FAQs
Clear answers to common questions about carbon footprinting and trading, energy management, and green leases. Jump to: Carbon Concepts / Carbon Markets / Carbon Management.
Carbon Concepts
1. What is a “carbon footprint” and where does the carbon in my (building’s) carbon footprint come from?
The carbon footprint of a building is the total of its greenhouse gas emissions, primarily carbon dioxide, released as a result of activities in the building, either directly as from combustion of fuel, or indirectly from use of electricity. Read more about carbon footprinting in Carbon 101.
2. How is a carbon footprint calculated?
By factors based on the carbon content of fuels and, for electricity, the fuel mix of the local power sector. Your energy use is multiplied by the appropriate factors to convert to “tons of carbon.” We recommend tools for benchmarking current energy use and calculating carbon footprint.
For power information in your area, see the EPA's
Emissions & Generation Resource Integrated Database (eGRID), a comprehensive inventory of environmental attributes of electric power systems.
3. What is a carbon “cap and trade” system?
A legal upper limit for carbon emissions is placed on some category of market entities, who must then comply. One way for those over their allowance to comply is to purchase credits from others in the market who are below their allotted caps. For more information, see Carbon 101.
4. Why should upper management understand the language and concepts of “carbon management”?
Corporate reporting has new categories requiring information on environmental impacts and corporate social responsibility. Clients, employees, and investors are attracted to organizations with a proven track record of environmental awareness, and in an increasingly competitive marketplace, "green-washing" won't cut it.
Furthermore, a carbon footprint is, to some extent, an indicator of your company or building's energy use, and energy equals money. Corporate environmentalism means paying attention to the "triple bottom line": coming in on or under budget, minimizing environmental impact, and being the kind of company that people want to work for and do business with.
5. What legislation should I watch for that would signal the growth of carbon markets?
You should watch for congressional action legislating a national “cap-and-trade” program. McCain-Lieberman has been the leading one of several such pieces of proposed legislation in the Senate. New Yorkers should pay attention to news about the Regional Greenhouse Gas Initiative (RGGI) which establishes a carbon market between utilities in the northeast. The state’s Renewable Portfolio Standard (RPS) and Energy Efficiency Portfolio Standard (EEPS) also have elements that relate to establishing and trading energy “certificates.”
The New York Renewable Portfolio Standard is policy that promotes renewable energy through a variety of initiatives, including "generating local economic benefits by attracting renewable resource generators, manufacturers, and installers to New York."
6. What international developments are driving the development of carbon markets?
International mechanisms around the Kyoto Protocol are driving carbon markets. Europe already has one, the European Climate Exchange, initiated in 2006.
7. How much will it cost to reduce my carbon footprint?
This really depends on building conditions and also how far you want to go. It may also depend on how much of the building’s energy use is under your control (vis-à-vis tenants). As a rule-of-thumb based on experience, a 20% reduction should be achievable with a 5-year payback on a package of measures. So if your building uses $3.00 per square foot as a first-cut you might plan on spending $3.00 per square foot to reduce your energy and carbon by roughly 20%.
Bear in mind that there are a number of incentive programs in New York State for various carbon footprint-reducing activities.
Carbon Markets
8. What is a “carbon market”?
A carbon market is a mechanism for trading instruments that represent reduced or avoided carbon emissions. The instrument is usually called a “credit” or a “certificate” that is verified by a neutral and expert party. A carbon market is created when an upper limit or “cap” is set on emitters. Those who are above their cap must obtain additional credits, those who are below their cap have credits that they can sell. For more information, see Carbon Markets in Carbon 101.
9. When will carbon markets come into existence?
A carbon market already exists in Europe between signatories to the Kyoto Protocol. An experimental and voluntary one exists in the US as the Chicago Climate Exchange (CCX). A carbon market is being created now among the utilities of the northeast states under the Regional Greenhouse Gas Initiative (RGGI). A national carbon market may be brought into play in the coming years by national legislation. There is also a much less formalized market for “carbon offsets.” This is a voluntary market in which people can sell and buy interests in carbon-reducing projects, such as tree-planting in Costa Rica.
10. When would I buy from a carbon market?
If your emissions were over an applicable cap you would either have to reduce them or else buy credits. If you are responding to corporate policy to move towards “carbon neutrality,” you might want to buy carbon offsets.” You might want to make an event or your airplane travel carbon neutral by buying offset credits.
11. When would I sell to a carbon market?
If you’ve reduced your energy use and associated carbon emissions, then you might want to try to sell the credit for this into a carbon market. Similarly if you are producing electricity without use of fossil fuels.
12. What do I have to do to be able to sell to a carbon market?
Your energy/carbon reduction (or your renewable energy production) would have to be certified by an approved third-party entity in order to create a tradable credit or certificate. Your reduction has to be large enough to support the transaction costs. Otherwise, your smaller credits would have to be combined with many other small credit producers and brought into the market by an “aggregator.” See Measurement & Verification in Toolkits and Carbon 101 for information on certifying emission reductions, as well as accounting and reporting.
