e-Dialogues

The Economics of Green Buildings in Canada

Introduction The complete dialogue (pdf)

Buildings consume land, energy and material resources, and create emissions, effluent and contribute to landfills; locating them determines other infrastructure needs, which comes with its own impacts; and in developed nations we spend 90% of our time in them. For these reasons, buildings are both a determinant and barometer of sustainability.

In order for buildings to contribute to sustainability, they must be designed, constructed and used in a manner that reduces ecological impacts. However, one of the strongest barriers to ‘greening’ buildings is economic. “There is a widespread belief that green buildings cost much more to build than traditional buildings” (Cole, 2000, p. 317).

The purpose of this e-Dialogue research is to confirm or confute this belief. On October 7, 2004 expert panelists from Canada’s green building community will engage in an online dialogue, with Dr. Ann Dale and with Rodney C. McDonald, currently leading this research at Royal Roads University, as co-moderators. The dialogue focuses on three main questions:

  1. How do you define a green building?
  2. What are the economic barriers to green building?
  3. Is the design process integral to the success of a green building project?

Leading into this e-dialogue, Mr. McDonald recently delivered a presentation titled Green Building and the Need for Ecological Engineers to faculty and students of the University of Manitoba Faculty of Engineering. Critical questions from the audience included:

  1. Capital budgets are often separate from operation & maintenance budgets, which thus restricts someone from spending more on a building up front even when operating costs savings can be demonstrated. What is the solution?
  2. One green building strategy is to eliminate or downsize mechanical components. If professional fees for engineers are a percentage of the capital cost of mechanical equipment, isn’t green building a disincentive to professionals?
Background Information Complete Thesis (pdf)

Green buildings offer great potential to help communities move towards sustainability. New technologies, materials, knowledge, and ratings systems, such as the U.S. Green Buildings Council’s LEED™ Green Building Rating System and BREEAM™ (Building Research Establishment Environmental Assessment Method), are helping to support the development of green buildings in the Canada and around the World. However, relative to the entire building market in Canada, there are a small number of green buildings and the adoption of green building practices by the industry is slow.

The assumption that the first price premium for green buildings is too high is likely one reason for this slow progress. Current literature provides good information on the performance of green buildings but only provides minimal data on the economic aspects. The State of California commissioned a report in 2003, The Costs and Financial Benefits of Green Buildings, in which the authors conclude that a small upfront premium (over the first price of conventional construction) can result in ten-fold savings of over the life of the building. Additional literature (Romm and Browning (1994); Cole (2000)) indicates that integrating the design process is key to bringing down the price of green buildings.

Although there is now credible information from the United States on the economic benefits of green buildings, similar data is not as readily available or accessible in Canada.

The purpose of this research to examine the economics of green buildings in Canada, and to confirm or confute the general assumption that green buildings are too expensive.

The three objectives of this research are:

  1. To develop criteria for green buildings based on existing tools, and create an
    inventory of Canadian green buildings (based on the criteria);
  2. To develop a framework for the economic evaluation of green buildings in Canada; and
  3. To determine the economic benefits of green buildings in Canada, from a sample of
    case study buildings.

The scope of this research encompasses new commercial and institutional (C&I) buildings, or C&I buildings that undergo extensive renovation involving modifications to the building structure or envelope.

For more information about this research, please review the Thesis.

For a preliminary list of green buildings in Canada, please click here.

Moderators The complete dialogue (pdf)
Ann
Ann Dale, Professor, Science, Technology & Environment Division, Royal Roads University.
Dr. Dale is a rare hybrid, both an academic and an activist. Currently she is engaged in two major research initiatives at Royal Roads University. First, she is leading the e-Dialogues for Sustainable Development, a series of online dialogues exploring critical issues using the power of the internet to influence public policy. Second, she is working on exploring the relationship between social capital and sustainable community development. In 2001, she received the Policy Research Initiative's Outstanding Research Contribution Award for her most recent book, At the Edge: Sustainable Development in the 21st Century.

From 1993 to 2001, she was a Senior Associate with the Sustainable Research Institute at UBC, where she led a major women and sustainable development conference in 1994. In addition, Dr. Dale created and continues to edit a Sustainable Development biannual book series, and chairs the Canadian Consortium for Sustainable Development Research (CCSDR).

As an activist, she has been involved in the creation of a 30 million dollar people's trust for the environment, called the National Environmental Treasure (the NET). She is also Executive Coordinator of the Research and Public Policy Office of the Canadian Biodiversity Institute.

