Colorado has passed nation-leading standards that will reduce climate-damaging emissions from large buildings, helping transform them into safe, healthy, energy efficient, and livable homes and workplaces. This Rocky Mountain model should be adopted by other states to help save their residents on costly energy bills and advance equity while acting on climate. Known as a Building Performance Standard, Colorado’s new policy will decrease greenhouse gas emissions from large commercial and residential buildings 20 percent by 2030 and is an essential measure to ensure Colorado meets its climate targets.
Buildings are the third largest polluting sector in Colorado, accounting for 20 percent of greenhouse gas emissions in the state. Reducing emissions from existing buildings is a crucial step to meeting Colorado’s climate targets, but it can be more challenging than constructing new buildings with electric, pollution-free appliances from the start. Building performance standards (BPS) are a smart policy for existing buildings. They give building owners a variety of different options to stay in-line with energy and emissions targets, such as installing efficient appliances, improving insulation, or using renewable electricity. These targets ramp up gradually, giving building owners enough time to incorporate necessary improvements into otherwise routine investments in their buildings.
In Colorado, the BPS applies to buildings over 50,000 square feet—about 8,000 buildings in the state. Cutting carbon emissions from existing buildings comes with a host of co-benefits including improved indoor air quality, safe and efficient electric appliances, and energy cost savings for building owners, residents, and the entire state’s energy infrastructure system. These benefits are especially important for low-income people and communities of color who disproportionately shoulder energy costs. About 1,000 of the buildings that will be impacted by the standard are multi-family buildings that house renters.
Developing a Strong and Reasonable Policy
Colorado has worked to decarbonize existing buildings for many years. House bill 1238, passed in 2021, established building sector emissions reduction targets of 7 percent by 2026 and 20 percent by 2030. The bill directed the Colorado Energy Office to convene a Task Force to develop recommendations for the state’s BPS to meet the required reductions. The task force consisted of a diverse range of stakeholders, including large building operators, local governments, labor organizations, affordable housing developers, and environmental organizations. The group met for a year, and the BPS adopted last week by the Colorado Air Quality Control Commission was a result of that process.
Denver, the state’s largest city, adopted a BPS in 2021, which they created with robust, equity-centric stakeholder process and technical analysis, including input from the real estate industry, labor, and environmental advocates like NRDC. Creating a standard that balances rapid decarbonization with the challenges and costs of building upgrades necessitates a nuanced and thoughtful process. Denver led this effort with equity, racial justice, and community needs at the forefront.
Building off Denver’s efforts, Colorado’s new standard rewards buildings that comply with energy efficiency targets that slowly ramp up over time. The standard grants significant flexibility and provides support for building owners to meet their targets by assigning specific targets to each building type. For example, a commercial office building will have different efficiency targets than an ice-skating rink. This way, targets are designed to be achievable and equitable across building types and communities.
While some efficiency upgrades to buildings involve upfront cost, a host of incentives and tax credits from the Inflation Reduction Act are now available to help. Colorado’s largest utility, Xcel Energy, also has more than 20 different rebate and incentive programs to help buildings pay for energy efficiency upgrades. Once installed, building upgrades pay off by improving indoor air quality and decreasing energy costs.
Leading the Nation on Clean Buildings
Denver and Colorado are nationwide leaders in building decarbonization. Denver is one of eight cities or counties to adopt BPS. Other local-level BPS include Boston, Cambridge, New York City, Washington, D.C, St. Louis, Chula Vista, and Montgomery County. Colorado is one of five states to adopt statewide BPS, joined by Washington, Maryland, California, and Oregon. The Institute for Market Transformation maintains a running comparison of BPS across the U.S. here.
A new study by the Lawrence Berkeley National Laboratory shows that the buildings sector can see 90% emissions reductions by 2050, but only with strong building efficiency and electrification policies. These demand-side measures are critical to get harmful carbon emissions out of the buildings sector and make the most of the increasingly clean power grid.
Colorado can’t afford to miss a beat at this critical point in the climate fight. Now that the leading-edge BPS is in place, the state must align all of its other building sector efforts to support compliance and expand the policy’s potential impact: securing Clean Heat portfolios that ensure all gas utility investments are compatible with the state’s long term decarbonization goals; continuing the building sector ambition of the last few years into the Colorado Energy Office’s refreshed GHG Reduction Roadmap 2.0; and leveraging all possible IRA funds to multiply (rather than replace) Coloradan’s investments in cleaner, healthier, more affordable buildings.