As more become aware of the impact construction operations and materials have on climate change, we’ve seen an influx of local, state, federal, and private policies that help move the needle toward decarbonization in the sector.
Many of these policies focus on addressing embodied carbon emissions, or emissions that come from the manufacturing, installation, use, replacement, and end-of-life disposal of construction materials, which are responsible for 13% of annual global CO2 emissions.
General contractors are uniquely positioned to drive real change as it relates to embodied carbon across the construction industry, so it’s important for them to understand the role that policy plays across the sector not only to remain compliant but also to win more bids by prioritizing sustainability.
Below offers a crash course on policy in construction and how contractors can use it to their advantage when planning a new build.
POLICIES IMPACTING INDUSTRY
A significant segment of environmental policies is those that support buy clean policies or low-carbon material procurement. As mentioned above, construction materials generate a huge portion of annual global emissions, which presents an opportunity for the sector to reduce these emissions through material specification.
Contractors must understand the different types of policies that focus on material procurement and the terms they must follow to remain compliant. Here are a few examples of important policies affecting construction across different levels of government as well as in the private sector:
1. THE INFLATION REDUCTION ACT (IRA)
In August 2022, President Biden’s Administration passed the Inflation Reduction Act, which is focused on correcting the climate crisis and supporting environmental justice. Within the Act, significant funds are allocated to the procurement of materials with substantially lower levels of greenhouse gas emissions—specifically concrete, asphalt, glass, and steel. This initiative will provide incentives for firms to procure lower-carbon materials through tax credits, grants, and loan guarantees.
These incentive funds can make a huge impact as they are available to building and infrastructure projects under multiple government agencies, including the Federal Highway Administration (FHWA), the General Services Administration (GSA), and the Federal Emergency Management Agency (FEMA).
2. BUY CLEAN CALIFORNIA ACT (BCCA)
As the first Buy Clean bill passed in the U.S., the Buy Clean California Act has made strides toward reducing the greenhouse gas emissions released on public infrastructure projects in the state. The Act requires the publication of Environmental Product Declarations (EPDs) and establishes global warming potential limits for eligible materials or products. In 2022, a new portion of the Act was added, requiring contractors to submit material or product EPDs before a material can be accepted for installation for projects signed on or after July 1, 2022.
This is an important addition to help reduce embodied carbon emissions of the built environment by educating contractors on the importance of comparing product EPDs and specifying those with less impact.
3. PRIVATE POLICY
There is also an increase in large developers, especially technology companies, establishing their own policies and requirements related to embodied carbon. Companies like Microsoft are beginning to add language to their project specifications for new builds, requiring the calculation of embodied carbon and the achievement of reduction against an established baseline.
Developers are also beginning to require EPDs and establish global warming potential limits in specific materials specifications such as concrete and steel.
POLICY AS AN ADVANTAGE
Now that we’ve looked at a few examples of policies impacting the industry, it’s important to understand how contractors can use these regulations to their advantage. As mentioned above, the IRA provides monetary incentives for procurement of substantially lower carbon materials, driving embodied carbon education throughout the sector. These incentives will save contractors money while also saving the environment.
Additionally, contractors can take their policy knowledge to the bidding process, which can give them a leg up against their competition. Property owners are increasingly looking to contractors to identify lower-carbon products and strategies to meet sustainability requirements, especially for government-funded projects. If a contractor can show off their knowledge of green building standards before the build, it will pay off in the end.
LOOKING DOWN THE PIPELINE
As the construction industry continues to adopt sustainable practices, the list of policies affecting the sector will constantly evolve. There are current policies in the works that will make a huge impact but have not yet been enacted. Take the IRA as an example, the Act’s policies will impact the industry immensely, but the funding has not yet been used, and the sector is eager to take advantage.
With policies such as the IRA coming down the pipeline, it becomes even more important for contractors to understand their regulations and have the tools to act once they are put into place.
CLOSING THOUGHT
Resources are available for contractors to learn more through the Carbon Leadership Forum and Contractor’s Commitment. Additionally, the Embodied Carbon in Construction Calculator (EC3) tool is a free and open-access tool that makes it easier for contractors to identify low-carbon products during material procurement.
About the Author:
Katie Poss is the program manager of procurement and policy at Building Transparency, a nonprofit organization that provides open-access data and tools to foster a better building future and aid in reversing climate change. For more, visit www.buildingtransparency.org.
Modern Contractor Solutions, August 2023
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