As California leads the nation in a green revolution, there's been a lot of debate about the economic costs and benefits of environmental policies and practices. Now, a study from the University of California shows convincingly that one of those policies — energy conservation — is green in more ways than one.
Office buildings built to the latest energy-saving standards, the study found, rent for more than comparable structures. These energyefficient buildings also fetch a higher price when sold. Being green, in other words, can earn you green.
Researchers at the Center for the Study of Energy Markets examined records for 10,000 office buildings, their rental rates and sales prices. Their study concluded that, after controlling for the buildings' quality and location, rental rates for "green" buildings were 3 percent higher per square foot than rents for otherwise identical buildings. "Effective rents," after controlling for occupancy levels, were 6 percent higher. And sales prices were about 16 percent greater for the energy-efficient buildings.
The study found that every $1 in energy cost savings in a building with an Energy Star rating meant about $18 in increased value. The premium went beyond the value of the energy savings in part because of the intangible value of the Energy Star label.
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