Carbon Cuts Could Cost $24 Billion

New York City’s ambitious Climate Mobilization Act will require large buildings, including co-ops and condos, to reduce building carbon emissions 40 percent by the year 2030. One of the act’s major advocates, the nonprofit Urban Green Council, released an analysis Tuesday suggesting that building owners might have to spend between $16.6 billion and $24.3 billion during the next decade to meet the dramatic carbon targets, Crain’s reports.  

"We believe the investment necessary will be somewhere in the middle, something closer to around $20 billion," says John Mandyck, head of the Urban Green Council. "Local Law 97 is the largest disruption to the city's real-estate industry in our lifetime. It's going to require an unprecedented amount of investment." 

In comparison, only about $235 million was spent by owners in the city last year on energy-efficiency upgrades. The Urban Green Council estimates that spending will need to grow to around $3 billion a year as the deadline nears. 

The money will be needed to install energy-saving equipment and systems, such as new facades and windows that lock in heat or air conditioning, high-efficiency boilers and air-cooling units, and other systems such as sophisticated software that tracks and manages a building's energy use. 

The rules apply to roughly 50,000 buildings that are 25,000 square feet or larger. There’s good news amid all these scary dollar figures: the law requires these buildings to first meet a more modest carbon cut by 2024, which 80 percent of the affected buildings already have already met. And there’s bad news: after 2024, the heat will be on for co-op and condo boards, rental landlords, and the owners of commercial buildings to up their game.