Friday, October 10, 2008

Green Building Law--The Credit Crunch Edition

What will the credit crunch mean for green building (and other green laws)? I don't know for sure, but I am willing to prognosticate a bit...

1. Some are saying that the carbon markets will suffer because they are too complicated and too nascent to survive an environment of increased investor skepticism. My verdict--maybe. But if cap-and-trade is mandated, then the carbon markets will flourish.

2. Some are saying that the credit slowdown which is hurting the building market in general will have an even greater impact on green buildings.
Others, like McGraw Hill in their newly released report on Green Home Building (see article with conclusions here and purchase report here conclude that green construction will be more resilient in a down market because of green buildings perception of greater quality and people's willingness to pay more for green construction. My verdict--building in general will slow down, but this may be a good time for municipalities to get their legislative houses in order in terms of drafting and passing sound green building legislation.

3. If the recent "green" bailout is any indication, green will still be a legislative priority. Congress tacked on renewing the tax incentives for solar and renewables onto the bailout bill last week. But, some communities may have trouble passing green building legislation that is perceived as costing more to build.

4. In the end, it will all come down to the election. If Obama wins, the environment will be a major priority. If McCain wins, look for incentives for "clean" coal and nuclear, but not much action on cap and trade (even though he claims to be in favor of it) because of the cost it will bring to corporations.

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