Prior to 1993, Dr. Dale was an Executive with the Federal Government of Canada where she had the privilege of working on many innovative and exciting assignments on behalf of the government such as: the Atlantic Canada Opportunities Agency in 1987, the National Round Table on the Environment and the Economy in 1988, two of the Neilson Program Task Forces (Regulatory Reform and Natural Resources), the D'Avignon Commission and the Anti-Inflation Board.


Rodney McDonald
Rodney McDonald, MEM Learner,
Royal Roads University

Rodney McDonald is a Masters of Arts candidate in the Environment and Management program at Royal Road University. He received his B.A. (Economics) from the University of Manitoba in 1997 and obtained his LEED™ accreditation in 2003.

Rodney works for a national First Nation non-profit based in Winnipeg and is a founding partner of a new sustainability consultancy. He is the Chair of the Manitoba Organizing Group of the Canada Green Building Council and a member of the City of Winnipeg’s Civic Environment Committee (CEC), which recently established a green building sub-committee.

Rodney has been working in the sustainability field for over seven years and takes a holistic and interdisciplinary approach to his work. Frustrated by piecemeal solutions to environmental problems, he recognized that becoming engaged in green building provides the opportunity to work on energy, water and material resource issues, as well as economic and social issues all at the same time.


Panelists

Anne Auger, Director, Buildings Division, Natural Resources Canada 

Auger Anne is an architect with many years experience in both the public and private sectors related to building design and sustainability. During her professional career, Anne has been charged with project design; program management; and the development and implementation of various policies related to real property and sustainable development in the federal government.

In her current position as Director of the Buildings Division within the Office of Energy Efficiency, Natural Resources Canada, Anne is responsible for managing a series of energy efficiency programs that target the commercial and institutional buildings sectors, as well as federal government facilities. These programs focus on the development and implementation of strategies and energy efficiency measures to support the reduction of greenhouse gas emissions and climate change initiatives.
 



Corin Flood,
Facilities Planner, Mountain Equipment Co-op
 



Pierre Guevremont*
, Chief, New Building Program, Natural Resources Canada
* standing in for Ms. Anne Auger



Nils Larsson
, Director of International initiative for a Sustainable Built Environment, architect in Ottawa, Ontario

LarssonNils Larsson is an architect with long experience in research and development related to both residential and commercial building sectors, in Canada and internationally. Under contract to Natural Resources Canada, Mr. Larsson developed the C-2000 Program for Advanced Commercial Buildings, which has resulted in the design and construction of commercial buildings across Canada that have energy consumption approximately 50% of current standards. As part of this work, he developed a formal implementation of the Integrated Design Process (IDP), which has been widely emulated around the world.

Mr. Larsson is also the main organizer of Green Building Challenge (GBC), an international project involving over 20 countries, whose aim is to develop and test new methods of assessing the environmental performance of buildings. In addition to management, the GBC work has included the lead role in the development of the software system for the project. As Executive director of the International initiative for a Sustainable Built Environment (iiSBE) he also led the development of a web-based multi-lingual information system called Sustainable Building Information System (SBIS).

Since 1999, he has been invited to speak on green building issues at seminars and conferences in USA, Korea, China, Taiwan, France, Japan, Netherlands, Israel, Kenya, Malaysia, South Africa, Italy, Argentina and Mexico; and has also served as a juror on two architectural competitions in Europe
 


Gordon Shymko, Principal of G. F. Shymko & Associates Inc., Vancouver, B.C.
ShymkoGordon is the Principal of G. F. Shymko & Associates Inc., an engineering consulting firm specializing in advanced building design and energy and sustainability engineering. Gordon has over 21 years of experience in the field, and has provided consulting service for new and retrofit/renovation projects from the conceptual planning stages down to the detailed design level. Notable achievements include the design facilitation and energy/sustainability engineering of two of the three Canadian entries in the 2002 International Green Building Challenge, and the design facilitation and energy/sustainability engineering of the majority of successful C-2000 projects to date. His portfolio of projects represents several billion dollars in construction value.

In addition to awards at the national level, Gordon has past and current advisory appointments to Canada Energy, Mines, and Resources, the United Stated Department of Energy, the National Research Council, the US and Canadian Green Building Councils, the Canadian Standards Association, the Province of British Columbia, the Province of Alberta, and the City of Vancouver.
 



