“While the subject is indeed complex, the central facts are simple.  High performance green building is just a fancy description for good building.  It is good for your wallet. 
It is good for the environment.  And it is good for people.”
* Thomas Menino, Mayor of Boston

*Everyone Benefits from Green Building…Everyone. Green Building Task Force Report Executive Summary Fall 2004

The Concerns

There appears to be some uncertainty with a building industry in transition.

• a gap still exists between progress in green technology and evolution of policy and funding for sustainable development

• ordinances and codes don't always keep up with the green-building industry
  
  
• new technologies have resulted in longer lead time, higher costs and/or limited supply
  
  
• designers and contractors, confronted with unfamiliar materials and processes, overbid to absorb the learning curve
  
  
• hesitant investors have been unfamiliar with products and processes
  
  
• lending institutions have not underwritten individual projects for community benefit
  
  
• certification requires considerable documentation – and cost – and close scrutiny by raters and reviewers

But Did You Know?

• The value of green building construction is projected to increase to $60 billion by 2010 (Source: McGraw-Hill Construction Analytics, SmartMarket Trends Report 2008)
  
  
• The green-building products market is projected to be worth $30-$40 billion annually by 2010 (Source: Green Building Alliance)
  
  
• Over 3.6 billion square feet of commercial building space is involved with the LEED green building certification system
  
  
• Every business day, $464 million worth of construction registers with LEED
  
  
• By 2010, approximately 10% of commercial construction starts are expected to be green (Source: McGraw Hill Green Building Smart Market Report 2006)
  
  
• The three largest segments for nonresidential green building construction – office, education and health care – will account for more than 80% of total nonresidential green construction in 2008 (Source: FMI’s 2008 U.S. Construction Overview)
  
  
• In a 2003 study, an analysis of first costs and 20-year operational costs and savings of 30 completed LEED projects showed that, on average, while the additional first cost was 2%, the total 20-year net present value of improvements attributed to energy, emissions, water, waste and commissioning is $11.98 (The Costs and Financial Benefits of Green Buildings)
  
  
• A critical review of dozens of green-building projects across the nation done in 2006 concludes there is no difference in average costs for green buildings when compared to non-green buildings (The Cost of Green Revisited)
  
  
• A 2007 report found while average construction costs across the board had risen 25-30% LEED certified projects were coming in within budget (The Cost of Green Revisted)
  
  
• A recently released 2008 study finds: (Commercial Real Estate and the Environment: CoStar)
  
  
  • LEED buildings command rent premiums of $11.33 per square foot over their non-LEED peers
  • LEED buildings have 4.1 percent higher occupancy
  • LEED buildings sell for a remarkable $171 more per square foot than their peers
  • Rental rates in Energy Star buildings represent a $2.40 per square foot premium over comparable non-Energy Star buildings
  • Energy Star buildings have 3.6 percent higher occupancy
  • Energy Star buildings are selling for an average of $61 per square foot more than their peers

• recycling can help reduce a contractor's construction costs (Building Savings, EPA)
  
  
• a "green" designation can also increase a building's market value as assessed by appraisers and investors (GREEN VALUE: Green buildings, growing assets Report)
  
  
• A 2007 study by Deloitte found companies declining to green existing buildings may incur unrecoverable loss due to increased operating costs, lower productivity, poor public image, worker dissatisfaction (The Dollars and Sense of Green Retrofits)

The Real Costs*

Energy consumption

• Buildings represent 39% of U.S. primary energy use (Source: 2003 U.S. DOE Buildings Energy Data Book)

• Buildings in the U.S. account for 39% of all CO2 emissions (Source: EIA Annual Energy Review 2005.  U.S. Energy Information Administration, U.S. Department of Energy)

Electricity consumption

• Buildings represent 70% of U.S consumption.  (Source: 2003 U.S. DOE Buildings Energy Data Book)

Water use

• Buildings use 12.2% of all potable water, or 15 trillion gallons per year (Source: U.S. Geological Service, 1995 data)

Materials use

• Buildings use 40% of raw materials globally (3 billion tons annually) (Source:  Lenssen and Roodman, 1995, “Worldwatch Paper 124: A Building Revolution: How Ecology and Health Concerns are Transforming Construction,” Worldwatch Institute)

Waste

• The EPA reported 209.7 million tons of municipal solid waste of which 136 million tons were estimated as attributed to building-related construction and demolition (C&D) debris in 1996. (Sources: U.S. EPA Characterization of Construction and Demolition Debris in the United States, 1997 Update.  U.S. EPA Characterization of Municipal Solid Waste in the United States, 1997 Update. Report No. EPA530-R-98-007)

USGBC

It is estimated that buildings account for nearly half of all greenhouse-gas emissions, and over 75 percent of all electricity produced by power plants – a compelling argument for social responsibility by regional land-use planners and local governments, and the financing and building industries.  Green building is good for business: The U.S. Green Building Council has continued to document green buildings conserve natural resources, protect ecosystems, improve air and water quality, decrease waste, reduce capital and operating costs, increase property values, boost worker productivity, improve the health, well-being, and quality of life for occupants, and benefit the community by reducing pressures on the local infrastructure and service-delivery systems.  Green building serves what is known as the "triple bottom line": economy, ecology, equity.

