Given that I’ve been on deadline this week, I admit that it wasn’t until yesterday evening on the commute home that I heard the piece on NPR. The long and the short of it? The EPA can regulate carbon emissions if Congress fails to pass climate legislation this fall. “And nobody wants the government to regulate carbon emissions,” said the voice on the radio.

Here’s a good brief synopsis from Pro Farmer, an industry newsletter for, well, professional farmers.

Congressional sources confirm what we have suspected for some time – that the Senate will not likely complete action on controversial climate-change legislation this year. Majority Leader Harry Reid (D-Nev.) acknowledged a climate bill could wait until 2010 and said that senators will “push climate as hard and as fast as we can.” Some observers think the controversial topic could not pass in an election year. With the likely delay, attention is turning to what the Environmental Protection Agency (EPA) will do to regulated greenhouse gases in the absence of a new law.

In April, the EPA followed through with the Supreme Court’s 2007 directive to determine whether carbon dioxide is a threat to human health and welfare. The agency’s finding that it is a threat is expected to be finalized this fall. The EPA would then be required to begin the process of regulating emissions from a several sources.

Sen. Barbara Boxer (D-Calif.), author of the Senate’s climate-change bill, said If Congress does nothing, “we will be watching EPA do our job, because they must under the Clean Air Act.” EPA Administrator Lisa Jackson said that she, and the rest of the Obama administration, would prefer not to regulate, as the Clean Air Act was not designed to regulate carbon dioxide and a Congress-passed cap-and-trade bill would better address both environmental and economic concerns. White House officials and climate-change bill proponents have used the threat of EPA regulation to push Congress toward action.

I guess all that press about the big bad EPA had some sort of impact on Congress, or public opinion, or both, because this morning the New York Times came out with a story entitled: “Senate Draft of Climate Legislation Makes Unofficial Debut”.

Others tried to decipher new provisions ranging from strengthened U.S. EPA authority to altered carbon offset language.

Sens. Barbara Boxer (D-Calif.) and John Kerry (D-Mass.) are not releasing the official version of their major climate legislation in the Senate until today, but advocates on the right and left already are making their thoughts known about a preliminary 801-page draft (pdf) of the bill leaked to E&E yesterday.

I haven’t read the 801-page draft (available by way of link from the NYT story) but I may scan it tonite given that I’ve had terrible trouble sleeping lately. And I’d probably like to ferret out the section that brought the NYT writer to this conclusion:

The preliminary draft of the Senate climate bill gives EPA a wider berth to set limits on greenhouse gas emissions, even in the event that a federal cap-and-trade plan takes effect.

My youngest son, Wolfie, a 19-year-old college sophomore and a half German, had the opportunity to live and go to school in Berlin for most of his high school career. There he studied cello and was fortunate enough to travel to Beijing with an international honors orchestra. This was during China’s building boom, as the bird’s nest stadium was rising along with thousands of hotel rooms, office buildings, etc. What an incredible cultural opportunity, right? But when Wolfie returned, I heard little raving over the Forbidden Palace or the Great Wall. Instead, I was greeted with an onslaught of 17-year-old complaints about the thick, putrid, yellow air that had “a taste, and not a good one.”

So it should come as no surprise that this week at the U.N. meeting Chinese President Hu Jintao vowed to take action on his country’s greenhouse gas pollution—if only for the sake of improved public relations.

Per the Associated Press:

[Hu] outlined an ambitious program that included plans to plant enough forest to cover about 150,000 square miles — an area the size of Montana — and generate 15 percent of its energy needs from renewable sources within a decade.

He said the communist nation would also take steps to improve energy efficiency and reduce “by a notable margin” its growth rate of carbon pollution as measured against economic growth — though he did not give any specific numerical targets.

“At stake in the fight against climate change are the common interests of the entire world,” Hu said. “Out of a sense of responsibility to its own people and people across the world, China fully appreciates the importance and urgency of addressing climate change.”

Still, China and other developing nations “should not … be asked to take on obligations that go beyond their development stage,” Hu said.

Meanwhile, President Obama, who also pledged to place stringent cuts on U.S. emissions, has run up against fierce opposition from senators of both parties.

No single nation appears able to step up and be the ‘bigger nation’ at this point. There are so many reasons not to take decisive action and these reasons all come in the form of open-ended questions: Should the U.S. lower its carbon emissions if China and India don’t do it, too? Should any country sign an international climate treaty if it doesn’t have a domestic treaty first? Should climate change take a backseat to the world’s financial recover or could climate change actually help bolster the global economy?

