By Tamara Small | This column originally appeared in Banker & Tradesman on June 12th.
The news is dire. On an almost daily basis, new reports are issued which illustrate the need for immediate action to address a monumental threat to public health and safety, the environment and economic development: climate change. Sea level rise, increased storms and precipitation and rising temperatures will affect all residents and business owners in Massachusetts. The time to act is now.
It has never been more important to be strategic and think carefully about how we can best tackle this urgent crisis while recognizing that today’s actions will have an immediate impact on future generations.
One example of a well-intentioned, but deeply flawed proposal is the movement to ban fossil fuel connections in new development. Municipalities across the state are asking the legislature, Attorney General Maura Healey, the Department of Energy Resources and others to allow these bans at the local level. Most recently, the Massachusetts Senate passed An Act Driving Climate Policy Forward (S.2842), the second comprehensive climate bill passed in this legislative session.
Section 65 the bill, which is now in conference committee, allows the Department of Energy Resources to grant 10 communities permission to prohibit fossil fuel connections in new construction or major renovation projects. While advertised as a “pilot program,” the ban would halt construction overnight in these communities.
While the desire for a quick fix is understandable, the consequences of such a decision at this time must be examined.
Hospitals, Innovation Must Be Supported
The innovation and research economy in Massachusetts is the envy of the world. It allows companies like Moderna and Pfizer to create lifesaving vaccines and medications in our collective backyard. The strength of the lab and life sciences sector bolstered the commonwealth’s economy over the past two years. The facilities where this research and development takes place have unique system and building needs – from federally required fossil fuel backups to additional air decontamination and cycling requirements.
As Newton-Wellesley Hospital and its parent system Mass General Brigham told The Boston Globe last year, a proposed fossil fuel ban in Newton “raises very serious and practical operational concerns that could directly impact the delivery of patient care.”
We cannot afford to ignore our healthcare providers and the hundreds of life science companies who have chosen to call Massachusetts home without considering the serious impacts on the economy. While the goals may be laudable, fossil fuel bans in the commonwealth threaten new investment and force businesses to consider moving to other markets at a time when economic forecasts are grim, and Massachusetts must be preparing for a potential downturn.
It is not lost on affordable and market-rate housing developers that many of the same communities seeking to ban new fossil fuel infrastructure also have growing anti-development sentiment. Massachusetts is facing a housing crisis where demand far outstrips supply. As a result, housing prices continue to skyrocket. The lack of housing is often cited as one of the primary threats to the Massachusetts economy. With the cost to build at a record high and supply chain instability expected to continue, fossil fuel bans are an effective way to ensure the housing crisis will worsen and employers will choose other markets outside of Massachusetts.
Pursue Solutions that Work
The good news is that the Massachusetts legislature, together with the Baker-Polito administration, is aggressively working to make the commonwealth a leader in climate mitigation and adaptation. As required by Chapter 8 of the Acts of 2021, the nation-leading climate bill that was signed into law in March 2021, the Massachusetts Department of Energy Resources is currently drafting code language for the creation of a specialized energy code. This code, which is legally required to be promulgated by the end of this year, will give municipalities seeking to require either all-electric or net-zero-ready construction a clear path forward.
In addition, the Clean Heat Commission, created through executive order in 2021, is currently working to accelerate the deployment of energy efficiency programs and clean heating systems in new and existing buildings. A set of policy recommendations to sustainably reduce the use of heating fuels and minimize the greenhouse gas emissions from buildings is now underway and will be released later this year. Finally, the updated 2025 and 2030 Clean Energy & Climate Plans, required to be released by July 1, are anticipated to set out aggressive policies designed to decarbonize the building sector in line with the commonwealth’s carbon reduction requirements.
Impatience is understood, but fossil fuel bans are not the answer. It is critical that the regulatory processes already underway be allowed to move forward without additional, ill-conceived policies impeding this complex implementation.
We all must to work together to ensure our shared decarbonization goal of net zero by 2050 is achieved – without endangering jobs, housing or growth. We in the commercial real estate industry are ready to play our part to create thoughtful, practical and achievable pathways forward, protecting our economy and our residents both now and beyond 2050.
Tamara Small is CEO of NAIOP Massachusetts, The Commercial Real Estate Development Association.