Start Crunching Numbers Now to Avoid Carbon Emission Fines in 2024

As part of our Problem Solved series, Habitat spoke with Marc Zuluaga, chief executive at Steven Winter Associates.

Deadlines are coming for the Climate Mobilization Act, also known as Local Law 97. But why would a board make a huge investment now to reduce its building’s carbon emissions when potential fines won't hit until 2024, then again in 2030? 

On average, a New York building is going to spend $5,000 for operations per unit per year. Over the course of a decade, that's millions of dollars. And I think there is a tremendous opportunity to nudge all of those resources into a better possible direction, to help you get to your Local Law 97 goals as cost effectively as possible. There's an opportunity to piggyback on infrastructure upgrades that are being made anyway. While there’s a huge value in starting early, that doesn’t mean jumping in with two feet and spending a million dollars next year. But having a plan and then thoughtfully moving forward on that is, to me, the minimum due diligence that any board should be looking at in the coming years.

Is it really important today, in 2021, to create a plan so that you know where you'll be in 2024?

Yes, absolutely. There's any number of pathways to get your carbon emissions down, but the downside of that is it's not obvious which is the most logical pathway for any one building. So I think there's a real need to translate this very abstract, complex regulation into what it means for your building in concrete terms over the next few years. Everything relates to the end goal. So, for instance, a lot of people say, "Oh, we're on top of energy stuff. We just put LED lighting in our corridors." Which is great, but from the standpoint of the overall emissions of the building, that's going to have an almost minuscule impact. So there needs to be an understanding of which things can really move the needle. You're not going to get there without knowing how every action fits into the overall puzzle.

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Your firm has developed a planning and tracking tool, which perhaps could help in this. Can you tell us a little bit about it?

We're calling it Smart Building Insights. As an organization, we’ve been around the industry for 50 years, and we know what it takes to improve building performance. We know the common pitfalls, but to date we’ve been unable to get that information out there in a very cost-effective way across thousands of buildings. We've spent a lot of time for the past year trying to digitize our experience, put it into a tool that can help building owners understand through a smart plan that scrapes up their publicly available data, which you do for annual compliance anyways. We get more value out of it by turning it into a plan that can then be tracked over time to help you understand how what you're doing now relates to the final goal. You can understand if you're on track to comply with the emissions caps of 2024. So maybe it's OK to wait for a few years and not do anything big; or maybe a building needs to do something big in the next couple years. As long as you have a plan and understand where you are – that's the due diligence that’s required at this stage.

So there's a way of gauging when you need to start with your investments, and what the ramifications are if you don't. Is that the correct way of looking at it? 

Sure. There's definitely an economic calculus. No one's going to spend $5 million to eliminate a $5,000 fine. So I think the numbers need to be looked at, but the important thing for boards to understand is that compliance doesn’t cost the same whether you start today or in 2026. It's going to probably cost you a lot more if you start later. So again, can you do things incrementally over time in alignment with your overall plans that are happening anyway? Maybe it's not a big lift to get to a complete fine avoidance in 2030; or maybe it makes economic sense to reduce your fine exposure from a million dollars to a hundred thousand dollars. That’s an informed decision every board can make. You don’t want to be surprised a few years down the road.