So as the U.N.’s Copenhagen Climate Change meeting in December bears down upon world leaders, they need not worry about solving too much. They can easily sidestep the issue with their old standby: Who’s on first? What’s on second? And I don’t know is on third.

By Matt Valley

While apartment developers are making a big push to construct LEED-certified buildings and gain a competitive edge in the marketplace, most renters are unfamiliar with the highly coveted green seal of approval and they’re unwilling to pay more for it.

So says Jonathan Bartlett, vice president of Robert Charles Lesser & Co. (RCLCO), a real estate consulting firm based in Washington, D.C. that has conducted extensive research on apartment demand. Renters are familiar with the Energy Star program, however, and are willing to pay a premium to use products or reside in buildings that carry that label, adds Bartlett.

Energy Star is a voluntary labeling program established by the federal government that identifies both products and buildings that exceed minimum federal standards for energy consumption. But the gold standard in the eyes of the commercial real estate development community is the Leadership in Energy and Environmental Design program, or LEED, run by the U.S. Green Building Council.

“They really don’t know what [LEED] is,” says Bartlett, referring to apartment renters. “They may come to know what it is, and you may educate them about what it is, but until that time comes we’re finding that LEED is not really paying off from a branding standpoint to the consumer as much as Energy Star.” Still, he acknowledges that LEED may be a significant factor when underwriting commercial mortgage loans.

Bartlett’s remarks came during a keynote address delivered at the 2009 MPF Research Southeast Apartment Markets Conference last Wednesday, Sept. 16 at the W Hotel in Midtown Atlanta. The event attracted more than 200 apartment owners, managers and investors from throughout the region.

“When it comes down to it, whether the apartment is green is actually not a number one priority for [prospective tenants], and not even necessarily a number two priority,” says Bartlett. “The most important factor for people choosing an apartment among those we surveyed is the rent. But a strong number three is green environmental features and amenities.”

Differing attitudes about green initiatives have emerged between age groups. Young adults 20 to 24 years of age — the so-called Generation Y crowd — place a high value on companies that embrace green practices and they acknowledge it’s a factor in their renting decision. Yet, they are less likely to pay a premium for green than persons age 45 to 49 (see chart).

“It seems somewhat inconsistent with the level of passion that they have as a group for doing the right thing by the environment. When we probed this issue a little further, we came to understand that the Generation Y group really sees green as a baseline expectation,” explains Bartlett. “They don’t see why they would have to pay extra for something you ought to be doing anyway.”

The researcher separated the importance of green benefits into two categories: “me green” and “we green”. Efforts to slow global warming, promote cleaner soil and avoid the consumption of nuclear energy sources were grouped as “we green” benefits. Saving money on utility bills, reducing the number of automobile trips by walking and minimizing personal exposure to harmful chemicals were among the “me green” benefits.

In short, “me-green” benefits affect individuals directly versus the “we-green” benefits that focus on doing what’s right for society, according to Bartlett. “The ‘me-green’ benefits are very important, and that’s where we think you should be focusing your energy.”

But whether it’s possible for apartment owners to offer me-green benefits without having to raise rents remains a challenging question.

National Real Estate Investor is once again investigating trends in the development and use of Green Buildings. Whether you own, develop or lease green buildings or not, we would like to include your opinions as an industry professional and valued National Real Estate Investor reader. Your answers will be kept completely confidential and used only in tabulation with others. As an added incentive, at the end of the survey you will be given the opportunity to win a $100 Visa gift card.

If you’re a developer, click here:

If you’re a corporate user, click here:

I wanted to provide some additional details on the Small Business Administration (“SBA”) 504 energy efficiency loan program that was first referenced by Sibley Fleming on June 4th, 2009 since many borrowers and mortgage brokers have asked about it lately.

Over the past couple of months, two small business borrowers have been able to obtain real estate financing through the SBA 504 loan program by reducing their energy consumption. Financing was obtained for the new construction of a retail center totaling approximately $9 million and the acquisition of an existing warehouse totaling approximately $8 million using the SBA 504 loan program.

The SBA 504 loan program is one of the few consistent sources of capital for real estate construction and acquisition projects today and because of recent changes to the program, project sizes can now be up to $10 million if an energy efficiency or renewable energy generation project is implemented as part of the business plan.

In general, the SBA 504 loan program provides small businesses with long-term, fixed-rate financing for major fixed assets, such as land and buildings. A Certified Development Company (CDCs) is a nonprofit corporation set up to contribute to the economic development of its community. CDCs work with the SBA and private-sector lenders to provide financing to small businesses.