With the release of An Inconvenient Truth and the revelation of building's impact on the health, energy costs and the future of the planet, shifting perceptions of the industry's role in greenhouse gas-emissions reductions, an unprecedented level of government initiatives, an increasing demand for green in residential construction, and improvements in sustainable materials have all served to expedite the growth of green building.  Membership in the US Green Building Council (USGBC-LEED), including over 17,000 member organizations including corporations, governmental agencies, nonprofits and others from throughout the industry, has more than tripled since 2000.

Costs of Certification
Commissioning monitors and documents the proper installation and performance testing of building systems from the design phase, with a review of the design intent and constructability/maintainability issues. The process continues through operations, management review and operator training and should include benchmarking, energy information systems (EIS), building automation systems (BAS) and automated fault detection and diagnostic tools.

Commissioning can include the cost of rating and certification under LEED or being GreenPoint Rated. In one recent study, energy modeling and commissioning averaged approximately $1 per square foot. However, the certification process provides assurances: certification means that corners have been cut, and it legitimizes energy-efficiency claims.  Certified buildings have higher occupancy rates, are commanding rent premiums and selling for more per square foot. In a recent study, LEED-EB-certified buildings achieved superior operating-cost savings in 63% of the buildings surveyed, ranging from $4.94 to $15.59 per square foot of floor space, while overall cost of LEED-EB implementation and certification ranged from $0.00 to $6.46 per square foot of floor space, with an average of $2.43 per square foot.**

Market Research on Best Practices & Tools Energy Performance Tracking Guide, a guidebook produced in partnership with, will be published December 2010. Presentations are now posted from the 18th National Conference on Building Commissioning www.peci.org/ncbc

*Deliver the Green-A Fresh Look at LEED-EB and Facility Management http://www.ifmafoundation.org/deliverthegreen.pdf  

However, the certification process provides assurances: certification can't cut corners, legitimizing energy-efficiency claims, certified buildings have higher occupancy rates, are commanding rent premiums and selling for more per square foot. Industry rule of thumb has held an initial up-front investment of 2% extra will yield over 10 times the initial investment over the life cycle of the building.  In another recent study, LEED-EB-certified buildings achieved superior operating-cost savings in 63% of the buildings surveyed, ranging from $4.94 to $15.59 per square foot of floor space, while overall cost of LEED-EB implementation and certification ranged from $0.00 to $6.46 per square foot of floor space, with an average of $2.43 per square foot.**

*15th National Conference on Building Commissioning  www.peci.org/ncbc
**Deliver the Green-A Fresh Look at LEED-EB and Facility Management http://www.ifmafoundation.org/deliverthegreen.pdf

Rating, certification and application for incentives is becoming more user-friendly, thanks to the coordinated efforts of the Heschong Mahone Group Inc, with assistance from the New Solar Homes Parnership, Build it Green and Davis Energy Group. Jointly, they have prepared a Residential Program Matrix that provides a comparison of requirements under multiple certification and incentive tools that include LEED, GreenPoint Rated, Tax Credits and utilities, and also by considering the type of program, the geographic breadth of service, eligible projects, program costs, incentives, processes and resources, all of which exceed Title 24 requirements by more than 15%.  Utility-incentive programs, Energy Star, GreenPoint Rated, and LEED programs all recognize 15% better than Title 24 as a baseline for participation.  From there, the programs are working to coordinate their review and rating criteria to build upon each other from the easiest incentive programs to those of more complexity, combining energy efficiency and resource management like the GreenPoint Rated and LEED certification programs.

Cost Benefit Studies

The Cost Effectiveness of Commercial Building Commissioning
http://eetd.lbl.gov/emills/PUBS/PDF/Cx-Costs-Benefits.pdf

Unlocking Energy Efficiency in the U.S. Economy
A recently released 165-page report from McKinsey & Company, a global management consulting firm and advisor to the world’s leading businesses, governments, and institutions, indicates U.S. businesses and individuals could save money, reduce green house gas emissions and other pollutants equivalent to removing all passenger vehicles and light trucks from U.S. roadways, cut energy consumption by 23% in the next ten years and reduce national dependence on foreign oil, through energy efficiency practices available today.
You can download a copy at: Unlocking Energy Efficiency.