Monday, August 19, 2013

Reduced CO2 emissions are the currency of growth


Reduced carbon emissions as the CURRENCY of growth, development and real estate commissions. 

AB 32 set a standard to be achieved by 2020--- 1990 CO2 emissions. That created a limited commodity--like a finite money supply (an allowance--not like our government's crazy printing presses), CO2 emissions are now limited in CA to 1990 levels. Unlike the money supply, you can’t just flip a switch to create more CO2 capacity (currency), because the Earth itself represents the ultimate zero sum game and the FED doesn't control the Earth, even under Bernancke. 

Any future growth, to the extent that it produces increased CO2 emissions, must have those emissions directly offset by reductions in CO2 emissions somewhere else. The beauty of CO2 is that it’s like currency, it’s transportable and universal. You can increase CO2 emission in one sector, housing, for instance, but you can offset that increase--ANYWHERE--the offset doesn’t need to come from cutting CO2 emissions in the housing stock. The offset could some from simple conservation--many people cutting their personal CO2 emissions by 10% -- or it could come from lowering CO2 emissions associated with transportation or water/sewer processing. Obviously, increasing use of renewable energy represents and decreasing other energy sources is an offset too. 

It follows that REALTORS need to become more aware about CO2 emissions because without sufficient offsets, in terms of reduced CO2 emissions, their very near future business success will be shaped by the 2020 CO2 emission ceiling. That ceiling could mean less growth and more expensive growth that produces more costly houses that are forced to be net zero or close to net zeroFor older homes there are likely to be complications and expenses in reselling because those houses tend to be more energy inefficient (the low hanging fruit) and are prime candidates for mandated energy saving retrofits to generate offsets needed to meet 1990 CO2 emission levels. If growth is limited, new jobs, income and purchasing power will be too--there goes the housing recovery. 

Local communities can continue to grow, but only if sufficient CO2 offsets are achieved. Growth without offsets creates CO2 debt that must be paid back before the 2020 AB 32 deadline. 

Recently, the accelerating growth in The City of San Luis Obispo is generating much more interest and enthusiasm than the modest progress being made in the implementation of the Climate Action Plan that was passed nearly a year ago. REALTORS, developers and citizens should rethink their priorities by considering whether the near term convenience of business as usual is really worth inevitable constraints on growth and likely increases in complications and expenses imposed on the resale of the existing stock of residential and commercial property. 

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