green building impact report 2009

8/14/2019 Green Building Impact Report 2009

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1 2009 Greener World Media, Inc. (www.greenerworldmedia.com). May be reproduced or noncommercialpurposes only, provided credit is given to Greener World Media, Inc., and includes this copyright notice.

by ROB WATSON

.com

Executive Editor

REPORT2009

GREEN BUILDING

IMPACT

MARKETA

N

D

Greener World Media


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Contents

Executive Summary ............................................................................. 3

LEED Market Trends ...................................................................................5

Site and Land Use Impacts .......................................................................10Water Eciency Impacts ..........................................................................13

Energy Impacts .........................................................................................15

Materials Impacts .....................................................................................24

Indoor Environmental Quality ..................................................................26

The Big Picture .........................................................................................28

Whats Next ..............................................................................................30

Appendix: Methodology ................................................................... 31

About the Author .....................................................................................35

About Greener World Media ....................................................................36

Researched and Written by Rob Watson

For Greener World Media:

Joel Makower, Executive Editor

Matthew Wheeland, Managing EditorLeslie Guevarra, Associate Editor

Pete May, President and Publisher

Katherine Eastman, Marketing Coordinator

Inographics by Seth Fields

Thanks to Our Sponsor:

2009 Greener World Media, Inc. (www.greenerworldmedia.com). May bereproduced or noncommercial purposes only, provided credit is given toGreener World Media, Inc., and includes this copyright notice.
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The great American philosopher Yogi Berra once noted: Its tough to makepredictions, especially about the uture. Most orecasts or 2009, including ourscalled or a fattening or even decline in LEED project registrations, mirroringthe general malaise in the market. However, LEED registered and certied foorarea in 2009 is estimated to grow by over 40% compared to last years totals, ora cumulative total o over 7 billion square eet worldwide since the standard waslaunched in 2000.

New Construction Registrations Exceed National Construction Starts

Dramatic declines in 2009 U.S. new non-residential construction might result inconstruction starts dipping below the one billion square oot mark or the rsttime in many years, yet registrations o LEED new construction projects in theU.S. are expected to exceed 1 billion square eet! Although the majority o LEEDprojects registered this year are unlikely to start construction this year, it is nothard to imagine that 25% or more o new non-residential construction startsbeing registered, which implies that in registrations the LEED Version 2 (V2)standard has pretty much ully penetrated the market.

Construction Industry Clambers Aboard Green Lieboat but International

Disappoints There may be a lieboat eect at work, where the market

is jumping to the hot trend in the hopes o dodging the economic bullet.Somewhat refecting this, membership in the USGBC is stronger than orecast,expecting to grow over 10% and top 20,000 or the rst time, compared with apredicted 3% decrease. As a category, International LEED projects showed thegreatest decline in foor area, partially refecting the assumption o certicationduties by Canada and India.

LEED 2009 Launches as Version 2 Sunsets The other clear infuence on theyear-to-date registration gures is the sunsetting o the V2 standard as LEED2009 rolls out. In the run-up to the LEED Version 3, there was a huge spike inJune, with over 4,000 projects registering the month beore the deadline.

LEED Certied Floor Area Sets New Record Over 350 million square eet oLEED buildings certied in 2009, tripling the record certication in 2008 andexceeding all certied foor area to date by more than 30%. As impressive as thisgure is, in 2010, certied foor area will need to almost triple again in order tokeep up with the explosion o registrations that began in 2007.

LEED EB is the Certication Champion and CI Surges LEED or ExistingBuildings (EB) certied almost 15% more foor area in 2009over 10 millionsquare eetthan did LEED or New Construction (NC) and added over 65%new foor area, which to us signals a welcome trend toward the green operationo buildings. Last year, we did not include LEED or Commercial Interiors (CI)

in our calculations. CI registered foor area almost tripled to over 200 millionsquare eet this year, and showed similar growth in certications.

ENVIRONMENTAL TRENDS

Overall, LEEDs green impact shows some impressive numbers, but relative tothe problem still is not providing sucient contribution to halting unmanageableclimate change.

Exec

utiveSummary


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Land and Site Impacts Due to the large jump in LEED penetration last yearand the inclusion o LEED CI gures, we increased our estimate o vehicle milestraveled (VMT) reduction to 780 million VMT to date vs. 400 million rom 2008.By 2030, the annual gasoline savings equal our current imports rom the MiddleEast. There also has been a distinct shit toward more urban inll development,which we predict will accelerate as the heavy emphasis on location eciency inLEED 2009 infuences the market.

Water Impacts Total water savings this year are signicantly higher than lastyear, due to increased foor area rom the inclusion o CI, unanticipated growthin all o the standards foor area, plus an increase in the penetration o projectsachieving the 20-30% savings rom plumbing xture eciency. Total watersavings rom LEED through 2009 is estimated at 15 billion gallons, comprising.5% o annual non-residential water use. But, by 2030, LEED results in nearly 1.3trillion gallons o saved water, which represent a noteworthy 30% reduction oannual non-residential water use.

