Cambridge Net Zero Action Plan Market-Based Incentive Program
Additional Project Background
In 2013, in response to community concern that continued construction activity would make the goal of reducing greenhouse gas emissions harder, the City of Cambridge convened the Getting to Net Zero Task Force to foster a deep conversation among stakeholders to advance the goal of setting Cambridge on a trajectory to becoming a “net zero community,” with a focus on carbon emissions from building operations. For Cambridge, ‘net zero’ refers to a building or a community of buildings for which, on an annual basis, all greenhouse gas emissions resulting from building operations are offset by carbon-free energy production. Achieving the net zero objective relies on a combination of energy efficiency improvements, renewable energy production and, where necessary, purchase of carbon offsets or, potentially, credits (that meet specific criteria).[1]
New building energy performance in Cambridge is currently governed by Article 22 of the Zoning Ordinance.[2] Article 22 requires new buildings and major renovations over 25,000 square feet and subject to a special permit to meet the requirements of the most current applicable LEED building rating system at the level “Certified” or better, and for buildings 50,000 square feet or greater to meet the requirements at the LEED “Silver” level. Under Action 2.3 of the Net Zero Action Plan, buildings are being asked to meet the LEED “Gold” level, and this requirement along with Enhanced Commissioning are being proposed as updates to Article 22. Cambridge has also adopted the Massachusetts Stretch Energy Code, which requires buildings larger than 100,000 square feet to perform 10% better than the baseline energy standard.[3]
In order to exceed these minimum levels of performance andbegin achieving net zero buildings within ten years, Cambridge should explore the use of financial mechanisms to motivate the market and accelerate innovation. MIT and Harvard have agreed to collaborate with the City on this investigation in order to determine the most effective incentives for the Cambridge context. These could include tools such as green building bonds, “green banks”, and adjusting pricing of permit fees based on performance. A “fee-bate” strategy initially proposed (see below) was not adopted along with the Net Zero Action Plan due to concerns about equitable impacts across building types; such concerns should be considered in the design of any new program approach.
Recognizing the complexity of implementing such a program, it is recommended that the design and feasibility of this tool be thoroughly researched in partnership with the institutions noted above and in consultation with industry to better understand its impact and potential effectiveness in the Cambridge context. Further, should the feasibility analysis prove favorable, the approach should be initially tested by way of a pilot in the residential sector first for new construction and major renovations where there is less complexity and shorter construction cycles. The pilot would then be extended to commercial and institutional sectors after the business model and institutional process has been further developed. One possible approach to testing market-based approaches is a “virtual pilot” in which potential market-based incentive structures are applied only “on paper” to current building permits.[4]
[1] This language is drawn from the Getting to Net Zero Framework report, which can be found along with additional materials about the Cambridge Net Zero Action Plan at
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[4] From Cambridge Net Zero Action Plan, Appendix G: Summary of Proposed Actions, p.9: