HomeMy WebLinkAbout02-19-2019 Item 14 - Carbon Neutral Buildings Study Session Department Name: Administration
Cost Center: 1001
For Agenda of: February 19, 2019
Placement: SS1
Estimated Time: 45
FROM: Robert Hill, Interim Deputy Director, Office of Sustainability
Prepared By: Chris Read, Sustainability Manager
SUBJECT: CARBON NEUTRAL BUILDINGS – ENERGY CODE RESEARCH AND
OPTIONS
RECOMMENDATION
Direct staff to develop policy and regulatory amendments to achieve carbon neutral buildings
including potential amendments to the building code, and research the development of a carbon
offset program.
REPORT-IN-BRIEF
On September 18, 2018, Council unanimously directed staff to update the City’s Climate Action
Plan to include a carbon neutral by 2035 target and to assess the potential of building codes that
would require carbon neutral buildings. This report provides initial research regarding the
greenhouse gas emissions associated with buildings and potential policy approaches for reducing
those emissions including amendments to the California Building Code and research into and
develop ment of a carbon offset program. This report illustrates that developing an approach to
decarbonizing new development would be highly impactful to future greenhouse gas emissions,
that staff has the technical capacity and resources to complete work in 2019 , and that there are
offramps should the program not be cost effective. Staff seeks Council’s direction to continue, to
pause, or to cease working on the effort.
DISCUSSION
Background
In California, as in the rest of the world, climate change is contribu ting to an escalation of
serious problems, including wildfires, coastal erosion, disruption of water supply, threats to
agriculture and natural ecosystems, spread of insect -borne diseases and invasive species, and
continuing health threats from heat and air pollution. Climate change is making events like the
recent droughts and the consecutive historic wildfire seasons more frequent, more catastrophic,
and more costly.
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Climate scientists agree that global warming and other shifts in the climate system obse rved over
the past century are caused by human activities. These recorded changes are occurring at an
unprecedented rate. Determined local climate action provides an opportunity to proportionally
slow the impacts of climate change, create new economic deve lopment engines, ensure
environmental integrity, address issues of equity and public health, enhance local quality of life
and demonstrate climate leadership with actions that can potentially be replicated in other
locations.
Previous Council Action and Policy Context
On September 18, 2018, City Council unanimously gave staff direction to update the City’s
climate action plan and pursue a greenhouse gas emissions reduction target of carbon neutrality
by 2035. The City is currently assessing specific strategies on how best to achieve this goal, but
it is generally understood that this will require virtually zeroing out existing emissions sources
such as gas emissions generated from the consumption of energy (e.g., electricity and natural
gas).
At the same meeting, City Council provided unanimous direction to research the possibility of
requiring carbon neutral buildings as part of the City’s building codes. This direction is primarily
derived from the need to be responsive to carbon neutral development co nditions in
Development Agreements with pending large subdivisions but is also responsive to the time
pressure presented by the 2035 target. Specifically, Council requested that staff return with more
details regarding the benefits and required work effort and resources. This report provides
additional information about the City’s climate target, the time sensitive opportunity presented
by standing Development Agreements, and opportunities to decarbonize new and existing
buildings.
Greenhous Gas Emissions and the Built Environment
Existing Emissions
On September 18, 2018, staff presented the findings of the communitywide greenhouse gas
emissions (GHG) inventory report update. The inventory, which is measured in metric tons of
carbon dioxide equivalence (MTCO2e), includes emissions from transportation, energy used in
buildings and for lighting for residential and nonresidential uses, methane from solid waste
decomposing in Cold Canyon landfill, direct emissions from certain wastewater processes, and
off-road sources (e.g., lawn and garden and construction equipment).
As illustrated in Table 1, emissions overall decreased by approximately 10 percent, with large
decreases in nonresidential and residential energy (-8 percent and -21 percent respectively). In
2016, energy use accounted for approximately 40 percent of all emissions in the City. As
previously mentioned, to achieve carbon neutrality, the emissions from each sector in Table 1
will need to be as close to zero as possible, which means a combination of decreasing energy use
and waste, as well as transferring all existing technologies (e.g., vehicles, home heating and
cooling, water heating, etc.) to carbon free sources of energy.
