Going Green Continues it's Momentum
LEED certification
Categories: Market IQ
There is no doubt that “going green” is the new buzz phrase in commercial development.
With consumers, developers and governments becoming more aware of our environmental responsibilities, no other issue has resulted in such a groundswell shift in the commercial development mentality and framework. Consider for a moment the following. The latest statistics show that commercial buildings account for:
- 39% of all U.S. CO2 emissions,
- 70% of U.S. electricity consumption,
- 40% of global raw material consumption and
- Over 12% of potable water consumption.
In response, stakeholders are changing the way look they do business, and the way they look at new and existing development. LEED (Leadership in Energy and Environmental Design) performance standards were only introduced in the year 2000. By the end of 2005, LEED registered projects accounted for more than 350 million square feet of new and renovated space, or about 3% of the new building market in the U.S. The LEED certified building ‘market share’ is expected to grow more than threefold to roughly 10% of all new commercial construction space by 2010. In addition, the green building products market is projected to be worth $30-$40 billion annually by 2010.
The reasons for this phenomenal growth are clear. First, as noted above, stakeholders have become much more environmentally aware. As such, building green is not only considered a moral responsibility, it generates public relations and marketing benefits. Second are the economic benefits, including:
- Reduced operating costs estimated at 25%-40%,
- Reduced maintenance costs through better planning and technology, and
- Increased top-line revenues via creating a healthier and more productive work environment (estimated to be worth 1% to 5% of employee costs), and attracting the best and brightest in the workforce.
- All of these result in increased building values.
Third, the LEED ‘certified’ rating capital cost premium per square foot has narrowed to just 1% to 2% over standard building codes, with a payback period of less three years. There are also numerous governmental initiatives and tax incentives for building green. Altogether, the capital cost premium may be fully covered by these incentives. Finally, there are potential risk management benefits in the form of future lawsuit protection with certified measures to protect indoor air quality beyond just meeting code.
Clearly, financial opportunities and growth potential in the green building movement abound.
Martin Boyett
Mr. Boyett is a Las Vegas based natural resource consultant and economics lecturer
Posted by cbprds at 12:00 AM | Link | 0 comments
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