Carbon Fun

From The Times:

Throwing money at tatty buildings might not seem like a great investment (1) but a new consortium is planning to plough £350 million into buying and refurbishing old offices that pose an environmental threat.

The Carbon Trust (2), Threadneedle (3) and Stanhope, the property developer (4), have set up the Threadneedle LowCarbon Workplace Trust to invest in decarbonising buildings, a move that could help to meet government targets. The green commercial property fund, open to institutional investors (5), will be the largest of its kind in the UK and is a sign of the growing demand (6) from investors for exposure to such ventures...

David Camp, the chief executive of Stanhope, said: “The timing is right from an economic and a carbon-challenge perspective to launch this fund. Not only is there money to be made in refurbishing existing building stock while there is a dearth of new development, but occupiers, especially those who will be affected by the Carbon Reduction Commitment (7), are looking for more support in managing their carbon emissions.”...

The Policy Exchange, the public policy think-tank, has estimated that Britain needs to spend about £400 billion on new and refurbished infrastructure by 2020 (8). Meanwhile, more than 90 per cent of offices in the Investment Property Databank index are more than ten years old and “highly unlikely” to conform to present or future efficiency rules, Threadneedle said (9).

1) If the increase in rents you can charge exceeds the amortised expense, then of course it is a good idea, duh.

2) Fakecharity.

3) Rentseeker-cum-subsidy junkie.

4) See (3)

5) i.e. 'your pension funds'.

6) And why might demand be growing? See (7)

7) And who made this 'Commitment'? The government, perhaps? Nobody knows for sure what the external costs of 'carbon emissions' are (a stupid abbreviation for 'carbon dioxide emissions'. The only businesses that emit actual carbon are coal mines, AFAIAA), but they are sure as heck a lot less than the actual cost of energy to the end-user. Assuming that businesses act rationally, it is fair to assume that they will try and minimise their energy bills, ergo, it is fair to assume that businesses are already trying to minimise their 'carbon emissions'.

8) That's about £40 billion per year, which is approximately equal to the amount that UK households spend on domestic fuel bills every year, or twice as much as businesses spend on heating and ventilating their buildings.

9) So they've tapped into a rich seam of subsidies that will extend way into the future. Tasty.