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Table 1. Community Greenhouse Gas Emissions, 2005-2016 (MTCO2e)
Sector 2005 2005 % of
Total
2016 2016 %
of Total
% Change
Transportation 130,210 48% 122,920 51% -6%
Nonresidential Energy 57,800 21% 53,410 22% -8%
Residential Energy 55,190 20% 43,580 18% -21%
Solid Waste 15,540 6% 13,880 6% -11%
Waste Water 170 0% 190 0% 12%
Off-Road 10,810 4% 8,230 3% -24%
TOTAL 269,720 242,210 -10%
Table 2 provides additional detail of communitywide GHG emissions in 2016. Of energy related
emissions, electricity accounted for approximately 47 percent of emissions; natural gas
accounted for approximately 53 percent emissions.
Table 2. 2016 Community Greenhous Gas Emissions, Energy Detail (MTCO2e)
Sector Energy Type Emissions (MTCO2e) % of Total
Residential
Electricity 14,650 15%
Natural Gas 28,930 30%
Nonresidential
Electricity 31,310 32%
Natural Gas 22,100 23%
Total 96,990
Future Emissions
Table 1 and 2 report the emissions from the built environment as it existed in 2005 and 2016,
respectively, and for 2016, includes approximately 21,155 units of housing and approximately
19,000,000 square feet of nonresidential space.1 The City’s Land Use Element of the General
Plan anticipates a total of 4,607 additional units and a total of 5,170,000 square feet of additional
nonresidential space by 2035.2 Although this development will be increasingly efficient due to
regular improvements in the State Building Code, they still represent one of the most significant
potential sources of GHG emissions growth in the community.
Of immediate interest, in 2017 and 2018, two major development s were approved by City
Council: San Luis Ranch and Avila Ranch. Combined, the developments will add up to 1,300
new housing units and approximately 265,000 square feet of commercial and office space. This
additional development represents approximately 28 percent of all available residential buildout
and 6 percent of all available commercial buildout in accordance with existing Land Use and
Circulation Elements of the General Plan.
1 Source: 2016 General Plan Annual Report
2 Source: Land Use and Circulation Element Environmental Impact Report
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As part of both approvals, individual “Development Agreements” were negotiated to provide
public benefit beyond what is required as part of the standard approval process. In both cases, the
Development Agreements include specific provisions to be consistent with any net -zero carbon
policies in place at time of building permit ap plication (See Ordinance #1639 (2017) and
Ordinance #1649 (2018)). Specifically, Section 7.07 of the Avila Ranch Development
Agreements requires:
(a) Avila Ranch shall provide for accelerated compliance with the City' s Energy Conservation
Goals and its Climate Action Plan by implementing energy conservation measures significantly
above City standards and norms by providing for solar PV energy generation for 100 percent of
onsite electrical demand as described in Section 13 of the Design Framework of the
Development Plan. The Project shall also include energy efficiency standards in excess of the
current Building Code.
(b) Developer shall provide sustainability features as described in Section 13 of the Design
Framework of the Development Plan, including: (i) housing that meets the 2019 net zero
building and energy codes or, if the 2019 building and energy codes are not yet adopted upon
building permit application, the equivalent to the satisfaction of the Community Development
Director, (ii) implementing any future city-wide policy regarding carbon emissions reduction, (
iii) solar electric panels, ( iv) integrated power outlets for electric vehicles and electric bicycles,
(v) building design that maximizes grey water usage, and (vi) work -at-home options with high-
speed internet connectivity.
Section 7.06 of the San Luis Ranch Development Agreement requires:
(a) Developer shall provide for accelerated compliance with the City’s Energy Conservation
Goals and its Climate Action Plan by implementing energy conservation measures significantly
above City standards and norms by providing for solar PV energy generation for 100 percent of
onsite electrical demand at build-out. The Project shall also include energy efficiency standards
in excess of the Building Code in effect in the City on the Vesting Date and implement the
feasible strategies set forth in Section 5.4.2 of the SLR SP.
