eco benefits

Natural Strategies LLC

Economic Benefits of Economic Benefits of

Green BuildingGreen Building

Design and ConstructionDesign and ConstructionA primer for government decision makers A primer for government decision makers


Economic Benefits of Economic Benefits of

Green BuildingGreen Building

Design and ConstructionDesign and ConstructionA primer for builders and project managersA primer for builders and project managers


Purpose: Purpose: To enhance a building’s overall performance To enhance a building’s overall performance while improving comfort; indoor air; energy, water and while improving comfort; indoor air; energy, water and materials efficiency; and the bottom line.materials efficiency; and the bottom line.

Buildings use or produce:Buildings use or produce: 30% of total energy use30% of total energy use 60% of electricity60% of electricity Billions of gallons of water dailyBillions of gallons of water daily 30% of solid waste generated30% of solid waste generated

Why “Green” Building?Why “Green” Building?


First Costs/SavingsFirst Costs/Savings = = costs and savings from costs and savings from

incorporating green features into a building incorporating green features into a building Life-Cycle Life-Cycle Costs/SavingsCosts/Savings == costs/savings over a building’s or costs/savings over a building’s or

feature’s useful lifefeature’s useful life Relative costs components of a commercial Relative costs components of a commercial

building over 30 yearsbuilding over 30 years Design & building = 2%Design & building = 2% Operations, maintenance, finance &Operations, maintenance, finance &

employees = 98%employees = 98% Key point: more should be spent on better designKey point: more should be spent on better design

Economic FactorsEconomic Factors


First Costs of green buildings:First Costs of green buildings: will vary significantly depending on the will vary significantly depending on the specific project goals. specific project goals.

While there are many significant benefits that are ‘no additional cost’ (e.g, While there are many significant benefits that are ‘no additional cost’ (e.g, South facing windows), some features will cost more in both design and South facing windows), some features will cost more in both design and materials costs.materials costs.

Estimates for additional first cost are as low as 0-3%, for LEEDEstimates for additional first cost are as low as 0-3%, for LEEDTMTM Certified, Certified, to 10% or more for higher LEEDto 10% or more for higher LEEDTMTM ratings. ratings.

Existing incentives aimed at offsetting additional first costs range from 3% Existing incentives aimed at offsetting additional first costs range from 3% (Federal Office of General Services and California DGS) to 6% (NY State tax (Federal Office of General Services and California DGS) to 6% (NY State tax credit).credit).




Life-Cycle Savings from:Life-Cycle Savings from: Energy & Lighting EfficiencyEnergy & Lighting Efficiency Water EfficiencyWater Efficiency Materials EfficiencyMaterials Efficiency Employee ProductivityEmployee Productivity Employee HealthEmployee Health Construction & Debris RecyclingConstruction & Debris Recycling


Energy savings up to 80%Energy savings up to 80%

Sources of Savings:Sources of Savings: LightingLighting WindowsWindows HVAC SystemsHVAC Systems

Efficient lighting & better windows can lead to Efficient lighting & better windows can lead to smaller and less costly HVAC systemsmaller and less costly HVAC system

Energy Efficiency & LightingEnergy Efficiency & Lighting


Energy savings from efficient lighting:Energy savings from efficient lighting: Payback period can be Payback period can be < < 2 years2 years Average investment return 50-80%Average investment return 50-80%

Energy efficient buildingsEnergy efficient buildings

Investment return usually 20-40%Investment return usually 20-40%

Higher property asset valueHigher property asset value

Energy Efficiency & LightingEnergy Efficiency & Lighting


EEnergy Efficiency & Lightingnergy Efficiency & Lighting

Example: US Postal Service, Rodeo, CAExample: US Postal Service, Rodeo, CA• Total lighting loadTotal lighting load 71%71%

