Jim Hartzfeld stood in front of a banquet room full of people who want to help save the planet -- people who might be characterized at first blush as tree huggers -- and proclaimed, "I am an avid, enthusiastic capitalist pig."

	Stacy Innerst, Post-Gazette Click photo for larger image. Related Story Being green doesn't take a lot of green

And with that, the managing director of the Atlanta-based consulting firm InterfaceRaise, which helps corporations work through environmental issues, summed up a new wrinkle that is emerging in the world of green building -- one that dominated the presentations at the recent "Greensense 2007," the local nonprofit Green Building Alliance's annual conference.

For years, those who advocate designing and constructing buildings to make them energy-efficient and environmentally friendly have argued that the higher costs of such an approach could be justified by long-term payoffs in energy savings. The new wrinkle is that now they are saying that a range of benefits that goes beyond energy savings helps produce economic returns that make going green advantageous from the get-go.

Indeed, the changing role of capital markets in green construction soon will be a primary reason to build green, said Denis Darragh, chairman of the Washington, D.C.-based Institute for Market Transformation to Sustainability. As more green buildings are built and prove their long-term value, Wall Street is eyeing packaging loans for green construction and trading them as securities, much as traditional residential and commercial mortgages are sold now. Ratings agencies already are looking at developing criteria for evaluating such green mortgage-backed securities.

It's expected that as the green mortgage-backed securities hit the market and prove their long-term value and investment safety, lenders will be willing not only to make more loans on green construction projects but also to charge lower interest rates than on loans for traditional construction, Mr. Darragh said. Those savings would offset the traditionally higher upfront costs of building green, he said, adding that he expects the market for green mortgage-backed securities to develop within three years.

That's not the only financial incentive green building enthusiasts see on the horizon. Already, green buildings are experiencing lower insurance premiums than traditional buildings.

Stephen Bushnell, product director for the Firemen's Fund Insurance Co., of Novato, Calif., said his company offers discounts for buildings with green characteristics, along with a policy specifically designed to ensure that a green building is rebuilt to the stringent U.S. Green Building Council Leadership in Energy and Environmental Design ("LEED") standards.

As an added push to reach new customers, Firemen's Fund offers a policy that allows a traditional building to be rebuilt to green standards in the event of a loss, as well as a policy that offers enhanced coverage to owners who add green features to traditional buildings. He notes that the potential market for such coverage is huge -- there are some 10 million buildings constructed using traditional practices in the country, vs. only about 600 so-called LEED-certified commercial buildings.

If coming changes in the financing of green building cancel out the initial impact of higher construction costs, the ongoing economic benefits of owning or occupying green buildings go far beyond savings on energy, advocates say. Writing in Urban Land magazine, authors Allan Montpellier and Brent Rogers contend that "a truly sustainable workplace not only helps the environment, but also lessens utility costs, allows for greater organizational and technological flexibility, and most important, enhances individual productivity ... Evidence indicates that over the long term, the savings far outweigh the costs of sustainable design."

Architect William A. McDonough, a pioneer in green building, said in an interview with the magazine that the benefits accrue more quickly than even most advocates realize. "Certainly, for owners who are building for their own use, the productivity gains for their employees, which are their highest cost, more than offset the cost of the entire building, not just the green features -- and sometimes in only one or two years. The numbers are compelling. A 1 percent increase in productivity can pay for green features. A 10 percent increase in productivity can pay for the building -- yes, the building."

That 10 percent increase in productivity falls dead center of the range of productivity increases that Denis Blackburne, chief financial officer of Savannah, Ga.-based developer Melaver Inc., observed in green buildings. Speaking at the conference, held at Westin Convention Center, Downtown, he said that green office buildings have helped to increase employee productivity by 2 to 18 percent; that hospitals built to green standards release patients an average of 2.5 days earlier than traditionally built hospitals; and that students in green school buildings have shown a 20 percent improvement in test performance.