China is now the world’s largest emitter of carbon, with growth in emissions up 300 million tons or 3.8 percent since 2011. Developing countries now account for 60 percent of global emissions from energy use, up from 45 percent in 2000.

So what does that tell us? Does it mean that the people who have resisted any national energy policy for the United States, much less having the United States sign international carbon treaties are right – there is nothing that the United States can do that makes any difference? On a happier note, does it mean that the United States is actually doing quite well, making steady progress towards the goal of reducing its carbon emissions to sustainable levels?

I would answer those questions “no” and “no.” There are no simple answers in the search for sustainability. At a headlines-level, the report is bewildering and disheartening. But the report provides layers of data, precisely because achieving carbon sustainability is not going to be possible if you don’t look behind the headlines.

To understand what is happening and what it will take to achieve sustainability, I have to think back to the China I first saw 20 years ago. I made my first trip to China in 1992 for a joint U.S.-Chinese conference on land use and the environment. The U.S. delegation was composed of people like me; more interested in seeing China than they were capable of managing the sort of growth it faced. The Chinese delegation, on the other hand, were an amazing collection of people charged with addressing some of the hardest challenges in land use planning ever approached by humans. (I sat next to the public works director of Shanghai at one session, and we chatted about how Shanghai treats its municipal water. The answer to that question: every way it can, and at least then, you still couldn’t drink it.)

The conference was shortly after the fall of the Berlin wall and the collapse of the Soviet Union. For the previous decade American broadcasters had reported many times about bread lines in the Soviet Union and Eastern Europe. The Chinese at the conference were openly disdainful of their Eastern European counterparts. (“What were those people thinking?! How could they have focused on building weapons to fight the United State sand left their people hungry?! They got what they deserved!”) The Chinese Communist Party had started in 1948 with a desperately poor country, in which famine regularly killed millions of people and families sold their daughters into slavery. As of the early 1990s, China was still much poorer than the United States, but there had been immense progress. It was obvious that food was plentiful. The housing stock was substandard by U.S. measures, but people were housed. Children were being educated. When people were sick, there was a doctor to go to – whether or not that doctor had access to modern facilities or medicines. People were optimistic – not because of what they had, but because they believed that life was improving. The Chinese leadership had concluded that the way they would avoid the fate of their Eastern European counterparts was to continue to meet the rising expectations of their people. There was a lot to not like about China’s leaders – but they had a strategy and they were working hard to implement it.

But – as of my first trip to China, electricity was rationed by apartment building. At the first of the month, the building got a defined amount of electricity. If it was used up by the 20^th of the month, then the lights went off until the next month. Talk about peer pressure! No one was going to have their neighbors accuse them of being the reason the lights went off. Each apartment room had a single 40 watt bulb in the center. There were no consumer electronics; no dishwashers, washing machines or dryers; no boom boxes. Every apartment did have a small black and white TV, but that was the limit of their electricity-consuming luxuries. Cities were dark at night; there was almost no street lighting. The vast majority of the population commuted by bicycle. Most deliveries were by bicycle. (Indeed, we watched two guys with bicycles haul a steel I-beam along a darkened city street one night.) There were only about 10,000 automobiles in the entire country and the planners were terrified of what would happen if people who wanted them could buy automobiles, because having designed their cities for the bicycle, they would be choked by an increase in cars that would be less than one month’s production for American car makers in the U.S.

It was clear then, as has happened since, that China could not meet the rising expectations of its people without enormous increases in energy use. People might have been satisfied for the moment in the early 1990s, but as people have more money, it is human nature to want to move beyond having enough food and a roof over your head, to wanting the things you see others have – like cars, music, washing machines and hot water heaters, all of which were nonexistent for the Chinese population at the time.

So turning back to where we are today, the IEA report of country-by-country statistics on emissions, and particular carbon dioxide emissions per capita and the carbon dioxide emissions per GDP, provides a richer understanding of what it going on.

In 2012, the United States emitted 17.31 tons of carbon dioxide per person. That compares to 5.43 tons per person in China, 1.39 tons per person in India, 3.85 tons per person in Mexico, 5.52 tons per person in France, 8.64 tons per person in Ireland, 6.50 tons per person in Italy and 9.32 tons per person in Germany. The United States is not the most consumptive country in the world per capita – oil rich countries like the United Arab Emirates and Kuwait use more. But of the countries we want to be compared with, the United States uses a lot more energy per capita than anyone else. That is why developing nations say that they won’t do anything to harm their economic growth unless the United States does more to reduce its energy consumption. You can understand that; so long as each American emits three times as much carbon as each Chinese and twelve times as much carbon as each Indian, the Chinese and Indians resent being lectured to.