13. What are “Renewable Energy Certificates”? “Energy Reduction Certificates”?
RECs and ERCs, sometimes also called Green Certificates and White Certificates, are the instruments that are created for use in carbon markets or in voluntary reduction programs.
14. Who certifies energy savings and carbon reductions?
There are various non-profit entities that do this – Green-E (aka Resource Solutions) is the most well-known and trusted.
15. If I create a certificate for the market, what kind of commitment am I making? What obligations over time?
You are certainly implying that you will maintain that level of savings at least over the period of the certificate. Monitoring and enforcement of such an obligation will depend on the specifics of the certification.
Carbon Management
16. How can I reduce my (building’s) carbon footprint?
An energy management program is the key element for reducing your building’s carbon footprint. An energy audit by a qualified professional will tell you what things can be done to reduce energy and carbon. For more information, see Retrocommissioning in Toolkits.
17. What does it mean to “benchmark” my (building’s) energy use?
Benchmarking refers to comparing your building’s performance with other similar buildings. The process starts by setting the baseline of energy use and turning it into an index for comparability, most commonly “BTU per square foot” The benchmark can also be used “longitudinally”, that is over time, to compare your building’s performance one year to the next as you go about making improvements and other changes.
18. What tools are available and recommended for benchmarking energy use and calculating carbon footprint?
The most widely used tool for benchmarking energy use is the US EPA’s Energy Star Portfolio Manager. This tool is available on-line along with instructional webinars, all free of charge.
19. Are energy-saving techniques and technologies cost-effective for the real estate industry?
Incentives can make many projects even more financially attractive. In New York state, NYSERDA is still the major source of incentives although local utilities are also gearing up new programs. See Incentives for funding opportunities from NYSERDA.
20. How do I know which energy-saving techniques are right for me?
We provide some online tools to help you in reviewing the possibilities. Your Operations people probably have some good ideas about areas for improvement. An energy audit by a qualified professional will help you with site-specific analyses and recommendations and just going through the process will help clarify things.
21. How do I know if my energy reduction and carbon management plan is working?
If you’re interested in real energy reduction and not just “hot air,” then you will need to monitor results. There is an established energy engineering discipline that is called “Measurement and Verification” (M&V) that lays out the rules and tools for understanding, tracking, and documenting project performance. This should become a standard part of your operations going forward.
22. Who should be responsible for managing energy and carbon footprint in an organization? What knowledge and skills do they need?
You can staff this internally or outsource it to a consultant or a specialized service vendor. Or use a combination of both approaches with a staff Energy Manager who uses outside resources for the more specialized, technical functions. This decision depends in part on the size of your portfolio and the skills and interests available on your staff.
In any case, the Energy Manager needs to be comfortable with data management and analysis, with building systems engineering, with budgets, finance, construction and operations, and with all the people-management skills implicit in the preceding!
Certification information from both the Association of Energy Engineers and from Building Operator Certification are good guidelines for the skills and knowledge required in an effective Energy Manager.
23. How do I manage tenant energy use?
This is a tough one and “why bother” you might ask? In some case, you can realize material gain from tenant energy efficiency. In some cases you may gain tenant good-will that comes in handy at lease renewal time. And low tenant energy costs can be a competitive advantage. So where tenants are responsible for much of their own energy use – lighting, computers, local data centers – it can make sense to help them control their energy costs. Specific clauses can be added in a “green lease” to clarify and facilitate such cooperation.
24. What is a “green lease”?
With the advent of major tenants seeking “green” spaces to meet their corporate guidelines for social responsibility, BOMA and others have begun to give serious thought to what a lease-form would look like that captured and articulated environmental attributes. As a result, guidelines are emerging that provide specific language and/or riders that can be used in lease negotiation.
BOMA International is a leader in this area. Their Guide to Writing a Commercial Real Estate Lease, Including Green Lease Language is a valuable resource that is for sale at their online store.
25. What is the relationship between carbon reduction, energy savings and LEED certification?
For your existing building, in order to pursue a LEED rating you must achieve an Energy Star score of 69 (top 31 percentile) as calculated with the EPA’s Portfolio Manager benchmarking tool. This rating is based on your building’s energy performance. If you don’t make the score, you will have to improve with an energy savings program that will also reduce your carbon emissions.
The Efficiency Valuation Organization has a public library of the various volumes of the International Performance Measurement and Verification Protocol (IPMV), which "provides an overview of current best practice techniques available for verifying results of energy efficiency, water efficiency, and renewable energy projects in commercial and industrial facilities. It may also be used by facility operators to assess and improve facility performance."
There are lots of practices, techniques, and technologies that are proven to be highly cost-effective. And when you are replacing capital equipment or parts of the structure following your asset-management and capital plans, the incremental cost of increased energy efficiency is usually highly cost-effective and can add to the value of your planned projects.