Green Building: A Flawed Yet Worthwhile Industry

By Brennen Hogan

Hanging gardens of one central park  sydney

Hanging gardens of One Central Park, Sydney. By bobarc, via Wikimedia Commons

Bob Brown, an Australian politician, once warned, "The future will either be green or not at all." In modern America, almost every aspect of daily life impacts the environment. From the cars people drive to the food both humans and animals eat, effects of daily choices resound in the environment. Some decisions, such as the option to drive a car, are daily and deliberate. Thus, the impacts appear more evident. Other interactions with environmental ties, like the design of one's home, may not involve frequent decisions, yet these factors impact the world in a similar manner. In fact, choices regarding building design impact the residents of a building and the surroundings for numerous years after implementation. Initiatives in sustainable building methods, such as LEED, are among the efforts to transform the construction of buildings and to reduce energy consumption while maintaining the wellbeing of both humans and the environment. It is clear that economic incentives for sustainable construction make green implementation viable. However, vagueness in the green rating systems prevents efficient implementation of green technology. Green design programs demonstrate promising long-term economic viability, yet ambiguities in the green rating systems detract from the effectiveness of these sustainable programs. Could these flawed green criteria be improved in an economically viable manner, and how would changing green criteria impact the sustainable design process?

When considering methods of waste reduction, transportation is often the first topic to come to mind; however, building design significantly contributes to the environmental impacts of humans. Notably, buildings account for one-third of the world's greenhouse gas emissions.[1] Additionally, Kibert writes, "More than 40% of the world's energy, 25% of its water and 40% of its natural resources are consumed by buildings; they are also responsible for the generation of over 45% of global wastes."[2] Buildings impact the surroundings throughout their lifecycle. From the beginning of construction to the conclusion of demolition, all aspects of the building process integrate with the ecosystem around the structure.

Due to the serious impact of buildings, engineers seek to minimize the harmful effects of construction through sustainable development. In 1987, Our Common Future, a report from the United Nations World Commission on Environment and Development, first defined sustainable development as "development which meets the needs of the present without compromising the ability of future generations to meet their own needs."[3] This definition unofficially marked the beginning of the world's interest in sustainable development. With increased environmental research, the public awareness of the devastating environmental impacts related to human behavior has risen in recent years. Thus, people have readily adopted sustainable innovations in more parts of the world than ever before.

Despite increased green adoption in some areas, the perceived cost of building green serves as a barrier for some potential customers. As no quick fix presents itself in many cases, developing sustainable practices takes time and money in order to implement the proper technologies. However, misconceptions surround the expenses of green building practices relative to the costs of a standard design. In a 2003 study, the costs of 33 green buildings from across the United States were compared to conventional designs for comparable buildings. Kats concluded, "The average premium for these green buildings is slightly less than 2%, or $3-5 per square foot, substantially lower than is commonly perceived."[4] This would equate to around $10,000 of additional costs for a 2,500 square foot home. The majority of the cost discrepancy is due to the increased architectural and engineering design time, modeling costs, and time necessary to integrate sustainable building practices into projects.[5] Due to lifecycle benefits of sustainably designed buildings, the earlier green building features are implemented, the lower the cost becomes in the long-run. Green buildings also provide health and economic benefits that traditional buildings do not.

In spite of initial expenses, sustainable design yields value in the long-run. The direct benefits associated with green building are related to costs. Green buildings save energy by reducing electricity purchases and minimizing peak energy demands.[6] Kats writes, "On average, green buildings are 28% more efficient than conventional buildings and generate 2% of their power on-site from photovoltaics (PV). The financial benefits of 30% reduced consumption at an electricity price of $0.08/kWh are about $0.30/ft2 /yr, with a 20-year NPV of over $5/ft2."[7] These savings are comparable to or more than the typical marginal cost associated with initially building green. From electricity alone, green buildings can pay for their additional expenses in 20 years. In that case, all savings related to other factors would be considered profitable for an average owner. Additionally, human costs related to air pollution caused by non-renewable power generation and on-site fossil fuel use are often excluded when making investment decisions.