But there is another statistic that is also significant, which is carbon dioxide emissions per GDP. There the United States emits 0.41 kilograms per 2005 dollar of GDP while China emits 1.89 kilograms and India emits 1.3 kilograms per 2005 dollar of GDP. Comparing nations in the developing world to the world’s richest nations (and leaving aside oil-rich countries from the developing world, which tend to be very heavy energy users, presumably because they can be), the economies in the developing world are more energy consumptive for what they get. They still have less – but they emit more carbon per dollar of what they have.

Therein may lay the twin approaches that allow a path towards sustainability. On the one hand, the United States must continue to reduce its per capita energy use. So long as it is far above most of Western Europe and the entire developing world which has taken over as the primary source of emission growth, the United States will be hampered in its ability to either lead or persuade. But the United States can and should also do what it does best, which is to innovate ways to make the economies of the developing world more efficient. American innovation can help countries that are building their economies do so in ways that make them energy efficient from the beginning, rather than depending on hugely expensive retrofitting once they have been built. Developing countries need help in continuing to grow their economies while growing them efficiently.

It is in America’s interest for the developing world to develop successfully. A prosperous China, India, Russia, South America and elsewhere will be more peaceful and better trading partners than those countries ever were when they were impoverished, or will ever be in our shrinking globe if they do not successfully develop. We cannot begrudge the people of the developing world the things we take for granted in our own world. We can, however, help them develop their economies to be energy efficient, and in doing so, both capitalize on the wealth that will be spread to us by their growing wealth, and reduce their carbon emissions as we reduce our own.

No one in that room doubted the need for a transportation package being passed in this special legislative session. The package is not ambitious—rather it is trying to finish up the commitments on five major projects (520 bridge, SR99 tunnel, I-5 Colombia River Bridge, SR-167, and SR-509) and address our aging and weakened transportation infrastructure. In his remarks, Governor Inslee noted the sad state of our transportation infrastructure. It is both a public safety issue as well as an economic development issue. Our transportation helps (or hurts) all of us in the state—we all need to be able to get to and from work safely.  We need food, clothing, and other necessities  transported across our state highways. Good transportation systems equal good economic climate to attract new businesses and jobs. Conversely, bad transportation systems equate to barriers to start-ups, disincentives regarding business expansion here in our state, and misery for all commuters, vacationers, and deliverers of any service or good.

Last night, the I-5 Skagit River Bridge collapse was a huge wake-up call for our state. An aging mid-1950’s bridge collapsed in a matter of minutes when an oversize truck hit one of the bridge truss elements. The good news is that there were no fatalities or even serious injuries. However, it was a huge scare to those affected. Two cars were submerged in the Skagit River, and thousands were and will be affected by the bridge closure. According to the Seattle Times, government officials did not believe that this bridge was particularly worrisome when the state received an overall “C-“ for bridge safety.

The state’s number one goal is public safety. Economic development (for all) is goal number two. Taking care of our aging and decaying transportation infrastructure needs to be given the high priority that it deserves. The legislators and Governor are eager to get a transportation bill passed. It’s now time for the public to set aside tax aversion and do its civic duty.

I am new to Green Tech blog, but you might remember me as the “incensed” partner who objects to paying bicycle taxes on bikes as a way of funding a highway and other infrastructure to which bike users have virtually no access (at the top of my list of objections is that the proposed bike tax would fund highways and highway expansion, not bike-and pedestrian-friendly complete street initiatives). For another time is my side of the debate about the wisdom of an extra tax on bike purchases (for the record, I am not against them across the board).

What we do agree on is the promise of bike share coming to Puget Sound. And, probably, the necessity of additional bike—and other non-car—infrastructure.

Imagine this in Seattle:

The recent announcement by Puget Sound Bike Share that it is moving forward with the next phase of bringing bike share to Seattle should be hailed with the sort of fanfare that might be given to an announcement that King County Metro’s budget has been doubled (were it so!) or that light rail will connect Seattle to the eastside (make it happen!): it is a game changer in our urban transportation landscape.  