Paul Stevens
, ZAS Architects, Toronto, Ontario
 McDonaldPaul Stevens, is a Senior Principal with the Toronto-based firm of ZAS Architects, a multi-disciplinary design practice with a wide range of expertise in areas such as community-based public sector facility design. Paul obtained his Bachelor of Architecture at the University of Toronto in 1987, and he maintains an active connection to the university community through working with students, giving guest lectures, and serving as a guest critic. While at ZAS, Paul’s recent work has included leading the design teams for award-winning projects such as Humberwood Centre, Etobicoke, Canadore College Aviation Campus, North Bay, Vellore Village Education/Recreation Complex, Woodbridge; and The Charles Stockey Centre for the Performing Arts/Bobby Orr Hall of Fame, Parry Sound. His achievements have resulted in award-winning projects that respond intelligently to complex programming challenges, promoting building/landscape integration; and ecologically-responsible design.



Alex Zimmerman
, President and CEO of the Canada Green Building Council, Ottawa, Ontario
Zimmerman Alex has been serving as the first President and CEO of the Canada Green Building Council (CaGBC) since August 2003. CaGBC is a fast growing national non-profit, governed by its members, that seeks to transform the built environment by mainstreaming green building best practices. Prior to CaGBC, Alex managed a number of leadership initiatives in his 13 years at British Columbia Buildings Corporation (BCBC), including ISO 14001 certification and cleanup of contaminated sites. Alex also acted as Canadian Team Leader of international Green Building Challenge process in 2000 and 2002. He started out his professional life many years ago as a Maritime Engineering Officer in the Canadian Navy before moving to Alberta where he worked for Alberta Public Works.

Readings The complete dialogue (pdf)
Books and Writings

Benyus, J. M. (1997). Biomimicry: Innovation inspired by nature. New York: William Morrow and Company, Inc.

Dale, A. (2001). At the edge: Sustainable development in the 21st century. Vancouver: UBC Press.

Hawken, P., Lovins, A., & Lovins, L. H. (1999). Natural capitalism: Creating the next industrial revolution.
Boston: Little, Brown and Company.

McDonough, W. (1993, February 7). A centennial sermon: Design, ecology, ethics and the making of things. Retrieved September 17, 2004, from http://www.mcdonough.com/Sermon.pdf

McDonough, W., & Braungart, M. (2002). Cradle to cradle: Remaking the way we make things.
New York: North Point Press.

Mendler, S. F., & Odell, W. (2000). The HOK guidebook to sustainable design. New York: John Wiley & Sons.

Reed, W. G. (2004). Questions as leverage for change. Retrieved September 9, 2004, from http://www.natlogic.com/Articles/BillReed_Questions.pdf

 

Periodicals  

Anonymous. (2003, October). Green economics: Two proposed tools would help show financial benefits of green buildings [Electronic version]. Building Operating Management, 50(10), 66-68.

Bartlett, E., & Howard, N. (2000). Informing the decision makers on the cost and value of green building. Building Research & Information [Electronic version], 28(5/6), 315-324.

Bogenstätter, U. (2000). Prediction and optimization of life-cycle costs in early design. Building Research & Information [Electronic version], 28(5/6), 376-386.

Bon, R., & Hutchinson, K. (2000). Sustainable construction: some economic challenges. Building Research & Information [Electronic version], 28(5/6), 310-314.

Bordass, B. (2000). Cost and value: Fact and fiction. Building Research & Information [Electronic version],
28(5/6), 338-352.

Canada joins green building movement by launching council [Electronic version]. (2003, November).
Environmental Design + Construction, 6(7), 8-10.

Chodikoff, I. (2004, January). Green lantern. Canadian Architect, 49(1), 20-21.

Clift, M. (2003, April-September). Life-cycle costing in the construciton sector. UNEP Industry and Environment, 37-41.

Cole, R. J. (2000). Editorial: Cost and value in building green. Building Research & Information
[Electronic version], 28(5/6), 304-309.

Cole, R. J., & Sterner, E. (2000). Reconciling theory and practice of life-cycle costing. Building Research & Information [Electronic version], 28(5/6), 368-375.

Cravens, L., & Schwer, P. (2002, May/June). The natural step and building construction [Electronic version].
Environmental Design + Construction, 5(3), 32-37.

Gottfried, D. (2003, July/August). A blueprint for green building economics [Electronic version].
Environmental Design + Construction, 6(5), 24-25.

Heerwagen, J. (2000). Green buildings, organizational success and occupant productivity [Electronic version].
Building Research & Information [Electronic version], 28(5/6), 353-367.

Hucal, M. C. (2003, November/December). The price of green [Electronic version].
Environmental Design + Construction, 6(7), 6.

Hydes, K. R., & Creech, L. (2000). Reducing mechanical equipment cost: the economics of green design [Electronic version]. Building Research & Information, 28(5/6), 403-407.

Kohler, N., & Moffatt, S. (2003, April-September). Life-cycle analysis of the built environment [Electronic version]. UNEP Industry and Environment, 17-21.

