Pitch
Engage public/legislators/private industry to enact tax credits and provide financing subsidies for sustainability and resiliency projects.
Description
Summary
As provided in The NRF White Paper, see website.
• The NRF is a development stage company.
• The NRF addresses financing challenges faced by (i) owners of multi-family and commercial properties undertaking sustainability and resiliency retrofits, and (ii) municipalities undertaking large-scale climate resilience infrastructure projects. NRF proposes two financing mechanisms--Climate Resilience Investment Subsidy (CRIS) Fund and Climate Resilience Investment Tax Credits (CRITCs)--and a public advocacy program for their establishment.
• For the CRIS, The NRF would raise $100-$250 Million from Property & Casualty Insurers, Utility Companies and/or Municipalities. NRF would provide subsidies targeted to property owners and businesses with financing gaps so they can undertake and complete sustainability/resilience retrofits.
• Under the CRITCs, The NRF advocates that legislators enact these tax credits to raise substantial dollars from taxpayers who want to protect their environment while receiving a commensurate reduction in their taxes. If only 1.5% of the 9.5M NYC taxpayers each give $500, $71M would be generated annually to assist NYC to undertake and complete important large-scale resilience projects that protect critical infrastructure and natural systems. These funds could be leveraged to support larger public works bonds.
• As these efforts promote the public interest, provide taxpayers the chance to support resiliency and private industry to leverage public dollars, The NRF would undertake public and industry advocacy through on-line and offline PR campaign, and a NYC referendum for support of resiliency tax credits.
• The NRF requires $800,000 to first undertake feasibility and economic impact studies, and then launch advocacy, lobbying, petitioning, outreach activities as well as a referendum initiative if permitted. Following passage, with an annual $1M budget, we would set up advisory board, public information, and a process for fund distribution.
Category of the action
Mitigation/Adaptation, Changing public attitudes about climate change
What actions do you propose?
Establish Climate Resilience Investment Tax Credits to stimulate economic activity and create green jobs. The loss in tax revenue on the federal, state and local levels will be eclipsed by the multiplier effect on the economy generated by these investment tax credits. The multiplier effect has proven itself with the real estate rehabilitation credit, motion picture investment tax credits, solar and other renewable energy tax credits and new market investment tax credits.
We estimate if only 1.5% of the 9.5M NYC taxpayers each give $500, $71M would be generated annually to assist NYC to undertake and complete important large-scale resilience projects that protect critical infrastructure and natural systems. Imagine the scale of funding possible when this is applied within NY State and those within the tri-state region. The notion of CRITCs has been very well received locally, nationally and internationally. Some European experts feel that the CRITC might be applicable to the 2009 Copenhagen Accord requirement for developed countries to fund $100 billion annually to developing countries in terms of their climate adaptation (resilience) efforts. The CRITC could be adopted by developed countries as a means to fund this requirement and increase economic activity through the multiplier effort at the same time.
The NRF has begun the process at the New York City and New York State levels and is working to build grassroots support as well as legislative support to get this tax credit enacted in some acceptable form.
Feasibility and economic impact studies must be undertaken to show the costs and benefits of the proposed CRITC.
Establish Climate Resilience Investment Subsidy program to encourage and assist property owners and building managers of multi-family and high-use commercial properties who are undertaking retrofits to reduce utility and energy costs (sustainability) to also address and incorporate resiliency measures. The projected savings in energy costs is the basis for financing these sustainability projects. Unfortunately, many of these projects within a particular building are being done in a singular, “one-off” manner where window upgrades are considered one project, installation of a solar roof another, upgrading boiler yet another, etc… At the same time, these projects are being undertaken more often than not without a clear understanding or incorporation of resiliency.
The NRF sees sustainability and resiliency retrofits as forming two sides of the same coin. Both when conceived properly and undertaken within a larger view can perform in a dynamic and interdependent way that (1) improve the quality of life for residents in a building, (2) improve the energy efficiency of a building), (3) protect the investments made into the building that include energy efficiency improvements, and (4) mitigate the building’s contribution to fossil fuel dependency while also mitigating the building’s contribution to overloading infrastructure systems during extreme weather events.
