The energy consumed by our buildings is like the “dark matter” that makes up most of our universe. We know it’s out there; it’s just very difficult to know exactly how much there is without being able to see it.
Indeed, most of us are in the dark ourselves when it comes to understanding how much energy our commercial buildings consume.
But measuring that energy use is a heck of a lot easier than finding invisible matter in space. We already know what kind of policy tools that need to be put in place to encourage transparency. They just need to be implemented.
States and cities are starting to understand this. So far, seven cities and two states have adopted energy disclosure laws that require commercial building owners to disclose energy consumption data. Some of them require full disclosure in a public database and some only require disclosure in private real estate transactions. Minneapolis is the latest city to open up building energy and water use to the public -- joining Austin, New York City, Philadelphia, San Francisco, Seattle, the District of Columbia, Washington state, and California.
“It’s making our local governments smarter," says Andrew Burr, leader of the building performance program at the Institute for Market Transformation. "Local governments know very little about their privately owned buildings -- so they don't even know the right questions to ask about their impact."
For example, after creating an energy reporting system for commercial buildings, New York City officials found that asthma rates were higher in neighborhoods with less efficient buildings. They also found that new buildings often used more energy than older ones.
"These laws are already making a difference in helping us understand where to take action," says Burr.
So what would it take for the U.S. to tap into this growing local movement and implement a national law?
After President Obama advocated for doubling U.S. energy efficiency by 2030 in his State of the Union address earlier this month, efficiency advocates are hoping that Washington, D.C. is ready to take the subject more seriously. Forming a national energy disclosure law would be an effective tool for achieving that target. Although there still isn’t currently any serious talk in Washington about a national energy disclosure law, it’s helpful to think about what it might look like if it were developed.
We have a few tools that might serve as a model.
One is calorie disclosure. Throughout the 1900s, Congress passed various laws requiring better food labeling. It wasn't until 1990 that Congress passed the Nutrition Labeling and Education Act, which established the nutrition label on food products that we know today. The national health care law recently upheld by the Supreme Court takes food labeling a step further, directing the Food and Drug Administration to require fast food chains to prominently display calorie counts on menu boards. While food lobbies have pushed back on these laws over the years, there is strong agreement that calorie transparency is necessary for consumers to make good decisions.
Fuel standards offer another model. In the mid-1970s, Congress created Corporate Average Fuel Economy (CAFE) standards that set average fuel efficiency targets for different classes of automobiles. The law established a labeling system for fuel mileage, giving consumers more information when making a purchase. That labeling system was revised in 2011 to include additional information on environmental impact, fuel costs, and energy use.
Today, it's almost impossible to imagine not having a labeling system for calories or vehicle fuel efficiency. So it doesn't seem like much of a stretch to imagine Congress creating a similar system for energy use in commercial buildings.
But a federal law on energy disclosure might look less like CAFE standards and more like the Toxic Release Inventory (TRI) managed by the Environmental Protection Agency.
Established in the mid-1980s by Congress, the TRI is a federal database of toxic chemicals and industrial pollution sources around the country. Anyone can access the database to see where harmful chemicals are being stored or how much pollution is being emitted in their area.
"We need a national database for commercial building energy use. The TRI is a really good template for what it might look like," says Rob Day, a cleantech investor with Black Coral Capital.
Tracking data and making it accessible is probably the best role for the federal government. IMT's Andrew Burr doesn't think a national law should trump local standards. Rather, it should create a set of guidelines that would elevate what states and cities are already doing.
"There’s an important role for the federal government in standardizing disclosure. But you need to balance that with local innovation. If the federal government could come up with guidelines a state could follow, that would give them some latitude to respond to their local challenges. That seems like the best solution," says Burr.
Along with establishing a national database and standards, the federal government could create competitive challenges for states in order to encourage a reduction in energy use -- leveraging competitive programs already underway for energy and education within the Obama administration.
There's not yet much serious discussion in Washington about a national energy disclosure law. But there are plenty of examples throughout history of Congress passing better reporting standards to encourage transparency. It's only a matter of time before the same thing happens for building energy consumption, says Burr.
"This hasn't gotten a lot of federal traction yet. But people realize that transparency is a good thing. And like food stickers or fuel reporting, that’s what these laws are focused on. People should have the right to access this information to make good decisions," says Burr.