Kravis, J. (2004, May). What is sustainability? Canadian Facility Management & Design, 10.

Larsson, N., & Clark, J. (2000). Incremental costs within the design process for energy efficient buildings.
Building Research & Information [Electronic version], 28(5/6), 413-418.

Lotspeich, C., Rumsey, P., & Van der Ryn, S. (2002, November/December). Renovating the design and construction process for sustainable success (part 1) [Electronic version]. Environmental Design + Construction, 5(6), 28-34.

Lotspeich, C., Rumsey, P., & Van der Ryn, S. (2003, January/February). Renovating the design and construction process for sustainable success (part 2) [Electronic version]. Environmental Design + Construction, 6(1), 24-26.

Lotspeich, C., Rumsey, P., & Van der Ryn, S. (2003, March/April). Renovating the design and construction process for sustainable success (part 3) [Electronic version]. Environmental Design + Construction, 6(2), 36-37.

Malin, N. (2000). The cost of green materials [Electronic version]. Building Research & Information, 28(5/6), 408-412.

McDonough, W. (2002, January/February). Buildings like trees. Resurgence, 210, 40-42.

McDonough, W., & Braungart, M. (2003, April-September). Towards a sustaining architecture for the 21st century: the promise of cradle-to-cradle design [Electronic version]. UNEP Industry and Environment, 13-16.

McLennan, J. F., & Rumsey, P. (2004, May). Green edge [Electronic version].
Environmental Design + Construction, 7(4), 72.

Meyer Boake, T., & Prochazka, C. (2004, January). LEED: A primer. Canadian Architect, 49(1), 30-33.

Ngowi, A. B. (1998). Is construction procurement a key to sustainable development? [Electronic version].
Building Research & Information, 26(6), 340-350.

Reed, W. G., & Gordon, E. B. (2000). Integrated design and building process: what research and methodologies are needed? [Electronic version]. Building Research & Information, 28(5/6), 325-337.

Rees, W. E. (1999). The built environment and the ecosphere: a global perspective [Electronic version].
Building Research & Information, 27(4/5), 206-220.

Riley, D., Pexton, K., & Drilling, J. (2003, April-September). Procurement of sustainable construction services in the United States: the contractor's role in green buildings [Electronic version]. UNEP Industry and Environment, 66-71.

Sosnowchik, K. (2000, May/June). The hopeful inventors. Green@Work, 12-21.

Theaker, I. G., & Cole, R. J. (2001). The role of local governments in fostering 'green' buildings: a case study
[Electronic version]. Building Research & Information, 29(5), 394-408.

Vaciliou, C. (2004, July). Green economics: Small price for environmental gains [Electronic version].
Building Operating Management, 51(7), 19-22.

Reports  
Canada Mortgage and Housing Corporation. (2003, November). Seville theatre redevelopment project: Integrated design process. Retrieved September 18, 2004, from http://www.cmhc-schl.gc.ca/

Commonwealth of Australia Productivity Commission. (1999, November). The environmental performance of commercial buildings. Retrieved September 8, 2004

David and Lucile Packard Foundation. (2002, October). Building for Sustainability Report: Six Scenarios for the David and Lucile Packard Foundation Los Altos Project. Retrieved September 18, 2004, from http://www.packard.org/pdf/2002Report.pdf

David and Lucile Packard Foundation. (2002, October). Building for Sustainability: Sustainability Matrix. Retrieved September 18, 2004, from http://www.packard.org/pdf/2002Matrix.pdf

Do green buildings cost more?
(2003, November). In R. Cassidy (Ed.), White paper on sustainability (pp. 29-36):
Building Design & Construction.

Gottfried, D. A. (1996). The economics of green buildings. In D. A. Gottfried & L. N. Simon (Eds.),
Sustainable building technical manual. United States of America: Public Technology Inc.

Kats, G., Alevantis, L., Berman, A., Mills, E., & Perlman, J. (2003, October). The costs and financial benefits of green buildings: A report to California's Sustainable Building Task Force. Retrieved September 8, 2004, from
http://www.cap-e.com/ewebeditpro/items/O59F3259.pdf

Kats, G. H. (2003). Green building costs and financial benefits. Retrieved September 6, 2004, from
http://www.cap-e.com/ewebeditpro/items/O59F3481.pdf

Matthiessen, L. F., & Morris, P. (2004, July). Costing green: A comprehensive cost database and budgeting methodology. Retrieved September 8, 2004, from http://www.davislangdon-usa.com/images/pdf_files/costinggreen.pdf

