The Economic Benefits of Green Building

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When it comes to green buildings the benefits far outweigh the costs.The costs of these buildings are about the same as traditionaldevelopment projects. One study indicates that green buildings are 2 percent more expensive than conventional buildings.

A large number of economic advantages more than offset the minor increase in costs. Here is a summary of the research on the economic advantagesof green building.

According to a study from Syphers, Geof, et al. titled "Managing the Cost of Green Building," higher construction costs can be avoided by the inclusion of greendesign from the outset of the project. The investment of an additional3% of project costs in the design phase can reduce construction costs by 10%.

A business case titled "Making the Business Case for High Performance Green Building," by the U.S. Green Building Council, indicates that energy and watersavings allow an average green premium recovery period of 3-5 years.

The same business case makes the point that green buildings increaseproperty values. The low operating costs and easy maintenance of greenbuildings make for lower vacancy rates and higher property values.Investment in energy efficiency and low-priced power at the USAA RealtyCompany’s La Paz Office Plaza in Orange County, CA led to an$0.80-per-square-foor-market value improvement, or a $1.5 millionincrease in value.

Green buildings improve employee health andprevent absences. According to a U.S. Green Building Council reporttitled "Making the Business Case for High Performance Green Buildings,"Lockheed Martin’s green facility in Sunnydale, CA, had a 15% drop inemployee absenteeism, a savings which made up for the building’s greenpremium in the first year alone.

A January 2000 report from theUS Environmental Protection Agency titled, "Energy Cost and IAQPerformance of Ventilation Systems and Controls," demonstrates thatmajor reductions in health care costs and work losses result fromimprovements to indoor environments.

Employee productivity hasbeen positively correlated with indoor environmental conditions.According to a report titled, "Health and Productivity Gains from Better Indoor Environments and Their Relationship to Building EnergyEfficiency," improvements to indoor environmental conditions areestimated to have generated $20 to $160 billion nationally in workforceproductivity gains.

A 1999 study from The Heschong Mahone Group,showed increased sales in stores that utilized natural light. The studycalled "Skylighting and Retail Sales: An Investigation into theRelationship Between Daylighting and Human Performance," surveyed 108outlet stores and found that sales were 40% higher in stores usingskylights instead of electric lighting.

For useful tools to help assess the economic benefits of green building go to the US EPA.

Richard Matthews is a consultant, eco-entrepreneur, sustainable investor and writer. He is the owner of THE GREEN MARKET, one of the Web’s most comprehensive resources on the business of the environment. He is also the author of numerous articles on sustainable positioning, green investing, enviro-politics and eco-economics.

Original Article on The Green Market Blog