Spotlight on Los Angeles: Increasing Energy Efficiency in Buildings

Recently the UCLA Institute of the Environment and Sustainability and the Ziman Center for Real Estate hosted the UCLA Green Building Symposium - Building Better Places.  The symposium addressed the critical issue of increasing the efficiency of buildings, focusing on the importance of adopting sustainable technology in residential and commercial properties and retrofitting the existing stock of large commercial buildings to increase energy efficiency across the real estate market.  A panel of Los Angeles-based sustainability leaders at the forefront of green buildings provided valuable insight on both the benefits of energy efficiency and strategies to overcome the perceived barriers to increasing energy efficiency in buildings. 

According to the EPA, 30% of energy use in large buildings is actually wasted.  Commercial buildings spend an annual average of $107.9 billion on energy costs, and there is ample room for meaningful savings. In addition to saving on water and power costs, energy efficiency can increase productivity and happiness for those who use the buildings, and result in cleaner air inside and lower carbon emissions.  We also know that eighty percent of buildings in 2030 will be buildings that already exist today.  In order to achieve significant energy and carbon pollution reductions in our cities, we need to continue beating the drum on efficiency and scale up efforts in buildings that exist today. 

But several misconceptions continue to create challenges –  limited market information, misaligned incentives, and lack of available capital to name a few.  The symposium panel suggested several ways to address these barriers.  Increasing market information can demonstrate to building owners that tenants value and are willing to pay for the benefits associated with efficient buildings. Additionally, thinking of efficiency investments in terms of their net present value, instead of the rate at which an investment breaks even, can give investors a more accurate sense of their investment’s total value.  Lastly, increasing the industry’s awareness of, and accessibility to, efficiency incentive programs and other financing opportunities can help reduce the cost of retrofitting upfront.

It was exciting to hear the panel speak to these issues, because the City Energy Project aims to address many of them.  City Energy Project is a joint initiative of the NRDC and the Institute for Market Transformation (IMT) with the goal of increasing the energy efficiency of large existing buildings in ten major American cities – Atlanta, Boston, Chicago, Denver, Houston, Kansas City, Los Angeles, Orlando, Philadelphia, and Salt Lake City.  The cities in this project aim to achieve a cleaner environment, economic growth, and increased competitiveness, through innovative leadership on building efficiency.

Here in Los Angeles, Mayor Eric Garcetti has shown leadership through his commitment to increasing energy efficiency, pursuing sustainable economic development, and creating local jobs.  “Energy efficiency creates jobs, lowers energy bills, and is a cornerstone of constructing a sustainable future,” said Mayor Garcetti at the launch of City Energy Project.  And last November, Mayor Garcetti was named to President Obama’s Task Force on Climate Preparedness and Resilience.  As part of the Task Force, which is comprised of state and local leaders, Mayor Garcetti advises the federal government on how to help communities address the impacts of climate change. 

Buildings make up 51% of Los Angeles’ carbon emissions, more than either the transportation or industrial sectors, so addressing energy use in buildings is a significant piece of the City’s sustainability efforts.  In January, Mayor Garcetti and Hilton Hotel Executives celebrated the completion of a $7 million retrofit of the Universal City Hilton.  The retrofit is the largest Property Assessed Clean Energy (PACE) project in the U.S., and included upgrades like energy efficient glass, LED lighting, and low-flow shower heads.  The renovation is expected to reduce energy use in the hotel by a whopping 50% and save $800,000 per year in energy costs and $28,000 per year in water costs.  This is a great example of a single building taking a leadership role and making meaningful changes to save energy and money.  To bring building efficiency to scale in Los Angeles and other cities, we will need thousands of buildings to step up and show similar leadership.   

This post was co-authored by legal intern Sarah Taylor.