• in both ambient and task lightingin both ambient and task lighting



Example: Energy Efficient WindowsExample: Energy Efficient Windows

Can decreaseCan decrease heating costs by 40%heating costs by 40%



Example: Energy Efficient WindowsExample: Energy Efficient Windows

Can decrease cooling costs by 32%Can decrease cooling costs by 32%



Example: SchoolsExample: Schools

• Spend more than $6 billion annually on energySpend more than $6 billion annually on energy

• DOE estimates possible 25% savings through:DOE estimates possible 25% savings through: Energy efficiencyEnergy efficiency Renewable energy technologies Renewable energy technologies Improved building designImproved building design

• Daylit schools vs. non-daylit schools:Daylit schools vs. non-daylit schools: 22%-64% energy cost reductions 22%-64% energy cost reductions Payback for new daylit schools Payback for new daylit schools < < 3 years3 years Increase in student performanceIncrease in student performance


Water EfficiencyWater Efficiency

Water savings from:Water savings from: Water-efficient fixtures and appliancesWater-efficient fixtures and appliances Water-efficient landscapingWater-efficient landscaping Rainwater collection systemsRainwater collection systems

Benefits include:Benefits include: water billswater bills volumes of wastewatervolumes of wastewater energy costs for hot waterenergy costs for hot water


Water EfficiencyWater EfficiencyExample: Municipal Plumbing Incentive ProgramsExample: Municipal Plumbing Incentive Programs

• New York City Toilet Rebate ProgramNew York City Toilet Rebate Program Water demand 50-80 million gallons/day Wastewater flow Wastewater flow 7%7% $393 million investment$393 million investment $605 million saved from deferral of expansion projects$605 million saved from deferral of expansion projects

• Santa Monica, CA Toilet Replacement ProgramSanta Monica, CA Toilet Replacement Program 15% in average total water demand 20% in average total wastewater flow


Water EfficiencyWater EfficiencyExample: Water-Efficient LandscapingExample: Water-Efficient Landscaping

• Denver, CODenver, CO Low water landscaping cost = 1/2 standard irrigation Almost eliminates water use in lawns Also saves labor, fertilizer, herbicides & fuel

• Palm Desert, CA Water-Efficient Median StripsPalm Desert, CA Water-Efficient Median Strips Well-received by the public 85% in water & maintenance costs


Water EfficiencyWater EfficiencyExample: Rainwater Collection SystemExample: Rainwater Collection System

• Residence -- Austin, TXResidence -- Austin, TX Rainfall collected from roofRainfall collected from roof 84,000 tank can provide 100 gallons/day84,000 tank can provide 100 gallons/day Met all 2-person household needs since 1988Met all 2-person household needs since 1988 Worked well during 3-year droughtWorked well during 3-year drought Cost of system Cost of system < < drilling well or connecting to water districtdrilling well or connecting to water district Can Can fire insurance premiumsfire insurance premiums


Green buildings Green buildings worker productivity worker productivity

Environmental factors impacting productivityEnvironmental factors impacting productivity Indoor air qualityIndoor air quality Climate controlClimate control Lighting, esp. daylightingLighting, esp. daylighting ““Biophilic” features -- views, plants, etc.Biophilic” features -- views, plants, etc.

Employee ProductivityEmployee Productivity


Employee ProductivityEmployee ProductivityCase Study: US Post Office, Reno, NVCase Study: US Post Office, Reno, NV

Energy efficient lighting and dropped ceilingEnergy efficient lighting and dropped ceiling Cost = $300,000Cost = $300,000 Energy savings $22,400/year, payback 13 yearsEnergy savings $22,400/year, payback 13 years

Impact on productivityImpact on productivity Sorting errors dropped to 0.1%Sorting errors dropped to 0.1% 8% 8% in mail sorted per hour in mail sorted per hour Annual productivity gains $400-500K Annual productivity gains $400-500K Payback period < 1 yearPayback period < 1 year