Bike share is a network of shared bicycles that are available for rental on a short-term basis. From its audacious beginning in 1965–50 bicycles were painted white and dispersed around Amsterdam for anyone to use free of charge—to today, where some describe bike share as the “fastest growing” mode of transport in our planet’s history, bike share has a lengthy and mostly positive history of contributing to community transportation, culture, and climate. The organization, design, and operation of the system vary widely around the world (some are run by local community groups, others by public-private partnerships, still others by government agencies), but the fundamental concept is similar: bike sharing extends traditional transportation systems (solving the “last mile” problem), provides faster and more convenient access to areas underserved by those systems, and increases opportunities for multimodal transportation. At the same time, bike sharing does not create pollution or add to global warming (unless you believe that bicyclists pollute the environment simply by exhaling, as some apparently do), improves congestion, is less expensive to implement and requires less infrastructure than other transportation modes, provides a low-cost, on-demand transportation option, promotes physical activity, and generally “enhances livability and neighborliness” of an area. (For an excellent survey of bike share generally and assessment of its introduction in Seattle, take a look at Seattle Bike Share, which links to a 2010 feasibility study conducted by UW graduate students and commissioned by SDOT.)

With all of this going for it, how can bike share be wrong? There are some obvious hurdles to overcome—most point to King County’s mandatory helmet law, others to our region’s topography—but Puget Sound Bike Share has teamed up with Alta Bicycle Share, one of the most experienced operators of bike share around the country, and has been studying this issue for several years. I applaud their efforts and look forward to joining at first launch in 2014. We may not beat NYC’s recent bike share success—5,000 signed up for bike share in the first hours of registration—but we can come close.

For six years running, Washington has been named the most bike friendly state in the U.S. by the League of American Bicyclists, an organization that has been around longer than Washington has. Puget Sound Bike Share provides an opportunity to further enhance that hard-earned, well-deserved reputation.

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Diane Meyers is a shareholder and member of Graham & Dunn’s Litigation & Dispute Resolution team, focusing her practice on commercial litigation and appellate advocacy. She is pro bono outside general counsel to Puget Sound Bike Share.

• Increase funding for Department of Energy’s clean energy technology activities by more than 40%, to $6.2 billion.
• Increase funding for clean energy technology across all agencies by 30%, to approximately $7.9 billion

A noteworthy part of the budget plan is a proposal to make permanent certain tax incentives for renewable energy production and tax credits for advanced energy manufacturing. This part of plan would cost $23 billion spread over 10 years. Making the tax credit for the production of renewable energy (PTC) permanent would, in the words of the administration, “provide a strong, consistent incentive” for investments in renewable energy technologies and “meet our goal to double generation from wind, solar, and geothermal sources by 2020.” In addition, the budget plan makes the PTC a refundable credit, which, if finally approved by Congress, could be a key source of financing for many startup companies in the renewable energy industry.

To help pay for these and other increases in the Federal budget, the budget plan calls for a repeal of many tax incentives, such as the deduction for intangible drilling costs and the Section 199 manufacturing tax deduction for oil and gas, that many view as subsidies to taxpayers in the the fossil fuel industry. The repeal would raise approximately $44 billion over 10 years.

It should be noted that the President has introduced in prior budget cycles many of the ideas that now make up his budget plan for the 2014 fiscal year, but without success in getting them implemented. For example, in 2012 he included a permanent, refundable PTC in his proposed budget for the 2013 fiscal year, but this was finally rejected by Congress. So while it is encouraging to learn that the President and his team continue to support and push for clean, renewable energy, it is still a little too early to get excited about the prospect of additional funding for companies in the industry.

By any sales measure, the car2go model is very successful. Consumers love them because they are easy to use, easy to find, cost-effective (38 cents per minute with a maximum cap per hour), and small enough to park nearly anywhere (with paid parking no less). And car2go is gaining a lot of media attention and acquiring new members (customers) at a rapid clip. I’m about to join them.

Car2Go, is owned by Daimler AG, the parent owner of Smart. Daimler started offering car2go in Europe in 2008. Car2Go has begun offering member services in San Diego, Austin, Portland and Seattle. Daimler offers its San Diego members all-electric Smart Cars.

In Seattle, all of the Smart car2go vehicles are gasoline-powered. It may be an interesting experiment: are the gasoline powered vehicles here so wildly popular because they are accessible nearly anywhere and not limited to access to a charging station or at least a 110v outlet? While an all electric Smart Car would reduce greenhouse gases more than a gasoline-powered Smart Car, the gasoline-powered Smart Car gets approximately 36 miles to the gallon (non diesel version). Driving even a short distance is not an environmental equivalent for walking or riding a bike, but far more environmentally-friendly than taking the “big vehicle” (think SUV or large sedan) to get a traveler (or two) from point A to a short distance point B.