In regards to human experience within a building, sustainable design benefits the residents through increased productivity and improved health. By improving the indoor environmental quality, the inhabitants of a building see many benefits during their daily routine. Even LEED (Leadership in Energy and Environmental Design), a United States green certification system, places an emphasis on improving the human experience, as 42% of credit intents in LEED for Neighborhood Development are evaluated using information on human experience.[8] Quantifying the exact value of a healthier working space is difficult, as many of the costs attributed to a poor working environment do not appear on a budget sheet. Kats writes, "The costs of poor indoor environmental and air quality—including higher absenteeism and increased respiratory ailments, allergies and asthma—are hard to measure and have generally been "hidden" in sick days, lower productivity, unemployment insurance and medical costs."[9] Poor indoor environmental quality causes issues related to illness within the workplace, and improving the quality of a building can minimize these "hidden" costs. Four of the main benefits of a green building include increased control over ventilation, temperature, lighting, and an increase in natural light. By providing a more comfortable workplace, green buildings allow companies to attract and retain the best and most competitive employees. Though many of the perks associated with green buildings are not quantifiable, the benefits of improving the indoor environmental quality allow for a company to maintain the best possible experience for employees.

Although barriers such as higher initial costs and misconceptions about green systems deter some customers, the benefits of green building reserve sustainable design a place in both national and international sustainability agendas. Studies on the specific motivations towards green development identify several drivers and benefits for a group of diverse stakeholders. Outside of meeting green requirements for direct economic incentives, stakeholders and organizations also make the efforts to adopt sustainable development practices in order to improve their corporate culture and image, increase their marketability, and conserve energy to decrease operating and maintenance costs.[10] Outside of the positive effect on the environment, business owners have economic incentives motivating the shift towards sustainable design.

Sustainability has become an increasingly important factor in the economic activity of developed nations. In fact, both small businesses and large corporations utilize sustainable design as a marketing tool. The recent attention to sustainable design is striking. From 2005 to 2010, the use of the term "green building" in the US popular press tripled.[11] The public is increasingly aware of green efforts throughout the nation. Even a small decrease in the environmental impact of buildings can have drastic effects on the long-term energy consumption. Energy costs make up around 30% of a company's operating expenses in the United States.[12] Through sustainable design, executives can easily manage consumption costs amidst increasing energy prices. By incorporating green practices, tenants benefit from lower utility bills and higher employee satisfaction, and real estate investors are incentivized by higher rents and lower risk premiums. In other words, investing in green technology is a safe investment for people looking at the real estate market. In fact, a 2009 study has shown that the Energy Star rating, a classification given to certain sustainably designed buildings, is associated with 3.3 percent higher rent.[13] The increase in the number of green properties serves as evidence of both tenant and investor satisfaction. Between 2007 and 2009, the number of green office spaces in some areas more than doubled.[14] Newly constructed green buildings account for a portion of increased green spaces, but a large share of newly certified buildings are existing structures that recently qualified for an Energy Star or LEED certificate. Initiatives to adopt green technology in older buildings and an increased ease of green adoption account for this change. Green redesign presents itself as a more viable option than ever before. Thus, not all efforts to implement sustainable design occur in new construction. This dramatic increase testifies to the overall levels of satisfaction and the public fascination with the benefits of green building. However, many challenges remain. Some include a complex design system, a lack of understanding about green buildings, and a vague green rating system.

In order for future green technologies to be implemented efficiently, core pillars of green construction must develop to improve upon the currently ambiguous green rating system. The majority of a building's environmental impact comes after construction is completed. In an industry constantly among the top producers of GDP, it is essential to employ healthy practices during new phases of urbanization and renovations to existing structures. Green building, or sustainable design, is at the forefront of this issues. When defining green building, Zuo writes, "[T]here are four pillars of green buildings, i.e. minimization of impacts on the environment, enhancing the health conditions of occupants, the return on investment to developers and local community, and the life cycle consideration during the planning and development process."[15] Though people understand the outcomes of green building, the definition of the topic itself remains vague and serves as a challenge for the promotion and implementation of green buildings. In recent years, various assessment tools have developed to rate green buildings.

Among those attempting to quantify green building are Leadership in Energy and Environmental Design (LEED, United States), BRE Environmental Assessment Method (BREEAM, United Kingdom), and Green Building Council of Australia Green Star (GBCA, Australia).[16] Each country has its own rating system, and each system has its own classification criteria. Overall, it is rather difficult to compare data from each system as the categories and criteria for evaluation differ greatly. However, the differences in systems can be justified by the fact that green buildings in different countries are designed and built according to local climatic conditions and seek to suit the requirements of the locals. Despite the justified discrepancies between rating systems, developing a baseline could be an essential step along the path towards an universal definition of a green building.

