The Economic Benefits of Sustainable Building
Green building offers more than environmental benefits to society. Various studies have shown that green building has significant economic benefits as well. Figure 1 shows and categorizes some of these benefits. Green building lowers the costs for energy, waste disposal, water, operations, maintenance, and saves money by increasing productivity and improving the indoor environmental quality of the building (Spivey, 2004). Since green rating organizations have only been around for the past two decade, there are no statistics that demonstrate the actual economic benefits obtained throughout a sustainable building’s lifecycle. Instead, expenses and savings are estimated based on sets of data collected in the past.
Figure 1: Advantages of Green Building, Source: Dailey, J. (2013, May 07). An Introduction to the Cost Benefits of Green Buildings. Retrieved from http://ny.curbed.com/2013/5/7/10246368/an-introduction-to-the-cost-benefits-of-green-buildings
Several studies have been conducted to prove that green building is economically beneficial in the long run despite being initially more expensive than conventional building. The Sustainable Building Task Force, a former green building organization, found that a building with green features costs on average 2% more to build than a conventional one, but pays back the investment by ten times over a period of 20 years (Spivey, 2004). Green building cuts material, design, water and energy costs due to its sustainable characteristics. For example, sustainable buildings include natural systems that help reduce the building’s energy and water usage; therefore, expenses are reduced. By conserving water, native landscaping cuts costs on water and maintenance. Likewise, natural pollution prevention systems cut costs for waste disposal. In addition, the design of a sustainable structure eliminates expenses in a few stages of the construction process. Green building requires efficiency in infrastructure, therefore, savings are obtained from the minimized use of sewer lines, utility lines, and electrical equipment (Nalewaik & Venters, 2009). By incorporating water and energy saving technologies, green building reduces future water and energy costs. Green roofs, also known as vegetation roofs, are natural technologies that help decrease the energy used in a building by reducing the need for heating and air conditioning. The Energy Information Administration states that a green roof reduces annual household energy consumption by 1% (Blackhurst, Hendrickson, and Matthews, 2010).
Furthermore, studies demonstrate that economic benefits arise from the improvement of indoor environmental quality and increase in productivity in office buildings. Buildings with low indoor environmental qualities can trigger allergies, sneezing and drowsiness. As a result, productivity among employees decreases. Studies have shown that green features increase occupant health and productivity by 1-7%. It is estimated that a 1% increase in productivity is equal to $600-700 per employee (Spivey, 2004). A study conducted in 1998 reported eight cases that showed up to 16% improvement in productivity in consequence of relocating employees to new facilities designed according to green building codes. It was also calculated that a 1% increase in employee productivity would equal to a 15% decrease in property costs since employee cost is almost 15 times larger than the share of property cost (Ries, Bilec, Gokhan, and Needy, 2006).
In addition to the economic benefits green building offers the owner and tenant, it also proves profitable to the developer of the building. The free market values sustainable structures. A study conducted in 2009 shows that tenants prefer green buildings over conventional buildings since LEED buildings had an 8% higher occupancy rate. Since demand for green buildings is high, developers are able to sell them at a higher price (Tolan, 2012).
Despite being costlier than conventional building during the construction phase, green building has been estimated to be economically beneficial in the long run in numerous of studies. Green building has the ability to reduce costs and create savings for the tenant, owner, and developer. Its evident advantages have contributed to its increasing popularity in the construction world.
References
Blackhurst, M., Hendrickson, C., & Matthews, H. S. (2010). Cost-Effectiveness of Green Roofs. Journal Of Architectural Engineering, 16(4), 136-143.
Nalewaik, A., & Venters, V. (2009). Cost benefits of building green. Cost Engineering, 51(2), 28.
Ries, R., Bilec, M. M., Gokhan, N. M., & Needy, K. L. (2006). The economic benefits of green buildings: a comprehensive case study. Engineering Economist, 51(3), 259+. Retrieved from http://go.galegroup.com/
Spivey, A. (2004). Going green saves over time. Environmental Health Perspectives, 112(5), A276. Retrieved from http://go.galegroup.com/
Tolan, P. (2012). GOING-GOING-GREEN: STRATEGIES FOR FOSTERING SUSTAINABLE NEW FEDERAL BUILDINGS. Public Contract Law Journal, 41(2), 233-295. Retrieved from http://www.jstor.org/stable/41635335