Car2Go seems to be so popular in my neighborhood to go that “last transit mile” or a short distance (the grocery store, for example). But there are two trends that might cause pause for others than Car2Go. These are: (1) more urban, or possibly non-urban, consumers may decide that they don’t need a second vehicle and can more readily rely on mass transit, and (2) so called “millennials” (the Millennium generation or “Gen Y generation”) don’t appear to want or need a personal car as an extension of their persona or “personal brand.” While these trends are great for the environment, automobile manufacturers (other than Daimler) might have much to worry from the very sizeable millennials, in general, and car2go millennial members, in specific, or adopt a similar “rental” model.

Recently, I’ve been having a debate with one of my partners, who bikes to work, and who is incensed that a key current transportation funding bill in the Legislature would impose a $25 excise tax on the purchase of a bicycle costing $500 or more. My response is that we need to tax all bikes and we need to increase the tax on electric vehicles and hybrids. She says I get credit for consistency, but she’s not buying it. She makes some valid points about the tax falling mostly on independent bike shops, while the major discount stores can sell bikes for less than $500. She also makes a valid point that far more bicycle infrastructure is needed than a $25 tax on new bikes will pay for, although I’m not quite sure why the fact that the tax won’t raise enough money to do what is needed is a reason not to have the tax.

Really, the bottom line is that we need to be taxing all bikes, electric vehicles and hybrids. We have a huge transportation funding deficit and all users who need facilities built for them need to be prepared to pay their fair share of the transportation budget. That is true because the deficit in our transportation funding is so huge that there simply is no free lunch. And it’s true because in our polarized, tax-averse political world, the ability to get anything paid for depends on everyone feeling that the system is fundamentally fair, most especially the people being taxed.

Washington’s primary source of road funding is the gas tax. The State Supreme Court has held that gas taxes cannot be used for transit facilities under the state constitution. So, transit is paid for by sales tax and recently by a motor vehicle excise tax, as well as federal funding. But gas taxes are a declining resource. If the number of vehicle miles driven stayed unchanged, the shift to more fuel efficient vehicles would automatically reduce gas tax revenues. The recession compounded that effect by causing people to drive fewer miles. As recently as 2010, the State’s Office of Financial Management forecast that gasoline use would increase at around 1.2% per year over time. Today it estimates that gasoline consumption will fall on average about 0.43% per year. We have not kept up with basic maintenance of our state or local transportation infrastructure. A commission appointed by former Governor Chris Gregoire estimated that the state has at least a $50 billion backlog of maintenance and basic infrastructure preservation tasks. That was before a federal judge ordered the State to accelerate repair of culverts that block 1,000 miles of salmon migration – at the cost of more than $1 billion.

The bottom line is that my plug-in hybrid puts exactly the same demands on our state and city roads as my old VW Beetle did. But it not only doesn’t make me pay for gasoline, it also exempts me from gasoline taxes.

My partner wants – correctly, in my view – the City to spend a lot of money to build bicycle lanes, to separate bicyclists from automobiles. We need to do that. Bicycling is great exercise for our increasingly sedentary society and we should encourage it. It is carbon neutral. Most importantly, bicycles and automobiles in the same space are a disaster on two fronts: the bicycles slow down the cars and thereby increase congestion on already congested streets, and while a fender bender between two cars makes for repair bills, the same accident between a car and a bicyclist kills or maims the bicyclist. We simply must separate the two.

But the cost of all of this will necessarily fall most heavily on the people driving cars. In a world with Tim Eyman, it may need a vote of the people. Even if a vote is not required, politicians who vote for new taxes are going to have to explain and defend that decision at the next election, and if people don’t feel the decision was warranted, politicians will be replaced. Taxes must be fair, and they must be perceived as being fair. If they are not, they will not last long in a democracy.

There has been an argument among bike and electric vehicle enthusiasts that they are “so good” for the environment, it is important to encourage them, and that they should somehow be exempt from taxes. It is as if taxes, being nasty, should fall on the folks who want to do “nasty” things, not on people who are “virtuous.”

Don’t get me wrong. I will happily take my tax credit if the federal government wants to make up for the fact that the plug-in part of my car added several thousand dollars to its cost. Subsidizing early technology is one of the key ways that government has brought many technologies to commercial viability. But the federal tax credit is the government’s effort to get the plug-in hybrid market past its initial start-up costs. I don’t expect that in addition to federal tax incentives, the fact that I bought a green car should keep me from paying my fair share of the cost of the roads I drive it on. I think all people who believe that it is important to make basic infrastructure investments in our transportation system should be prepared to step up to their share of that cost. That includes me, and the folks about to spend $500 on a new bike.