(b) Developer shall provide sustainability features including: (i) housing that meets the 2019 net
zero building and energy codes or, if the 2019 building and energy codes are not yet adopted
upon building permit application, equivalent energy features shall be provided to the approval of
the Community Development Director, (ii) implementing any future City-wide policy regarding
zero carbon emissions, (iii) solar electric panels, (iv) integrated power outlets for electric
vehicles and electric bicycles, (v) building design that maximizes grey water usage, and (vi)
work-at-home options with high-speed fiber-optic connectivity.
Both developments are expected to make investments on “backbone” utility infrastructure
including natural gas and electricity infrastructure, as soon as Summer of 2019 and could begin
pulling building permits as soon as Winter of 2019.
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Decarbonized Electricity and Built Environment Implications
The emissions presented in this report were arrived at using factors to estimate the greenhouse
gas emissions generated per unit of energy consumed. The electricity factor uses 2016 PG&E
grid average carbon intensity. Starting in 2020, the community will begin receiving electricity
service from Monterey Bay Community Power, which through its carbon free electricity supply,
has an effective emissions output of zero. This means that starting in 2020, the primary source of
greenhouse gas emissions coming from existing and new buildings will be from the combustion
of onsite fossil fuels, primarily natural gas. The most direct path to carbon neutrality in the built
environment is to transition from natural gas to carbon free ele ctricity.
The opportunity to transition away from fossil fuels comes at a time of significant advances in air
source heat pumps for space conditioning and water heating and induction cooking. According to
a paper authored by the Natural Resource Defense Council and published in the Electricity
Journal in November of 2018 (“Emissions Reduction Potential from Electric Heat Pumps in
California Homes”), switching from natural gas for space conditioning and water heating to
electric air source heat pumps are a critical tool for achieving California’s deep decarbonization
goals due to their efficiency and ability to ensure that electricity consumption is occurring during
times of peak onsite solar production or at times when the grid has the most amount of
renewables on it.
There are early indications that an all-electric code that reaches beyond the standard 2019
building co de may be cost effective (equal or fewer lifetime costs). For example, a recent study
completed by the City of Palo Alto reviewed the cost effectiveness of requiring, as part of the
2019 California Building Code, certain electrical appliances individually, as well as a complete
package, in new single-family and low-rise multi-family residential and small nonresidential
development. For single-family residential, the study finds that although certain individual
measures may not be cost effective, an all-electric package exists that is cost effective. The
results are less clear for low-rise multifamily. Small and medium nonresidential buildings appear
to be cost effective. It should be noted that the study is specific to Climate Zone 4 (San Luis
Obispo is in Climate Zone 5) and uses Palo Alto electricity and natural gas rates, as well as costs
estimates for entitlements and permits. Should Counci l direct staff to proceed as recommended, a
study would be completed using San Luis Obispo specific data.
Policy Options
An outright prohibition of fossil fuel infrastructure could be technically challenging, expensive,
and legally tenuous. Instead, staff has researched approaches, laid out for informational purposes
in this report, that would incentivize carbon free development and ensures that new development ,
which chooses to include fossil fuel infrastructure would offset the resulting GHG emissions.
Several policy options exist to move new buildings toward decarbonization through carbon free
electricity. Should Council wish to continue working on a policy approach to building
decarbonization, staff seeks feedback on specific interests or concerns with each option outlined,
as well as identification of any options that staff should not continue pursuing. It should be noted
that any of the options can be considered individually or together. The feedback provided by
Council will dictate what additional research and analysis will be needed.
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Building Codes
Residential and commercial development in California is regulated under the California Building
Standards Code, Title 24, California Code of Regulations. It is made up of thirteen parts. Energy
use and conservation is addressed in Part 6 (California Energy Code), and additional green
building measures, including measures designed to reduce greenhouse gas emissions, are
covered in Part 11 (California Green Building Standards Code, also known as CalGreen).
The California Energy Code contains energy efficiency standards for residential and
nonresidential buildings, new construction, remodels and additions. Public Resources Code
Section 25402.1(h)(2) and Section 10-106 of the Building Energy Efficiency Standards establish
a process that allows local adoption of energy standards that are more stringent than the
statewide standards. Cities and Counties throughout California have a history of adopting reach
codes that go above and beyond Title 24, Part 6 to achieve their climate objectives, including the
County of Marin, and the cities of Palo Alto, Santa Monica, Fremont, and West Hollywood.
