Climate law's future is about supply and demand

{"version":"0.3.0","atoms":[],"cards":[],"markups":[["i"],["a",["href","https:\/\/www.aia.org\/press-releases\/6534285-architects-celebrate-climate-action-and-co"]],["b"]],"sections":[[1,"h2",[[0,[],0,"Reading between the trend lines with AIA\u2019s chief economist "]]],[1,"p",[[0,[0],1,"The\nInflation Reduction Act (IRA), signed into law on August 16, promises to invest\n$369 billion in climate solutions to the pervasive challenges of climate\ninjustice and carbon emissions\u2014putting the US on a more aggressive path to 2030\ngoals than ever before. Some observers say it doesn\u2019t go deep enough in terms\nof carbon reductions, but the AIA recently "],[0,[1,0],2,"praised"],[0,[0],1," its inclusion of building energy codes,\nfederal building energy efficiencies, competitive grants for greenhouse gas\nreduction, and rebates for home energy efficiencies. How will the\nmarketplace\u2014and the economy\u2014respond? Not swiftly, according to AIA Chief\nEconomist Kermit Baker, Hon. AIA. \u201cWe are committing a lot of money to making\nthings better,\u201d he says, \u201cbut the industry can\u2019t produce enough to meet this\nramped-up demand that\u2019s being subsidized.\u201d"]]],[1,"p",[[0,[2],1,"Is this law and all its provisions for\nclimate solutions an adequate playbook for architects? "]]],[1,"p",[[0,[],0,"The Inflation Reduction\nAct has been highly touted\u2014it\u2019s hard to track in\nterms of the economics, despite the estimates. Speaking of estimates, it\u2019s\nabout $370 billion of new spending\u2014and it\u2019s what I like to call Build Back\nBetter Lite, being 15-20% the size of the original proposal. But a lot of what\nstayed in the legislation is good for architectural professionals. I don\u2019t want\nthis fact to be lost, though: despite the changes from Build Back Better, it\u2019s\nstill a lot of money focused on clean energy and combating climate change\u2014and\nthat\u2019s going to be very good. At the end of the day, home modernization is\ncentral to what many architects care about here. So, all the rebates and\nincentives provide a playbook in terms of giving residential architects a\nframework to talk to clients."]]],[1,"p",[[0,[2],1,"How does IRA speak to residential architects\nwho specialize in design, renovation, and restoration, in particular? "]]],[1,"p",[[0,[],0,"Home modernization has\na bunch of incentives covered by the IRA. If you install a heat pump, you can\nget a rebate. If you replace a gas furnace, you may be eligible to get a rebate.\nIf you improve your electrical wiring, you are eligible for a rebate; if you\nswitch to an induction cooktop, if you install solar panels, if you install an\nEV charging station\u2014and on and on\u2014there are rebates. You can get up to $14,000\nin rebates per household if you cover all these items\u2014and that\u2019s a good thing.\nProviding incentives to consumers works. "]]],[1,"p",[[0,[2],1,"As some observers have noted, decarbonizing\nour homes will lead to price stability and savings, but \u201cgreenflation\u201d today\nstill means high prices on renewable materials and labor crunches\u2014including\nlong waiting times for work to begin, even on simple home renovation projects.\nWhat does the timeline look like for the pivot away from greenflation?"]]],[1,"p",[[0,[],0,"There\u2019s always a\n\u201cbut\u201d here\u2014there are issues, which I\u2019d summarize as: the bill has done a good\njob creating demand, but it\u2019s not doing much of anything to improve supply."]]],[1,"p",[[0,[],0,"A labor shortage in\nconstruction? That\u2019s true. If you talk to a contractor about a project, generally\nthey\u2019re scheduling a minimum six- to nine-months out. Second, there\u2019s a\nspecialization shortage and a skills shortage\u2014aside from general contractor work\u2014such\nas installing a heat pump. That\u2019s not something a lot of general contractors do\nor want to do. So, those specialists are already in demand and will be more-so."]]],[1,"p",[[0,[],0,"The supply chain\nissue hasn\u2019t gone away either, and we have to ask how the current supply chain\nissues occurring now on a daily basis will map against these ambitions\ncontained in the bill. Related: EV charging stations. There are about 100,000\nacross the country now and I\u2019ve seen estimates\u2014to get to the Biden target of\n50% of new sales being electric vehicles and plug-in hybrids\u2014that you will need\none million stations to satisfy that size fleet of vehicles."]]],[1,"p",[[0,[2],1,"Is this legislation a little light on the\njustice side of \u201cenvironmental justice?\u201d"]]],[1,"p",[[0,[],0,"Related to all of this\nis the question about the Americans living in older homes that need to be\nupgraded. Most of them are lower income households. It\u2019s nice to say that\neveryone who is eligible will get a $14,000 rebate\u2014a figure that\u2019s a fraction\nof the total cost to upgrade homes\u2014but how will lower income households pay the\nrest of it? It would have been nice if there were labor training and\nconstruction training, or incentives to improve the supply chain\u2014including\nmoving some of those jobs to America. Are those fatal flaws? Not necessarily. But it\u2019s a good place\nto restart our journey to 2030 goals and beyond. "]]],[1,"p",[[0,[2],1,"How will\nthis law impact the Architectural Billings Index?"]]],[1,"p",[[0,[],0,"I think there will be a\nton of demand for these focused home improvement activities among households\nthat can afford them. If I\u2019m a client, and I\u2019m going to renovate my kitchen,\nthere\u2019s a lot that my architect can recommend to upgrade my entire renovation\nefforts to be a lot greener than I expected it could have been originally. If\nI\u2019m a client and I want to, say, have an EV charging station for my new Tesla,\nyou don\u2019t need an architect, necessarily. I would say this: if\nyou\u2019re an architect, look for opportunities to help your clients realize all of\nthe possible rebates that the new bill represents. After all, we aren\u2019t going\nto solve the world\u2019s problems by buying Teslas. In the environment, as in the\neconomy, we need a multidimensional approach to thorny problems\u2014and architects\nare positioned, especially in light of this legislation, to define that\napproach at the scale of the individual home or building."]]]]}