The Federal Government is Electrifying All New Buildings — States and Cities Should Follow Suit

Covering new buildings and major renovations, the new rule is one of the biggest actions Washington has taken to cut climate pollution from federal properties. City and state governments should mirror the move and green their buildings, too.

On April 24, 2024, the Department of Energy finalized a rule that will accelerate the electrification of new federal buildings and major renovations and reduce fossil fuel pollution. The Clean Energy for Federal Buildings rule requires a 90% reduction in direct fossil fuel consumption during the next five years and the elimination of burning fossil fuels on-site by 2030.

By mid century, the new rule will deliver $134 million in savings and cut carbon emissions by roughly 2 million metric tons, the DOE estimates. It follows a federal Building Performance Standard announced in December 2022, which will enhance energy efficiency and drive down carbon emissions from the federal government’s over 300,000 existing buildings, managed by the General Services Administrations (GSA).  

The federal standards are major milestones in decarbonizing US buildings. And another big prize awaits: similar shifts at thousands of existing state and local buildings dotting the US. As the building sector saw with LEED, government embrace of sustainable construction standards can reshape the market for all large buildings.

Don’t stop at federal buildings

Across the United States, about one-sixth of building square footage (some 20 million square feet) is owned by state and local governments. With control of this massive portfolio, governments can shift “business as usual” practices to align with the country’s climate goals through their purchasing power. According to RMI analysis, decarbonizing state and local government buildings would eliminate six percent of building greenhouse gas (GHG) emissions — approximately 38.6 million metric tons per year, equivalent to the climate-warming emissions from all private and public US office buildings.

More than half of these buildings are schools and colleges, creating an opportunity to both reduce carbon emissions and improve learning environments with better air quality and less pollution. We see a strong demand for this transformation, with several colleges already leading the charge on projects that replace decrepit oil systems with clean, renewable geothermal heating and cooling.

In many jurisdictions, organized labor will benefit economically from an increased focus on retrofitting public buildings to save energy and enhance operations. Meanwhile, federal funding from the Inflation Reduction Act (IRA) – notably Climate Pollution Reduction Grants – is available to support this work.

Learning from LEED

Governments deserve much of the credit for the rise of the LEED green building rating system in the early 2000s. Many of the first buildings to use LEED were publicly owned or underwritten. For instance, the first LEED-certified multifamily building was constructed in Battery Park City, along Manhattan’s southern coast in New York City, under requirements from the state-led public authority that controls the land. Nationwide, states and cities adopted requirements for LEED certification of their buildings, many of which remain in place today.

Government adoption and first-moving on LEED was central to its success, providing a testing and training ground for legions of designers and contractors who spread out across other large commercial and residential buildings. Today, LEED is the world’s most widely used building performance rating system in existence. Someone always needs to go first, and the private sector usually doesn’t want to lead.

States and cities: A big opportunity

Over 47 states and territories included building decarbonization in their recent IRA application for federal Climate Pollution Reduction Grants. A no-regrets first step is for these states and their cities to “lead by example.” Taking a page from the LEED playbook, they can jumpstart decarbonization of government buildings by establishing requirements for their own buildings.

Securing these policies for existing public buildings would be low-hanging fruit compared to the last five years of progress cities have made adopting all-electric new construction laws for residential and commercial buildings. It’s the government that bears the responsibility to manage costs and implementation, so there will be less industry opposition.

State governors and city mayors often have the authority to make commitments on government building standards through executive order, creating an additional forum for action beyond legislatures. And there should be fertile ground to start in the over 100 cities and multiple states that have made all-electric or electric-preferred new construction the standard.

Note: RMI analysis used square footage, census region, and emissions estimates from US Energy Information Administration data