The Treasury Department has now explained the effect of sequestration on the Section 1603 cash grant program for renewable energy projects. That program was introduced by the American Recovery and Reinvestment Act of 2009 to encourage investment in renewable energy projects. It provides direct cash grants for energy property that is placed in service by a specified credit termination date. The date varies depending on the type of renewable energy involved. The amount of a Section 1603 cash grant is up to 30 percent of the energy property’s tax basis and is claimed in lieu of any production tax credit or investment tax credit that would otherwise be available. The program has been popular and has helped attract investors to renewable energy projects where the numbers would otherwise not pencil out.

The Treasury also announced that Section 1603 cash grants issued between March 1, 2013 and September 30, 2013, when the current fiscal year ends, will be cut 8.7 percent, irrespective of when the application for the grant was received by Treasury. However, awards made prior to March 1, 2013 will not be affected.

The announced cut will have more of an impact on solar energy projects than wind energy projects. In order to take advantage of the Section 1603 cash grant program, wind energy projects were required to be placed in service by December 31, 2012, a deadline that has already passed. Solar energy projects, however, do not need to be placed in service until December 31, 2016.

The 8.7 percent cut translates into a loss of 2.61 percent of the cash invested in a project (i.e., 30 percent x 8.7 percent). That may not sound like a lot, but with returns already pretty thin, it may cause investors to shy away from some projects.

Kathleen Petrich reported on January 9 that I had bought a new car.  I had been nursing my 13-year old VW Beetle, hoping that before it died someone would make a car that I could drive back and forth to work without using any gasoline, but still could drive to Olympia or Tacoma or Edmonds whenever I wanted without worrying about whether I had enough battery to get home.  And Ford did it!  Just in time.  The Ford C-Max Energi is a plug-in hybrid, which gets somewhere between 12 and 21 miles based on a full charge of its plug-in battery, then switches to a hybrid motor, using what we have all come to think of as “Prius technology.”  [Ford would be offended by that statement.  It turns out that Ford and Toyota were independently developing the technology at the same time.  After some suits and countersuits, they settled by giving each other a cross-license.  So they both have essentially the same hybrid technology, and each claim bragging rights to it.]

My new car is an amazing piece of engineering.  It is a joy to drive, with lots of pickup, great handling, an array of gadgets, and far more space than I was used to.  Ford claims I can expect better as the car gets broken in, but on that first tank of gas I went 642 miles on 10.9 gallons of gasoline, for an average gasoline use of 58.8 miles per gallon.  Yes, there were trips to Olympia, Edmonds, Kirkland and Tacoma, but mostly commuting to work has been gasoline-free.  Living in Seattle, where our electricity comes from water falling over dams, not coal- or gas-fired generators, that makes my commute about as climate neutral as it gets.  And when I get home at night, I plug it into a normal 110-volt plug in our garage – no fancy charging station for this car.  I love it!

But the experience has also focused my attention on the issue of “what happens if this move to plug-in hybrid cars succeeds like I think it will?”  Because it is hard to miss the fact that it takes energy to move this car, all 3,400 pounds of it, up and down the hills of Seattle.  Just because it is gasoline-free doesn’t mean it is energy free.  It can’t be.

Right now Seattle City Light gets about 13% of its revenues from selling surplus power on the wholesale market.  In the middle of the night, it can produce way more energy than it can sell, and mostly spills water over the dams rather than running it through the generators.  Charging a car at night has essentially no environmental consequences.  But what if 5 years from now 50% of the new cars in Seattle are plug in cars.  What then?

About 28% of all energy used in the United States is used by transportation.  That includes planes, trains, trucks boats and cars, not just the personal automobile.  But the personal automobile and fleets of vehicles that could be electric-powered are a significant share of the total.

Electric companies are required to build generation, transmission and distribution capacity to meet their peak demands.  That is typically the middle of the hottest day, when the most people are running their air conditioning systems at full bore.  Different electrical utilities have somewhat different peaking periods, but for all of them, by 10 or 11 o’clock at night, they don’t begin to need all the generation capacity they have.  Across the United States, during the off-peak periods there is enough unused electrical capacity to take maybe half the power demands of our automobiles if they were electric.  But, if all those cars were being charged during the middle of a hot summer day – the nation would need to build a lot more generation plants and distribution facilities and would need to upgrade its distribution systems downstream of thousands of substations.

And what would that mean?  Power companies are entitled to earn a return on the capital investments they are required to make in order to supply the power we need.  Those investments get repaid, and a return on the investment gets earned, through the electrical rates we pay.  That is a fundamental rule of utility rates.  So if power companies have to build new generation capacity, or new transmission lines or upgrade their substations, they are entitled to increase their rates to pay for that and earn a return on the investment.  The bottom line is that if some years from now, the conversion to electric cars forces construction of new generation, transmission or distribution capacity, the rates for electricity must rise.

