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June 4, 2024
Buildings frame our lives—not just in terms of space, but also in terms of our well-being. A well-constructed and maintained building allows people to breathe clean air, offers protection against the elements, and even supports a positive mental state. On average, Americans spend 90% of their time indoors. But how much time do we spend thinking about the buildings we occupy? Do you know how the buildings in which you live, learn, and work are affecting the climate and environment?
The building sector accounts for 35% of total greenhouse gas emissions in the United States. Of these emissions, the bulk comes from electricity generation for building use, which makes up nearly one-fifth of overall U.S. emissions. Robust building codes can help mitigate building emissions, including those associated with electricity and natural gas consumption and embodied carbon. However, building codes mostly apply to future structures. To address existing structures, policymakers now have a new tool: building performance standards (BPS).
Building performance standards are state- and local-level policies that establish performance targets, typically focused on greenhouse gas emissions and energy use, designed to minimize the climate impact of the built environment. These targets become progressively higher and more comprehensive over time to ensure continuous improvements in decarbonization. BPS policies are most effective when they work hand-in-hand with regularly updated building codes to minimize building sector emissions.
Implementation of a well-designed BPS policy should initially focus on larger buildings, which tend to be owned by companies with extensive resources at their disposal. The wide-ranging benefits of BPS adoption go far beyond the buildings themselves and include climate resilience, lower utility bills, improved air quality, and job creation.
Washington became the first state to establish a BPS policy with the passage of its Clean Buildings Act (House Bill 1257) in May 2019. Colorado, Maryland, and Oregon have since followed suit, with California committing to developing a BPS strategy by July 2026. The Clean Buildings Act tasked the Washington State Department of Commerce with developing state-specific targets for the Clean Buildings Performance Standard (CBPS), which applied to covered buildings greater than 50,000 square feet (sq. ft.). It used the ASHRAE (formerly the American Society of Heating, Refrigerating and Air-Conditioning Engineers) Standard 100-2018 as a starting point. In March 2022, Governor Jay Inslee signed an expansion bill into law, adding a second tier of covered buildings between 20,000 and 50,000 sq. ft.
According to the Institute for Market Transformation (IMT), a nonpartisan nonprofit dedicated to improving buildings across the country, Washington’s 2022 CBPS expansion was significant. The state has not yet published updated figures, but James Burton, IMT’s senior policy associate, estimates that the number of buildings covered by the 2019 law may have doubled from the nearly 12,000 buildings originally covered.
“This [expansion] means two things: that there will be greater energy savings and greenhouse gas reductions across the state, and that both commercial and residential tenants can reap the benefits of improved performance in the spaces they lease,” Burton said. “This point about tenants is important from an equity standpoint because members of frontline communities are more likely than the general population to rent apartments in buildings subject to the [Clean Buildings Act].”
The first compliance date (for buildings over 220,000 sq. ft.) is June 1, 2026, but upgrades may be more affordable for those who comply ahead of schedule. In 2021, the Early Adopter Incentive program launched for buildings greater than 50,000 sq. ft. Eligible building owners who meet CBPS requirements in advance qualify for a base incentive payment of $0.85 per square foot.
Emily Salzberg, managing director of the Buildings Unit at the Washington State Department of Commerce, said that the current incentive rate has resulted in seven approved applications for buildings ranging from 65,000 to 890,000 sq. ft., representing an overall allocation of $1.5 million. There is a total of $75 million in incentive funding available.
When it comes to BPS policy, customization is key. State and local governments have firsthand knowledge about community needs and the condition of the existing infrastructure within their jurisdictions. Therefore, decision-makers at the sub-national level are better positioned to craft well-informed BPS policies with optimal impact.
Still, the federal government plays a critical role in supporting the development of state and local BPS policies across the country. The Infrastructure Investment and Jobs Act (IIJA) (P.L. 117-58) provides more than $1.8 billion for the advancement of building sector policies, in addition to $3.5 billion for home weatherization. In January 2022—two months after the passage of the IIJA—the Biden-Harris Administration followed up on its investments with the launch of the National Building Performance Standards Coalition. State and local governments in this network can receive support from federal agencies—including technical assistance from the Department of Energy and the Environmental Protection Agency—in addition to guidance and resources from labor and non-governmental organizations.