Energy Impacts Buildings use more energy than any other human activity andthe building sectors share o global energy use continues to grow. It will notbe possible to eectively address carbon pollution and climate change without

an aggressive, concerted eort to reduce energy consumption in buildings.LEED is starting to make a dierence in the United States; we estimate that theannual CO

2savings rom LEED buildings is approximately 2.9 million tons rom

energy eciency and renewables. This gure grows to 130 million tons per yearby 2020 and almost 320 million tons annually by 2030. In both the Low Savingscase and the High Savings case, orecast penetration o LEED results in a netdecrease in national energy consumption in non-residential buildings, by 2030 inthe Low Savings case and by 2020 in the High Savings case.

Materials Impacts Based on average materials costs, green building materialsrepresented approximately $7 billion in cumulative spending through 2009,

reaching $230 billion by 2030. Moreover, the embodied energy in buildingsthat are renovated instead o demolished is expected to save as much energy in2030 as we import this year rom Saudi Arabia. In addition, an average o over60% o C&D Waste is diverted rom LEED projects, totaling 25 million tons todate and reaching almost 800 million cumulative tons by 2030.

IEQ Impacts While operational savings are real and important, the nancialbenets in LEED are largely achieved through the enhancement o employeeproductivity. Salaries represent approximately 90% o the money fow througha building. To this end, we calculate that an average o at least 580,000employees are currently enjoying improved indoor environments in LEEDbuildings at present. Looking ahead, the green building workorce is expected

to approach 29 million by 2020, and almost 64 million strong by 2030. Theproductivity benets rom LEED buildings to date are estimated at $230 millionto $450 million; we expect this number to reach between $11 billion and $22billion by 2020, and $25 billion and $49 billion by 2030.

Non-residential

construction,

the ocus o our

report, represents

about 40% o theenvironmental

burden o buildings.


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185

21,173

49,167

264

3,959

7,359

70

2,197

4,361

37

3,508

7,707

Cumulative LEED NC Certified SF Cumulative LEED CS Certified SF Cumulative LEED CI Certified SF Cumulative LEED EB Certified SF

2009 2020 2030

Floor Area Forecast(millions of square feet)

This year we are expanding our coverage o market trends in LEED, hence therenaming o the report as Green Building Market & Impact Report.

Overall, LEED market perormance greatly exceeded our expectation o afattening and maybe even a decline. Total registered and certied foor areain 2009 is estimated to grow by over 40% compared to last years totals ora cumulative total o over 7 billion square eet worldwide since LEED waslaunched in 2000.

This growth is perplexing or a couple o reasons. First, dramatic declines in2009 U.S. new non-residential construction startsby some estimates almost40% below the peak o 2007means that new non-residential constructionmight dip below the one billion square oot mark, yet registrations o LEED newconstruction projects in the U.S. are expected to exceed 1 billion square eet![This includes LEED New Construction (NC), Core & Shell (CS), CommercialInteriors (CI), LEED Schools and LEED Retail, but not LEED or ExistingBuildings(EB).]

What is going on?

We think a couple things might be operating here. The unexpected growth

LEED MarketTrends

The currenteconomic

situation coupled

with increased

stringency in the

LEED requirements

will contribute

to an expected

slowdown.


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phenomenon is likely something o a lieboat eect where the marketis jumping to the hot trend in the hopes o dodging the economic bullet.Membership in the USGBC is stronger than orecast, growing over 10% andtopping 20,000 or the rst time, compared with a predicted 3% decrease below2008 totals. Although growing below historical rates, the act that membershipis growing at all refects the relative strength o the green sector compared withother segments o the building industry.

The other clear infuence on the year-to-date registration gures is thesunsetting o the Version 2 (V2) standard as LEED 2009 rolls out. Following thepattern seen when the old LEED AP exam was retiredthe number o peoplewho registered or the exam in the last our months almost equaled all previousapplicantsthere was a huge spike in project applications in June, with over4,000 projects registering the month beore the deadline.

As or the registered foor area expected to exceed new construction starts, themost likely explanation is that projects register at very dierent times duringtheir development. Its quite likely that projects started in 2007 or 2008 havedeerred registering until now either because o uncertainty whether certicationwas possible or to get their project in under the V2 deadline. Similarly, its quite

likely that projects expected to be started in 2010or even 2011registeredearly to avoid the cuto. Its not hard to imagine 60-70% o total registrationsalling outside o the 2009 start year.

Even i this were the case, it implies that over 40% o new construction startsregistered in the system, which does not seem realistic either. While thereis no way o knowing the magnitude, our guess is that there is some cohorto wishul thinking projects that register each year. These projects ail tomaterialize or any number o reasons, lack o nancing being the most obvious.With prevailing economic conditions, its not hard to imagine a higher-than-normal amount o vapor estate, as opposed to real estate, projects this year.

Yet, it is quite possible that 25% or more o new non-residential constructionstarts being registered, which implies that in registrations the V2 standard haspretty much ully penetrated the market. Now all we need is or certications tocatch up.

Certications One o the main stories this year is the huge ramp-up ocertications compared to historical rates. We expect 2009 certied foor areato grow by more than 200% compared with 2008 and by 30% compared with allcertied foor area to date.

In spite o more than doubling each year since the launch o LEED, certicationsso ar represent only approximately 10% o registered foor area. That

certications lag registrations is to be expected and in a rapid-growth situationlow numbers are not surprisingbut the 10% certication rate is lower thanwed like to see. We believe that a 70% graduation rate is acceptable, andas a whole, LEED exceeded, a 70% graduation compared to 2006 (assuminga 3 year graduation cycle), as shown in ollowing table. However, comparedwith 2007 registrations, LEED alls ar short o a 70% graduation rate, with theexception o LEED or Existing Buildings: Operations & Maintenance (EBOM).