Proposed building code amendments would likely vary by development type (e.g., single family
residential, low-rise multifamily residential, large commercia l, etc.) and could include individual
prescriptive measures (e.g., requiring electric space heating, but allowing other fossil fueled
appliances) or a package of measures. Additionally, amendments can be made to either new
construction requirements, building alteration requirements, or both. Due to complicated federal
law and local regulatory considerations, the City may not simply require that all buildings be
electric without also providing a separate pathway for mixed fue l development (i.e., electricity
and natural gas).
One part of adopting amendments to the standard provisions in the California Energy Code is
obtaining approval from the California Energy Commission. Evidence must be submitted and
approved that the proposed code will save more energy than the current statewide standards and
that the code is cost effective for the building occupant, relative to the standard code. As
mentioned in the “Known Resources” section, below, should Council direct staff to proceed,
studying and determining the cost effectiveness of potential Energy Code amendments would be
a critical step in the process.
Carbon Offset Programs
As staff researched Title 24, Part 6 considerations and requirements, the concept of a carbon
offset program was identified as a potential tool for supporting carbon free development and
buildings. A carbon offset program could simultaneously provide an appropriate price signal for
the cost of carbon emissions, incentivize carbon free developments, and providing a carbon
neutral path to mixed-fuel developments via the funding of retrofits to carbon neutral electrical
appliances in the community.
This concept has been implemented successfully locally when the City administered the water
offset program in the early 2000s. Under that program, any new water use had to be offset at an
offsite location to achieve net zero increase in water use. A carbon offset program could initially
be applied to reach code applic able developments that chose to go with mixed fuel instead of all
electric development.
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It should be noted that t here are many variations and possibilities of how an offset program could
work. For example, the offsets could have to cover the costs to retrofit some number of fossil
fuel appliances in the community, or they could cover the net difference between a standard
replacement and an electric alternative for some number of community housing units.
Several jurisdictions (e.g., Watsonville, CA and Aspen, CO) have created renewable energy
offset programs to encourage the use of clean locally generated electricity. Additional
jurisdictions (e.g., Eugene, OR, Boise, ID, and Vancouver, B.C.) have set carbon prices for
internal decision making that are intended to ensure that the full cost, including the social cost of
climate change, are included in the decision-making process. These peer communities could
provide valuable insight on the design of a carbon offset program.
If the Council directs staff to continue developing this concept, additional research would be
needed to identify the appropriate offset ratio, cost of carbon, program administration details, and
to ensure that any fee is appropriately authorized and administered consistent with Proposition
26 and AB 1600.
Tools for Existing Buildings
Buildings built by 2019 or earlier will be the majority of the City’s building stock in 2035. A
number of policy options exist to address energy efficiency and fuel switching in existing
buildings. Some retrofits may occur by making advanced energy building codes applicable to
remodels or building changes of certain sizes.
There are also retrofit policies available for projects not actively seeking building permits (e.g.,
partnering with Monterey Bay Community Power to provide incentives, requiring development
above certain thresholds (square foot or valuation) to retrofit or fuel switch at time of sale,
require disclosure of energy costs and energy saving opportunities during sale or direct
requirements for certain building types and sizes (similar to the program enacted and
successfully completed in the City’s Downtown for seismic retrofits)). However, these policy
options may be more complicated and controversial, and will also be evaluated as part of the
climate action plan update which will be conduct ed through 2019. As a result, staff recommends
that these approaches are further vetted after adoption of the climate action plan.
Additionally, a reach code for new development that is applicable to the City’s in-process
subdivisions will allow for building equipment vendors, contractors, developers, builders, and
City staff to build capacity through a small number of large projects. Successful completion of
these new development projects could pave the way for successful implementation of future
retrofit programs.
Potential Approach to Building Decarbonization
At a minimum, this Council Agenda Report is meant to report back to Council on findings and
seek direction on whether or not to continue working on building decarbonization through
enhanced building codes or other methods. Given the dynamic nature of this topic, research and
technical work throughout the year could lead to changed assumptions and could change the
approaches laid out in this report.
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Regardless of potential changes to assumptions, staff would be required to return to Council for
adoption of building codes, or any other related policy decision. At that time, staff would be able
to present significantly more detailed and certain findings around greenhouse gas emissions
reduction by building type, cost effectiveness by building type, and will have assembled draft
code, policy language and/or program.
