Sustainable Construction, 5th Edition

Chapter 15Green Building Economics

In World Green Building Trends 2018, Dodge Data & Analytics reported that the top metric that building owners are using to quantify the benefits of green building is lower operating costs. Additional economic factors that drive the decision to green a building project include higher occupancy rates, increase productivity for tenants, higher rental rates, future-proofing the building, and higher value at point of sale. The most important benefits of green building vary from country to country. In most countries surveyed for this report, lower operating costs are the dominant economic rationale for green buildings. while in Ireland, the most frequent reason for opting for a green building strategy is future-proofing the building project (see Figure 15.1).

In this chapter, we cover the business case for high-performance green buildings; the economics of green building, including how to quantify a wide variety of savings and benefits; and the management of the additional first, or capital, costs that may accompany a green building project. Finally, we discuss the topic of tunneling through the cost barrier, which suggests that the synergies created in greening a building can be so significant that significant capital cost reductions can be achieved.

Figure 15.1 Major perceived benefits for opting for green building strategies in various countries. ...