Global Warming Causes

Incentives and impediments to green buildings

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Still, there are barriers to the widespread adoption of green building techniques, technologies and systems, some of them related to real-life experience and the rest to perception in the building industry that green buildings still add extra cost. This is surprising because senior executives representing architectural/engineering firms, consultants, developers, building owners, corporate owner-occupants and educational institutions have held positive attitudes about the benefits and costs of green construction for sometime.6

Given these positive views, it is surprising that the top obstacles to widespread adoption of green building approaches continue to be perceived higher costs and lack of awareness of the full range of benefits of green construction.

Other factors discouraging green construction remain the perceived complexity and cost of LEED documentation, short-term budget horizons on the part of clients and long payback for some energy-efficiency and renewable energy measures, the difficulty in quantifying benefits and sometimes the more complex methods, systems and technologies construction involved.

Overcoming impediments to green buildings

Architects, engineers, builders and developers are working hard to bring costs into line with benefits, in five specific ways. There are many ways in which design and construction decisions influence the costs of green buildings (see Chapter 4). Over the next three years, the green building industry is likely to focus on lowering the cost barrier, in several ways:

• Working aggressively to lower the costs of green building through accumulating their own project experience and strengthening their focus on integrated design approaches that might lower some costs (such as HVAC systems) while increasing others (such as building insulation and better glazing), but with a net positive cost-reduction impact.

• Developing communication and marketing strategies that make good use of available research that demonstrates the benefits of green buildings, to justify the economic and market risks inherent in trying something new. We'll see some of that research in what follows.

• Finding ways to finance green building improvements to reduce or eliminate the first-cost penalty that often frightens away prospective buyers, using incentives from electric utilities, utility "public purpose" programs, and local, state and federal governments to maximize points of leverage. There are also a growing number of third-party financing sources for energy-efficiency and renewable energy investments in large building projects.

• Trying to duplicate successful project results for institutional buyers who represent about half of the current market for LEED-registered buildings. This means documenting the full range of green building benefits so that building owners with a long-term ownership perspective can be motivated to find the additional funds to build high-performance buildings.

• Use good project management and cost management software to show the benefits of various green building measures in real time. Decisions about green building measures are often made quickly, during project meetings that can last all day. Having good information about costs, benefits and ROI can be critical to keeping good green measures under consideration, instead of losing them to strictly cost considerations.

Paul Shahriari is the developer of a leading software for green project cost management, Ecologic 3.7 He developed this project management product because of his experience with advising dozens of green building projects, where cost was the only consideration ever placed on the table. He says,

We created web-based collaboratve software that allows a team to attribute certain cost savings or premiums to each LEED credit sought. They can also attach a cost impact profile to each LEED credit. The tool combines the soft costs of design, consulting and engineering and the hard-cost component (construction) and presents a life cycle benefit structure. So far, for every project that's in the system right now, the average payback period is less than five years for certified projects. Our philosophy is that we want to harness economic value from the environmental performance of a project. The most important thing I discovered is that prior to having an economic framework with which to discuss LEED, I had a lot of projects that never went forward. I've never had a client that's seen the output from the software decide not to build a green project.8