What role should high-performance construction and technology play in the Trump administration's infrastructure plan? During today's OnPoint, Mahesh Ramanujam, president and CEO of the U.S. Green Building Council, explains how green construction can boost profits and save money.
Monica Trauzzi: Hello and welcome to OnPoint. I'm Monica Trauzzi. With me today is Mahesh Ramanujam, president and CEO of the U.S. Green Building Council. Mahesh, thank you for joining me.
Mahesh Ramanujam: Thank you, Monica.
Monica Trauzzi: So the conversation over green construction and technology has shifted somewhat over the last six months as Washington politics have changed. As this administration considers a strategy on infrastructure, what role do you believe high-performance construction should play, and how does it get paid for?
Mahesh Ramanujam: I believe it's similar to what we have done with the building sector. The emphasis on high-performance infrastructure is important, but we believe high-performance infrastructure is about sustainability. And the way you get paid is by making sure that the private sector participates. The private sector gets certainty from the government that clear policies and clear regulations will be laid and supported, in which case a lot of private investors, particularly the infrastructure side, are waiting to actually invest dollars like any good business would do, and really take this to the next level. So for us it's very simple. Give certainty to the market, send a clear signal that this is the trend and this is the direction the government is going to take, and importantly make this all about sustainability and increasing the key focus around green investments and green returns and green business.
Monica Trauzzi: Are you confident that the Trump administration will give that clear signal to the business community?
Mahesh Ramanujam: At this point in time there is a lot of confusion, but I think after they get through all the commotion this will be the next logical step that they will take, because given that most of their leaders are from the business world it should become a logical conclusion, or at least the private sector will drive that conclusion for them.
Monica Trauzzi: But we hear many folks in the business sector saying that business will continue on its current path, right — looking to be more sustainable, more efficient. Why is this different? Why is the signal from the government so, so critical here?
Mahesh Ramanujam: I think from a building-sector point of view we have been working on this ... 20-year plan, as — if you take U.S. Green Building Council, we are now on our 24th year of existence. So our journey has been long and hard, and it has taken a long time for the market to understand it. They understand that about buildings, that ... system, et cetera, is possible, but when it comes to infrastructure, the total need to transform the global public infrastructure is $89 trillion. And to transition that to a low-carbon economy it is going to take another $6 trillion. Now that capital doesn't sit in anybody's bank account today. So in order to get that kind of capital mobilized in the marketplace, the government has to play its role in sending clear signals, because then investors will allocate capital from buildings to infrastructure or both.
Monica Trauzzi: Have you interacted with the Trump administration? And what is the one message that you would hope to deliver to them?
Mahesh Ramanujam: Our team is in active dialogue with the Trump administration team. I think the simple message to Mr. Trump is follow your election promise, but make America great again by demanding better things for America, and green is one better way to do it.
Monica Trauzzi: What are some examples that you would use in speaking with the Trump administration of how energy conservation can boost profits?
Mahesh Ramanujam: Today the — if you really look at it — let me take a couple of examples from the emerging world. Like if you take India, if you take China, they have deployed solar full scale. And what solar does is that it takes away the burden on the infrastructure, the grid, the carbon challenges, et cetera, et cetera. And it has helped them to actually put the dollars back into the infrastructure. So what we want America to do is to actually focus on energy efficiency as a core constraint and require that more innovation happen, more technological improvement happen in the United States to make sure that capital could be released from defending, maintaining, supporting to R&D, innovation, optimization and also placing the strategy ... for the future to improve infrastructure. So I think that's the key message.
Monica Trauzzi: So outside of the policy signals that you're looking for, what are the biggest hurdles that you see that are still facing the green building industry?
Mahesh Ramanujam: I think it is mindset. Most of the people, even though that makes sense, they keep asking for a business case. Today they don't ask business case for marketing. Today they don't ask business case for technology. Today they don't ask business case for customer service. But for some reason they keep asking business case for sustainability and stop looking at examples that's around the world. And importantly businesses are also realizing a key part of the brand building is to not just to do well, but also to do good. So that shift is not being understood by the people who are not trying to take the leadership at all. So I think it's just a mindset issue, and people ought to look at data very closely like they are supposed to and make sure they push the envelope to understand that we can move the needle by simply making a simple step, saying, "OK, I'll build everything green." And the action will automatically happen.
Monica Trauzzi: And what can Congress do?
Mahesh Ramanujam: I think at this point in time the Congress needs to really be clear that they are not in the way of green. Because they don't support green, that doesn't mean they are against green. So if they can make it clear that they are willing to have the private sector lead, I think we'll see massive transformation.
Monica Trauzzi: All right, very interesting conversation. We'll end it there. Thank you for coming on the show.
Mahesh Ramanujam: Thank you, Monica.
Monica Trauzzi: And thanks for watching. We'll see you back here tomorrow.
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