supercenter, at an average of 178,000 square feet, would be five times as big. And a building nearly seven times in size would be the iconic pink U.S. Bancorp  Tower in Portland, considered to be the biggest office building in Oregon, is 42 stories tall and 1.2 million square feet.

Oregon’s proposed building performance standards don’t cover agricultural or industrial structures, hospitals or residential buildings, including dorms and some historic buildings. However, many of those building types may still be required to measure and benchmark their energy efficiency as the law goes into effect. And many of the state’s buildings that range in size from 20,000 to 35,000 square feet must measure their efficiency and emissions based on how much electricity, gas, and other fuels a building consumes. Over time as more data becomes available, “smaller” big buildings may be required to fully comply too.

Also, Haight noted, smaller buildings can voluntarily monitor their efficiency and emissions to be eligible for some of the state incentives. The exact amount of the incentives in Oregon have not yet been determined. But in Washington state, for example, building owners that demonstrate early compliance with the state’s program are eligible for a one-time incentive payment of $0.85 per square foot of floor area. Washington has capped its incentive pool at $75 million.

The legislation in Oregon had overwhelming support from environmental groups and some sectors of the construction industry. Even those organizations with concerns were lukewarm in their objections — in part because the standards take effect over multiple years and don’t cover all building sectors, but also because the groups will have an opportunity to shape the rules as they’re written. Oregon’s Department of Energy will oversee the rulemaking that leads to finalized standards by the end of 2024.

A selling point

More efficient buildings can quickly make a difference on emissions, said Cliff Majersik, a senior adviser for policy and programs at the Institute for Market Transformation. They also are cheaper to run, because they have lower utility bills. And they often have better indoor air quality, a critical measure since most people spend 90% of their time inside a building.

Performance standards also can help make some commercial buildings more attractive to potential tenants at a time when there’s a glut of commercial property and empty office districts in many American cities. Many corporate tenants have their own greenhouse gas reduction commitments and “they want to be in buildings that are better for the climate,” Majersik said.

“It makes them more attractive to tenants for a variety of reasons, because the buildings become more comfortable, more productive places to work, better places to live, [with] lower vacancy rates.”

Many states also are developing penalties for buildings that fail to comply with the standards, although most programs allow property owners multiple years to make upgrades. In Oregon, many buildings wouldn’t have to comply until 2030. In Colorado, Kipp said that the state’s aim is to encourage voluntary compliance, not to be forced to fine building owners.

“Just changing the light bulbs out in a large building can have significant savings,” Kipp said. “Companies that do the investment in making these changes, and then get their payback in their energy savings down the road. So there are ways for this to happen that are less expensive, and I think a lot of times it’s just inertia and people not wanting to change.”

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