What's more successful in moving an industry forward: Carrots or sticks? Or is a specific combination of the two?

Since 2012, Hanley Wood has consulted building and architecture experts under its  Vision 2020 program to discuss the role of sustainability in the future of the design and construction industry between now and 2020. The consensus is that we must change the way we design, construct, and operate our buildings, and we must do it now. So what does this mean?

I recently chatted with  Hanley Wood Sustainability Council members Steven Winter, FAIA, president of Steven Winter Associates, and co-lead of our Vision 2020 Energy Efficiency + Building Science section, and Maureen Guttman, AIA, vice president for buildings and utilities at the Alliance to Save Energy, executive director of the Building Codes Assistance Project, and our Vision 2020 Codes, Standards + Rating Systems section leader, to continue the roles of incentives and regulations in moving green building forward.

In our conversations so far this year, you’ve both discussed the role of incentives and regulations—or carrots and sticks—in green building and energy efficiency. How do you balance use of the two?

Steven Winter: Who is driving each of them? Codes are driven by different forces within the industry. Some people have vested interests because a tight code helps their business models. Some aspects are driven by health and safety. We want a building to be as healthy and as safe as possible, but when it comes to energy or the green aspect of a building code, it’s less of a health and safety issue and more of a public benefit issue. What justifies tightening or strengthening those areas? I don’t think that’s been clarified.

Maureen Guttman: People tend to think codes generally address health and safety, but that energy codes do not. However, they do, because we’re looking to protect health and safety through energy conservation. We need a change of mindset in the code enforcement community, and that will take a while. This brings up the use of sticks. Building codes are pretty much the only stick we have to regulate the industry.

We need a change of mindset in licensure, too. I wish most architects understood that their license includes liability and responsibility for building performance. I’d venture to say nobody has been sued on the basis of building performance.

Winter: But they should be. That would be a good stick.

Guttman: One of the criticisms with LEED is that we know that a lot of LEED buildings are better than what they would have been, had they not gone through that process, but relative to energy performance, they’re all over the map. Who is responsible if it’s not performing?

I just met with the CEO of the Sustainable Energy Authority of Ireland. They’re run a lot of residential incentive programs and have touched 20 percent of the market, but are having a hard time breaking into the remaining 80 percent. Incentives are not doing it, so they’re starting to look at a more regulatory focused aspect for design and construction professionals. They’ve moved to where I feel we need to go, which is putting some level of responsibility on the people who make these design decisions and who make sure that these buildings are actually being built to the criteria that the design professionals put on paper.

Winter: Right. Katie and I had talked about was the need for ongoing measurement and verification. Without real measurement and verification (M&V), we won’t ever know if a building is or is not performing as designed or anticipated. That’s very necessary in our industry.

Energy benchmarking legislation tracks performance. Is that a step in the right direction?

Winter: Benchmarking is a collection of utility bills and not much more. As such, it is a good snapshot of how the building is performing with all things considered, including efficient or inefficient equipment, building management, and wasteful practices. A thorough M&V program would pinpoint a little more closely just where that energy is being spent so that you could take corrective measures. Benchmarking is a good beginning, but it is not enough of a procedure to be truly actionable.

Will more detailed M&V procedures become regulated or required via code?

Guttman: A lot of people are promoting outcome-based codes that focus on the energy provisions occurring 18 to 24 months after occupancy begins, and that makes sense. The problem is that our code enforcement structure isn’t set up to accommodate that kind of oversight, and it is really reluctant to change. I don’t know if we’ll see post-occupancy performance become a building code enforcement issue in the short future. I do think, however, that design professionals are in a great position to take that on as an extension of services.

People don’t see these things as business opportunities. They see them as a threat and liability exposure, but the liability already exists. It’s a question of whether you are managing it. Measurement may never become a code provision, but we do have to pass it on to somebody and I would like to think it should be the people who are already licensed to be responsible for health, safety, welfare, and performance.

Winter: The problem is, and I’m speaking as an architect, that our profession has consistently advocated new opportunities and new technologies and then passed them off to someone else. We used to be the master builders who did everything. Then we got rid of engineering, construction, and lighting. Everything is subbed out to specialists.

Technology is making M&V the easiest thing to address. There are many new devices that are smaller, more invisible, increasingly wireless, and smart that can be embedded in parts of the building, including the centers of walls and equipment, where the continuous monitoring, evaluating, and number crunching of all aspects of building performance can be done less extensively and more remotely. M&V is becoming a high-tech addition to the building itself that allows easier and more accurate ways of checking the building performance. That’s a positive trend,

Guttman: The flip side of that is the design process. We’re missing is the incorporation of energy modeling. Energy modeling software that is fundamentally simple to use and architect-friendly needs to be adopted and used by architects, but they’re not using it. It would certainly make fixing a problem after the building is built a lot easier if we had a better idea of how it was actually going to perform once it is built.

There isn’t an appreciation for the value of energy modeling. It’s a hard sell with clients, and it’s often not perceived as part of an architect’s job. We don’t provide it as a part of standard practice and give it to clients whether they like it or not. We are very much driven by what the client wants, rather than what we know is the right thing to give. Somehow, we have to get energy modeling services more deeply embedded in the standard practice of design.

