Global warming, green construction, energy efficiency. Never before has a set of concepts achieved such an impact in such a short time. We have suddenly had our attention drawn to the fact that polar bears are drowning at the North Pole, so our living conditions may also be drastically altered. We also know for certain that oil will run out, and that drinking water will soon become a commodity in short supply globally, with the risk that this will cause serious conflicts. What do we do?
Much of this is a matter for overarching policy decisions, but it depends even more on how we as individuals decide to live our lives and what we define as prosperity. In the following, I will ignore these extremely difficult political and existential issues, and will discuss what we can achieve in the short term, within the built environment, in what can be called the planning, building and management process.
The city as a business
This deliberately provocative heading refers to the fact that we build the city together. The public sector, with its democratically made decisions, cooperates with the private sector. In a market economy, this cooperation is always based on the fact that investors, property developers and property managers can earn interest on their capital and that consumers feel that they get their money's worth.
Most people acknowledge that global warming is a fact, but opinions may differ on what, for example, is meant by "green building". In the same way, "energy efficiency" is not always defined.
But now, almost all firms and organisations are climbing on the "green building" bandwagon and are incorporating the concept in their brand. "Green" has become good business! The actual content of that which is called "green" can vary. Most can however be seen as something positive in an ongoing learning process, but it is not until the green produces extra money in people's wallets that the effect will be evident.
Basis for decisions
The agenda for the future city is formulated by all the small and large investment decisions that are taken, mostly about infrastructure, public and commercial buildings, as well as our dwellings and holiday houses. What is important is how clients incorporate sustainable functions in a life cycle economic approach, how investors, in their in-depth analyses of the technical, environmental, economic and other risks consider sustainability, and how property valuers and creditworthiness assessors judge the value of energy efficient buildings.
It is thus a matter of the basis for strategic decisions concerning both large and small investments, and the way the decisions are actually taken. It is only when decision makers in actual practice change the basis for their decisions that there will be a substantive change. One example of this is property valuation and creditworthiness assessment where the prevalent behaviour is to normalise the surplus that may be expected from the property. This means that property with a high net value will be valued near the average, and the same goes for property with a low net value – "all cats are grey in the dark". This procedure must be changed, so that buildings with a low energy use have a higher value in the market.
Sustainability in several dimensions
In this context, sustainability can be seen from different perspectives. The perspective here are the resources we use up in the construction process. What is most common is that we think in terms of real capital such as land, buildings and installations. It is then obvious to discuss e.g. the choice of materials and transport with reference to their climatic impact, or the way design solutions affect energy use in our dwellings. At present, many property owners regard energy declarations and environmental classification of buildings as an additional on-cost item, since the costs are evident but the gains are more diffuse. The gains will however become more palpable when consumers realise that environmentally correct choices have advantages people are willing to pay for.
Sustainability can also be regarded in an economic/financial dimension. The current (sub-prime) mortgage crisis in the US highlights the need, inter alia, for financial systems of long term stability. The financial anxiety is now spreading into the real economy and has a direct impact on consumption, not least on investments to improve climate.
Our value judgments of critical influence
The human capital, i.e. the education, experience and value judgments of people, will in the end decide what changes in attitude and savings can be achieved. New technical systems are often controlled by a few experts, but they are used and evaluated by a large number of consumers. Educating consumers may then be essential with regard to technical measures that have the aim of creating a sustainable society.
The step from human capital to the social capital and the conviction that we build the city together is not a long one. The various networks which people join will in the end decide whether "the sustainable city is to be seen as the business of all of us". We must perhaps sacrifice one of our individual welfare markers in order that construction of the built environment as a whole should be as good as possible. Investing in sustainable social networks may be just as important as investing in technical installations.
Management = 100 x new production
Green construction makes one think of new production, but the built environment is already in place. With the present rate of new production, it will, in round numbers, take 100 years to replace our built environment. New production is important – but management of the building stock is more important still. A point to bear in mind may be that, in many respects, it is easier to make drastic changes in design and techniques in conjunction with new production than during measures in ongoing management.
However, capital and a consideration of the pros and cons soon decide in favour of new production, since it is there that short term profits, and especially status as a decision maker, are to be found.
Research about what and how?
My own experience is that new thoughts and ideas often emerge at the interface between technology and social sciences. This may be a signal to research that is usually strictly discipline based to open up to more collaboration among different research environments. However, the present great emphasis on international publication as a means of ranking researchers is a clear drawback, since interdisciplinary science is often a long way down in the list of priorities. In addition, many good research results never reach the domestic target audience when they are published in a prominent journal in the US and not in the Swedish trade publication.
Do we engage in research to make a difference? Communicating the results is in that case just as important as research itself.
Author
:
Stellan Lundström
Professor of Building and Real Estate Economics, Royal Institute of Technology, KTH and Director of the KTH Centre for Banking and Finance, Stockholm.
Literature:
Hans Lind and Stellan Lundström, "The Gårdsten Affair - Has the renewal of Gårdsten been good business?, KTH Building and Real Estate Economics, Department of Real Estate and Construction Management. Stockholm 2007.