For illustrative purposes, it may be useful to present what a building decarbonization policy
might look like for new development that would be subject to a reach code. Figure 1 provides
one potential approach. Under this approach, new development that is all electric would build
using the electric reach code. New development that uses mixed-fuels could be subject to some
combination of participating in a carbon offset program and complying with more rigorous
mixed-fuel reach energy codes
Figure 1. Potential Decarbonization Approval Process for New Buildings (Illustrative Only)
Known Resources
There are multiple technical and financial resources available to the City to further investigate,
develop, and complete the work that could result in Council direction, including:
1. California Codes and Standards Team - Starting in September of 2018, staff began engaging
with a group of 38 local government staff members from jurisdictions throughout California
who are working with the State of California’s “Codes and Standards Team”, which uses
funding through the Investor Owned Utilities and the California Energy Commission to
support advanced energy codes. The Codes and Standards Team will be providing a “cost
effectiveness” study and additional documentation. Should Council direct staff to continue,
this documentation will provide the technical foundation for the City’s work. Staff expects to
have access to the initial public draft of the technical work in late February.
2. California Building Decarbonization Coalition – The Coalition is a statewide coordination
effort on reach codes supported by the Sierra Club and the Natural Resource Defense Cou ncil
and is working to connect peer communities that are engaging with the California Codes and
Standards Team and to provide work programs and project management support for adoption
of local reach decarbonization codes. The Coalition is primarily focused on coordination,
support in creating outreach content, circulation of technical work for review, and staff
training. The City is a member of the Coalition and would receive the benefits of the project
management support at no cost.
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3. Peninsula Clean Energy Building Electrification and Electric Vehicle Reach Code Project –
In January of 2018, Peninsula Clean Energy (a Community Choice Energy program in the
Bay Area) contracted with TRC and DNV-GL to support their member jurisdictions through
developing and adopting decarbonization reach codes in calendar year 2019 for adoption in
January of 2020. As part of the project, Peninsula Clean Energy pre-negotiated terms to
allow additional local government to participate in the project using pre -negotiated rates.
Staff is in early discussion with TRC and DNV-GL to identify the potential benefit of such
assistance.
4. Central Coast of California Regional Energy Network – The Regional Energy Network is an
energy efficiency program that serves San Luis Obispo, Ventura, and Santa Barbara counties.
The Regional Energy Network has funding to support work on advanced energy codes.
Although the group’s working budget is not yet finalized, it is expected that the Regional
Energy Network will be able to provide advisory support for advanced energy code work.
The Regional Energy Network is also expected to be able to provide training and support to
the City’s plan checking, inspection, and enforcement team.
5. ZERO Code – In November of 2018, Edward Mazria from Architecture 2030 presented
ZERO Code to staff and local community members. ZERO Code for California is a zero -
net -carbon building energy code standard incorporating 2019 California Energy Code. The
ZERO Code can be adopted immediately and integrates cost -effective energy efficiency
measures with on-site and/or off-site renewable energy requirements resulting in zero net -
carbon buildings. Staff continues to evaluate the feasibility and local appropriateness of using
ZERO Code templates as the foundation for a potential reach co de.
6. SLO Climate Coalition – The SLO Climate Coalition has a working group dedicated to
building decarbonization. The working group includes a cleantech innovation professional,
an energy efficiency modeling expert, an architect, and a green financing expe rt, and is
supporting related research and community outreach.
7. Monterey Bay Community Power – Starting in 2020, the city will begin receiving carbon
free electricity through Monterey Bay Community Power (MBCP). MBCP will also provide
energy programs to the City and its residents. Although the specifics of the energy programs
are not finalized, staff is working with MBCP to voice support for programs that assist with
retrofitting fossil fuel appliances with highly efficient and clean electric alternatives.
8. Funding for Technical Support – Staff has budgeted $50,000 to support any additional
technical work and outreach support that may be required for advanced building codes,
research for a carbon offset program, or other related issues that may arise including
California Energy Commission required reports or studies.