Could the advancement of technology—smaller, smarter, more remote devices—help with code enforcement?

Winter: There’s a big hole in who would do [the enforcement]. Once a building is occupied, the code enforcement officials are no longer involved.
Guttman: It’s only in very limited communities that code officials see themselves as having any kind of jurisdiction over buildings once they’ve been occupied. They’ve got too many other things to do. Those of us in the code or energy advocacy realm think of energy codes as being the only important thing, but in most jurisdictions, a code official is administering up to 15 different codes and the energy code is the least important.

Winter: So we agree at is something to address, but how? The technologies I referred to are indifferent as to who monitors them. You can embed little smart sensors inside a layer of paint, a duct, boiler, window, or wall, and have it send signals to a central gathering point. But you need individuals or organizations that take advantage of these things, and building owners who want to take a closer look at how their buildings are performing in real time. That’s not the viewpoint of code enforcement; it is the view of minimizing costs and improving ongoing performance.

How do you see programs such as the proposed Tenant Star and Supply Star programs driving codes and energy efficiency forward?

Winter: They’re still voluntary, and that would be an issue. Other than codes, there is no real stick.

Guttman: Even though we’ve experimented with incentives at all levels of government and all building types, the fact is that we’re not at scale and we can’t get there with incentives. You have to have something that fundamentally creates market transformation. Generally speaking, when incentives go away, so do the initiatives and the enthusiasm for pursuing those activities.

That’s not to say Energy Star and LEED aren’t great and that these proposals don’t have the potential to make a dent. However, I don’t see how we can get the entire country thinking about energy and building in a very different way without someone being required to do it.

Are there any examples from other realms you think provide an interesting approach to how it has worked or been addressed in other market sectors or different types of professions?

Guttman: The European Union requires very different performance levels for design and construction, and buildings have to be labeled. That’s a very different type of motivation, but it is a stick.

Winter: We have a precedent in the automobile industry where there are national fuel standards. Why is it easy to regulate fuel consumption standards in vehicles but not in buildings? It’s not this country’s mindset to do so.

Guttman: It’s especially important as buildings use so much more fuel. We could be doing so much more with many different types of fuel.
Winter: And, once we build a lousy building, it’s lousy for 50 years, unlike an automobile, which becomes a clunker in less than 10 years.

Earlier this year, we talked about how moving beyond the individual building scale to a portfolio perspective could change practices. Is that something that will become increasingly important?

Guttman: That’s an interesting question, not just from the building owner’s portfolio perspective, but from an architect’s portfolio as well. The AIA’s program for the 2030 Challenge, where they’re asking firms to make a commitment and monitor and record building performance, is a really great idea. Unfortunately, the uptake isn’t there. People seem to put in one project or their own office. What can we do to make something bigger?

Winter: The notion of community or fleet scale can be seen from different perspectives, from an architect’s body or work to a municipality with a couple hundred of buildings in its portfolio. The aggregate group of buildings can be diced in many different ways. If we look at that aggregation differently to see how large numbers of buildings can be improved on average, perhaps we can get to where we want to go, even if some outliers in a portfolio or community are dogs in terms of performance.

That echoes a comment from Doug Bennett, this year’s Vision 2020 Water Efficiency expert, on our conference call, where he mentioned that his organization, the Southern Nevada Water Authority, aims for maximum participation at moderate gain.

Guttman: That’s where BCAP [the Building Code Assistance Project] is right now. The American Reinventment and Recovery Act pushed adoption of the 2009 energy code and that stick was probably the best thing that ever happened for building energy performance in this country. We’re going to continue to push for the 2012 code, but I also have to shift focus to compliance because if everyone who met the 2009 code could legitimately show that there was 100 percent compliance, we’d have so much energy savings it would rock our world. Maximum participation for modest gain is a brilliant way to put it.

Could net-zero buildings become a regulatory requirement?

Guttman: I love the idea of net-zero energy, but we’re so far from that becoming a reality. If we’re going to put regulatory mechanisms in place, I’d rather shoot for something that’s got a chance of being doing. I like things that push the leading edge, but I’m focused on broad-scale implementation and change and I don’t think there’s anything on the horizon for broad-scale adoption of the net-zero movement in the near future.

Winter: We’ve done a couple of net-zero buildings and given the hoops you have to jump through to reach that level of performance, it’s going to take a long time for it to become widespread, especially when large parts of the country currently don’t comply with any standard at all. That’s a place for carrots: Start with incentivizing extremely high performance, and see what happens after a few years.

Stay tuned for future conversations between the 2014 Hanley Wood Sustainability Council participating in our Vision 2020 program. Scroll over points in our on-going timeline to learn more about the path ahead in green building. Track our progress all year as the Hanley Wood Sustainability Council shares its perspectives on initiating, tracking, and ensuring progress toward these sustainable priorities and goals. This year's program will culminate in an exclusive Vision 2020 Sustainability Summit in conjunction with Greenbuild International Conference and Expo in New Orleans, and with a special Fall edition of ECOBUILDING REVIEW.