It is not hard to

imagine 25%or more o new

non-residential

construction starts

being registered,

which implies that

in registrations the

V2 standard has

pretty much ully

penetrated the

market.


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LEEDStandard CI CS EBOM Schools NC

GrandTotal

2009 CerticationRates vs. 2006Registrations

68%* 115% 390% 299% 57% 112%

2009 CerticationRates vs. 2007Registrations

29%** 14% 72% 3% 23% 29%

*For CI we compare vs. 2007refecting the shorter turnaround cycle.

**For CI we compare vs. 2008refecting the shorter turnaround cycle.

Whats interesting about the table above is that LEED NC is the main laggardin the certication realm on the three-year cycle. LEED EBOM is the standout,exceeding the 70% graduation rate compared with both 2006 and 2007registration levels.

However, in order to keep up with the pace o registrations, certications in2010 will need to triple compared to 2009. There is sucient capacity in the

certication pipeline, but it remains to be seen what impact the economy hasand whether acceptable graduation rates can continue.

It was the Best o Forecasts, it was the Worst o Forecasts In the 2008Green Building Impact Report, our crystal ball gazing resulted in this mixed-bagorecast:

The current economic situation coupled with increased stringency inthe LEED requirements will contribute to an expected slowdown. In theU.S.the ocus o this reportwe expect a fattening o the growthrate or even a decrease in the new construction markets, both o whichwill refect a slight decrease in general LEED NC and LEED CS projects

and rapid growth in the Schools and Retail markets. We do expect,and indeed hope, that the growth in LEED EBOM continues, given therelative magnitude o the existing building stock compared with the sizeo new additions to foor space.

Going orward, we anticipate that LEEDs growth will fatten relative tothe market as it reaches the expected saturation point or the level ostringency the market is able to handle. Even though the growth ratefattens, in absolute terms we believe the amount o foor area beingadded to the system will continue to grow.

LEED CI and EB Soar The registration growth rate sweepstakes winner o 2009

is LEED CI, which increased a whopping 165% compared with 2008, while LEEDCS is the biggest loser, actually declining by 3% compared to last year. NewCI certied foor area could almost triple this year to approximately 23 millionsquare eet.

In what could be a harbinger, exepcted certications o LEED EB/EBOM oover 135 million square eet o projects are likely to signicantly exceed NCproject certications that this year will top about 120 million square eet. This isthe rst time the Existing Building standard will certiy more foor area than the

In what could be

a harbinger o theuture, certications

o LEED EB/EBOM

o over 135 million

square eet o

projects are likely

to signicantly

exceed NC project

certications o

about 120 million

square eet.


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New Construction standard. LEED EB/EBOM certied foor area will grow byapproximately 250% compared with last year, though registered foor area (over600 million square eet) still lags that o New Construction.

New Construction Remains Strong LEED NC Registration continues stronggrowth o almost 40% in 2009, adding 1.2 billion square eet worldwide. TheNC certication growth rate o 20% is the slowest in years, while Core and Shellactually registered less foor area this year than in 2008, a rst.

Application Guides Gain Traction On the Application Guide ront, LEED orSchools is doing quite well, Growth in LEED or Schools is anticipated to exceed65%, consistent with our skyrocket orecast. LEED Retail has not grown asmuch as expected, in part due to delays in nalizing the update o the RetailApplication Guide and project classication issues between the CI and LEEDPortolio programs.

Cumulative Certications 2000-2009

NC CS CI EBOM

ApplicationGuides

(Schools & Retail)283,000,000 91,000,000 40,000,000 191,000,000 8,500,000

46% 15% 6% 31% 2%2009 Certication totals are estimated rom year-to-date gures through September

So What About Homes? The residential sector in the U.S. represents thelargest share o the environmental burden o buildings and in response, theUSGBC launched LEED Homes at the end o 2007. LEED or homes coversseveral dierent types o dwelling units: single-amily, duplex/triplex and low-rise multi-amily types. Because o the structure o the homebuilding industry,

a very dierent delivery system or LEED needed to be established. This tooka little over a year to perect and LEED has now certied nearly 3,000 units,with several thousand more awaiting certication. Similar to the non-residentialmarket, LEED or Homes project activity did not refect the market as a wholeand still remains strong. Particularly gratiying is the very strong participation othe aordable housing industry, which indicates in this razor-thin margin marketbeing green allows you to do well while doing good.

International Market Almost hitting 800 million square eet o registeredprojects this year, aggressive growth o LEED internationally continues,representing over one quarter o all project square ootage. This brings the totalregistered foor area internationally to almost two billion square eet, about 25%o the LEED total.

Foreign LEED projects could show a 30% increase in registration this year,despite the tanking o the Dubai market. China and India seem to havesomewhat taken up the slack o the Middle East. Another interestingdevelopment is the growing penetration in Europe, notably Germany and Italy,which is already populated with excellent green building standards.

Most Active Countries or LEED

Almost hitting

800 million squareeet o registered

projects this

year, aggressive

growth o LEED

internationally

continues,

representing over

one quarter o

all project square

ootage.


