Construction – both Residential and Commercial, is a primary economic sector worldwide that, beyond adding to the Nation’s GDP, contributes to societal growth, adds value to Businesses, and generates employment. Despite those credentials, the Construction Sector bears the burden of contributing to significant environmental externalities across the spectrum of its inputs, construction-associated pollution, and demolition waste. Construction figures prominently in Climate-change debate and policy priorities for reasons its share in the economic pie, and the externality-intensiveness of income-incremented upgrades to Property assets. In response, Governments worldwide have adopted the ‘Green Building Code’ to incentivize Property Builders and Developers to increment environmental sustainability of their operations. While such Code is legislated and incentivized with Budgetary subvention of Sector funds and Buyer loans, it is worthwhile to explore an FV financial mechanism that obtains an alternate, if not a superior, more comprehensive and efficient route to Sustainability in the Construction Sector.
This market-based AltKuznets design fast-forwards Sustainable Construction through the Financial markets by conceiving an over-arching Galactic-Global-Sovereign-Precinct Authority, the GBPCC, with powers to monetize a Fund Source on its liened Gold Collateral, and administer a Schumpeterian for Cause-advantaged and -disadvantaged Sectors and Businesses. Administration of the Cause by the GBPCC is facilitated by the issue of Collateral Mirror PV Bonds that are monetizable in to lines, keys and GETFs consistent with intended outcomes. The GBPCC in association with Realty Mutual funds offers Precinct-entering Households, and those tying the knot, a membership toward an eventual, if publicly competed issue of a ‘Next Green LQ Asset Offer’. Members are required to affirm their allegiance to the Sustainable Construction Cause by subscribing to an SIP attached to a Realty Mutual Fund. The FV-Lien nature of the scheme facilitates prospective Households to lean on the underlying GBPCC Collateral to verify their long futures around the ‘Green Next LQ Offer’, and adjust their life-plans.
The GBPCC Authority stimulates both Supply of, and Demand for Sustainable Construction, or Green Buildings and funds various entities to meet its goals. It underwrites, on one hand, Realty Mutual Funds and Realtors/Builders/Property Developers, and on the other Construction R&D, and suppliers of Conventional and Advanced Materials.
Under the proposed design, the Realty Mutual Fund would sponsor a variable number of high-scoring, high-ranked Participants to its associated Realty Platform. In turn, the Realty Platform would apply the twice-leveraged and socially-challenged Sustainable Asset Credits to offer Households a ‘Next LQ Upgrade’ in the form of Residential assets conforming to the ‘Green Building Code’. Concomitantly, the GBPCC would insist upon, monitor, compile and update the Sustainability record of Construction firms, and compute a ‘Builder Cumulative Sustainability Score’ that encompassed the sustainability of its past and current projects. It’d. thereafter, financially enforce a PE ZS that upgraded Sustainability-complaint listed Construction firms from those non-conforming. Incentivized with both, an upward shift in the demand for Sustainable residences from Member Participants, and a PE-Upgrade tied to their Sustainability credentials, Builders and Property Developers would design, source, construct and offer Green Buildings to the Realty market in preference to conventional structures. Such Green Sustainable Buildings would be characterized by use of advanced sustainable materials and pro-active internalization of externalities associated with input use and construction wastes – factors that would count toward their Project-specific Sustainability Score.
The Design has many attractive features that increase the likelihood of its success. The Schumpeterian obtains from the confluence of intents of the NGDP Cause Bond and the Global Innovation Cause Bond. The Technology Schumpeterian FV monetizes two ways: 1) as Sovereign-monetized Prudence Key to fund local R&D, & as RoW-Auerbach-monetized Schumpeterian PV to fund and incentivize Advanced Materials, and 2) as a Schumpeterian End stream offered to local Aggregate/Commodity businesses that seek to close down. These monetizes incentivize advances, particularly in Advanced Materials, but otherwise offer a Sundown monetize to conventional Construction aggregates and Commodities businesses. The design outlines a quantitative model that traces Monetization and allocations on one hand, Builder Credentials on the other and Participant Credit, and Rank on yet another.
The AltKuz Design abstracted here focusses on achieving its cause by incentivizing Household demand for Green Buildings, Property Developer Supply of Green Buildings, and Investor interest in Green Realty stocks. The design offers significant long-run Investor returns for a life-long commitment to the Sustainable Construction Cause. The insistence on a) Credit Scores, b) participation in the HCEC Lifetime Card Scheme, and c) a Social Diligence Challenge, together ensure those sponsored by the Realty Mutual Fund, and those who make it to the final pool are entirely worthy and deserving of their ‘Next Asset LQ’ Offers.
The stimulation of Demand for, and Supply of Green Residences, concomitant with the issue of Schumpeterian FV keys to Construction and Advanced Materials, the 3-step ‘Credit Score-HCEC-Social Diligence Challenge’ calibrated criterion, fast-forward the Sustainable Construction Cause, and obtain a Government-overseen, market-implemented, formulaically-quantified design that is transparent, efficient, and verifiable.
Our Sustainable Construction Strategy anticipates another two-pronged DSM-leveraged Social-cum-Mortgage strategy. Together, the 3-pronged strategy encompasses the entirety of (commercial & non-commercial) construction, and boosts Env. & Social Sustainability concomitant with augmenting Sustainable Consumption.
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