Green Performance Contracting in Highway Construction: Strategies for Sustainability

1. Green Performance Contracting On Highway Construction Qingbin Cui August 4, 2011 SmartConstruction.org

2. Agenda • Introduction • Green Performance Contracting • Definition • State of Practice • Application Cases • Decision Model for Selecting Strategies • Conclusion and Recommendation

3. Did You Know? 136 million tons of construction and demolition debris was generated annually in the US. The construction Industry consumed 6% of total energy. • Construction of a 1-km section of a typical two-lane highway • Requires 5.0 -7.0 x 106 Mega Joule of Energy • Generates 636 – 723 tons of waste

4. Greenhouse Gases Emissions From Construction

5. Transportation Construction Emissions • Top-down estimate • Construction equipment population surveys • SIC Group 161 (highway / street construction) is 12% • SIC Group 162 (includes bridge, tunnel, elevated highway) is 38% • CO2 emissions are 50 MMTONCO2e from fuel combustion • Bottom-up estimate • One lane-mile of freeway Construction emits 500- 1200 tons of CO2 • U.S. added 32,300 lane-miles per year • CO2 emissions are 16-38 MMTONCO2e

6. Emission Reduction: Nationwide Initiatives • EO 13514: 28% of direct emissions and 13% of indirect emissions • 10 States (CA, CT, HA, ME, MD, MA, MN, NJ, OR, WA) adopted emission reduction target legislations • Another 13 States (AZ, CO, FL, IL, MI, MT, NH, NM, NY, RI, UT, VT, VA) established emission reduction targets • Emission Trading Scheme: RGGI, WCI, MGGA • Smart, Green & Growing initiative in Maryland • Maryland Climate Action Plan • MDOT Commitments • Reduce CO2 emissions by 25% by 2020 • Reduce CO2 emissions from off-road transportation sources by at least 15% by 2020--- Collaboration with Contractors

7. Lady GaGa: It's Not Easy Being Green!

8. Green Performance Contracting: A Definition Any contract provisions, contracting methods, delivery strategies that help reduce emissions and adapt to climate change benefits the environment improves the life of the public through a direct economic, ecological, or social benefit

9. Green Performance Contracting Strategies Level I: Material Related Strategies Level II: Equipment and Energy Efficiency Strategies Level III: Green Life Cycle Strategies Level IV: Clean Energy Development

10. Green Performance Contracting (GPC) Strategies

11. GPC Card • Name • Description • Implementation • Technological Options • Technological Requirements • Green Benefits • Barriers • Sample Provisions • Project Application

12. State of Practice

13. Implementation • Contract specification is the primary form of green contracting, although other forms have been successfully used in a few states. Other forms are also used in some states, bidding preference (AR), contract allowance (TX) • Green contracting can be incorporated into varied size of projects and different project delivery systems.

14. Primary Reasons Some green contracting strategies are primarily cost-driven and easily integrated into contract specifications. However, higher levels of green contracting strategies may be driven by local green initiatives, mandates, or legislations.

15. Application Case: MassDOT Retrofitting Specification Provisions that address diesel retrofit technology implementation • Requires: • All MassDOT projects to install diesel engine retrofit devices • Contractors and sub-contractors to use EPA/CARB certified equipment as part of the bidding process. Contractors must submit: • Identified owned/rental equipment • Equipment type, equipment make, model, and VIN • Engine model, year of manufacture, and horsepower rating • Type of fuel used • Emission control device (ECD) type • ECD manufacturer, make and model • ECD EPA/CARB verification number or certification • ECD installation date

16. Application Case: MassDOT Retrofitting Specification • Sample Equipment Standard Compliance Certification • MassDOT issues a compliance label assigning a tracking number to acceptable devices and uses random site checks to uphold the standards

17. Application Case: GreenLITES at NYSDOT In 2008 the New York State Department of Transportation (NYSDOT) implemented a sustainability self-certification program called GreenLITES (Green Leadership In Transportation Environmental Sustainability) Projects are assessed using a scorecard that divides each of the five areas into two to five categories that consist of several sustainable practices. A project can accumulate 1 or 2 points depending on the impact of the sustainable practice. Evaluation Areas • sustainable sites • water quality • materials & resources • energy & atmosphere • innovation/unlisted Certification Levels Certified : 15-29 points Silver: 30-44 points Gold: 45-60 points Evergreen: above 60 points

18. Green Highway Rating Systems

19. Application Case: ODOT Solar Highway • Project Data • Contractor: Portland General Electric • Project Size: 214 kW • Period: Sept-Dec 2008 • Project Cost: $1.4 million • GHG Reduction: 43 MT CO2e • Source of Funds • Oregon Business Energy Tax Credit • Federal solar Investment Tax Credit • Energy Trust of Oregon • Accelerated depreciation

20. Delivery of Solar Highway Project

21. Selection of GPC Strategies • Various emission reduction potential and cost • Competitive or mutually exclusive • Resource constraints

22. Evaluation Criteria • Financial Consideration • Technological Maturity • Organizational Readiness • Industrial and Public Acceptance • Emission Reduction Potential • Risk and Uncertainty • Impact on Project Performance

23. Evaluation Method: Factors • Example: Emission Reduction Potential • Issues should be considered include: • Emission reduction target • Existing emission inventory • Emission type, source, and volume • Long term emission reduction due to GPC strategies • Emission reduction estimation method and accuracy • Application condition, etc.

24. GPC Strategy Scorecard

25. GPC Strategy Evaluation: Data Envelopment Analysis • Compare with others • Max Output at min Input • Efficient Frontier • Efficiency Score • Strategy is efficient if 100% • Otherwise, Not efficient

26. GPC Strategy Efficiency Evaluation for MSHA • Strategies with higher scores are more efficient than other strategies. • Choosing Strategy Portfolio from efficient strategies could maximize the total performance.

27. Conclusion • Going green at the project level: an increasing interest • Although not defined before, Green Performance Contracting has been used on highway Construction • Could be in the form of • Contract specifications • Incentive grants • Process-oriented strategies • Agency wide green initiatives help the successful implementation

28. Conclusion • Selection of GPC strategies could be optimized by several criteria • Emission Reduction Potential • Financial Consideration • Technological Maturity • Organizational Readiness • Industrial and Public Acceptance • Impact on Project Performance

29. Recommendations • Small steps can lead to huge leap • Five GPC strategies recommended to MSHA • Establish green Initiatives and programs • Numerous challenges exist • Establish protocol and best practices • Develop shared vocabulary and guidance • Towards Green Specifications

30. Thank you! Please forward comments, ideas and suggestions to: Qingbin Cui 301-405-8104 cui@umd.edu