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Pitch

Legislators should establish climate resilience investment tax credits. Private and public sectors should establish subsidies for retrofits.


Description

Summary

As provided in The NRF White Paper, see website.

•  The NRF is a development stage company.

•  The NRF seeks to address financing challenges faced by property owners of multi-family and commercial properties undertaking sustainability and resiliency retrofits, and (ii) municipalitiesundertaking large-scale climate resilience infrastructure projects.  NRF proposes two financing mechanisms:  Climate Resilience Investment Subsidy (CRIS) Fund and Climate Resilience Investment Tax Credits (CRITCs).  

•  For the CRIS, The NRF would raise $100M-$250M from Property & Casualty Insurers, Utility Companies and/or Municipalities.  NRF would provide subsidies through grants and low-cost loans targeted to property owners and businesses facing financing gaps so they can undertake and complete sustainability/resilience retrofits.

•  Under the CRITCs, The NRF would work with legislators to enact these tax credits to raise substantial dollars from the millions of taxpayers who want to make a difference while receiving a commensurate reduction in their taxes.  Cities could then access these funds to undertake and complete important large-scale resilience projects that protect critical infrastructure and natural systems and benefit the public.

For example,  the Big U Project has been awarded $335M from HUD's Rebuild By Design Initiative, but the entire project cost will cost $1B+.  The Big U Project is a public-works project that when implemented will be vital in protecting Lower Manhattan from the effects of future extreme weather events such as flooding.  CRITC could, if enacted, raise $100 million of additional funding from the general taxpayers as well as give private companies and investors greater incentives to do their share in funding the remainder.

•  The NRF requires a $500,000 working capital fund to undertake impact and feasibility studies, launch marketing and advocacy efforts, and establish the initial round of pilot projects that would later be scaled-up.


Category of the action

Mitigation - What U.S. Federal Agencies can do to mitigate climate change


What actions do you propose?

Promote PEP Measures as being green, sustainable and resilient measures demonstrated to “protect, enhance and preserve” buildings, critical infrastructure and natural systems.  We would do so through two large-scale funding initiatives (discussed below) :

1)  Expand Sustainable/Resilient Communities through the development of a master resilience plan (see PlaNYC report of June 2013 for useful guidelines).

2)  Promote and broaden flood accommodative design and engineering to be accomplished in conjunction with public & private resilience efforts.

3)  Encourage efficient storm water management through deployment of portable flood barriers, mold resistant foam insulation and wallboard, climate resilient landscaping, installation of permeable surfaces and additions to property elevations above flood levels.

4)  Promote use of clean energy through implementation of passive and renewable technologies.

5)  Utilize cutting edge high efficiency heating, cooling and ventilation technologies.

6)  Improve building envelope to achieve optimum balance of air flow reducing loss of heat flow in the winter and cool air in the summer.

7)  Connect natural world elements with internal property improvements such that flood prone areas are improved in streetscapes and public areas to further protect and align with private property investment.

8)  Relocate building infrastructure above projected flood levels (including reasonable projections for sea level rise over a 50 year useful life assumption).

9)  Create resilient and sustainable connectivity between utility grid and individual properties.

10)  Utilize earth friendly building materials.  Encourage reuse, recycling and renewal policies in building program with a focus on the use of zero VOC materials.

These PEP measures were a team effort between Eric Kaufman, Joaquin Matias, James Sellinger & DF Gibson Architects.

Establish Climate Resilience Investment Tax Credits to stimulate economic activity and create green jobs.  The loss in tax revenue on the federal, state and local levels will be eclipsed by the multiplier effect on the economy generated by these investment tax credits.  The multiplier effect has proven itself with the real estate rehabilitation credit, motion picture investment tax credits, solar and other renewable energy tax credits and new market investment tax credits.

The notion of CRITCs has been very well received locally, nationally and internationally.  Some European experts feel that the CRITC might be applicable to the 2009 Copenhagen Accord requirement for developed countries to fund $100 billion annually to developing countries in terms of their climate adaptation (resilience) efforts. The CRITC could be adopted by developed countries as a means to fund this requirement and increase economic activity through the multiplier effort at the same time.

The NRF has begun the process at the New York City and New York State levels and is working to build grassroots support as well as legislative support to get this tax credit enacted in some acceptable form.

Economic impact studies must be undertaken to show the costs and benefits of the proposed CRITC.

 

Establish Climate Resilience Investment Subsidy program to encourage and assist property owners and building managers of multi-family and high-use commercial properties who are undertaking retrofits to reduce utility and energy costs (sustainability) to also address and incorporate resiliency measures.  The projected savings in energy costs is the basis for financing these sustainability projects.  Unfortunately, many of these projects within a particular building are being done in a singular, “one-off” manner where window upgrades are considered one project, installation of a solar roof another, upgrading boiler yet another, etc… At the same time, these projects are being undertaken more often than not without a clear understanding or incorporation of resiliency. 

