Help! Need to Lose Two Tons Fast

So I just learned that I have a carbon score of 415 and must lose two tons of carbon output, just to put a mere 10% dent in my estimated individual carbon emissions.  Ouch! And that’s after taking into account that we don’t even drive our car more than once a week.

When I heard that Earthlab was providing Al Gore’s Alliance for Climate Protection website with a carbon calculator, I decided to give it a test drive. There are quite a few out there, and I am still on the lookout for the ultimate user friendly model that my clients and colleagues can work with without much difficulty.

Earthlab’s Live Impact Calculator provided an interesting experience, since it satisfied the need for instant gratification on a key level: you get immediate info on how specific lifestyle changes reduce your carbon output plus you are encouraged to make a personal pledge to improve your carbon footprint.  Most calculators just move you over to the ‘buy offsets here’ screen and send you on your way.

Learning that, as a frequent flying business traveler, my carbon score is much higher than the average 325 score for Americans or 305 for Canadians and that I alone generate approximately 20 tons in emissions was depressing, to be honest.  But I am now armed with info on how to behave my way out of the problem.

And unlike any fad diets out there, at least I can ‘offset’ the weight that I can’t lose entirely.

Do you know your carbon score? Have any experience with reducing and offsetting your emissions that you would like to share?

Talking Points on the New Green Bonds

Green Bonds are a first-of-its-kind pilot financing created by Section 701 of the American Jobs Creation Act of 2004. The Council of Development Finance Agencies summarized the basics of this newest trial debt initiative in an online ‘explainer’ memo, which outlined some of the qualifying criteria:

• Size: Projects must include cleanup of a brownfield site and contain 1 million square feet of building space or at least 20 acres.

• Mandatory LEED certification: 75 percent of the square footage of commercial buildings, which are part of the project must be registered for LEED certification.

• Energy Use Reduction: Project applicants must demonstrate how the project contributes to the reduction of electric consumption compared to conventional construction as well as other energy measures.

• Federal, State & Local Co-financing: State and local governments that nominate projects must contribute $5 million to a project. Tax abatements and in-kind contributions count toward the $5 million.

The limited scope of the financing is underscored by Section 701 specifically naming four projects, which should submit for financing within 120 days of the IRS publication of formal guidelines for the tax exemptions:

• The Atlantic Station, Atlanta, GA
• The Belmar, Lakewood, CO
• The Louisiana Riverwalk, Shreveport, LA
• Destiny USA, Syracuse, NY

Interesting for investment real estate is the conditioning of incentives based upon achieving mandatory LEED certification, requiring energy use reduction at the asset level as well as the focus on existing, large mixed-use projects in urban metro areas.

You should also take note of energy reduction goals being formulated as specified carbon footprint reductions. For example, super regional shopping center Destiny USA announced that they are closer to complying with the terms of their $229 million in green bonds by running one of their developments, The Carousel Center, on green power, stating that:

“We are committed to reduce So2 [sulfur] output on the project by 1780 tons per year. This initiative alone satisfies 10% of that requirement, avoiding 185 tons of So2 per year, reducing visible pollution like haze.”

In the green age, those commercial lenders who may be asked to co-finance the greening of of existing real estate will have to learn to do a much more complex credit assessment, incorporating direct LEED review as well as the borrower carbon reduction strategy into credit due diligence. The existence of tax exemption compliance issues plus possible additional environmental cleanup would leave too much potential liability on the shoulders of the lender if these issues were not properly examined when making the loan.

So are you up to speed now? We will keep bringing out stories about how these green bonds are shaping up in future posts.

credit: flickr/photosfromonhigh

The Lender Case for Going Green

I had a good time this afternoon with the USGBC Chapter BayLUG (Bay Area LEED User Group), along with Chris Bartle of Green Key Real Estate. I gave a banker’s perspective on green commercial real estate and Chris shared his expertise on the situation for green residential. My synopsis on financing green commercial real estate:

• Many real estate deals are sidelined now due to current capital market conditions

• The positive business case for going green is being heard by financial institutions. I receive a strong, constant flow of positive anecdotal evidence that green buildings deliver superior economic performance.

• Financing green buildings is hampered by poor integration of the players.

• While an investment in a green building creates much additional value overall, there is an uneven allocation of that economic upside among the different players — lenders are not seeing a tangible (read: cash) value-add for financing green, and so have been sluggish to establish green lending programs.

• More organizational and industry paradigm shifts are on the way as green buildings emerge as a preferred investment asset for institutional real estate.

How to move forward? As they say in Cameroon,

The questioner never loses the way…

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