Commercial real estate developers are crying foul over an effort by Maryland Democrats to pass sweeping climate legislation that would change building energy and emissions standards. The proposed Climate Solutions Now Act of 2022 would, among other things, prohibit new construction beginning in 2024 from using fossil fuels for heating and hot water and require some existing buildings to reach net-zero emissions by 2040.
Real estate developers say the new standards are cost-prohibitive, and the rule’s timelines are unrealistic. They also argue there aren’t enough tax incentives to help make properties more energy efficient. The standards also set penalties for property owners who fail to meet emissions targets. “Where is the money going to come from?” said Sen. Benjamin F. Kramer (D), who owns commercial buildings. “[Lawmakers] already fight and scrap for every penny in the budget.”
The real estate developer’s objections highlight some of the tension between acting now on climate change against the cost of the more aggressive efforts to decarbonize the world’s building stock. More cities, states, and municipalities worldwide are setting net-zero emissions goals for buildings, and the price tag associated with them isn’t cheap. Achieving net-zero emissions worldwide by mid-century, despite being unrealistic, would cost an estimated $1 to $2 trillion annually in additional investments, or about up to 1.5 percent of global GDP, according to a report by the Energy Transitions Commission.
Many argue the short-term financial pain is worth avoiding long-term, and some say irreversible, climate damage. But just as many are shocked at the rising cost of gas in recent weeks, we’ll see if objections to higher prices during an energy transition crowd out the long-term vision of cutting out greenhouse gas emissions by 2050. Gathering the political will, not to mention coordinating hundreds of diverse economies, to tackle something as massive as global warming will be no easy task.