The NRF knows that financing considerations are the primary challenge for this “one-off” “single improvement at a time” approach to sustainability and this approach that often if not always falls short of resiliency. The cost differential between sustainability measures (financed through energy savings) versus a package of sustainability and resiliency often is the margin needed to undertake fundamental, important and basic resiliency measures. By providing subsidies that close this funding gap, the NRF seeks to fund these resiliency measures.
Through these subsidies, we can also encourage behavior and raise awareness towards a broader understanding that together sustainability and resiliency measures can really “protect, enhance and preserve” buildings, critical infrastructure and natural systems.”
How CRITCs Would Impact Two Projects.
Big U: The Big U Project has been awarded $335M from HUD's Rebuild By Design Initiative, but the entire project cost will cost $1B+. The Big U is a public-works project which, when implemented, will be vital in protecting Lower Manhattan from the effects of future extreme weather events such as flooding. CRITCs could, if enacted, raise in one year alone $71M million of additional funding from the general taxpayers as well as give private companies and investors greater incentives to do their share in funding the remainder. These proceeds could also be used as debt service to float a comprehensive resiliency bond. The NRF has engaged with The City of New York, who in turn is discussing with The New York State Legislature to start exploring some sort of investment tax credit and/or subsidy for climate resilience.
To date, there is no tax incentive or subsidy at the City or State level for climate resilience efforts. There are subsidies and tax credits but these are primarily for sustainability and renewable energy measures through NYSERDA. The City has asked us to select a pilot project that New York State can pursue and we have selected The Big U as the pilot. We are in touch with the Big U team and have made a proposal to have The NRF join the Big U team to assist with financing beyond the $335 million Federal Government commitment since phase I of The Big U requires an additional $700 million in funding.http://www.rebuildbydesign.org/project/big-team-final-proposal
Piermont Town: The town of Piermont, New York has approached The NRF for their help in funding their resilience plan which is coming up for public review on September 11th for publication sometime in late-September 2014. Piermont sees itself as an ideal, pilot project given their proximity to the Hudson River. A number of single-family residences have already raised their homes to be prepared for the next climate event. We will be attending the September 11th meeting.
Leveraging Funding for an Integrated Approach. As we advocate an approach that integrates sustainability with resiliency, The NRF would direct, allocate and support those projects that do this. The NRF's PEP Measures is a menu of green, sustainable and resilient measures demonstrated to “protect, enhance and preserve” buildings, critical infrastructure and natural systems.
1) Expand Sustainable/Resilient Communities through the development of a master resilience plan (PlaNYC report of June 2013).
2) Promote and broaden flood accommodative design and engineering to be accomplished in conjunction with public & private resilience efforts.
3) Encourage efficient storm water management through deployment of portable flood barriers, mold resistant foam insulation and wallboard, climate resilient landscaping, installation of permeable surfaces and additions to property elevations above flood levels.
4) Promote use of clean energy through implementation of passive and renewable technologies.
5) Utilize cutting edge high efficiency heating, cooling and ventilation technologies.
6) Improve building envelope to achieve optimum balance of air flow reducing loss of heat flow in the winter and cool air in the summer.
7) Connect natural world elements with internal property improvements such that flood prone areas are improved in street scape and public areas to further protect and align with private property investment.
8) Relocate building infrastructure above projected flood levels (including reasonable projections for sea level rise over a 50 year useful life assumption).
9) Create resilient and sustainable connectivity between utility grid and individual properties.
10) Utilize earth friendly building materials. Encourage reuse, recycling and renewal policies in building program with a focus on the use of zero VOC materials.
Raise Public Awareness and Participation. Throughout all facets of our work, the public plays a vital, central role. While it is very challenging to have to rely on legislators in a legislative initiative like the CRITCS, these decision and policy-makers do rely upon and are heavily influenced by public input. So ultimately and directly it is the public who we wish to activate and involve so that they exert pressure on their legislators to enact the CRITCs. It is the public who has been and will be most affected by the effects of extreme weather events and who have the biggest interest in seeing that municipal public works that make NYC more resilient are undertaken. As the public becomes increasingly aware of the connection between sustainability and resiliency, they will incorporate that awareness in their lives and behavior. As taxpayers, the public must be engaged to make these contributions and receive these tax credits later should the CRITCs legislation be passed.