What does that mean for today?  The power companies are saying, “don’t worry about it.  We’ve got plenty of power.”  And indeed many electric power companies have seen their loads fall as consumers have invested in energy saving devices and strategies.  When their load falls, the power companies need to cover their return on investment from the sale of fewer kilowatt hours of electricity.  Power companies don’t necessarily like too much conservation.  And they would not necessarily mind having a new source of load on their system – that is more kilowatt hours to sell.

But the rest of us, and particularly the automobile companies that have invested in developing this amazing new technology, need to worry now.  People who would love to see a major switch to electric cars should be insisting that electric rates get set now to encourage electric cars to be charged at night.  Some Northwest utilities already have time-of-use pricing.  Smart metering makes that possible.  On the other hand, when time-of-use pricing just moves the existing load around, there can be real disadvantages as well, because while some customers’ rates go down, customers who use electricity during peak periods see their rates go up.

But electric cars are not existing load – they are potentially a huge new load.  That load needs to be met, to the greatest degree possible, by the unused capacity of the off-peak hours.  And now is the time to develop the rate structures and the technologies to encourage electric car owners to charge during off-peak periods.

That can still make electric cars a new source of revenue for power companies.  They need not worry about too much efficiency with electric cars – every kilowatt sold to power a car is a new kilowatt.  But if we just assume that electric cars can be charged “whenever” – if we wait until the power companies have to build more capacity or we start to experience brown outs as a result of that new load – the odds that we can get this right go down.  At that point electric cars will be demonized, and we will have one more example of the law of unintended consequences.  What could and should have been a major tool in reducing carbon emissions and our dependence on foreign oil will instead sour, as all electric consumers pay the price.  There is no excuse for that to happen.  We should be smart enough, and able to see over the horizon well enough, to address the problem now.

Washington spends more than $20 billion each year on energy. “Shrinking our dependence on imported energy and boosting home grown clean energy will strengthen and expand our economy.”  Approximately ¾ of the $20 billion dollar energy goes for traditional transportation fuels.  Governor Inslee wants to quickly move to electrify our state transportation system by taking advantage of clean and affordable electrical power.  “We will ensure that state investments in transportation contribute to clean energy and climate solutions while we generate jobs and save taxpayer dollars.”

Governor Inslee calls for the extension of the electric vehicle “corridor” (from British Columbia to Oregon along I-5 and completed last year) across I-90 to Spokane and along Highway 101 to expand consumer confidence for using electric vehicles throughout the state.

By leveraging the clean power that we already generate through low-cost hydropower and wind resources, local electrical utilities can be part of the solution in the move to vehicle electrification.  While there were no specifics here, the reference leads me to believe that there will be changes to utility regulation that encourages and accounts for increased demand of electricity from EVs when displacing other forms of energy generation.

Of interest was the statement “The Governor will direct state procurement of electric passenger vehicles, with other public and private entities, for a net savings of taxpayer dollars.”  State fleet vehicle purchases are certainly envisioned, but the reference to public and private partnerships is certainly encouraging.

Lest one think it all about electrification in the transportation space, the Governor is showing his commitment to biofuels.  Specifically, the state will support biofuel production at Washington biodiesel refineries and oil seed farms at costs below those for imported fuels.  The state will also support Washington State University’s new Center for Excellence of Alternative Jet Fuels and the Environment in terms of matching funds to help nurture partnership among the state’s research institutions and its agricultural, aviation, and maritime industries.

If you think the Governor’s clean energy policy brief is still “aspirational” rather than reality-based, his selections for key state posts would suggest that business is anything but usual.  Yesterday, Governor Inslee appointed Lynn Peterson to head Washington State Department of Transportation (WSDOT).  Ms. Peterson was a special aid to Oregon Governor Kitzhaber regarding sustainable transportation solutions.  She was not the “usual suspect” for the WSDOT post.  But her visions seem to be very aligned with the Governor’s clean energy policy brief.  And Ms. Peterson’s appointment represents a very real possibility of a Washington-Oregon alliance for purposes of fleet volume purchases/getting attention from manufacturers/furthering the work of the West Coast partnership regarding the creation of common standards, pooled research results, and developing joint economic development opportunities.  [As an aside, I (along with Steve Marshall, Mike Grady, and Jan Greylorn) had the opportunity to meet with Ms. Peterson in Oregon in December.  While none of our group had any idea that she may be in the running for the WSDOT post –and perhaps she wasn’t at that time–, I was struck by her knowledge, sense of reality, and level of commitment regarding clean transportation.]

