I'm grateful to John and Andrew for the response, because while I'm interested in the topic, I bring only a lawyer's skill set and not an engineer or economist's skill set to the questions. I'm quite sympathetic, but my legal training encourages me to ask the hard questions of yourself, so that when someone else does, you have a decent answer. So I'm asking the questions from the perspective of someone who might be advising a lender to a green project (the lender's interest centering on the ability of the borrower to extract sufficient income to pay the loan) or to a developer, potential landlord, whose concern would be whether increased building costs could be realized in a combination of rent payments and reduced costs. This isn't the sole perspective (I'm sympathetic to the others and deeply appreciate the reductiveness of economic analysis), but these are the tools I bring to the conversation.
As a side note, I saw on the L today that I missed a several month long exhibit at the Chicago Architecture Foundation on this topic - this is the Big and Green exhibit page. D'oh. Its got lots of cool links.
So if the building costs run between 2-7% (the higher number stemming from this now defunct NYTimes article), with several percentage points being within the margin of construction estimation error, how close might a project be to some form of tipping point regarding non-profitability, particularly when you factor in the cost of increased borrowing?
I'll admit that I'm also skeptical of the necessary extrapolations required in estimating savings from reduced absenteeism, etc. I would be inclined to advise a potential client (either a potential tenant in a green building or a developer) to discount those numbers pretty heavily with a preference for longevity and energy savings until those other elements could be more substantially supported. I'll admit that this may be unfair, but it seems the more conservative way to go.
So who might be a target client?
It would seem that large institutional clients - such as universities - that are interested in experimental work might be interested. Buildings with a single occupant - whether owner occuppied or single long-term tenant - would also be excellent candidates. Mulit-tenant buildings would seem to be a tough sell without additional information. Government agencies might be work as well, though the tremendous capacity for waste and lack of accountability always concerns me about these entities. I'm of mixed feeling about government subsidy of something like this.
I was also greatly intrigued by the idea of 'embedded energy' (by which I took to mean the energy used in the creation and transport of the building materials to the jobsite) and how its costs compared to energy usage.
Thanks Andrew - I learned something. And I'm going to check out the links on the Big and Green page.
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