Should we reward 'doing good'?

August 11, 2010

Two years ago, my wife and I bought a new Toyota Prius, in part to do something good for the environment (her reason), in part because it turned heads (my rationale). It's been a lot of fun. Just don't expect to get 60 mpg unless you drive like a Park Avenue chauffeur.

Imagine my surprise when, on top of the other benefits, we got a $2,000 deduction on our federal taxes. Of course, we would have bought the hybrid without the writeoff, but hey, why argue with the IRS?

Which brings me (by an admittedly circuitous route) to HR 1510, the Realistic Roofing Tax Treatment Act of 2005. Known as "R2T2," this bill would trim the depreciation schedule for nonresidential roofs from the current 39 years, to 20 years.

The National Roofing Contractors Association, which has lobbied for the bill, argues that the 39-year schedule is unrealistic because the average life of a low-slope commercial roof is only 17 years. The NRCA points to a study by its research foundation in which 51% of building owners surveyed said they would replace their roofs more frequently if the depreciation cycle were reduced.

Brian Whelan, president/CEO of roofing products manufacturer Sarnafil (an NRCA member), wants Congress to take R2T2 a step further. He argues that the more generous schedule should apply only to new white or "cool" roofs. Whelan readily admits to being biased—Sarnafil makes white roofing products—but says the potential energy savings over dark-colored roofs would be in the public interest.

Setting aside the relative merits of the NRCA and Whelan positions on R2T2, I would raise the larger question of whether building owners should be rewarded for "doing good" for the environment. For example, 90% of building owners surveyed in the study cited above said they would use more insulation or other energy-saving methods when replacing or recovering an old roof. Why, then, should the public reward building owners (through reduced taxes) if they already see the practical benefit of doing the right thing?

Even within the sustainability movement, there are those who feel that green buildings should not be given extra tax breaks—that well-designed green buildings shouldn't need a crutch to hold them up. The argument could be taken one step further to ask why owners should not be required to use more energy-efficient systems, which is essentially what California is doing with its Title 24.

Last November, in our "Progress Report on Sustainability," we called for a sophisticated review of green-building laws, regulations, and incentives to lay out what's working and what needs fixing; from that review, model guidelines could be developed to give states, counties, and cities (and the feds) a wide variety of proven options. We urge the National Conference of State Legislatures, the National Governors Association, and other appropriate governance organizations to join us in this effort.


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