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CountryNumber o

ProjectsTotal Floor Area

(square eet)

India1 491 478,000,000

UAE 669 455,000,000

Greater China2 310 250,000,000

South Korea 94 123,000,000

Saudi Arabia 59 89,000,000

Canada3 326 72,000,000

Mexico 109 43,000,000

Brazil 145 38,000,000

Germany 92 22,000,000Data through September 2009

1 Includes projects registered directly with IGBC

2 Includes Hong Kong, Macau and Taiwan

3 Only includes gures prior to program administration by the Canada GBC.

The structure o real estate development, particularly in Asia and the MiddleEast, tends to be more speculative than in the U.S., which accounts or the muchhigher proportion o LEED Registered projects in CS compared with NC. Sincewe did not see signicant LEED activity prior to 2005approximately 97% ointernational projects have registered in the last 3 yearsit is still too early todraw conclusions about certication, particularly given the average size o theseprojects. International projects tend to be much larger than the U.S. average asindicated by the nearly 1 million square oot average o projects in India, Chinaand South Korea.

2009 International Registration Share

NC CS CI EBOMApplication

Guides

463,000,000 155,000,000 6,000,000 89,000,000 2,800,000

65% 22% 1% 12% 0%2009 Registration totals estimated rom year-to-date through September gures

USGBC has successully developed a certication structure that can adapt to thecurrent portolio o projects, but urther improvements are needed beore LEED

can begin penetrating the international market at the same level as in the U.S.Challenges to increased penetration in large international markets include:

benchmarking environmental perormance standards, particularly energy

development o qualied industry proessionals rom designers to builders

translation o support materials to local language

the inrastructure needed to support, protect and certiy to the LEED brand.

USGBC has

successullydeveloped a

project certication

structure that can

adapt to current

projects, but

needs urther

improvements

beore LEED can

penetrate the

international market

at the same level as

the U.S. market.


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Due to the largejump in LEED

penetration last

year and the

inclusion o LEED

CI gures, we

increased our

estimate o VMT

reduction to 780

million to date vs.

400 million in 2008.

Site and LandUse Impacts

Far Fewer CarTrips, and anImplosion o

Erosion

Its an axiom in real estate that it all starts with the land and that is true withLEED as well. LEED addresses impacts to the land in a three principal ways:location eciency, site protection and restoration, and site perormance.

Unlike most other impact categories, where benets o LEED are directly relatedto project foor area, site impacts relate to the number o projects. Thus, ourassessment o progress to date is based on actual project gures rom USGBC;although our project number projections derive rom the growth in foor spaceand the average size o LEED projects.

Location Eciency We kept the same indicator o location eciencyvehiclemiles traveled (VMT)to illustrate LEEDs benets o location eciency andalternative transportation methods. Due to the large jump in LEED penetrationlast year and the inclusion o LEED CI gures, we increased our estimate o VMTreductions to 780 million VMT to date vs. 400 million rom 2008. Our projectionsindicate that roughly 15 billion VMT are avoided by 2020, up rom 4 billionestimated last year. By 2030 that gure grows to about 32 billion. These guresseem large, but compared to total national VMT they represent a reduction oless than 1%. O commuting VMT, it represents a drop o over 2%.

These reductions result in the equivalent o taking nearly 60,000 vehicles o theroad, saving almost 30 million gallons o uel, and eliminates over 7 million tonso CO

2. These gures grow to 2.5 million vehicle-equivalents and over 1.2 billion

gallons o uel saved annually by 2030, preventing over 300 million tons eachyear o CO

2, as well as over 120,000 tons o other air pollutants.

Site Protection There was little change in the adoption rates o land protectionmeasures, so the 100% growth in site protection measure impacts vs. 2008 isprincipally due to increased penetration o LEED certied projects. As o 2009,we estimate that LEED certied buildings prevented nearly 800,000 tons o soilerosion to date and 11 million tons o prevented soil loss by 2020, which growsto almost 22 million tons by 2030.

2009 2020

780,000,000

15,250,000,000

31,790,000,000

2030

Site Impacts: Vehicle Miles Traveled(VMT reductions)


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Land-Use Impacts Summary

2009 2020 2030

VMT Reductions 780,000,000 15,250,000,000 31,790,000,000

Vehicles Reduced 59,000 1,271,000 2,540,000

Gasoline Reduced 29,000,000 622,000,000 1,244,000,000

Emissions Reductions

(in tons)

2009 2015 2020

Hydrocarbons 59 1,260 2,518

CO 2,659 57,104 114,132

NOx 86 1,847 3,693

Particulates 8 168 336

CO2 7,100,000 152,500,000 304,800,000

LEED stormwater

preventionand treatment

requirements have

avoided or treated

approximately

350 million gallons

o toxic fush,

signicantly more

than we calculated

in 2008. We revised our calculation method o sensitive land and open space impacts,which resulted in signicant increase in land impacts, due to the growth in thenumber o projects and the strong shit to urban development. To date weestimate that development on roughly 24,000 acres o sensitive lands have beenavoided, compared with 5,000 acres calculated in the 2008 report and 147,000acres in 2020 vs. 70,000. By 2030, the total grows to almost 280,000 acres.

