EarthTalk: Will Building Green Save Money?

Dear EarthTalk: Do buildings with various "green" features cost more to build and operate than traditional buildings? -- Chris Wiedemann, New York, NY

It is difficult to do an apples-to-apples cost comparison of a "green" structure against one that is not due to differences in design, materials and other factors, including the location. But the general consensus is that a green building might well cost slightly more up front, but it will very likely reap the rewards of lower operating costs going forward.

The U.S. Green Building Council's Leadership in Energy and Environmental Design (LEED) program is the standard-bearer used today in evaluating the relative green-friendliness of building projects. A 2004 nationwide study conducted by Greg Kats of the research and consulting firm Capital E found that structures that qualified for the lowest LEED rating ("LEED Certified") cost builders less than one percent more up-front than equivalent non-green buildings. For projects with more ambitious green features that qualified for higher LEED ratings (silver, gold and the highest, platinum), the cost premiums went up from between 1.9 percent and 6.8 percent, still surprisingly low.

What surprised Kats even more, though, was the value of the payback. Overall, Kats found that the average cost premium for building green was about $4-5 per square foot, while the financial benefits derived over 20 years from incorporating sustainability features-such as lower energy and water bills-was in the range of $49-65 per square foot, or about 10 times the value of the initial investment. Another 2004 study by Lisa Matthiessen of the consulting firm Davis Langdon came to similar conclusions. According to Matthiessen, incorporating sustainability elements in a project's design from the get-go-not layering them on later in the process-is essential to keeping the costs down.

Despite these financial benefits, Kats points out that there is unfortunately a "consistent disconnect" in peoples' minds between the higher up-front costs of building green and the ensuing savings in operating costs. He says that overcoming this is fundamental to understanding the value of green building.

And, of course, money is not the only issue. Transitioning to a greener built environment is important for the conservation of natural resources as well as for reducing pollution. According to statistics gathered by the U.S. Green Building Council, the 76 million residential and five million commercial buildings in the U.S. collectively consume 65 percent of America's electricity, 37 percent of its energy, 25 percent of its water supplies and 30 percent of its wood and materials. Likewise, buildings account for 35 percent of the nation's solid waste, 36 percent of carbon dioxide emissions, 46 percent of sulfur dioxide emissions, 19 percent of nitrous oxide emissions and 10 percent of fine particulate emissions.

Sustainable buildings, such as those that qualify for LEED certification, consume fewer resources, generate less waste, cost less to operate and provide healthier living and working environments for everyone-both indoors and out.

CONTACTS: U.S. Green Building Council; Capital E's "Green Building Costs and Financial Benefits" [PDF].

GOT AN ENVIRONMENTAL QUESTION? Send it to: EarthTalk, c/o E/The Environmental Magazine, P.O. Box 5098, Westport, CT 06881; submit it at: EarthTalk, or e-mail: Read past columns.

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