Typically, a project financed using the SBA 504 loan program includes a loan secured with a senior lien from a private lender, e.g., Wells Fargo or Bank of America, covering up to 50 percent of the project cost, a loan secured with a junior lien from the CDC (backed by a 100 percent SBA-guaranteed debenture) covering up to 40 percent of the cost, and a contribution of at least 10 percent equity from the small business. Private banks benefit from the program because they lend on only 50 percent of the project and are in a more secured position. Borrowers benefit by being required to provide only 10% equity.

Proceeds from SBA 504 loans must be used for fixed asset projects such as: purchasing land and improvements, including existing buildings, construction of new facilities, or modernizing, renovating or converting existing facilities.

With recent changes to the loan program, borrowers are able to qualify for up a $4 million SBA loan debenture. At this SBA loan size, qualified borrowers can utilize the SBA 504 loan program for projects up to $10 million if an energy efficiency or renewable energy generation project is implemented as part of the business plan. Otherwise, without the energy efficiency project, the maximum SBA 504 exposure is $1,500,000.

Interest rates on SBA 504 loans are based on a spread above the current market rate for five-year and 10-year U.S. Treasury issues. Maturities of 10 and 20 years are available. Fees total approximately 2.15 percent of the debenture and are financed with the loan. The American Reinvestment and Recovery Act has reduced these fees for a limited time.

To be eligible, the borrower’s business must be operated for profit and fall within the size standards set by the SBA. The business qualifies as small if it does not have a tangible net worth in excess of $8.5 million and does not have an average net income in excess of $3 million after taxes for the preceding two years. The business must occupy at least 51% of the building being purchased, if existing; or for ground up construction, 60% now and 80% within the near future. Loans cannot be made to businesses engaged in speculation or investment in rental real estate. Hotels are allowable.

For more information on SBA 504 energy efficiency loan program qualification visit:

www.sba.gov

www.ptrenergy.com/sba504.php

Tony Liou is the president of Partner Energy (www.ptrenergy.com) a nationwide provider of building energy audits, energy efficiency and renewable energy consulting and implementation services.

For years, my environmental consultant husband, says he has seen no scientific evidence of global warming. He’s one of the most apolitical people I’ve met in my life, but here comes this highly unpopular, controversial opinion. For my part, while I’m no scientist, I tend to want to err on the side of caution—if there’s even a possibility that global warming is a reality, we should do something about it. Not to mention the fact that who wants to live in a dirty, polluted environment?

Now, this morning, I find two interesting yet conflicting stories in my inbox from weather guru and editor of NREI, Matt Valley. The first, “Study: Global warming could be killer for Chicago” warns that if nothing is done, by mid-century more than 1,000 people in Chicago will be killed each year. The study was put out by a group called Union of Concerned Scientists based on the analysis of climate-modeling projections by the Intergovernmental Panel on Climate Change in a 2007 report. Junk science? Or a warning shot over the bow?

Matt’s second email was a story in Marketwatch, “Climate Change on Trial.” In short, the U.S. Chamber of Commerce has petitioned the EPA to provide proof that climate change is indeed a threat to the public.

Worth noting is a bit of editorializing on the part of the writer:

“It’s shocking that a business group representing the largest segment of American companies is labeling itself a climate-change denier, especially since the findings from the most well-respected and largest group of scientists, the Intergovernmental Panel on Climate Change, proves that climate change is undeniable.”

Of course, I’m not shocked but a little uncomfortable that a journalist should make such a judgment. I say loudly, why not provide the proof? I’m not a scientist and neither is Joe Public. And why should be have to rely on threats of global warming to use resources more wisely or to clean up the air we breathe?

Despite all of the talk—no new spec, no new green—Dallas-based KDC Real Estate Develoment & Investments in partnership with Prudential Real Estate Investors is moving forwarded with its branded Intellicenter program, which it launched in 2005. The new Intellicenter-Tampa is one of many green projects including Intellicenters in Atlanta (Silver Certified), Dallas, Charlotte, N.C. (LEED Certified), Houston (Silver Certified), Riverside, Calif. (Gold Certified) and Tampa, Fla. (Silver Certified).

1999 Broadway, Denver1999 Broadway, a 43-story, 680,276 sq. ft. office tower built in 1985 has achieved LEED-EB: O&M certification. It is one of nearly 100 buildings seeking certification across Transwestern’s managed portfolio. The property is owned by Transwestern Investment Co., Broadreach Capital Partners and Equity West Investment Partners.

Green design and operational features which included waste and recycling audits, lavatory upgrades to reduce water consumption, a sustainable purchasing plan that specifies the use of environmentally-friendly building products, a full green cleaning program, utilizing maintenance and cleaning products that met the standards of Green Seal and the EPA’s comprehensive procurement guidelines, a low environmental impact pest management plan, as well as landscape equipment and management.