Invesco Real Estate Conference 2009: Trends and Opportunities

1. Trends in Property Regulation to
Mitigate Climate Change
Jared Eigerman, Esq.
Invesco Real Estate Conference 2009
Green Zone: the Sense and Significance of Sustainability
Amsterdam, The Netherlands
September 24, 2009
© Goulston & Storrs 2009. All rights reserved.

2. Overview
 Regulatory Focus Has Shifted
o International, national and regional instead of local
o EU: Well ahead; “sustainability” in Amsterdam Treaty of 1997
o US: Smart Growth  GHG mitigation; and push  push/pull
 Three Categories to Consider
1. Energy Performance
2. Information
3. Carbon Pricing
© Goulston & Storrs 2009. All rights reserved.

3. 1. Energy Performance
 Regulations to reduce thermal energy/electricity consumption
o Easier row to hoe for regulators than Smart Growth?
o Mutual reinforcement with non-regulatory trends
o Recognition that incentives needed to lower first costs
 European Union
o Energy Performance of Buildings Directive 2002/91/EC  MS’s
o e.g. Energy Performance regulations in The Netherlands
o European Parliament and net-zero energy buildings
 United States
o Model codes (IECC, ASHRAE 90.1) vs. State Codes vs. Nothing
o Federal action: ARRA of 2009 funding for SEP + ACESA of 2009?
© Goulston & Storrs 2009. All rights reserved.

4. 2. Information
 Impact Reviews
o EU and Member States
o US federal and States
 Registration/Reporting
o EU and Member States
o US federal and States
 Disclosures
o The Global Reporting Initiative (GRI)
o Securities trading regulations
o Building labeling: EPC in the EU, ACESA in the US
© Goulston & Storrs 2009. All rights reserved.

5. 3. Carbon Pricing
 Last for a reason
 Voluntary Offsets Markets vs. Mandatory Cap and Trade
o Kyoto Protocol 1997
o EU: European Emissions Trading Scheme (ETS)
o US: CCX ; REC’s; RGGI, WCI; ACESA of 2009? vs. US EPA (2011?)
o Copenhagen 2009
 Effect on Buildings
o Applicability of cap and trade to portfolios and even buildings
o Effect of any carbon pricing on energy costs at buildings
© Goulston & Storrs 2009. All rights reserved.

6. Summary
 Regulations are complex, imperfect and evolving
o EU: e.g. EPBD recast at EC  Euro. Parliament  Council of Ministers
o US: Federal, state, local initiatives interplay, with unclear preemption
o Current transition period
• Down economy
• Regulatory experimentation
• Opportunity for market to get ahead of and/or inform regulators
 Managing regulatory risk
o Tightened building codes likely (Building Performance)
o Mandatory disclosure already begun (Information)
o Increased energy prices likely (Carbon Pricing)
© Goulston & Storrs 2009. All rights reserved.