For this reason, we seek to launch a public lobbying and advocacy campaign to engage the public both as the lever for influencing change and the means for enacting the change. This will be a multi-front campaign that includes influencing lobbyists, undertaking a referendum, petitioning the community, generating outreach and dialog through social media and grass roots support. We will work through bloggers who have an interest and influence in this area and whose blogs are read by politicians. We could submit guest editorials to online and offline media that serve the public sector.
A Public Referendum. New York State does allow for a permissive referendum in which residents of a community can vote directly to accept or reject a specific piece of legislation. Crafting the language in the referendum would have to comport with possible legislative decisions that have removed taxation initiatives from the referendum action. The NRF would work towards submitting to a referendum either Proposition 1—A vote to determine whether the general population favors enactment and institution of climate resilience investment tax credits to assist in dealing with future climate events, or Proposition 2—A vote to determine whether the general population favors enactment and institution of climate resilience investment subsidies to enable property owners to make the properties more climate resilient with regard to future climate events.
Commit to Resiliency. While some overseas government agencies are aware of and are actively engaged in implementing resiliency measures, there is scant understanding or commitment to this protocol in the New York area. The Bloomberg administration approved a program called Special Initiative for Rebuilding and Resiliency (SIRR) in Dec. 2012. To date, none of the allocated funding has been spent with the current administration seeking to update the plan in April 2015. Moreover many of the efforts that are occurring in this realm are happening at the think tank level not on the level of implementation and financing in collaboration and partnership with the business community.
We hypothesize that private sector-directed actions are needed because those organizations have both short and long term financial viability at stake. Their stakeholders are looking for immediate solutions that will protect real estate and the lives of people living in those properties for their own self-interests and those of the communities they serve.
Resiliency as a business discipline is just becoming known in insurance and property management circles. Our proposal will create critical connections between public and private sector entities so that actions can be underwritten and executed.
For this reason as we initially established The NRF as public charity 501(c)(3), we are in the process of incorporating Built Environment, LLC as a Benefits Corp to help implement the ideas behind The NRF White Paper in practical building and building improvement district situations. In this way, we are also influencing property owners and working with the insurance industry to influence their undertaking and financing of integrated sustainability/resiliency work and promoting the PEP Measures advocated in this Proposal.
Who will take these actions?
At the Federal Government level, we need the House of Representatives Ways and Means committee to consider the Climate Resilience Investment Tax Credit. For the Climate Resilience Investment Subsidy, other than a lobbying effort at the municipal level, most funding will take place in the private sector drawing from stakeholders such as companies within the insurance and utilities industries--as they have most at risk from extreme weather events.
At the State level, New York has recently formed a Green Bank and has made Con Edison fund $1 Billion for climate resilience efforts. The State Assembly would have to be involved with these initiatives.
At the New York City level, there is keen interest but the City feels New York State would have to take the lead as much of their tax revenue ends up going to the State. They have been in contact with the State Legislature about these ideas but we need more support.
The UN, the World Bank and other International NGOs can be quite helpful in looking at the CRITC for Climate Change initiatives.
Eric Kaufman (Founder), Joaquin Matias and James-Robert Sellinger (Principals) are the main individuals involved in both The NRF--a 501c(3) organization and Built Environment, LLC a Benefit Corporation to be established with a focus on for-profit activities related to linking climate resilience with sustainability for large scale building owners.
Mr. Kaufman initiates strategy and overall direction for The NRF, with Mr. Matias being responsible for public policy and Mr. Sellinger over financial and financing strategies.
Our branding agency, Synapse Partnership, led by Marty Katz will oversee the marketing, public advocacy and outreach process.
Where will these actions be taken?
We had hoped to launch this initiative on the federal level to build on Washington’s rare focus during the aftermath of Super Storm Sandy and to leverage HUD’s ReBuild by Design Initiative.