Public Engagement
The initial conversation regarding building decarbonization occurred at the publicly held
September 18, 2018 City Council meeting. Since then, staff has worked closely with the SLO
Climate Coalition and peer cities throughout California to identify and pursue resources and
develop the potential approach discussed in this report.
Staff has reached out to the two developers responsible for San Luis Ranch and Avila Ranch and
received initial feedback. Not wanting to get ahead of Council, staff has conducted only limited
outreach to this point. Should Council direct staff to continue building decarbonization work as
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discussed in this report, they would authorize staff to begin working closely with important
stakeholder groups including local developers, builders, contractors, suppliers, housing
organizations, and other groups as they are identified.
Schedule and Next Steps
Should Council direct staff to continue work as discussed in this report, work would proceed on
the following tentative timeline:
Task Timeframe
Confirm Council approach; procure technical support February 2019
Convene stakeholder group and conduct outreach March 2019; ongoing
Develop draft policy approach, including potential draft reach
codes, and present findings to Council*
Summer 2019
Submit code to the California Energy Commission for review
and approval
September 2019
Receive approval from the California Energy Commission November 2019
Building Code goes into effect January 1, 2020
*Note: The draft energy reach code would be implemented concurrently with rest of the Building
Code in January of 2020. However, due to the required California Energy Commission
approvals, the draft energy reach code would be considered by Council prior to the draft
Building Code.
It is important to note that the proposed schedule provides multiple offramps for Council,
including upon development of a first draft of the policy approach and when the final code is
adopted. Should staff not be able to identify a building decarbonization approach that is cost
effective, it will report back as such in Summer of 2019.
Conclusion
Through initial research, staff finds that developing an approach to decarbonizing new
development would be highly impactful to reducing future greenhouse gas emissions, that staff
has the technical capacity and resources to complete work in 2019, and that there are offramps
should the program not be cost effective.
FOCUS QUESTIONS FOR STUDY SESSION
FOCUS QUESTIONS FOR STUDY SESSION
1. Does Council want staff to develop a building decarbonization policy approach for further
review in Summer of 2019? If so:
2. Does Council want staff to begin technical and outreach work and develop draft reach c odes
for consideration in Summer of 2019?
3. Does Council want staff to continue developing a potential carbon offset program for mixed-
fuel developments for review and further direction in Summer/Fall of 2019?
4. Does Council want staff to research policy approaches for retrofitting existing buildings as
part of the Climate Action Plan update. The Climate Action Plan update will be presented for
adoption in Fall of 2019 and would include an implementation timeframe.
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CONCURRENCE
The Community Development Department concurs with this report.
ENVIRONMENTAL REVIEW
Staff’s recommendation is to request direction on several topics related to building energy use.
The California Environmental Quality Act does not apply to the recommended action in this
report, because the action does not constitute a “Project” under CEQA Guidelines Sec tion 15378.
Further, CEQA Guidelines Section 15306 categorically exempts from environmental review data
collection, research and resource evaluation activities which do not re sult in a serious or major
disturbance to an environmental resource.
FISCAL IMPACT
Budgeted: Yes Budget Year: 2018-19
Funding Identified: Yes
Fiscal Analysis:
Funding
Sources
Total Budget
Available
Current Funding
Request
Remaining
Balance
Annual
Ongoing Cost
General Fund $50,000 $50,000 $0 TBD
State
Federal
Fees
Other:
Total $50,000 $50,000 $0 TBD
The City currently has $50,000 budgeted for technical assistance in support of the work. This
amount would cover the cost to further investigate and eventually develop an approach as
directed by Council. Upon further investigation and completion of technical work, staff will need
to bring the items (e.g., more rigorous building codes, a carbon offset program, etc.) to Council
fo r approval. At that time, ongoing operational cost will be better known and will be considered
as part of the approval process.
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ALTERNATIVES
1. Council could direct staff to wait until after adoption of the Climate Action Plan update to
pursue building decarbonization work. This would allow further analysis identifying the
exact GHG potential of the initiative. Staff does not recommend this alternative as the initial
research conducting to date makes clear that building decarbonization is a key foundationa l
step to achieve carbon neutrality by 2035 and, additionally, should the approaches developed
through the work in 2019 be identified as cost ineffective, Council could pause or choose not
to adopt the standards in January 2020.