These are exciting times with potential for significant change.

In an earlier post (Part One) I described the broad outlines of the new City of Seattle Energy Code that is under development.  The new Seattle Energy Code seeks to go significantly beyond the newly approved 2012 Washington State Energy Code  – which itself is light years beyond the energy codes of a decade ago.  Seattle has set the goal of zero net carbon use by 2050, and aggressive implementation of the range of new building technologies that reduce energy usage is an essential piece of meeting that objective.

The entire code reflects the fact that there is no progress without some hard choices.  It will increase the initial cost of buildings in Seattle.  That means that certain kinds of buildings will be built elsewhere in the region.  But that’s ok.  It will dictate how comfortable buildings are.  But that too is ok.  You shouldn’t need to wear a sweater in the summer when you go into an office building, and it’s ok if you need to wear a sweater in the winter.  Although real estate markets don’t yet pay as much attention to on-going utility costs as they pay to initial costs, eventually the added initial cost will be repaid with lower operating costs.  And we will be just fine with summers seeming warmer than winters where we work.

The one area where I believe the Seattle code is a mistake, however, is with its provision that when a building undergoes a major renovation, or when it is reoccupied after it has been vacant, it has to be brought up to within 20% of the energy efficiency of a new building of the same size.  (The current proposal applies only to buildings of 10,000 square feet or more.  But once the concept is embedded in the code, it is hard to imagine that the 10,000 square foot limitation won’t fall in the next energy code revision.)  I believe it is a mistake based on a couple of experiences in my career in getting an older building re-occupied with a new use.  The reality is that the easiest thing to do with an old building is to wait until someone wants to tear it down and build two or three times as much on the lot.  That is what “pencils.”  Reusing an old building is much harder, and much harder to make pencil.  And still, in the situations I have been involved in, reusing an old building can have enormous benefits for the community.  Indeed, reusing existing building stock has energy savings over hauling all the materials in the existing building off, some to be recycled  and the rest to a landfill.

I expressed my concerns in an email to Duane Jonlin, the Department of Planning and Development staff person responsible for the new energy code, and he responded to my concerns in a detailed email.  If you are wonky enough to have read this far, then you may want to read what I said, and what he said – and then I get the last word.  Because this is my blog.

I wrote:

I applaud the City’s effort to adopt an energy code that will make a significant contribution to achieving the City’s goals of zero net carbon use by 2050.  Some of the code provisions are arguably onerous – but the goal of zero net carbon is not easy, and will require some cost.

That said, I think the City – both DPD and the Council – in adopting the new energy code needs to recognize that minimizing energy use in buildings is not the only important thing to be considered.  With respect to the retrofit provisions, I believe the City is applying a tunnel vision approach that will potentially result in some energy savings, but at a disproportionate cost to other important values.

In my experience, low-scale, outmoded buildings follow one of three paths.

• They receive less and less investment, until the business occupying them folds and they become vacant.  At that point they may remain vacant for many years.  Vacant buildings are almost uniformly a blight on their neighborhood, as well as providing minimal tax revenue and no jobs.
• They are converted to a new use.  I have been involved in several such conversions over the years, where non-profits have managed to put a building that was otherwise vacant to a completely different use.  Sometimes those included minor expansions of the building.  I am also aware of several conversions to retail uses.  This Sunday’s Pacific supplement in the Seattle Times had an article about several.  Those conversions were virtually always only possible because the space, after the conversion, is still cheap.  Whether it is a retail use or some little non-profit arts group or a housing group that manages to convert a vacant building into something entirely different, they can achieve a use that would never go into a new building for the simple reason that the price can be made right.  Those conversions offer many benefits to the community, including maintaining a sense of scale in the neighborhood,  creating spaces for important businesses and organizations that create the “fabric” of the community, and adding life to a neighborhood instead of blight.
• The building is bought by a developer to tear it down and build to the zoning maximum  – either for condo or office development.

The first and third paths are by far the most common, and the easiest to make happen.  The third would, of course, also bring the property up to current energy code standards. 

The second path is hard.  The second path is also often extraordinarily valuable to the neighborhood and to a range of things we value.  I do not believe the City should prejudice the ability for properties to take the second path except for compelling reasons.