The lack of a baseline for green rating systems causes confusion among the building industry. Developing key credit criteria such as energy and water expenditure could be the baseline for developing new rating tools and further developing the existing systems.[17] The current green building rating tools are designed for the evaluation of planning, construction, and demolition based on credit criteria. Certain criteria are developed to encourage the well-being of both the building occupants and the environment, yet these "well-being" criteria are often ambiguous and difficult to quantify. In most cases, points are rewarded for the fulfillment of each of these credit criteria. These points add up to a single score to arrive at the specific certification. Each rating system has different criteria, and Illankoon finds an issue in the differences between systems. Illankoon adds, "[T]he set of credit criteria identified by each green building rating tool has a critical impact on the evaluation of the building performance."[18] If the criteria are not carefully chosen, members of the industry will design to different standards, and the attempt to develop buildings in an environmentally responsible manner would be in vain.

Another challenge with sustainable design comes from the complexity of optimization and its reliance upon flawed green credit criteria. As almost all buildings serve a different purpose and face diverse environmental difficulties, there is no standard green building. In fact, the design of green buildings is highly complex and must achieve the highest levels of performance while minimizing expenses. As each building presents numerous design possibilities, engineers employ computational methods to optimize designs. In order to efficiently design, analysts must decide upon an objective function or a specific goal of the project.[19] These objective functions are often based on LEED and green certification. Thus, an unclear criteria causes confusion during the design process. Additionally, designs often require the incorporation of multiple objectives which may conflict with one another.[20] For instance, increasing the amount of natural light would require the addition of more windows, yet windows are costly in terms of heating and cooling. In order to compute the optimal solution with two conflicting objectives, analysts employ a weighted-sum approach. In this technique, various objectives are assigned a weight and are combined to form a single objective.[21] Due to LEED criteria and its influence on design objectives, improvements in credit criteria would yield enhanced results in the field of green engineering.

Though LEED and other initiatives in sustainable design are currently flawed, they present an opportunity to clarify existing accreditation criteria through a green baseline. Improvements in the green rating systems would only enhance the economic and environmental viability of green building. Economic and environmental benefits for sustainable construction allow green design to be impactful. In all, green building has proven to be effective despite the barriers of adoption. From an investor's standpoint, the benefits of financial savings from reduced energy consumption, lower operation costs, and enhanced workplace productivity outweigh the additional expenses of sustainable design. Green building can be improved through establishing common criteria between each rating system. By implementing a baseline based on quantifiable factors such as the four pillars of green building, credit criteria would be less likely to conflict and optimization would yield enhanced results. Improving upon LEED and establishing a baseline for green building would effectively change green engineering processes and foster future growth in the flourishing industry of sustainable design.

[1] Charles J. Kibert, Sustainable construction: green building design and delivery (Hoboken, NJ: John Wiley & Sons, 2016), 12.

[2] Ibid., 270.

[3] United Nations Brundtland Commission. "World Commission on Environment and Development (WCED): Our Common Future." 1987, quoted in Andrew D. Basiago "Economic, social, and environmental sustainability in development theory and urban planning practice." The Environmentalist 19, no. 2 (1998): 148.

[4] Gregory Kats. Green building costs and financial benefits. (Boston: Massachusetts Technology Collaborative, 2003), 3.

[5] Ibid., 4.

[6] Ibid.

[7] Ibid.

[8] Chris Pyke, Sean McMahon, and Tom Dietsche. United States Government. US Green Building Council. Green Building & Human Experience. (Washington, D.C.: Government Printing Office, 2010), 7.

[9] Kats, Green building costs and financial benefits, 6.

[10] Amos Darko, Chenzhuo Zhang, and Albert PC Chan. "Drivers for green building: A review of empirical studies." Habitat international 60, (2017): 35.

[11] Piet Eichholtz, Nils Kok, and John M. Quigley. "The economics of green building." Review of Economics and Statistics 95, no. 1 (2013): 50.

[12] Ibid.

[13] Piet Eichholtz, Nils Kok, and John M. Quigley. "Doing well by doing good? Green office buildings." The American Economic Review 100, no. 5 (2010): 2498.

[14] Eichholtz, "The economics of green building", 51.

[15] Jian Zuo, and Zhen-Yu Zhao. "Green building research–current status and future agenda: A review." Renewable and Sustainable Energy Reviews 30, (2014): 272.

[16] Ibid., 273.

[17] Chethana S. Illankoon, Vivian WY Tam, Khoa N. Le, and Liyin Shen. "Key credit criteria among international green building rating tools." Journal of Cleaner Production 164, (2017): 210.

[18] Ibid.

[19] Ralph Evins. "A review of computational optimisation methods applied to sustainable building design." Renewable and Sustainable Energy Reviews 22, (2013): 232.

[20] Ibid., 233.

[21] Ibid., 234.