New LEED Regulations Will Stifle Job Creation and Hurt Taxpayers
07-19-2012 at 02:50 pm - David Williams - Posted in: David Williams, Davis-Bacon, LEED, Regulation - 0 Comment

Today the House of Representative’s Committee on Oversight and Government Reform held a hearing entitled, “Continuing Oversight of Regulatory Impediments to Job Creation and Job Creators Still Buried by Red Tape.” Given our nation’s current economic plight, job creation should remain at the forefront of every policy makers’ considerations.  In order for companies and small businesses to be able to hire more employees, a hospitable environment must exist that will encourage businesses to invest in new endeavors.  On the other hand, what businesses need least when it comes to prompting job creation is another unnecessary, ineffective government regulation.  More often than not, additional government regulations not only dissuade companies from expanding, the new requirement actually will create an environment where it is cost prohibitive for the company to remain in business. 

Today’s hearing examined potential changes to the government’s flavor-of-the-day regulation, Leadership in Energy and Environmental Design (LEED) standards, which the Government Services Administration (GSA) uses as its only green building rating system.  If these new LEED standards are adopted, another blow to job creation will likely result.  Making the situation worse, an environmental group, U.S. Green Building Council (USGBC), is the entity responsible for proposing the arbitrary standards that lack scientific backing.  In practice, these standards would effectively punish a handful of industries while simultaneously create a monopoly for others.  As a Washington Post story recently explained the U.S. Green Building Council’s new standards, “which sets the rating system for green construction…  include a ‘chemical avoidance’ provision…” would deter builders from using particular materials.  A  National Journal article elaborated that “the proposed LEED standards include three different credits given to builders for not using certain plastics and chemicals, such as polyvinyl chloride, or PVC.”

The Washington Post article also reports that “The council emphasized that LEED is voluntary, and does not ban any chemicals or products. The system rewards companies that produce more transparent, well-documented building materials.”  This statement is a distinction without a difference.  By explicitly offering a significant competitive advantage to favored industries, the USGBC is implicitly discouraging and unfairly targeting other industries.  The LEED proposals will negatively impact manufacturers of materials that ironically aid in the construction of energy-efficient and environmentally-friendly buildings.

This realization prompts very important questions about the USGBC motivations.  Is this environmental group concerned with helping our environment by encouraging green building?  Or are the narrowly-tailored LEED standards intended to secure a monopoly for favored industries while simultaneously punishing others?  All things point to the latter.  This also demonstrates that the USGBC is far less concerned about green construction and much more concerned about crafting standards to benefit their interests. 

It also appears that the fact the new regulations will likely be at the expense of the environment, job creation and taxpayer dollars is also irrelevant to the USGBC.  However the policy director for the Green Building Council, Lane Burt, denies these facts entirely.  An article in The Hillquoted Burt when he explained that “It’s very far-fetched to say that LEED is going to have any kind of detrimental impact on jobs.”  Unfortunately for Burt, saying something doesn’t make it true.  Reality doesn’t support his statement. The fact of the matter is both the construction and manufacturing industries are fragile, and the proposed standards would be a matter of kicking an industry while it’s down. A recent New York Timesstory reported that contractors estimate that “LEED certification, with all its attendant paperwork, can increase the cost of construction by as much as 20 percent.”  Despite what some in Washington may think money doesn’t grow on trees.  When regulations force businesses to spend more time filing paperwork – as existing LEED standards already do – less time and money can be spent on growing their business and hiring new employees.

State and federal Davis/Bacon requirements already artificially inflate the cost of taxpayer-funded construction (read previous blog posting here).  LEED will require additional taxpayer expenditures at a time when the economy is fragile and the government should be doing (or not doing) everything in their power to get out of the way of economic progress and job creation.

Fortunately for taxpayers, these proposed standards have not yet been implemented.  As The Hill reported, members of Congress are fighting for taxpayers’ interests with the hope of blocking the GSA from adopting the LEED standards as are currently proposed.  Sens. Mary Landrieu (D-LA) and David Vitter (R-LA) along with 16 other sent a letterto GSA Administrator Tangherlini.  The senators’ letter defined the shortcomings of the proposed standards well when they wrote that “...the federal government should not base its choices on arbitrary restrictions that may not allow for the use of the most effective materials, especially when the rejection of these materials would mean the loss of jobs and economic growth at a time our country can least afford it.”

Playing favorites in the market takes away resources from more profitable endeavors, negatively impacts job creation and harms our economy.  Worse still, the proposed LEED standards may even result in buildings being less energy efficient and potentially higher energy costs for consumers. 

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