Over the last 15 years the City has adopted a number of codes that increase the cost of retro-fitting old buildings, and thus make it increasingly difficult to take the second path. These include the City’s seismic retrofit rules, and its handicapped accessibility rules, in particular.   I represented the owner of a one-time automobile garage when she converted it to a dance studio on Capital Hill.  Had she fully understood the costs of the seismic retrofitting she would be required to do, that project would never have happened.  On the other hand, that dance studio maintains the scale of the neighborhood, while it is surrounded by condos built to the maximum allowed by code, and it adds to the fabric and urban vitality of the neighborhood.  The City would be poorer if the owner had waited an extra 2 years, and sold the property to one of the current round of condo developers. 

We can probably all agree that the trade-off between losing a potentially nice project versus having increased occupancy of a seismically risky building probably weighs in favor of the seismic upgrading.  The same is true of handicapped accessibility.  As a society we can make a decision that we will risk losing a project rather than have it inaccessible.  But I am not convinced that the energy code is in the same category.  At the very least, the City needs to recognize that it is making a choice – that requiring major energy efficiency upgrades if an older building is significantly upgraded will result in more buildings not receiving new investment, and more buildings becoming vacant and staying vacant longer, and will lead to the ultimate outcome of those buildings being razed and turned into the current generic condos and offices more often. 

Again, I applaud the City’s motives.  But there are other potential avenues to achieve the objective – at least sometimes – of improving the energy efficiency of older buildings.  The City has received federal grants to upgrade its housing stock in older neighborhoods.  It could potentially seek grants to allow the City to finance energy upgrades when older buildings are being converted to a new use.  It might be able to do that with loans paid off over time that the new user could afford, and might well be delighted to take out.  But I don’t believe the requirements of the current draft are appropriate.  Energy efficiency is important; it is not the only civic value that is important.

The following week, Duane wrote back:

I certainly don’t maintain that energy use is our only value.  Maintaining our current building stock and neighborhood character is a significant policy for my department and for the City in general.  I have been working extensively with the Preservation Green Lab staff to develop rules that encourage long-term retention of our historic fabric, and our mutual belief is that old buildings will have improved resilience and long-term survival prospects if they are high performers.

Please note that during the state rulemaking process and in my proposed Seattle amendments I have softened the impact of energy code rules for non-residential to residential conversions, for unheated to conditioned space conversions, and for conversions of lower to higher energy use occupancies.  Those are now required to bring buildings most of the way to compliance with current code, rather than all of the way to code as has been the case with current codes.

Note that the draft proposal has a threshold of 10,000 SF, so that most of the building reuse projects featured in the Sunday Times article would have been exempt from these rules.

Note that the proposed rules, unlike almost all other regulations, do pay for themselves over time with reduced energy costs, and are certainly more comfortable for occupants.  The dance studio you mention, which must be kept comfortable and warm for the students but is built in an old uninsulated building, is a great example of an appropriate application of this rule.

Note also that all of the new systems (HVAC, lighting, water heating, windows, etc) in a renovated building must already meet current code.  Uninsulated roofs are required to be insulated during re-roofing projects. This leaves the remaining building envelope components to be upgraded under my proposed substantial alterations rule, and only to the extent that the whole building achieves about 80% of the performance level required of new buildings.  This would typically mean that some windows would need to be replaced, or walls insulated, or floors over unheated spaces insulated.

Over the long haul, we must make substantial energy use improvements to our existing building stock.  Mandating upgrades to occupied buildings would be expensive and disruptive, so I have instead selected the point of substantial alterations to be the least disruptive and most cost-effective time for these improvements.  However, I would certainly welcome any ideas you may have that would accomplish these goals more effectively.

I’m sorry to say that while I appreciate his response, it seems to me to typify how Seattle, with its liberal and well-intentioned goals, can be completely tone deaf to anything other than the objective of the moment.  I really do not believe Mr. Jonlin has ever tried to make a pro forma work.  Nor is anyone suggesting that a previously unheated building should remain unheated once it is occupied.  The issue is whether when older buildings are repurposed, they must be brought up to the standards that make them livable and workable for the new user, or whether they must go beyond that, to meet the rather extraordinary standards that the City has chosen to apply to new construction.  Almost by definition, if the costs of coming up to code made economic sense to the owner and the new user, they would be doing it without the code requiring it.  So these are costs that don’t make sense on their own, by any economic measure that matters at the time someone is trying to reuse the building.  The pay-back period for many of the improvements is longer than the commercial market will tolerate.  But more important when the objective is to reuse an existing building, the sort of non-profits and small commercial users who tend to engage in this reuse often cannot trade long-term operating costs off against initial capital costs.  The financing of these projects is not like that.  They must complete the construction within the funds available, and the fact that there would be a long-term reward from spending more money up front is simply irrelevant.  The upshot will be that what start as marginal projects will not happen.  How often that will occur, only time will tell.