Reducing Emissions for Earth Day and CRE’s Future

Josephine Tucker

As we celebrate Earth Day, it’s clear that climate change stemming from emissions is causing substantial damage to ecosystems and loss of species around the world, as the Intergovernmental Panel on Climate Change has reported. Turning off the lights for an hour, or an entire Earth Day, does make a difference, but to enact real change, we need to focus on energy conservation every day, starting now.

The call for action is clear and urgent, particularly for the real estate industry. Specifically, the IPCC has reported with “high confidence” that global warming is likely to reach 1.5 degree Celsius above pre-industrial levels between 2030 and 2052 if carbon emissions are not significantly reduced. Since the built environment accounts for 40 percent of the world’s carbon emissions, real estate professionals have a mandate to work toward net zero as quickly as possible.

The Shift to Renewable, Resilient Energy

It’s encouraging to see many real estate organizations taking steps to reduce the carbon footprints of their portfolios and their clients’ facilities. Increased public and private investment in renewable energy sources and infrastructure is helping reduce our dependence on fossil fuels and improve our energy security.

From public agencies like Washington Metropolitan Area Transit Authority to Six Flags entertainment parks, organizations are finding innovative ways to operate more sustainably. Hotels and resorts, biopharmaceutical manufacturers, hospitals, military installations and other major energy consumers have begun generating onsite renewables as well.

Some facilities are even storing power for later use or selling excess power to the grid. Development of smaller, more cost-effective batteries has and will continue to be an important next step toward widespread use of renewable energy.

Advances in renewable energy and storage also support the growing electrification of consumer and commercial vehicles and increasing power needed to supply EV chargers. For larger EV charging installations, and especially those with fast charging capability, onsite renewable energy (such as solar PV) and battery storage helps meet the increased demand for electricity without compromising building operations or significantly increasing costs.

Why We Need to Reduce Consumption

For the real estate industry, investing in renewables and energy infrastructure is critical—but that’s only part of the solution. The difficult reality is that we need to reduce consumption overall to make a tangible impact towards addressing climate change. Luckily, there are still plenty of savings to be had through targeted energy efficiency and optimization solutions across all types of residential, commercial and industrial real estate.

To their credit, many developers, landlords, corporate occupiers and facility managers are turning over every stone to use resources efficiently. Replacing conventional light bulbs with LED lights is a huge energy-saver, for example, as is replacing legacy HVAC equipment with an automated system that can be controlled via a smart building management platform to optimize building performance.

Many of today’s property technologies support sustainable operations. In addition to smart building systems, workplace technologies enable facility managers to scale energy use to occupancy levels and time of day. If only part of a building is occupied, it’s now easier to focus heating, cooling and ventilation on the occupied areas rather than expending energy on unused spaces. Microgrids also have a role to play, using a control system to balance on-site energy loads with battery storage and power from the grid, this allows facilities to optimize both energy resilience and cost.

The business case for these kinds of initiatives is undeniable. While new buildings today are often designed with highly efficient systems, many older buildings will deliver a return on investment from energy retrofits that minimize energy waste and improve occupant comfort, too.

Using sustainable building technologies is another way to reduce fuel consumption. Dallas-Fort Worth Airport—the first carbon neutral airport in the U.S.—installed high-grade glass that allows plentiful light to enter but is 10 times more energy-efficient than traditional glass and helps heat and cool the facility. In addition, DFW uses renewable energy, and implemented systems to recycle wastewater as a cooling agent

Financing Conservation and the Transition to Renewable Energy

Financing building improvements and EV charging installations to reduce emissions will require significant capital. The private sector will need to provide an estimated 70 percent of clean energy investment, according to The International Energy Association. The good news is that more government funding is available now than in the past to help spur private investments.

Notably, the landmark Inflation Reduction Act and the Infrastructure Investment and Jobs Act passed by the U.S. Congress under the Biden Administration include historic tax incentives, grants and loans for clean energy investments. These options significantly bolster the business case for many types of investments.

Production tax credits, for instance, now can be used for all types of clean energy, and non-taxable entities such as schools and libraries have access to federal funds for clean energy investments through “direct pay” provisions. Federal funding programs can be combined with renewable energy developer tax credits to make implementation more feasible for building owners and investors. Also significant, IIJA provides $7.5 billion to build out public EV charging networks, including $5 billion for the National Electric Vehicle Infrastructure Formula Program and $2.5 billion for the Charging and Fueling Infrastructure discretionary grant program.

Investing in Human Behavioral Changes

Alongside the material investments in sustainable building operations and construction, adopting the mindset of energy conservation is a critical aspect of achieving our collective net zero goals. Conservation in human activity, such as persuading consumers to reduce their own energy consumption and choose sustainable products, is paramount.

Energy conservation should always be part of the conversation about net zero carbon emissions, not just on Earth Day, but every day. By taking every feasible step to reduce carbon emissions, we will be better able to create a sustainable future for us all.

Josephine Tucker is a managing director at JLL Americas and leads the Clean Energy and Infrastructure Advisory Practice.