Green business, including technology companies such as Energy Conversion Devices Inc. (ENER) and alternative-energy firms like Xcel Energy (XEL - Get Report), was booming just a few months ago. Consumers were expected to spend $500 billion on green products and services this year, according to a survey from WPP's Landor Associates; Penn, Schoen & Berland Associates; and Cohn & Wolfe.
But with credit markets seizing up and many investors shying away from the market, even the most rock-solid sectors are having trouble. How will the economic crisis affect the green economy? To find out, we talked to Charles Lockwood, a green real estate consultant in southern California and New York City.
Will the economic crisis stall, or even kill, green commercial real estate?
No, green buildings are not headed for the chopping block. Certainly for the near term, corporations and developers will cut back on new construction. But sustainability makes too much economic sense to be discarded now or in the future.Besides, dozens of states and cities, including Boston, Aspen and, most recently, Dallas, have already enacted regulations that mandate high-performance sustainable standards for privately owned buildings. Green building materials, products and technologies were making real strides before the economic downturn. What is their future now? Before I answer that question, I want to stress that most green materials and products, like zero-VOC paints and non-toxic flooring, now cost the same as or less than conventional products. For now, the focus will be less on "green sci-fi" -- think of those 300-foot-tall towers that are supposed to suck carbon dioxide out of the atmosphere. Instead, expect to see greater emphasis on low-cost, proven solutions, like maximizing the energy efficiency of a building's existing HVAC system rather than purchasing an all-new system. What are the economic arguments in favor of green buildings at this time of great uncertainty? Green is not a frill. It is a quick, money-saving fix for corporations and building owners because green buildings substantially lower energy, water and waste costs. Of greater importance for the bottom line, however, is the fact that workforce productivity is up to 16% higher in green buildings than conventional buildings.