Newton’s developing carbon emissions reduction ordinance is set to include a fund that could someday help decarbonize the whole city.

Fifteen months ago, the City Council passed a Building Emissions Reductions and Disclosures Ordinance (BERDO), requiring large property owners to report carbon emissions and take steps to reduce them as it’s estimated that about a third of the state’s carbon emissions come from buildings and non-residential large buildings account for nearly a quarter of the city’s greenhouse gas emissions.

The City Council met as a committee-of-the-whole on Tuesday night—that’s government lingo for when the whole Council meets but with committee setting and rules—to talk with Newton Sustainability Co-Director Sam Nighman and BERDO Administrator Darius Bailey about how the BERDO ordinance is coming along.

One new component of Newton’s BERDO is an Equitable Emissions Investment Fund, and that’s where money from penalties and alternative compliance payments will go. The fund will help pay for decarbonization projects throughout the city.

“All of that money will go into this Equitable Emissions Investment Fund,” Bailey explained. “So it’s not a yearly thing. There aren’t going to be regular additions to the money there and what’s there will depend entirely on how out-of-compliance buildings in Newton are.”

In short, property owners who aren’t able to decarbonize their buildings will pay into that fund to help decarbonize the city.

Don’t expect BERDO money to pay for much, though. Those other decarbonization projects, Bailey added, would hopefully be funded jointly by nonprofits, commercial businesses, the city and other entities, and the BERDO fund would simply add to those funding sources.

“And the goal would be to set up some criteria approved by the mayor’s office and then give that funding out to the best projects that apply so that’s a good, hopefully better explanation—a better background—for what the fund is all about,” Bailey said.

The BERDO will have a hardship exception. But, as Councilor Randy Block pointed out  Monday night, there isn’t a clear set of guidelines for what qualifies for that.

“I feel very uncomfortable about this,” Block said. “It seems to me that whatever hardship means, it needs to be grounded in the ordinance. If the ordinance doesn’t circumscribe this, then the regulation, I’m not sure it’s valid. The regulation can’t just be thought up without regard for what the ordinance says should happen.”

The hardship qualification is intentionally set that way, Bailey said, to make it flexible in a newly developing policy.

“We were careful to leave it a little bit open-ended, so that we would give building owners the opportunity to make a case based off of something that we didn’t expect,” Bailey said.

This means the onus is on the building owner to convince city officials that a hardship exists for them to comply, and there’s no list of reasons outlined anywhere to let that business owner know if they should even bother.

Nighman said that it would be clearer if there was an established detailed policy in which “X” kind of hardship gets “Y” kind of relief. But after discussions with the BERDO Advisory Commission, the team decided it would be more beneficial to leave it a little vague so the city could gather data about what hardships were being found and where those hardships are, so the city can learn which properties are most difficult to decarbonize as the BERDO unfolds in practice.

“There are a lot of buildings that are more or less difficult to decarbonize,” Nighman said. “There are a lot of complicated financial circumstances property owners could find themselves in.”

And a hardship doesn’t mean a property owner walks away without contributing to the BERDO. In many cases, the hardship will be looked at by the city and the owner will get options for decarbonizing over time or some other alternative.

“It’s not so much the one-year, two-year deadline as it is the long-term plan that we want them to go through here,” Nighman said. “So it’s kind of an exercise in long-term planning. Every hardship compliance plan is going to have to come with an actual proposal for relief, and the relief is not that you don’t have to meet the requirements of BERDO. It’s perhaps a slightly different time frame for a particular emission standard or something like that.”

One thing that is clearly set by the ordinance is the amount of an alternative compliance payment: $234 per metric ton of carbon dioxide. An alternative compliance payment, unlike a non-compliance fine, keeps a building technically in compliance while providing the city with money in lieu of decarbonization. Non-compliance fines are limited by the state.

The amount of an ACP for a building is determined by the average cost to decarbonize a building, and that is calculated to avoid a slew of property owners paying the ACP as a cheaper alternative to compliance.

The price of an ACP will be reconsidered every five years by the BERDO administrator to see if it should be changed.

“The $234 number per metric ton was done a few years back,” Nighman said, “and it was based on the levelized cost across a wide variety of possible decarbonization work; some of those things are much more expensive than other things to do in your building, particularly talking about the lifetime costs associated with them.”

Boston has a BERDO in place already, and theirs has reached the phase where penalties are starting soon. New York City and Denver are working on theirs as well.

Decarbonization of cities is becoming all the rage, and we’ll soon see how it fares here in a MetroWest suburb.