White House Flexes Purchasing Power to Curb Climate Emissions

A big piece of the White House’s plan to lower government carbon emissions is drawing on an unlikely source: the federal checkbook.

If the strategy works, it will be thanks in no small part to the General Services Administration’s massive buying power, Robin Carnahan, the agency’s administrator, told Bloomberg Law in an interview.

The GSA owns and leases more than 371 million square feet of building space and oversees some $75 billion in annual contracts, making it the nation’s biggest property owner and one of its largest purchasers.

“Government has used its portfolio, its buying power, to show what’s possible and help jump-start some of these market activities,” said Carnahan, a former Missouri secretary of state. “It’s not like the government got it started, in most cases, but we can do things to accelerate it.”

The Biden administration has turned the GSA into a hub of climate activity in a way it never has been before. New policies have reset the agency’s purchasing requirements to slash emissions, use energy and water more efficiently, and keep waste out of landfills.

Flexing Muscle

One key market is electric vehicles. President Joe Biden has said he wants all new light-duty federal vehicles to be zero emissions by 2027, but several agencies have reported problems getting their orders filled because of a global microchip shortage.

Robin Carnahan, administrator of the U.S. General Services Administration.

Source: GSA

The GSA manages a federal fleet of 227,000 vehicles, meaning it’s likely to have the inside track whenever EVs do become more widely available and buyers start bidding on them, Carnahan suggested.

“The thing we bring to the table is, we are a very long-term, stable customer,” she said.

The GSA’s buying clout also includes energy.

Last month the agency signed the federal government’s first memorandum of understanding with a utility to move toward 100% clean energy, at least half of which would be provided on a 24/7 basis. The agreement between the GSA and Entergy Arkansas LLC is limited to federal agencies based in Arkansas, but Carnahan said at the time that she hopes the model can be replicated.

Carnahan said the government placing its thumb on the scale is an inevitable part of what the GSA does.

“We have all kinds of things that we do in government—we have preferences for small businesses, we have things for veterans, we have other things that reflect values and interests,” she said. “We want to have a point of view when it comes to how we spend taxpayer money.”

But when government picks winners, such as companies that make low-carbon concrete and steel, it also can’t avoid picking losers, including companies that fail to make that transition, said Roger Waldron, a former top GSA official and now president of the Coalition for Government Procurement, which represents companies that sell to the government.

Things could get even trickier for some vendors if a November proposed rule from the GSA, Pentagon, and National Aeronautics and Space Administration is finalized. The proposal would require federal contractors that sell at least $7.5 million worth of goods to the government per year to disclose their greenhouse gas emissions and climate-related financial risk.

The rule would likely hurt small and mid-sized businesses that aren’t already voluntarily tracking their emissions and may have to spend large sums of money to get up to speed, Waldron said.

New Targets

Under Biden, the GSA has set a goal of transitioning all its buildings to 100% renewable electricity by 2025, pledged not to use funding under the climate bill to install fossil fuel-based equipment, promised to broaden its use of mapping tools to better understand how its real estate investments affect vulnerable communities, and reached out to the public about the availability of low-carbon construction materials that are made in the US.

The administration also recently rolled out a federal building performance standard requiring agencies to electrify 30% of their buildings’ square footage through energy-efficient upgrades to equipment and appliances.

A lot of good ideas are expected to sprout from the GSA’s Green Proving Ground program, which identifies promising technologies and installs them in pilot programs throughout the agency’s real estate portfolio, Carnahan said.

Some of the projects include vacuum-insulated panels that insulate roofs within a slim profile, chromogenic windows that reduce heat gain, and advanced water treatment methods to inhibit scaling and corrosion in cooling towers.

Another big boost came from the climate bill, which poured $3.4 billion into the GSA’s coffers. That amount includes $2.2 billion for low-carbon building materials, $975 million for emerging technologies, and $250 million to convert more buildings into high-performance green buildings.

Low-Hanging Fruit

In many cases, the best approach for GSA is to start with its oldest, draftiest buildings, Carnahan said.

To illustrate, she pointed to the 150-year old Custom House in Portland, Maine, where energy consumption fell by 30% after a geothermal heat pump was installed. Big improvements can also be found in newer facilities, like a 1990s-era GSA building in New Carrollton, Md., that reduced its energy consumption by 60% and its water use by 56% thanks to upgrades like integrated sensors and building automation systems, Carnahan said.

Many of the lessons the GSA is putting into practice were learned after the passage of the 2009 stimulus bill, said Jetta Wong, the agency’s senior climate adviser. GSA got $5.5 billion in that bill to make its buildings more efficient and construct new, energy-efficient offices, ports of entry, and other structures.

That experience gave GSA a start on tallying greenhouse gas emissions and thinking more deeply about sustainable buildings, Wong said.

“It’s not like we weren’t doing anything before,” she said. “Now, with the urgency and the money, we’re able to take a lot of our best practices and accelerate what we’re doing to really think about what’s next.”

Carnahan also said she believes the GSA is broadly doing a good job of safeguarding all the new money flowing into and out of its doors from waste, fraud, and abuse.

“We’re always paying attention to how we most effectively use taxpayer dollars,” she said. But unlike some other agencies, “we are in the business of doing contracts and dealing with these vendors all the time, so this isn’t at all new for us.”