2. Council could do nothing at this time. Staff does not recommend this approach due to the
importance of building decarbonization, as mentioned above. However, should Council
choose this alternative, staff requests that the $50,000 in technical support be allocated to
other sustainability initiatives.
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2/19/2019 Item 14 ‐ Staff Presentation
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Carbon Neutral Buildings
City Council Study Session – February 19, 2019
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19%
Electricity
21%
Natural
Gas
Presentation Overview
Background
Greenhouse Gas Emissions and the Built
Environment
Policy Options and Potential Approaches
Public Outreach
Schedule and Next Steps
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2/19/2019 Item 14 ‐ Staff Presentation
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Background
Climate crisis is here with significant impacts already
“baked in” to the atmosphere; historic statewide
impacts are representative of the “new normal.”
Depending on global emissions in the next 50 years,
global temperatures could exceed a 1.5° C increase
over pre-industrial levels. A 2-3° C increase would
result in catastrophic impacts.
Global need to reach net zero emissions by 2050 to
limit warming; leadership communities need to
achieve this earlier.
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Previous Council Direction
In September of 2018, the City Council directed staff
to update the City’s Climate Action Plan and pursue a
greenhouse gas emissions reduction target of carbon
neutrality by 2035.
At the same meeting, Council directed staff to
research the possibility of requiring carbon neutral
buildings as part of the City’s building codes and to
return with information about potential benefits,
required work effort, and resources.
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Community Greenhouse Gas
Emissions (Metric Tons of Carbon
Dioxide Equivalent, or MTCO2e)
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Sector 2005 2016 % Change
Transportation 130,210 122,920 -6%
Nonresidential
Energy 57,800 53,410 -8%
Residential Energy 55,190 43,580 -21%
Solid Waste 15,540 13,880 -11%
Waste Water 170 190 12%
Off-Road 10,810 8,230 -24%
TOTAL 269,720 242,210 -10%
Greenhouse Gas Emissions and
the Built Environment
In 2016, building energy emissions accounted for 40
percent of total community emissions.
Of that, 47 percent of emissions are from electricity
consumption and 53 percent are from natural gas use.
Monterey Bay Community Power will provide carbon free
electricity starting in 2020.
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Sector Energy Type
Emissions
(MTCO2e) % of Total
Residential Electricity 14,650 15%
Natural Gas 28,930 30%
Nonresidential Electricity 31,310 32%
Natural Gas 22,100 23%
Total 96,990
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2/19/2019 Item 14 ‐ Staff Presentation
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Greenhouse Gas Emissions and
the Built Environment
City’s Land Use Element anticipates 4,607 additional
housing units and 5,170,000 square feet of additional
nonresidential space by 2035.
Two major developments have been approved: San Luis
Ranch and Avila Ranch. Combined, they will add 1,300
new housing units and 265,000 square feet of
commercial space.
Both have committed to complying with the 2019 building
code and other decarbonization standards, as outlined in the
Council Agenda Report.
This represents 28 percent of available residential buildout
and 6 percent of all available commercial buildout considered
in existing Land Use Element.
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High Quality All Electric Buildings
There have been significant
advances in highly efficient
electric appliances
Air source heat pumps
Water heating
Space conditioning
Induction cooktops
“Smart” appliances
Carbon free, efficient, healthy,
and comfortable
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Policy Options
Focus on incentivizing carbon free development
Enhanced Building Codes for new development
Potential Carbon Offset Program
Retrofit programs
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Policy Options – Building Codes
Residential and commercial development is regulated
by the California Building Code (Title 24 of the
California Code of Regulations);
Part 6 - California Energy Code
Part 11 – California Green Building Standards Code
The State updates Title 24 every three years
City adopts the code in its entirety, with local revisions as
it sees fit
The City is required to adopt the 2019 Title 24 Update in
Fall of 2019 and to begin implementing in January of
2020.
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Policy Options – Building Codes
Public Resources Code Section 25402.1(h)(2) and
Section 10-106 of the Building Energy Efficiency
Standards allows local adoption of energy standards
more stringent than Statewide standards.
The Energy Code could be amended to require more
efficient new buildings and to provide a pathway for all
electric buildings.