As the leading group on building performance standards in the United States, IMT manages the National BPS Coalition (which has grown from two states and 31 localities to five states and 40 localities) and provides general BPS resources, such as a model ordinance for a building performance standard. IMT also works with member jurisdictions individually as they strive to develop and implement building performance standards, sharing best practices and lessons learned with the rest of the coalition throughout the process.
Map of U.S. jurisdictions developing and implementing a building performance standard. Credit: IMT
In the case of Washington state, Burton highlighted accessible utility data as a successful feature that IMT believes can help bolster compliance with its performance standard. “Washington state has legislation in place that compels utilities to provide energy consumption data to building owners upon request,” he explained. “Not all states and local governments have such legislation.”
Another aspect of the CBPS that IMT encourages other localities to consider is the early-adoption incentive, although the program has room for improvement. “The state has faced criticism, primarily that the eligibility for the [early adopter] program is too stringent,” Burton said. “There are also concerns that the process’s complexity could dissuade potential applicants, the financial assistance may not be sufficient to cover extensive retrofitting costs, and the focus seems to tilt toward commercial entities.”
Washington has new policies already in motion that may begin to address some of the concerns Burton mentioned. A recently signed law authorizes the Washington State Department of Commerce to boost incentives for early compliance—a change the managing director of its Buildings Unit commended. “We believe a higher incentive is necessary to bring more buildings into the program,” Salzberg said.
The new rate will be announced in June 2024, following feedback from interested parties. Salzberg added that the Washington State Department of Commerce is eager to engage with building owners, managers, and utilities in an upcoming public workshop series to discuss the addition of early-adoption incentives for smaller buildings as well. The state has designated $150 million for buildings between 20,000 and 50,000 sq. ft., and will officially launch the program in July 2025 at a rate of $0.30 per square foot.
In December 2023, Seattle Mayor Bruce Harrell signed the Building Emissions Performance Standard into law, establishing a target of net-zero building emissions by 2050. The carbon emission targets will become progressively more stringent every five years, until they reach net-zero. Compliance is set to begin in 2027 for reporting and 2031 for emission reductions.
U.S. cities have varying degrees of authority to develop their own BPS policies. This largely depends on whether state law grants legislative autonomy to its local jurisdictions, a political feature known as “home rule.” Washington is a home rule state, giving Seattle greater autonomy to adopt local policies—like its Building Emissions Performance Standard—tailored to the specific needs of the city. Home rule does not, however, mean that local policy supersedes state policy. Therefore, covered buildings in Seattle are subject to both the local Building Emissions Performance Standard and the statewide Clean Buildings Performance Standard. IMT advises that coordination between state and local officials can help ensure consistent BPS policies and minimize compliance burdens.
Seattle’s BPS generally harmonizes with Washington’s, although there are some notable distinctions. For example, Seattle’s BPS offers more avenues for compliance by using a trajectory approach. IMT recommends this approach because it provides both certainty and flexibility for the building owners. The interim and final performance standards are set years in advance. While the final performance standard is the same for every property type, the interim targets vary depending on each building's starting point. Jurisdictions considering a trajectory-based BPS should be prepared to offer extensive guidance so building owners can better navigate the wider range of compliance options.
Example of a trajectory-based building performance standard. Credit: IMT
As with many types of climate policy, it will take a long time to fully assess the outcomes and benefits from Washington’s CBPS. “We are still two years out from the initial compliance dates,” IMT’s Burton pointed out. “This limits the insights we can draw from implementation to date.”
Despite this, he added that IMT is optimistic that it will have a profound impact on energy equity by helping to alleviate energy burdens and improve indoor air quality for low-income apartment tenants. Washington is backing up the CBPS with a strong update to its building code that took effect earlier this year. Burton noted that “it is one of the most efficient codes in the United States, at least on par with the 2021 International Energy Conservation Code.”
Washington State has a demonstrated track record of climate action outside of its building sector policies, as well. Some notable climate policy highlights from Gov. Inslee’s tenure include the Climate Commitment Act (CCA), the Clean Fuel Standard, and the Healthy Environment for All (HEAL) Act. The CCA and the Clean Fuel Standard adopt market-based approaches by establishing a carbon cap-and-trade program for polluting industries and credits for low-carbon transportation fuels, respectively. Both policies are strengthened by the environmental justice guidelines contained in the HEAL Act. These laws—alongside the CBPS—are critical pieces of Washington’s overall strategy to achieve 95% emission reductions by 2050.
Author: Alison Davis
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