There was a signicant shit in the amount o browneld development between2008 & 2009, with almost triple the number o projects achieving this credit in2009. This jump shows that LEED has resulted in an estimated 4,800 acres obrowneld reclamation vs. 250 calculated acres last year. We expect reclaimed

browneld acres to grow to over 30,000 by 2020 and 57,000 by 2030.

Stormwater The rst inch o a storm produces what is known as toxic fush,where all o the debris and air pollution that precipitates out o the sky is washedinto the watershed.

When stormwater runo overwhelms sewage treatment plants, combinedsewer overfow (CSO) results in untreated sewage going straight into ourwaterways, lakes and beachronts. When debris and bacteria counts get toohigh as a result o CSO, beaches are closed to protect public health. Accordingto the Natural Resources Deense Council (NRDC) report Testing the Waters2009, over 20,000 beach closures occurred nationwide in 2008the ourth

consecutive year, at this level. This indicates that polluted stormwater runorom CSO is still a major problem around the country.

LEED gives credit or measures to reduce and treat stormwater runo andwe base our stormwater treatment estimates on a reerence storm, since itsimpossible to aggregate impacts o all o the dierent types o storm events indierent climate zones. Between 2008 and 2009, we saw greater adoption ostormwater measures in certied projects growing rom about 40% in 2008 to50% in 2009. This refects the growing importance o stormwater mitigation.


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We estimate that LEED stormwater prevention and treatment requirementshave avoided or treated at least 350 million gallons o toxic fush during eachstorm event, signicantly more than we calculated in 2008 due to the growthin numbers o projects and land associated with these projects. However, dueto growth in LEED foor area, by 2020, volume treated grows to approximately3.5 billion gallons per storm event compared with 1 billion gallons estimated inthe 2008 report. By 2030, LEED projects reduce or treat over 7 billion gallons ostormwater per inch storm event.

Urban Heat Islands About 21,000 acres o land and rootops have implementedmeasures to reduce urban heat islands and we expect over 180,000 acres omeasures by 2015 and nearly 375,000 by 2020. Urban heat islands can increaseambient temperatures by up to ten degrees Fahrenheit and result in millions odollars o air conditioning costs and millions o tons o carbon dioxide pollution.

Looking Ahead LEED 2009 criteria signicantly boost the amount o creditgiven to projects that are location ecient, meaning inll lots adjacent tomass transit. Given this shit in emphasis, we expect that transportation- andland-related impacts going orward will be greater relative to earlier projections.And credits such as the much-maligned bike-rack receive signicantly

less weight compared to location eciency (1 point vs. 11 points) within theSustainable Sites category. However, given the time it takes or projects tomigrate through the LEED system, it will be a while beore these changes arerefected in the data.


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Total Water Savings(in Billions of Gallons)

15.2 574 1254

2009 2020 2030

We calculated that

18.1 billion gallonso wastewater

have been avoided

to date, a .6%

reduction in the

annual wastewater

generated.

Potable water is our most precious and scarce resource, at less than one-tentho one percent o all the water on the planet, or less than 10% o accessiblereshwater rom underground and surace (river, streams, lakes and reservoirs)sources. Water use in buildings makes up, on average, 80% o the worldspotable water. So, what do we do with this most precious o resources inbuildings? We fush our toilets with drinking water in the desert.

Indeed, we believe that water shortages will put the brakes on real estatedevelopment long beore energy shortages do. Because it is treated largely asa public or, at best, a quasi-market good, water is not likely to be priced at itstrue value. This means price signals, a good indicator o energy availability thathelps encourage conservation, dont apply to water. To be sure, water and sewerprices are going up, but compared to the cost o delivering the service and whatthe public is willing to bear, these prices are ar below waters true worth.

What weve seen in jurisdictions when water runs short are lurching publicpolicy responses, with last-minute building moratoriums or hastily created osetpolicies requiring builders to nd an amount o water equivalent to what theirdevelopment would use, beore permits are approved.

WaterEciency

Impacts

Savings Grow roma Trickle to a Flood

LEED addresses the need or ecient and reduced water use in buildingsoremost through conservation. Plumbing xtures, cooling towers, andlandscaping are the main areas where green design can eectively minimize abuildings demand or potable water, so were not just fushing it all away.

Total water savings estimated or this years report are signicantly higher thanthe estimates rom last year, largely because o increased foor area rom theinclusion o CI and unanticipated growth in all o the standards foor area. There


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also was an increase in the penetration o projects achieving the 20-30% wateruse reduction in plumbing xtures. These high levels o credit achievement werethe impetus or LEED 2009 to increase the prerequisite savings requirement

to 20% above minimum standards and to reward 30-40% savings. As withSustainable Sites, Water Eciency is more heavily emphasized in the LEED 2009standards.

Weve seen a slight drop in the number o projects using graywater treatmentsystems, largely because water chemistry is complicated and these systemsrequire a great deal o maintenance and capital to install. However, as on-sitewastewater treatment experience grows and technology improvesnot tomention the expected $1 trillion water and sewer inrastructure bill our local

jurisdictions ace in the next decadewe expect there to be increased emphasison buildings serving as reservoirs through the use o cisterns and other

rainwater capture methods, as well as sewage treatment plants by treatingtheir own wastes mostly on-site.