Employee ProductivityEmployee ProductivityCase Study: Herman Miller SQA BuildingCase Study: Herman Miller SQA Building

295,000 s.f. office & manufacturing center295,000 s.f. office & manufacturing center Extensive daylightingExtensive daylighting Interior “street” with plantsInterior “street” with plants Passive heating & coolingPassive heating & cooling $35,000+ annual energy savings$35,000+ annual energy savings

Impact on productivityImpact on productivity worker effectiveness and productivity worker effectiveness and productivity


Employee ProductivityEmployee Productivity

Example: Daylighting & Student PerformanceExample: Daylighting & Student Performance Daylighting, windows, skylights Daylighting, windows, skylights

15-25% faster progress on math and reading tests15-25% faster progress on math and reading tests 7-18% higher test scores 7-18% higher test scores

Students in daylit facility for multiple yearsStudents in daylit facility for multiple years 14% 14% on standardized tests on standardized tests


Employee HealthEmployee Health

• US EPA ranks indoor air quality (IAQ) as one of US EPA ranks indoor air quality (IAQ) as one of top 5 environmental risks to public health.top 5 environmental risks to public health.

• Indoor contamination levels can be 25 times as Indoor contamination levels can be 25 times as high as outdoors.high as outdoors.

• Solutions: eliminate sources and increase Solutions: eliminate sources and increase ventilationventilation


Factors contributing to poor IAQFactors contributing to poor IAQ Inadequate ventilationInadequate ventilation Chemical contaminants from indoor sourcesChemical contaminants from indoor sources

VOCs, smoke, other toxicsVOCs, smoke, other toxics Sources: building materials, cleaning productsSources: building materials, cleaning products

Chemical contaminants from outdoor sourcesChemical contaminants from outdoor sources Vehicle & building exhausts thru vents & windowsVehicle & building exhausts thru vents & windows Combustion products from garagesCombustion products from garages



Factors contributing to poor IAQ Factors contributing to poor IAQ Biological contaminantsBiological contaminants

Bacteria, molds, pollen, & viruses Bacteria, molds, pollen, & viruses

Inadequate temperature, humidity & lightingInadequate temperature, humidity & lighting



““Sick Building Syndrome”Sick Building Syndrome” (SBS)(SBS) Health & comfort linked to time in buildingHealth & comfort linked to time in building No specific illness or cause identifiedNo specific illness or cause identified

““Building Related Illness” (BRI)Building Related Illness” (BRI) Symptoms of diagnosable illness identified, Symptoms of diagnosable illness identified,

(e.g., asthma, upper respiratory infections) (e.g., asthma, upper respiratory infections) Directly linked to airborne building contaminantsDirectly linked to airborne building contaminants



World Health Organization says SBS affectsWorld Health Organization says SBS affects 1.34 million U.S. office buildings (OSHA)1.34 million U.S. office buildings (OSHA)

20 million U.S. workers daily (OSHA)20 million U.S. workers daily (OSHA)

20-35% of workers in modern buildings (EPA)20-35% of workers in modern buildings (EPA)

Costs California about $6 billion annually (LBL)Costs California about $6 billion annually (LBL)



Healthy buildings can Healthy buildings can illness and costs illness and costs Estimated annual productivity Estimated annual productivity $30 - 150 billion $30 - 150 billion 10 - 30% 10 - 30% respiratory diseasesrespiratory diseases 20 - 50 20 - 50 SBS symptoms SBS symptoms .5 - 5% .5 - 5% office worker performance office worker performance $17 - 43 billion annual health care savings$17 - 43 billion annual health care savings $12 - 125 billion direct $12 - 125 billion direct in worker productivity in worker productivity



Efficient use of building materials & land Efficient use of building materials & land Environmental benefitsEnvironmental benefits Saves “embodied” energySaves “embodied” energy Saves energy & water over life of buildingSaves energy & water over life of building Use of non-virgin or recycled materials Use of non-virgin or recycled materials