The NRF sees sustainability and resiliency retrofits as forming two sides of the same coin.  Both when conceived properly and undertaken within a larger view can perform in a dynamic and interdependent way that (1) improve the quality of life for residents in a building, (2) improve the energy efficiency of a building), (3) protect the investments made into the building that include energy efficiency improvements, and (4) mitigate the building’s contribution to fossil fuel dependency while also mitigating the building’s contribution to overloading infrastructural systems during extreme weather events. 

The NRF knows that financing considerations are the primary challenge for this “one-off” “single improvement at a time” approach to sustainability and this approach that often if not always falls short of resiliency.  The cost differential between sustainability measures (financed through energy savings) versus a package of sustainability and resiliency often is the margin needed to undertake fundamental, important and basic resiliency measures.  By providing subsidies that close this delta, the NRF seeks to fund these resiliency measures. 

Through these subsidies, we can also encourage behavior and raise awareness towards a broader understanding that together sustainability and resiliency measures can really “protect, enhance and preserve” buildings, critical infrastructure and natural systems.” 

 

How much will emissions be reduced or sequestered vs. business as usual levels?

The NRF B-Corporation (to be formed) will focus on retrofits to multi-family and high-use commercial properties to improve energy efficiency primarily through the use of CoGen (CHP) and TriGen (CCHP) systems, LED lighting systems, triple pane windows and building envelope alterations and incorporate resiliency measures such as stormwater management, and improved communications between building owners and municipalities.  Should CoGen/TriGen be embraced along with these first-level improvements, carbon emissions can be reduced by nearly 40%.  

Another 20% in energy costs with an associated reduction on the carbon footprint can be gained by generating supplemental energy using Photovoltaic Cells, Wind Turbines, GeoThermal and Hydro power.  

But where energy use and demand is sufficient great, setting up micro-grids to deliver reliable energy from the grid while incorporated these various forms of distributed generation will generate additional reductions.


Who will take these actions?

At the Federal Government level, we need the House of Representatives Ways and Means committee to consider the Climate Resilience Investment Tax Credit.  For the Climate Resilience Investment Subsidy, the Financial Services committee would be the appropriate body for the legislative approval process.

At the State level, New York has recently formed a Green Bank and has made ConEdison fund $1 Billion for climate resilience efforts.  The State Assembly would have to be involved with these initiatives.

At the New York City level, there is keen interest but the City feels New York State would have to take the lead as much of their tax revenue ends up going to the State.  They have been in contact with the State Legislature about these ideas but we need more support.

The UN, the World Bank and other International NGOs can be quite helpful in looking at the CRITC for Climate Change initiatives.

Eric Kaufman (Founder), Joaquin Matias and James-Robert Sellinger (Principals) are the main individuals involved in both The NRF and a Benefit Corporation (B-Corp) to be established with a focus on for-profit activities related to linking climate resilience with sustainability for large scale building owners.  

Mr. Kaufman initiates strategy and overall direction for The NRF, with Mr. Matias being responsible for public policy and Mr. Sellinger over financial and financing strategies.


Where will these actions be taken?

As mentioned above, the initial pilot for The NRF is New York City in particular and the New York Metropolitan area in general.  The platform can easily be expanded to the tri-state region, then adopted nationally.  We hope that by 2020 it can be launched on an international basis.


How much will emissions be reduced or sequestered vs. business as usual levels?


What are other key benefits?

The multiplier effect of the tax credits coupled with the building resiliency efforts as a result of the subsidy will provide society with a solid framework to effectively deal with climate change.


What are the proposal’s costs?

The loss of government tax revenue by providing Climate Resilience Investment Tax Credits could potentially divert tax revenue away from other areas like education, defense and other socially desirable programs.

The sheer amount of money required for climate change efforts mandates a solution like the CRITC and CRIS to deal with these potentially overwhelming problems so the cost/benefit of these programs must be thoroughly analyzed to prove that the multiplier effort for economic activity and job growth is far greater than the potential loss of tax revenue from the CRITC.


Time line

The short term will involve lobbying and grassroots efforts to bring the CRITC and CRIS into economic reality.

The medium term will see implementation of actual programs required to help deal with the effects of climate change and to begin the reversal of the effects of global warming.

The long term is involved with the stabilization of the planet's ecosystems and dealing with the future effects of climate change.  


Related proposals

To our knowledge, no other Climate CoLab proposals are directly related to this proposal but we will have to review the other proposals to make sure that there are linkages, which we feel are indirectly related to our proposal.


References

We have consulted with many experts in the New York Metropolitan area in the fields of climate resilience, including Susannah Drake, Landscape Architect, DF Gibson Architects, Klaus Jacob, scientist at Columbia University's Lamont-Doherty Institute for Geological Studies, the City of New York and have read numerous articles related to the field of climate resilience.  See our blog for further references: natresilience.blogspot.com