Across the United States, green building practices are being embraced and implemented throughout every sector – public, private and non-profit. By transforming how communities, workplaces and homes are designed, built and operated, green building is promoting a socially responsible and healthier environment that improves quality of life and is a smart choice for business.
Today, a diverse mix of more than 27,000 American private and public commercial buildings, comprising 4.4 billion square feet, have applied for or registered for third-party certification under the Leadership in Energy and Environmental Design (LEED®) programme developed by the U.S. Green Building Council (USGBC). USGBC is the driving force of the green building industry, which is projected to contribute $554 billion to the US gross domestic product from 2009-2013. USGBC leads a diverse constituency of builders and environmentalists, corporations and nonprofit organizations, elected officials and concerned citizens, teachers, students and green building professionals.
LEED registration in the US represents 87 per cent of buildings registered worldwide and 65 per cent of global registered square feet. Moreover, all 50 US states and the District of Columbia have LEED-registered projects.In 2010 the top ten leaders per capita were the District of Columbia, Nevada, New Mexico, New Hampshire, Oregon, South Carolina, Washington, Illinois, Arkansas, Colorado and Minnesota.
As acknowledged by the LEED rating system, widely accepted as the US national programme for green buildings, a truly integrated design approach will address water conservation, energy efficiency and renewable energy, material choices, indoor environmental quality and the inherent potential of the construction site itself. A green building approach embraces not just how we build but where we build, by evaluating sites based on development density, transportation, and other factors that contribute to smart growth.
The US is progressively embracing green building practices because of an increasing awareness among Americans of the impact our buildings have on our natural resources, our environment and our quality of life. US buildings are responsible for 72 per cent of US electricity consumption.They use 15 trillion gallons of water per year and consume 3 billion tons (40 per cent) of the world’s raw materials. They also account for 39 per cent of CO2 emissions in the US.
Building green is good for the environment and good for business
By consuming less energy and fewer resources, green building offers an immediate and measureable solution to some of the most pressing issues we face today. Building green is one of the best strategies for meeting the challenge of global climate change and foreign oil and resource dependence. The technology to make substantial reductions in energy and Carbon Dioxide (CO2) emissions already exists, and the LEED green building certification rewards its use.
LEED is also very focused on performance management of buildings to ensure they are operating exactly as they were intended to. Many LEED buildings are currently participating in the Building Performance Partnership, which means that they provide their LEED project’s energy and water use information to USGBC on a regular reporting basis. This information is then used to help the building owner make smart operations and maintenance changes to help them realize their building performance goals.
Green building is a source of significant economic and environmental opportunity because greater building efficiency can meet 85 per cent of future US demand for energy. On average, green buildings consume 30 per cent less water and 26 per cent less energy than conventional buildings, and produce significantly fewer CO2 emissions. Additionally, green buildings have been shown to bolster the health of all who reside or work in them, the vitality of our communities and the bottom lines of our companies.
Ultimately, LEED-certified buildings are designed to lower operating costs and increase asset value; to reduce waste sent to landfills; to conserve energy and water; to be healthier and safer for occupants and to reduce harmful greenhouse gas emissions. Moreover, they qualify for tax rebates, zoning allowances and other incentives in hundreds of US cities and federally.
In the last decade, energy efficient building designs have become increasingly commonplace and the green building industry in the US has made a significant impact on the market. Despite a continuing overall sluggish economic recovery, the green building industry is projected to accelerate at a dramatic rate.
Impact of the construction market in the US
Buildings in the US are responsible for 13.4 per cent of the $13.2 trillion US GDP. This includes all commercial, residential, industrial and infrastructure construction. New commercial and residential building construction constitutes 6.1 per cent of the GDP. From 2009-2013, green building will support 7.9 million US jobs and pump half a billion dollars into the American economy.
Additionally, the value of US green construction starts jumped 50 per cent from $42 billion in 2008 to $71 billion in 2010, when it represented 25 per cent of the all new building activity, and it is expected to reach $135 billion by 2015. Furthermore, LEED is referenced in project specifications for 71 per cent of projects valued at $50 million and over.
