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POLICYWATCH:
A Client’s Convenient Truth

01/2008

By Alec Appelbaum

The smartest innovation  in eliminating urban greenhouse-gas waste involves thousands of old buildings and one ex-president. Buildings’ wasteful heating, AC, and electricity emit 50 percent to 70 percent of cities’ greenhouse gases. A new $5 billion program from Bill Clinton, though, aims to help big cities worldwide tune creaky buildings to perform to cleaner standards. By enlisting energy service companies, the program promises to erase carbon emissions behind the scenes.

Image courtesy Jim Frazier
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Here’s the deal: 17 major cities have signed on with the Clinton Climate Initiative a year-old division of the former president’s foundation to draw on a five-bank, $5 billion pool to retrofit municipal buildings and encourage private landlords to do likewise. ABN Amro, Citi, Deutsche Bank, JPMorgan Chase, and UBS put up financing, expecting repayment through landlords’ energy savings. And energy-service companies (known as ESCOs) will run the jobs and train underemployed workers for them. “This will more than double the global market for retrofits,” Clinton said in May, “and landlords will not rely on new capital.”

True to Clinton’s businesslike approach to societal woes, the program lets members tailor-retrofit plans to their costs and building stock. On October 5, Paris promised to use its participation to cut emissions in kindergartens and grade schools by up to 67 percent. On October 22, New York mayor Michael Bloomberg proposed using city money to fund $56 million worth of retrofits this year: in December, Clinton promised to work with the New York City Housing Authority and Enterprise Community Partners to retrofit low-income buildings.

While remaining flexible, the $5 billion loan pool encourages landlords to propagate the ESCO model by promising ample capital for it. “This is a great way of bringing resources to the industry,” says Building Owners and Managers Association International (BOMA) president Henry Chamberlain. “With potentially $5 billion in loans, we see leverage as a way to accelerate peoples’ ability to change.”

So can this strategy put Clinton on par with his former VP as an ecological savior? Ashok Gupta, a building-efficiency expert at the Natural Resources Defense Counsel, says it’s a start. “Retrofit funding is an issue of capital and expertise,” Gupta says. Cities that own many square feet can double the ESCOs’ retrofit business from $2 billion to $4 billion. First, governments from Bangkok to Rome to Johannesburg to Houston must align procurement rules, says Gupta. But ESCOs, which guarantee performance improvements to landlords who pay them from cost savings, are eager to stoke the market. In May, Honeywell, Johnson Controls, Siemens, and Trane joined Clinton at the project’s announcement. Many of these companies have offered retrofit services, paid for by energy savings, as part of their core business. Over the summer, Ameresco, Noresco, and Schneider Electric and its TAC subsidiary joined the vendors’ pool. On October 8, BOMA pledged to develop a uniform energy-services contract for the program’s North American markets by next summer and promised to provide a six-course efficiency module to all participating cities by March 2008.

Gupta hopes the model provides encouragement to multi-tenant landlords and, eventually, homeowners to tune up their buildings. Architects can play a role in promoting retrofits: global architects Gensler, for instance, is making an energy overhaul into a statement by adding a green-glass skin to Verizon’s Midtown Manhattan tower. If energy savings come to measure a landlord’s green cred, a retrofit contract could become a client’s convenient truth.

For more information, go to: http://www.clintonfoundation.org.

Alec Applebaum writes about design and cities for Architectural Record, New York, Fast Company, and others. He lives in Lower Manhattan, where his neighbors are trying to get inefficient heating under control.

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This article appeared in the January 2008 print issue of GreenSource Magazine.

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