FROM THE PUBLISHER
It will take nothing less than a private sector stimulus to put our fragile economy back in the black. Our marching orders are clear: Make green solutions less risky and more profitable than conventional ones.
Capitalizing Sustainability
If you had asked me last autumn if I thought that Congress was close to passing meaningful climate and energy regulation, I would have responded with optimism. But after yet another excruciat- ing year of partisan politics forcing even the staunchest supporters to shrink away from the climate issue, we’re still miles away from a real solution. It has become disturbingly obvious to me that the onus has fallen completely on the private sector to create the economic systems and in- frastructure we need to drive the market toward sustainability. The most expedient and logical thing
we can do to restore the health of our fi - nancial and natural systems is to leverage the opportunities— invention, prosper- ity, and cost savings—presented by the emerging green economy. It will take nothing less than a private sector stimulus to put our fragile economy back in the black. Our marching orders are clear: Make green solutions less risky and more profi table than conventional ones. To accomplish a turnaround in the
building industry, it’s important that building professionals, manufactur- ers, lenders, and investment banks are
10 GreenBuilder September 2010
all seated at the table. Today, building professionals are pitching in by practicing green design and construction techniques. Their increasing demand for sustainable products are driving manufacturers to do their part by providing cost-eff ective, ad- vanced technologies that improve building performance. Unfortunately, lenders and investment bankers are lagging behind. Given that the average American house-
hold spends in excess of $70,000 over the life of a 30-year mortgage on energy bills, one would think that lenders would be clamoring to establish underwriting stan- dards that measure whether a home buyer can aff ord to stay in their home, and then to convert cost-saving green mortgages into profi table securities. It seems intuitive that the lenders who
can provide mortgages, construction loans, and other capital vehicles that reward effi ciency would be highly demanded, and that publicly traded securities that mea- sure the benefi ts of green buildings would be more profi table than conventional ones. The scarcity of these products isn’t just a curiosity, it’s a downright insult. The lack of accessible, aff ordable capital for green building projects enables the propagation of an erroneous and detri- mental defi nition of aff ordability. It’s not okay anymore for aff ordability to be solely characterized by lowest upfront cost. Fortunately, entities like Capital Mar-
kets Partnership (CMP) are working with fi nancial institutions across the country to create investment underwriting standards, structured fi nance products, debt and equity funds, and insurance products that reward green features and benefi ts. Other groups, such as the Institute
for Market Transformation, are working to buttress private sector advances with
public policy that will enable lenders to calculate mortgage values based on monthly energy costs. One such example, the SAVE (Sensible Accounting to Value Energy) Act, backed by Senator Michael Bennet (D-CO) and the Leading Builders of America (a group recently formed by the 16 largest home builders in America), would, if passed, establish new lending guidelines and provide consumers with greater access to green mortgages. Interestingly, this bill does not have the support of the NAHB, which has repeatedly undermined federal initiatives that would require improved building performance. Market demand for green building is in-
creasing. Supply is also growing but is still limited. Savvy investors should recognize that this combination has the potential to provide high yields. Once investors realize that conventional (non-green) structures and poorly performing homes are akin to subpar stocks that trade below their value, they’ll capitalize on the latent investment value in those assets. By connecting sustainability with prof-
itability, cost savings, and job creation, the private sector will succeed in reviving the economy through market driven solutions. At that time, special interests will demand climate policy to increase competition, and no doubt Congress will deliver. Please share your thoughts with me about our energy future at sara@greenbuilermag. com or join me on Twitter at SaraGBM. GB
Sara Gutterman
sara@greenbuildermag.com
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60