LEED certification of existing building projects is expected to grow at an even faster rate than new construction.In 2010, the fastest growing LEED rating system was the LEED for Existing Buildings: Operations & Maintenance program (LEED EB:OM), surpassing growth of LEED for New Construction. By 2015, the green share of the largest non-residential retrofit and renovation activity will more than triple, growing to 25-33 per cent – a $14 to $18 billion opportunity in major construction projects alone.
Strong federal leadership
In addition to growing public awareness, the primary factors driving US green building market growth are an increase in local, state and federal government regulations, and associated financial incentives and benefits. The government has been a leader in the green building movement as it continues to embrace trends in sustainable development and move forward with steps to reduce carbon emissions. The Obama Administration has implemented several green measures in the executive branch including requiring new federal projects and major renovations to meet higher energy-efficiency standards with a commitment to a minimum of LEED Gold certification.
This motivation to go green has resulted in more federal agencies requiring green and sustainable building initiatives. Associated legislation, executive orders, resolutions, ordinances, policies and incentives are currently found in 45 US states, including 14 federal agencies or departments, 35 state governments and the Commonwealth of Puerto Rico, 442 localities (384 cities and towns, and 58 counties), and numerous public school jurisdictions and institutions of higher education.
No increase in first costs
LEED certified buildings have demonstrated to not cost more than conventional buildings. The cost per square foot for buildings seeking LEED certification falls into the range of costs for buildings not seeking LEED certification. Any additional investments into a green building show that an average upfront investment of 2 per cent results in life cycle savings of 20 per centof the total construction costs – ten times the initial investment. Additionally, building sale prices for green buildings are as much as 10 per cent higher per square foot than conventional buildings and lease up rates have shown to be faster.
Building green saves money, and three significant business benefits continue to be the main drivers for building green:
- 13.6 per cent average reduction in operating costs for new buildings and 8.5 per cent for retrofits;
- 10.9 per cent increase in new building values and 6.8 per cent for retrofits; and
- 9.9 per cent increase in return on investment (ROI) for new buildings and 19.2 per cent for retrofits.
The green building movement has enjoyed increasing acceptance because of its value to business, to the world and to individual members of society. Occupants of green buildings are proven to be healthier and more productive.
Americans spend about 90 per cent of their time indoors, where US Environmental Protection Agency studies indicate that indoor levels of pollutants may be up to ten times higher than outdoor levels. Green building principles incorporate improvements in indoor environments, which are estimated to save $17-48 billion in total health gains and $20-160 billion in worker performance.
Ultimately, green buildings offer a host of mutual benefits for building owners and tenants, making them highly prized assets for companies, communities and individuals. With lower operating costs and better indoor environmental quality, green buildings differentiate themselves from the competition. Green features increasingly enter into tenants’ decisions about leasing space and into buyers’ decisions about purchasing properties and homes.
Some of business’s biggest players are becoming active in this contemporary environmental movement. Notable newly LEED certified projects in the US include the historic Empire State Building in New York City which earn LEED Gold; 7 World Trade Center in New York City which earned LEED Gold; sections of the Pentagon, which is the largest low-rise office facility in the world, covering 34 acres; and the Willis Tower (formerly the Sears Tower) in Chicagol. Additionally, one notable international LEED certified project is the Taipei 101, in Taiwan, which has become the world’s tallest green building by achieving LEED Platinum. These projects join the more than 10,000 LEED-certified commercial projects and another 31,000 registered to achieve certification around the world.
Green building is one of the most important and exciting movements of our time as we move toward market transformation and work to insure that buildings improve our lives and enhance our world. It is about cleaner air, more productive workplaces and stronger communities. It is about the benefits that will accrue to all of us in a world in which sustainability is woven into the fabric of our societies.
American British Trade & Investment
This article was originally published in American British Trade & Investment 2012, the annual investment guidebook produced by BritishAmerican Business, the leading transatlantic organization dedicated to helping its member companies build their business on both sides of the Atlantic.
Countries: United States
Topics: Insights & Statistics