Depletion of natural resourcesDepletion of natural resources Mining & manufacturingMining & manufacturing pollution pollution

Materials EfficiencyMaterials Efficiency


Efficient use of building materials & land Efficient use of building materials & land Economic benefitsEconomic benefits Initial costsInitial costs

““Right-sizing” of infrastructure and mechanical systems Right-sizing” of infrastructure and mechanical systems Optimum value engineering (OVE) Optimum value engineering (OVE)

labor & materials in foundations, framing $ finisheslabor & materials in foundations, framing $ finishes wood in framing 25% without wood in framing 25% without performance performance

Life-cycle costsLife-cycle costs costs for energy & watercosts for energy & water Durable materials last longer, Durable materials last longer, costs costs

Materials EfficiencyMaterials Efficiency


Emeryville, CA affordable housing developmentEmeryville, CA affordable housing development Framing at 24” instead of 16”Framing at 24” instead of 16”

Significant saving on volume of wood used Significant saving on volume of wood used

50,000 sq. ft. school50,000 sq. ft. school Costs of carpet vs. durable floor comparedCosts of carpet vs. durable floor compared Includes installation, maintenance & replacement costsIncludes installation, maintenance & replacement costs Over 40 years, durable flooring saves $5.4 millionOver 40 years, durable flooring saves $5.4 million

Materials EfficiencyMaterials EfficiencyCase StudiesCase Studies


Scope of the Problem Scope of the Problem 136 million tons of building-related C&D debris (1996)

43% from residential sources, 57% non-residential

Demolition = 48%, renovation = 44%, construction = 8%Demolition = 48%, renovation = 44%, construction = 8%

20 - 30% recovered for processing & recycling20 - 30% recovered for processing & recycling

Most often recycled: concrete, asphalt, metals, wood.

““Deconstruction” Deconstruction” highest diversion rates (76%) highest diversion rates (76%)

C & D Debris RecyclingC & D Debris Recycling


Environmental Benefits Environmental Benefits

Reuse or recycling (vs. dumping) C & D debris:Reuse or recycling (vs. dumping) C & D debris: Saves “embodied” energy in materialsSaves “embodied” energy in materials Demand for virgin resourcesDemand for virgin resources Need for limited landfill spaceNeed for limited landfill space



Economic Barriers to Increased Recovery Economic Barriers to Increased Recovery Cost of collecting, sorting, and processingCost of collecting, sorting, and processing

Contamination of recovered materialsContamination of recovered materials Value of recycled material vs. cost of virgin materialValue of recycled material vs. cost of virgin material Low cost of C&D debris landfill disposal (tipping fees)Low cost of C&D debris landfill disposal (tipping fees)



Economic Benefits of Debris Recovery Economic Benefits of Debris Recovery Cost often Cost often hauling and dumping as wastehauling and dumping as waste

Daily pick-up by recycling company Daily pick-up by recycling company

Keeps site cleanerKeeps site cleaner Work efficiency & safetyWork efficiency & safety

Compliance with landfill disposal reduction ordinancesCompliance with landfill disposal reduction ordinances

Landfill disposal (tipping) fees are increasingLandfill disposal (tipping) fees are increasing

Revenue from sale of recovered materialsRevenue from sale of recovered materials



Development of 95 large, single-family homesDevelopment of 95 large, single-family homes

Builder worked with recycling subcontractor Builder worked with recycling subcontractor

85% of construction waste recovered and recycled85% of construction waste recovered and recycled

1,000 tons of materials diverted from landfill 1,000 tons of materials diverted from landfill


Case Study: New Construction - Union City, CACase Study: New Construction - Union City, CA


Disassembly & salvage of common building materialsDisassembly & salvage of common building materials

2,000 square foot, 4-unit residential building 2,000 square foot, 4-unit residential building