The City must make the following findings for California
Energy Commission approval:
As stringent as the Energy Code – the reach code must
require buildings to be designed to consume no more
energy than permitted by the Energy Code.
Cost effective – the City must submit evidence that the
reach code measure costs are equal to or lesser than the
standard Energy Code costs over the life of the building.
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Policy Options – Building Codes
Federal law and local considerations prevent the City
from requiring that all buildings be electric without
providing a pathway for a mixed fuel option.
Other jurisdictions have developed a mixed-fuel
approach
Marin County Example:
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Policy Options – Carbon Offset
Carbon offsets could provide an appropriate price
signal for the cost of carbon emissions and incentivize
carbon free developments
Carbon offsets could also provide funding sources for
programs to help retrofit carbon neutral electrical
appliances
Additional research is needed to identify program
particulars and feasibility
Need to ensure that any fee is appropriately
authorized and administered consistent with
Proposition 26 and AB 1600
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Policy Options – Existing Buildings
Buildings built by 2019 or earlier will be the majority of
the City’s building stock in 2035.
Identifying an approach for retrofitting these buildings
will be critical to achieving carbon neutrality.
Retrofit policies tend to be more complicated and
controversial.
Reach code for new development will lead to
development of local supply chains, technical
knowledge, and increased awareness among
equipment vendors, contractors, developers, builders,
and staff.
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Potential Policy Approach
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More technical and stakeholder information is needed
before presenting a vetted policy approach
For illustrative purposes, the following diagram outlines
one potential approach for new buildings
Public Outreach
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Informal outreach has been conducted to date
Should Council direct to proceed, staff will begin
working closely with important stakeholder groups
including local developers, builders, contractors,
suppliers, housing organizations, and other groups as
they are identified.
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2/19/2019 Item 14 ‐ Staff Presentation
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Known Resources
1.California Codes and Standards Team
2.California Building Decarbonization Coalition
3.Peninsula Clean Energy Building Electrification and
Electric Vehicle Reach Code Project
4.Tri-County Regional Energy Network (3C REN)
5.ZERO Code – Ed Mazria
6.SLO Climate Coalition
7.Monterey Bay Community Power
8.Funding for Technical Support and Public Engagement
Why Now?
“Stop digging the hole” – New buildings that rely on
fossil fuels for heat, hot water, cooking or drying clothes
undermine carbon emissions goals by locking
occupants into fossil fuel infrastructure for the life of the
building.
Save money - New, decarbonized, all-electric buildings
cost less to build to code than those requiring additional
gas infrastructure.
Seed the market for retrofitting existing buildings – A
decarbonization reach code would allow critical industry
stakeholders, including manufacturers, architects, real
estate agents, builders, and contractors to begin
building capacity to support eventual retrofit programs.
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2/19/2019 Item 14 ‐ Staff Presentation
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Schedule and Next Steps
Task Timeframe
Confirm Council approach; procure
technical support
February 2019
Convene stakeholder group and
conduct outreach
March 2019;
ongoing
Develop draft policy approach,
including potential draft reach codes,
and present findings to Council
Summer 2019
Submit reach code to the California
Energy Commission for review and
approval
September 2019
Receive approval from the California
Energy Commission
November 2019
Building Code goes into effect January 1, 2020
19%
Electricity
21%
Natural
Gas
Recommendation
Direct staff to continue developing an approach to
carbon neutral buildings including potential
amendments to the building code.
Research and continue possible development of a
carbon offset program.
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1.Council could direct staff to wait until after adoption of
the Climate Action Plan update to pursue building
decarbonization work.
2.Council could direct staff to not pursue building
decarbonization work.
Alternatives
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Focus Questions for Study Session
1.
Does Council want staff to develop a building
decarbonization policy approach for further review in
Summer of 2019? If so:
2.
Does Council want staff to begin technical and outreach
work and develop draft reach codes for consideration in
Summer of 2019?
3.
Does Council want staff to continue developing a
potential carbon offset program for mixed-fuel
developments for review and further direction in
Summer/Fall of 2019?
4.
Does Council want staff to research policy approaches
for retrofitting existing buildings as part of the Climate
Action Plan update. The Climate Action Plan update will
be presented for adoption in Fall of 2019 and would
include an implementation timeframe.
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