Aggregate Water Savings Total savings rom plumbing, landscaping, andcooling towers combined as o 2009 is 15 billion gallons, comprising 0.5% oannual non-residential water use. By 2020, with LEED certied and built-toLEED foor area approaching 45 billion square eet, this gure is expected toapproximate 575 billion gallons, or 15.5% o annual non-residential water. Thisnumber will more than double by 2030, to nearly 1.3 trillion gallons o savedwater, which represents a noteworthy 30% savings o annual non-residentialwater use.

Wastewater Reductions Based on the raction o LEED projects pursuing watereciency, combined with innovative wastewater treatment, we calculated that18.1 billion gallons o wastewater have been avoided to date, a 0.6% reductionin the annual wastewater generated. This year we included reductions in wateruse rom plumbing and cooling tower savings, as well as estimates o savings inexcess o minimum LEED requirements.

We expect savings o over 850 billion gallons o wastewater generation avoidedby 2020, growing to nearly 1.9 trillion gallons by 2030. These gures represent,respectively, 30% and almost 68% reductions in annual wastewater generation.

Water Eciency and Treatment Impacts

UnitsImpact to

DateProjected

Impact 2015Projected

Impact 2020

Total Water Savings Million Gallons 15,200 574,000 1,254000

Plumbing Water Savings Million Gallons 2,350 106,800 237,200

Landscape Water Savings Million Gallons 8,420 255,700 561,100

Cooling Tower Water Savings Million Gallons 4,410 211,200 470,500

Annual Non-Residential Water Use Percent 0.5 15.5 29.8

Wastewater Reduction

Total Million Gallons 18,100 852,000 1,890,000

Annual Wastewater Reduction Percent 0.6 30.4 67.5


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EnergyImpacts

Eciency SavingsAre Losing Power

Buildings use more energy than any other human activity and the buildingsectors share o global energy use continues to grow. It will not be possible toeectively address carbon pollution and global warming without an aggressive,concerted eort to reduce energy consumption in buildings.

The principal infuences on how buildings use energy are (1) Occupant behavior,(2) Building design and (3) Technology. LEED attempts to infuence buildingenergy use principally through design and technology choices. Because o thelarge impact o occupant behavior, some LEED buildings are not perormingas expected given their design and technology elements. This is an area ocontroversy and a source o great attention by the US Green Building Council.

Energy Savings Trends in LEED As shown in the table below, based on trendsobserved in LEED-certied projects, this year we are basing our projectionson a smaller percentage o savings against a lower-energy baseline. Ater therelease o Version 2.2 in October o 2005, the USGBC ound that projectscertiying under this standard were pursuing ewer energy credits than under

Versions 2.0/2.1, with ully hal the projects not pursuing any LEED credits atall! In response to this trend, USGBC began requiring that projects registeredater June 2007 must achieve a minimum o two credits, or 14% energy savings

beyond the ASHRAE 90.1-2004 minimum standard.

Energy savings are

expected to reach

1.75 Quads by 2020

and approximately

3.9 Quads by 2030,

or 8.3% and 17.3%,respectively, o

national commercial

building energy use.

1.3

87

196

Energy Savings(in Millions of Short Tons of Coal)


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Low High Low-High

LEED NC 2.0, 2.1 22% 31% 25-31%

LEED NC 2.2 16% 24% 25-31%

CS 2.0 15% 20% 25-31%

EB/EBOM 28% 37% 37%

CI 14.1 (kBut/SF)

% Savings in LEED Projects % Savings 2008 GBIR

In spite o this temporary sag in energy savings per project, total energy savingsestimated in this years report rapidly outstrips the totals o last years report,principally due to greater projections o LEED foor area in the uture.

For the 2009 base case (low-savings) energy savings scenario, our ndingsindicated 0.03 quad (quadrillion Btu) energy savings to date, which represents0.15% o US commercial building energy consumption. This represents 1.3million tons o coal, enough to ll Yankee Stadium.

Given the acceleration o the adoption o LEED, energy savings are expectedto reach 1.75 Quads by 2020 and approximately 3.9 Quads by 2030, or 8.3%and 17.3%, respectively, o national annual commercial building energy use.The High Case savings scenario indicates that energy savings in non-residentialbuildings could hit 22.3% by the year 2030. The coal represented by theseenergy savings would ll every ootball and baseball stadium in the U.S.

National Impact o LEED Energy Savings

2009 2020 2030

Baseline U.S. Commercial BuildingConsumption Quads 19.07 21.09 22.72

TOTAL LEED SAVINGS (Low Case-Quads) 0.03 1.75 3.92

Net Commercial Building Consumption 19.04 19.34 18.80

Percent o 2009 Commercial Building EnergyUse Baseline

100% 101% 99%

TOTAL LEED SAVINGS (High Case-Quads) 0.04 2.25 5.07

Net Commercial Building Consumption 19.03 18.84 17.65

Percent o 2009 Baseline 100% 99% 93%

The level o savings calculated or both the Low (Base) Case and the HighCase result in a decrease in absolute non-residential energy use by 2030compared with 2009.

In the High Case, net growth in commercial building energy consumptionshows an absolute decrease by 2020.


17/36


LEED buildings

have purchasedor generated

2.45 BkWh

total renewable

electricity to date,

representing

0.2% o annual

nationwide

non-residential

electricity.