However, because of the legislative gridlock in Washington, we have strategically changed our approach by starting locally. And given the experience that the principals of NRF have in NYC and NY State, we expect our influence at this early stage could be more felt by making New York City the first launch, pilot site, with effects that would expand to the New York Metropolitan area.
The platform can easily be expanded to the tri-state region, then adopted nationally. We hope that by 2020 it can be launched on an international basis.
These actions can be duplicated and replicated, both at the building and municipal levels, so as to jump start the important work that needs to be done around the world.
What are other key benefits?
Our branding agency, Synapse Partnership classifies The NRF into a new breed of companies dedicated to saving the planet--"Planet Savers."
The ability to effectively deal with climate change through financing mechanisms like the Climate Resilience Investment Tax Credit and the Climate Resilience Investment Subsidy will have desirable outcomes for both the environment and society.
The multiplier effect of the tax credits coupled with the building resiliency efforts as a result of the subsidy will provide society with a solid framework to effectively deal with the global issue of climate change.
Without money channeled into resilience and sustainability efforts, the effects of climate change will be devastating so we must act now.
What are the proposal’s costs?
Effect on Other Programs. The loss of government tax revenue by providing CRITCs could potentially divert tax revenue away from other areas like education, defense and other socially desirable programs.
The sheer amount of money required for climate change efforts mandates a solution like the CRITC and CRIS to deal with these potentially overwhelming problems so the cost/benefit of these programs must be thoroughly analyzed to prove that the multiplier effort for economic activity and job growth is far greater than the potential loss of tax revenue from the CRITC. For this reason, one of the key elements of the NRF’s initial work and financial needs is the undertaking of a feasibility and economic impact statement.
NRF’s Program Costs.
First Stage (6 months): $300,000 to a) undertake through HR & A, a feasibility study ($50,000), (b) an economic impact statement ($100,000+) and (c) cover overhead. Totals $300,000.
Second Stage (one year): $500,000 to (a) engage and work with lobbyist and undertake referendums if possible, petitioning, community outreach, social media and grass roots support .
Third Stage (1 Year): assuming passage of the bill, $1M for the implementation of tax credit and investment subsidies by (a) setting up world class advisory board plus local operating boards, (b) setting up a public information and engagement process, and (c) establish administration mechanisms and distribution of funds.
Time line
The short term will involve lobbying and grassroots efforts to bring the CRITC and CRIS into economic reality.
The medium term will see implementation of actual programs required to help deal with the effects of climate change and to begin the reversal of the effects of global warming.
The long term is involved with the stabilization of the planet's ecosystems and dealing with the future effects of climate change.
Short-Term:
First Stage (6 months): (a) undertake through HR & A, a feasibility study ($50,000), (b) an economic impact statement ($100,000+)
Second Stage (1 Year): (a) engage and work with lobbyist and undertake referendums if possible, petitioning, community outreach, social media and grass roots support .
Third Stage (1 Year), assuming passage of the bill: implement programs by (a) setting up world class advisory board plus local operating boards, (b) setting up a public information and engagement process, and (c) establish administration mechanisms and distribution of funds.
Medium Term:
The implementation of many of the resiliency projects will take literally decades for full implementation of the ideas and plans.
Long Term:
Assessment and re-evaluation of implementation efforts to take into account actual sea level rise, actual global warming and actual carbon emissions.
As needed, programs will be tweaked and revised to reflect changing conditions.
Related proposals
To our knowledge, no other Climate CoLab proposals are directly related to this proposal but we will have to review the other 32 proposals to make sure that there are linkages, which we feel are indirectly related to our proposal.
References
We have consulted with many experts in the New York Metropolitan area in the fields of climate resilience, including Susannah Drake, Landscape Architect, DF Gibson Architects, Klaus Jacob, scientist at Columbia University's Lamont-Doherty Institute for Geological Studies, the City of New York and have read numerous articles related to the field of climate resilience. See our blog for further references: natresilience.blogspot.com
By:
The NRF, Inc
