The Bankruptcy of Sustainability

This story just floored me:

"How much is sustainability worth?" asks Pulitzer-prize winning reporter Nigel Jaquiss. "Try $65 million in public money." That's how much taxpayers will be spending on a $72 million "green" building in downtown Portland. At $462 a square foot, it will be "perhaps the most expensive office space ever built in Portland."

The director of the Oregon Environmental Council defends the building as something that can "leverage long-term outcomes," whatever that means. But she would defend it, since the state is promising OEC, 1000 Friends of Oregon, and other left-wing environmental groups office space in the building at low rents that are guaranteed to stay fixed for decades.

Although the public is paying for most of the building, "tenants will be expected to share a commitment to help advance Oregon's leadership in sustainable development, collaborate with fellow tenants, and pursue OSC's standards for energy and water use." Apparently, people who don't share those "commitments" won't be welcome, even if their taxes helped pay for the building and even if they are willing to pay more for office space than the greenies.

Sustainability supposedly bills itself as being about using a reduced amount of resources.  But this goal is already accomplished by pricing signals, as they signal the relative scarcity of resources we might want to employ.  By definition, then, building the most expensive office space ever means that they are more resources (or a mix of scarcer resources) per square foot than any other previous construction project.  How in heavens name is this "sustainable?"

Like many such public projects (e.g. light rail), this project drains resources from millions of people via taxation to benefit just a few.  It takes an approach that could never, ever be scaled to benefit everyone in the city as it would be bankrupting.  This construction uses unreasonably large resources for an application that will never come close to returning this investment and can only be funded on a small scale using the resources drained from millions of people.  How is this "sustainable?"

I will leave the answer to these questions to the reader, but here is a hint:  Those advocating projects like this tend to treat human labor as free, to be deployed like Egyptian slaves to the whim of the state planner, either via taxation or more directly through demands for free labor (e.g. in recycling programs).


  1. John David Galt:

    When the bureaucrats say "sustainability" they're parroting a myth about what the Earth can sustain -- but there is a real sustainability issue, namely how much pork can or will taxpayers keep giving to the lobbyist with the biggest bag of bribe money before we've had enough?

    The time to draw the line is now. If your Congressman sends you a newsletter bragging about pork he's brought home to your district, it means it's time to fire him.

  2. Neville:

    You need to understand that these big capital projects are modern-day medieval cathedrals; their lack of an economic return just adds to their value as sacramental monuments.

    The fact that the term "sustainable" sounds vaguely virtuous while being in fact economically incoherent is a positive advantage to the people who wield it to get what they want.

  3. morganovich:

    sorry, but someone really has to say this:

    "money doesn't grow on trees".

  4. Mesa Econoguy:

    Thank you, coyote. Very well stated.

    This is an aggravating conversation to have, especially with economic ignoramuses.

  5. Noah:

    A church is a monument to God. A cathedral is a monument to the Bishop.

  6. NormD:

    Don't get me started...

    The California Academy of Sciences was a wonderful place to take kids on an afternoon outing. It costs about $10 for an adult and $5 for a child. Then they decided to rebuild it as green substantial building. Cost: $500M. So much that they had to restrict the number and size of the exhibits, you know the things that people go to actually see. Oh and they had to raise the prices to $30 for an adult and $20 for a child. Now the main exhibit is the stupid green building itself.

    And now the Exploritorium,is starting down this same path.

  7. Dr. T:

    The most expensive "green" buildings I encountered were at Ithaca College. This private college for the children of wealthy parents (tuiton, room, board, and fees are just under $50,000 per year) built new buildings that make use of passive solar heat, flat roofs covered with dirt and field plants, expensive insulation, and piping in methane (for fuel) that is generated at an incredibly expensive garbage dump cum compost heap. My rough calculations were that even if maintenance and repair costs are ignored, the combination of "green" buildings and methane dump could never pay for themselves (because of the future value of the absurdly high initial capital costs). Despite the foolish waste of current resources, campus officials continually brag about having the greenest campus in the USA. Dolts.

  8. Country Thinker:

    "Sustainability" refers to "sustaining" the careers of politicians who control the world's wealth. So viewed, there's a lot of sustainability in these projects.

  9. Allen:

    Other issues aside, as cynical as I am I'm amazed they can get away with arguing that a full scale build out is an "experiment". 1/4 of our kids still don't graduate from high school and $65+ million is being spent on a building that won't be able to attract tenants without practically giving away the space compared to what it cost to build it.

  10. Jim Collins:

    Hopefully people are going to realize "Green" for the scam that it is. My personal pet peeve is carpool lanes. I 295 North into Pittsburgh has a lane that rotates between inbound in the morning and outbound in the afternoon. In order to use it, you have to have more than two adults in the vehicle. Instead of reducing the traffic congestion and cutting down on the amount of time that people are sitting in traffic with their engines running, a few people get to move to the head of the line because they are lucky enough to have similar schedules. Now they want to allow hybrids to use the lane even if there is only one person in the car.

    Don't even get me started on the "Tunnel to Nowhere".

  11. caseyboy:

    I am a big believer in the principle of Economic Value Added or EVA. The principle is that capital should only be invested in projects that return the capital plus a yield on the use of the capital that is greater than the cost of the capital. Businesses create value for their shareholders by generating a Return > Cost of Capital (positive EVA). Businesses destroy value when capital is invested sub-optimally (Return < Cost). In a study done by Stearn, Stewart & Co back in the early 90's it was shown that about 33% of the Fortune 500 companies had positive EVA, 33% were break-even or zero EVA and 33% were destroying shareholder value. The return on the services provided by government is far less than the cost to taxpayers. The government is destroying national wealth on a grand scale. Sucking capital out of the private market to fund its out of control spending. While at the same time increasing the cost of capital for businesses through taxes and regulations. Then factor in the Fed's attempt to trigger a little inflation (how do you think that will turn out?), which erodes EVA and you have an economic disaster in the making. I've been buying gold and silver for some time now and feeling better and better about the decision.

  12. Matt:

    "By definition, then, building the most expensive office space ever means that they are more resources (or a mix of scarcer resources) per square foot than any other previous construction project. How in heavens name is this sustainable?"

    What they have more of, per square foot, than any other construction project in local history, is environmental sanctimoniousness. Which, despite not being remotely scarce (it may well be in literally infinite supply, and certainly its production is not limited by any factor currently known to mankind) is nevertheless _very_ highly valued by the sort of people who voluntarily choose to live in a place like Portland, OR.