I the recent growth continues in LEED or Existing Buildings Operations andMaintenance, which is based on measured energy use, we believe that zero netgrowth in non-residential energy use is achievable by 2020. It would requirean aggressive combination o targeted policy and economic measures outsideo the scope o USGBCs voluntary program to zero-out net growth in non-residential building energy consumption by 2015.

Renewable Energy Impact The use o renewable energy in buildings deliverssignicant environmental benets. Though relatively low to date, renewablyderived energy in green buildings has considerable growth potential. Thiscomes both in the orm o on-site renewable energy technologies as well as(in the case o LEED EB, in particular) using clean sources o energy to powerbuildings through renewable energy certicates (RECs) and direct purchases orenewable energy.

From our ndings, we conclude that LEED buildings have purchased orgenerated 2.45 BkWh total renewable electricity to date, representing 0.2% oannual nationwide non-residential electricity. Doesnt sound terribly impressive,until you realize that its almost enough to power the city o Lincoln, Nebraska.

Commensurate with expected continued green building growth, we orecastthat green building electricity rom renewable sources will exceed 56 billion

2,873,672

130,451,026

318,908,074

2009 2020 2030

Renewable Energy SummaryCO2 reductions (in tons)


18/36


LEED Building Renewable Energy

2009 2020 2030

On-Site Generation

(Billion kWh)0.11 1.45 2.72

Grid Renewable

Electricity

Purchased

(Billion kWh)

2.45 56.84 123.38

% Non-residential

Electricity that's

renewable

0.2% 3.3% 6.2%

Household

Equivalents240,000 5,471,000 11,836,000

kilowatt-hours by 2020, approaching 125 billion kWh by 2030. These numbersrepresent 3.3% and 6.2%, respectively, o orecasted annual nationwide non-residential electricity, equivalent to the energy use o 12 million homes.

Emissions Reductions We estimate that the annual CO2 savings rom LEEDbuildings is approximately 2.9 million tons rom energy eciency and renewableenergy. This gure grows to 130 million tons per year by 2020 and almost 320million tons annually by 2030.

Financial Savings rom Commissioning and Monitoring & Verication (M&V):

Earlier this year, the Lawrence Berkeley National Laboratory (LBNL) updated its2004 study on the Cost Eectiveness o Commercial-Building Commissioning.In the 2009 update, no direct calculation o the economic value o non-energybenets or commissioning was included, refecting the diculty o evaluatingthe multi-aceted aspects o the commissioning process and the lack o a

baseline or comparison. The LBNL report did indicate that non-energy benetswere likely to oset all or most o the upront costs o commissioning. LBNLound, on average, that projects or new and existing buildings resulted inmedian energy savings o 13% and 16%, respectively, and had good paybacks:4.2 years or new construction and 1.1 years or existing buildings.

Do LEED Buildings Save Energy?

Last year, in the rst Green Building Impact Report, we punted on addressingthe critiques that LEED buildings do not save energy, but we eel as though wenow need to address this question head on because our work indicates thatenergy savings are the largest source o environmental benet in LEED.

So, do LEED buildings save energy compared to standard buildings or not?Overall, the answer is an unequivocal Yes. Equally unequivocal is our beliethat they can save still more.

LEEDs holistic approach to building sustainability has expanded the denitiono building energy consumption beyond the building envelope to include thebuildings location, the upstream and downstream energy consumption o water

Do LEED buildings

save energycompared to

standard buildings

or not? Overall,

the answer is an

unequivocal Yes.


19/36


supply and treatment and the embodied energy o materials. LEED buildings aremore location-ecient than average U.S. buildings, more water ecient and usea higher percentage o lower-energy materials.

Okay, so its about more than just operational energy, but what aboutoperational energy? Are LEED buildings more operationally ecient thanregular buildings?

In spite o the ongoing controversy, the answer remains: most are, some arent

and LEED continues to improve rapidly in this area to gure out how and whysome buildings slip through the cracks, particularly the buildings that werecertied earlier in the systems lie.

LEED is not perect in the eciency realm, but beore going into more detail wethink it is important to note that energy eciency is the area where LEED haschanged the most since it was launched. These improvements have been drivenboth by the importance o the issue and because o some o the problemsuncovered by the NBI study and other market and project research conductedby the USGBC.

NBI Study But what o the New Buildings Institute (NBI) study where ully 20%

o the LEED certied buildings studied received poor to abysmal Energy Starscores and that only slightly more than 20% o the LEED buildings certied by2007 actually tracked their energy use to begin with?

Clearly, neither o these ndings can be dismissed as irrelevant as they indicateserious problems with how energy eciency is captured and evaluated incertain kinds o LEED buildings. However, these problems are not representativeo LEED certied projects as a whole, particularly more recent projects:Approximately our times more foor area certied in 2007-2009 compared withwhat certied between 2000 and 2006. Increasingly, projects will have certiedunder later versions o LEED that corrected many o the problems described

below.About 550 projects were certied by LEED by the end o 2006 and all o theseprojects were surveyed asked to supply their energy consumption inormation.About 120 projects responded with all o the necessary inormation. Another128 projects responded, but with insucient data or comparison, or a totalresponse rate o approximately 45%, which is a pretty phenomenal responsegiven the sensitive nature o the inormation being sought. However, the NBIstudy discovered some problems in the cohort o certied projects, the mostprevalent o which was that the majority o projects were not adequatelymetered to respond to the survey. As a result o this nding, all LEED buildingscertied to Version 3.0 are required to report their energy consumption.

