The current administration wants to shrink the role of the federal government, turning oversight and control over to the states in many cases. This dialing back of federal oversight affects building owner authority, financing regulations, and environmental regulations. Where the latter is concerned, the Trump administration has already taken several steps:
- President Trump is expected to sign an Executive Order to begin weakening or eliminating the Environmental Protection Agency’s (EPA’s) Clean Power Plan (CPP)—a critical component of our nation’s climate commitment. The goal of the CPP is to reduce US carbon emissions from the power sector to 30 percent below 2005 levels by 2030. If Congress approves the cuts, EPA will see its budget cut from $8.2 to $5.7 billion, the lowest funding in 40 years.
- The Administration is expected to announce plans to roll back the EPA’s greenhouse gas standards for passenger vehicles.
- The EPAs budget cuts include a complete de-funding of Energy Star – a move that specifically impacts the real estate industry.
- Sources have also reported that the Administration is exploring whether the US should pull out of the COP21 2016 Paris Climate Agreement. This historic pact brought together 190 governments agreeing to take action on climate change and collectively hold global temperature rise well below 2°C (3.6°F).
The federal government created the EPA in 1970 to protect human health and the environment by writing and enforcing regulations based on laws passed by Congress. Before federal oversight, American manufacturers freely discharged pollutants into the air and water ways. Ohio’s Cuyahoga River famously caught fire several times because of its severe pollution. Washington D.C.’s Potomac River had 240 million gallons of wastes flushed into it daily in 1969. Even our own Emerald City’s air was fouled with a thick, gray haze, and mothers worried about their children playing at the local beaches.
The American public’s environmental concern began to develop in the late 1950s and grew through the 1960s until Congress was impelled to act. Since 1970, the US has made huge progress in cleaning up its air, water, soil, and protecting flora and fauna. Previously polluted cities and waterways were able to experience a resurgence in real estate and community development thanks to newly inhabitable spaces.
Clean energy is good for business
External motivators like EPA regulations and LEED certifications provide the direction and motivation to get US industry on the road to environmental responsibility. But once on its way, industry often realizes that what’s good for the planet is good for business, and embraces sustainability, going above and beyond federal requirements.
The transition to a low-carbon economy is well underway and looks to be inevitable. Clean energy is a growing part of American energy use: businesses are increasingly demanding it while investors are betting on it. Withdrawing federal support for important policies like the CPP and the Paris Agreement will slow the progress of this transition and send the wrong signal to US businesses. And every business deserves to realize the fiscal benefits of a clean energy and low carbon strategy.
When one Paladino client, The Hertz Corporation, designed its new global headquarters in Estero, Florida, its key motivators were to create a building that showcased its global brand; increased efficiencies among Hertz, Dollar, and Thrifty employees; and was sustainable through and through. It went above and beyond the regulatory requirements to protect local habitat and designed the building with community resilience in mind: the facility is designed as a refuge for occupants during hurricanes and can be self-sustaining off-grid for up to 48 hours.
Another Paladino client, PNC Financial Services Group, set out to make its Pittsburgh commercial office headquarters the greenest office tower in the world. PNC was motivated purely by employee performance and went beyond regulatory standards by adding unprecedented sustainable innovations and technologies.
While some companies, such as Hertz and PNC are leading the way on sustainability as a business strategy, others are still early in their transition to green business. Federal regulations, programs like Energy Star, and the work of the EPA benefit those companies that have not yet institutionalized smart green practices.
The CPP, if allowed to continue, is estimated to create between $26-$45 billion in net economic benefits—spurring innovation, creating jobs, and enhancing American competitiveness. The CPP is also a vital component of our country’s ability to meet our Paris Agreement pledge to cut emissions 26-28 percent by 2025. Businesses across the country recognize its importance: in June 2015, more than 365 investors and companies sent letters to governors encouraging its implementation.
Strong and consistent federal fuel economy and emission standards create certainty, drive innovation and job creation, save consumers and businesses money, and enhance the competitiveness of US manufacturers – while protecting against future gas price spikes.
In April 2016, Microsoft, Apple, Amazon and Google jointly submitted a brief to the US Federal Courts in defense of the CPP. By Q3 of 2016 these companies were the top four most valuable publicly traded companies in the world by market capitalization, accounting for more than 7 percent of US GDP; and they were clear that the CPP incentivized renewable energy and enabled business to reconcile duty to shareholders with care for community and planet.
Since we were founded more than twenty years ago, Paladino and Company has made and proven the case that sustainability is good for business. We have added our voice to the chorus of businesses, government agencies, and individuals who urge the administration to continue offering federal-level climate incentives and mandates.