Costs competitive with demolitionCosts competitive with demolition

Labor most significant cost Labor most significant cost

Minimized soil & vegetation disturbanceMinimized soil & vegetation disturbance


Case Study: Deconstruction - Riverdale, MarylandCase Study: Deconstruction - Riverdale, Maryland


2,000 truckloads of recyclable debris 2,000 truckloads of recyclable debris

30,000 tons of concrete crushed on site 30,000 tons of concrete crushed on site

Crushed concrete used as infill at new stadium Crushed concrete used as infill at new stadium

$2 million budgeted for demolition$2 million budgeted for demolition

Final cost only $800,000Final cost only $800,000

Recycling of concrete saved $1.2 millionRecycling of concrete saved $1.2 million


Case Study: Demolition, Milwaukee County StadiumCase Study: Demolition, Milwaukee County Stadium


Cost/Benefits of Green Building Cost/Benefits of Green Building

Most benefits now accrue to owners & tenantsMost benefits now accrue to owners & tenants

Green practices sometimes Green practices sometimes cost of buildingcost of building

State and local policies canState and local policies can

Builder/contractor “first costs”Builder/contractor “first costs”

Help builders/contractors share in life-cycle savingsHelp builders/contractors share in life-cycle savings

“ “First Cost” IncentivesFirst Cost” Incentives


ESCOs (Energy Services Companies) ESCOs (Energy Services Companies)

Respond to existing energy price signals, but don’t address Respond to existing energy price signals, but don’t address integrative approachesintegrative approaches

Construct & monitor energy-efficient systemsConstruct & monitor energy-efficient systems

Performance contractingPerformance contracting

Compensation based on results measured over building lifeCompensation based on results measured over building life

savings from savings from energy consumption energy consumption

Minimizes customer risk and initial capital expendituresMinimizes customer risk and initial capital expenditures



Local Green Building IncentivesLocal Green Building Incentives

Expedited (“fast track”) permit review for local building Expedited (“fast track”) permit review for local building

permits; environmental features may also address larger permits; environmental features may also address larger

permit issues such as CEQApermit issues such as CEQA

Inspection feesInspection fees

Subsidized training in green building practicesSubsidized training in green building practices

Free professional advice & design assistanceFree professional advice & design assistance



Other Local Policy InitiativesOther Local Policy Initiatives Fees based on estimated energy useFees based on estimated energy use

Adjusted for size of buildingAdjusted for size of building

Waived if on-site renewable energy system installedWaived if on-site renewable energy system installed

Standards and regulationsStandards and regulations Bigger the building, more green components requiredBigger the building, more green components required

Minimum recycled content (in concrete, etc.) requiredMinimum recycled content (in concrete, etc.) required

Old-growth wood, high VOC materials prohibitedOld-growth wood, high VOC materials prohibited



State Green Building IncentivesState Green Building Incentives Tax credits for developersTax credits for developers

Environmental performance criteria must be metEnvironmental performance criteria must be met

Approach minimizes state overhead costsApproach minimizes state overhead costs

NY State AB 11006NY State AB 11006 6% for fuel cells, photovoltaics, non-ozone depleting refrigerants6% for fuel cells, photovoltaics, non-ozone depleting refrigerants

Energy use must be no more than 65% of code Energy use must be no more than 65% of code

Portland ‘Green Building Standard’Portland ‘Green Building Standard’ $20,000 per commercial project to help with green design, LEED cerfitication $20,000 per commercial project to help with green design, LEED cerfitication

and energy modeling costsand energy modeling costs

$3,000 per residential home $3,000 per residential home



ConclusionConclusion

Demonstrable benefits exist in many projectsDemonstrable benefits exist in many projects Life cycle benefits must be considered to Life cycle benefits must be considered to

justify higher first costsjustify higher first costs Expedited permits and tax incentives are Expedited permits and tax incentives are

straightforward and can be effective when straightforward and can be effective when well-designedwell-designed

eco benefits

Technology