Palaces For The People
Wednesday, October 29, 2003
Green building investments yield high returns, says study

Tuesday, October 28, 2003

WASHINGTON, D.C. — Investments in green buildings pay for themselves 10 times over, according to a new study for 40 California government agencies.

The study — by the Capital E group, Lawrence Berkley Laboratory, and participating California state agencies — is the most definitive cost-benefit analysis of green building ever conducted.

With this study, the California Department of Finance has recognized for the first time the existence of financial benefits associated with improved health productivity and lowered operations and maintenance costs in green buildings.

The California Board of Regents also drew on the early findings of this study and is moving forward in pushing for all state higher education new construction to be "green." This study, drawing on national data for 100 green buildings and an in depth review of several hundred existing studies, found that sustainable buildings are a cost-effective investment.

"Green" or "sustainable" buildings use key resources like energy, water, materials, and land much more efficiently than buildings that are simply built to code, the study points out. They also create healthier work, learning, and living environments with more natural light and cleaner air and contribute to improved employee and student health, comfort, and productivity. Sustainable buildings are cost-effective, saving taxpayer dollars by reducing operations and maintenance costs as well as by lowering utility bills.

The report concluded that financial benefits of green design are between $50 and $70 per square foot in a LEED building, more than 10 times the additional cost associated with building green. The benefits include cost savings from reduced energy, water, and waste; lower operations and maintenance costs; and enhanced occupant productivity and health.

"Total financial benefits of green buildings are over ten times the average initial investment required to design and construct a green building," concluded the authors. "Energy savings alone exceed the average increased cost associated with building green. Additionally, the relatively large impact of productivity and health gains reflects the fact that the direct and indirect cost of employees is far larger than the cost of construction or energy. Consequently, even small changes in productivity and health translate into large financial benefits."

USGBC President & CEO Christine Ervin, who served as a member of an advisory committee that guided the study, said, "The study's conclusive findings demonstrate that green building is cost-effective and makes good business sense."

Greg Kats, a principal at Capital E and the lead author of the report, said, "The report should permanently lay to rest the myth that green buildings are not cost effective and not ready for prime time."


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