Simon Fraser University City Program, & Greater Vancouver Regional District. (2003, November 27-28). Public lecture and workshop summary: Economics of green buildings. Retrieved September 14, 2004, from http://www.sfu.ca/cstudies/urban/PDFs/Nov27_28ConferenceSummary.pdf

Stanger, C., Forum for the Future, & Carillion plc. (2002). Sustainability accounting in the construction industry.
Retrieved September 4, 2004, from http://www.forumforthefuture.org.uk/

Syphers, G., Baum, M., Bouton, D., & Sullens, W. (2003). Managing the cost of green buildings. Retrieved September 6, 2004, from http://www.kemagreen.com/KEMAGREEN/Portals/0/ManagingtheCostofGreenBuilding.pdf

U.S. Department of Energy. (2003, August). The business case for sustainable design in federal facilities.

Electronic Articles  
BetterBricks interview with Tom Paladino. (2003, May). Retrieved September 16, 2004, from http://www.betterbricks.com/

California State Treasurer. (2004, February 3). News release: State Treasurer Phil Angelides launches 'Green Wave' environmental investment initiative to bolster financial returns, create jobs and clean up the environment. Retrieved September 8, 2004, from http://www.treasurer.ca.gov/news/envrmt/020304_enviro.pdf

Canadian Architect. (n.d.). Measures of sustainability: Externalities. Retrieved September 17, 2004, from http://www.canadianarchitect.com/

Childs, K. (2003). The economics of green design: Can we afford not to do it? Retrieved September 10, 2004, from http://www.asid.org/asid2/pubs/economics_of_green_design.pdf

Enermodal Engineering. (2004). Ten Steps to a Sustainable Building.
Retrieved October 4, 2004 from: http://www.enermodal.com/ten_steps.html

Federal Home Loan Bank of Atlanta.
(2004, Summer). Is green building worth the green? Retrieved September 16, 2004, from http://www.cap-e.com/ewebeditpro/items/O59F4311.pdf

Fuller, S. (2003, July 22). Life-cycle cost analysis (LCCA). Retrieved September 8, 2004, from http://www.wbdg.org/design/resource.php?cn=3.3.2&cx=1&rp=6

Gerencher, K. (2004, August 16). More companies taking to building 'green'. Retrieved September 12, 2004, from http://www.investors.com/breakingnews.asp?journalid=22692599&brk=1&rb=1

Gottfried, D. (2003, March 1). A Vision of Green Building Economics for the Private Sector. Retrieved September 18, 2004, from http://www.greenerbuildings.com/news_detail.cfm?NewsID=26469

McDonough, W., & Braungart, M. (2002, August). Beyond the triple bottom line and designing for the triple top line.
Retrieved September 14, 2004, from http://www.mbdc.com/features/feature_aug2002.htm

Morgan, C. (2003, July 17). The economics of sustainability: Designers of the built environment must consider life-cycle costs. Retrieved September 16, 2004, from http://www.djc.com/news/en/11146931.html

Paladino, T. (n.d.). Long-term sustainability. Retrieved September 16, 2004, from http://www.betterbricks.com/

Paladino, T., & Stretch, A. (n.d.). Designers in unique position to protect environment. Retrieved September 16, 2004, from http://www.djc.com/special/design95/10002606.htm

Reed, W. G. (2002). Speaking out on the cost of LEED green buildings. Retrieved September 8, 2004, from http://www.gbapgh.org/Publications_Cornerstone_winter02.pdf

Smith, D. (2002, May 2). Why green buildings fatten your bottom line. Retrieved September 14, 2004, from http://www.djc.com/news/en/11132991.html

Spain, T. K. (2000, September 11). Pay now or pay later: Life-cycle cost and payback analysis techniques. Retrieved September 18, 2004, from http://www.energyusernews.com/

Taraska, J. (n.d.). The economics of eco-friendly land development. Retrieved September 8, 2004, from http://www.metropolismag.com/html/sustainable/case/economicsofeco.html

WBDG Cost Effective Committee. (2002, September 2). Quantifying non-monetary benefits. Retrieved September 16, 2004, from http://www.wbdg.org/design/index.php?cn=3.3.3&cx=0

Websites  

BetterBricks
http://www.betterbricks.com

BUILDSMART
http://www.buildsmart.ca

Canada Green Building Council
http://www.cagbc.org

GreenBlue
http://www.greenblue.org

GreenerBuildings
http://www.greenerbuildings.com

The Natural Step

http://www.naturalstep.ca

U.S. Green Building Council
http//www.usgbc.org

Whole Building Design Guide
http://www.wbdg.org

Royal Roads University
Science, Technology & Environment Division
edialogues@royalroads.ca