Why ASHRAE Standard 189.1 matters for green finance and investment
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The long awaited ASHRAE Standard 189.1 is finally here.
Why should anyone in real estate finance and investment cheer about that?
Architecture 2030 reports the building sector as being responsible for 50.1% of total annual U.S. energy consumption, 49% of GHG emissions, and 74.5% of annual US electricity consumption.
To combat that, ASHRAE came up with:
the first code-intended commercial green building standard in the United States. It covers key topic areas similar to green building rating systems: site sustainability, water use efficiency, energy efficiency, indoor environmental quality, and the building’s impact on the atmosphere, materials and resources.
Because Standard 189.1 provides the basis for new building codes, which can be adopted to define green buildings, it makes it easier for cities and counties to adopt codes which will a) result in real green buildings(!) and b) help the adopting government to achieve the 2030 Challenge target of 50% reduction in 2005 CO2 emissions by 2050 within its jurisdiction.
This standard, when adopted into code, does a huge service for the finance and investment community as well, because it finally defines a minimal standard of commercial green building quality. By being able to rely on Standard 189.1 within green building codes, a developer or contractor, could have an easier time of constructing green buildings across different markets, because the baseline would be transparent and similar. This assures greater efficiencies during construction, better execution and higher quality assets.
Moreover, when an investor steps up to buy buildings constructed with this standard as the baseline across multiple markets, it will be much easier for them to figure out if they are really buying a green building — mitigating those kinds of worries is something that can give markets momentum.
Add to that the fact that the adopting government entity would be demonstrating clear leadership and accountability for driving energy and GHG emissions reductions from its building sector.
In any event, it will be interesting to see how cities move to adopt green building codes using Standard 189.1 and the real estate and building community’s actual response.
Check out the site that ASHRAE setup with all the nitty gritty on Standard 189.1. Or just skip ahead and download the factsheet here.
Exciting stuff!
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So this ASHRAE 189.1 basically defines what a green building is? You would think that this kind of standard had been set a long time ago. How is it that “green” buildings have been built without a common standard to measure it by? It just seems strange. Of course this is a big deal!
Thanks, Leslie. Yes, Standard 189.1 is the first code-intended language defining green buildings. While green buildings have been previously defined in many other industry circles, the kind of language that assists governments in adapting / drafting enforceable building codes which would result in the level of comprehensive performance expected from a building to be called green have, till now, not been drafted in a way that building code officials could implement.
This is good news. But in my opinion goverment has to mandate cetain level of building performance and create an incentive system at the same time to see serious change in the local building codes. There are states already implemented such measured by enforcing LEED silver certification level on government buildings for example. I think, if the cap and trade bill passes, there would be enough incentive that more and more people would consider building/retrofitting their homes.
You cannot be paid for just following the law, so government mandates and incentives are mutually exclusive. In order to get a grant or a tax break, you need to exceed minimum legal requirements, so as codes get stricter, it’s harder to get any government subsidies. My latest blog entry, called “Why You Can’t Afford to Not Go Green” has links to 20 legislative initiatives related to green building either passed or pending on the Federal level alone.
http://www.idsgreen.com
Susan, I went back to your blog and read your post summarizing key legislation that will impact building owners. It was great! Thanks for reading Our Green Journey!