First, its important to understand the composition o the sample o LEEDbuildings evaluated by NBI & to recognize that it is not terribly representativeo LEED as a whole, particularly today. All o the projects in the survey werecertied under LEED Version 2.0 or 2.1, which means most o them werecompleted beore the end o 2005, and in many cases designed beore 2000.

Early versions o LEEDversions 2.0 & 2.1had faws in the way energy

Early versions o

LEED had faws in

the way energy

eciency was

evaluated. LEED

now requires

evaluation

based on whole

building energy

consumption and

minimum energy

perormance.


20/36


eciency was evaluated. These problems stemmed mostly rom the earlyunderlying ASHRAE 90.1-1999 standard, which was never intended to beapplied in the way LEED applied it. In addition, the part o the non-regulatedloads that included computer equipment and oce electronics was justbeginning to explode in the market and this end use was not at all addressed bythe ASHRAE standard.

These and other problems continue to be xed by LEED, which now requiresevaluation based on whole building energy consumption and requires minimumenergy perormance at least 10% beyond code. In addition, ASHRAE has madeimportant improvements by increasing the stringency o the 90.1 standardby about 20% between 1999 and 2007 and by introducing the Appendix Gmodeling guidance prescribes the modeling rules that allow comparisonsbetween the baseline building and the design case building.

LEEDVersion

LEED EnergyStandard

Requirement

NC Version 2.0

(3/2000)

ASHRAE 90.1-1999 Comply or regulated loads only

(envelope, HVAC, lighting); Plug loadsnot included

NC/CS Version2.1 (11/2002)

ASHRAE 90.1-1999 Comply or regulated loads; Plug loadsnot included

Version 2.2(10/2005)

ASHRAE 90.1-2004 Comply or whole building/Exceedby 14% (ater 6/2007) Appendix G

Modeling protocol introduced

Version 3.0(3/2009)

ASHRAE 90.1-2007 Exceed by 10% as a Prerequisite

Savings Compared to What? Everyone loves the concept o savings becauseit connotes a concrete achievement. However, the mechanics o producing asavings calculation are ephemeral, particularly with regards to new buildings.

Savings calculations are just that, calculations. They involve simpliying andstandardizing assumptions and the quality o the calculation depends onthe degree o accuracy o these assumptions. Another way o putting it: Thederivation o savings is always a guess, even with an existing building.

For this reason, most existing buildings in LEED are evaluated according toEnergy Star, which relies on actual perormance as benchmarked against

comparable buildings across the country. And, as noted above, trends in LEEDcertication and registration are tending much more heavily toward LEED EB/EBOM than ever.

The mechanics

o producing an

energy savings

calculation are

ephemeral,

particularly withregards to new

buildings.


21/36


EnergyStandard

% Change inEciency

U.S. Penetration o ASHRAEStandard at time o LEED adoption

ASHRAE 90.1-1999 N.A. 66% (90.1-1999)

ASHRAE 90.1-2001 0-3% 10% (90.1-2001)

ASHRAE 90.1-2004 15% 45% (90.1-2004)

ASHRAE 90.1-2007 3-5% 8% (90.1-2007)

For new buildings, the value o certication comes early in the developmentprocess, so waiting or a year or more o energy perormance is a non-starter inthe market. Thus, we are stuck with savings. So, again, the question arises:Savings compared to what?

Each building is a unique engineered object, so any comparison to averagesis problematic. Thus, the most accurate answer depends on how that buildingwould have perormed in the absence o eciency measures. This is the intento LEED in comparing the code-compliant building with the designed building.In addition, the denition o code-compliant is highly variable across the

country. Currently, less than 10% o the U.S. building market is required to buildto the ASHRAE 90.1-2007 standard two years later. Past upgrades have beensimilarly slow to be adopted. Thus, in most jurisdictions, merely complying withthe ASHRAE standard results in some savings compared to what that buildingwould have done in the absence o the LEED requirement.

On the other hand, benchmarking to comparable buildings is an importantindicator o how well the acility is being run and also must be part o trackingbuilding perormance over time.

The reality is that empty and occupied buildings are completely dierentcreatures. LEED attempts to true up the dierences through the commissioning

process, but the necessary reconciliation eort must extend ar beyond simplecommissioning, particularly in multi-tenant buildings. Our hope is that USGBCand the Green Building Certication Institute (GBCI) will continue to improve thetransition rom green design to green operations so that buildings certied asgreen designed can legitimately carry that designation orward into operations.

LEED Building Consumption Compared to Average Some critiques haveunavorably compared the buildings in the NBI study with the perormanceaverages in the Commercial Building Energy Consumption Survey (CBECS) othe Department o Energys (DOE) Energy Inormation Administration (EIA). Themost recent CBECS survey available is 2003, but the 2007 version should be outin late 2009 or early 2010.

There are several problems with comparing these datasets, some o whichinvolve arcane statistics, and some o which involve whether the datasets areindeed comparable and o sucient quality to draw conclusions.

The arcane statistics part involves the comparison o the median value o theNBI dataset with the mean value o the CBECS dataset. Everyone agrees thatthis is not a great match statistically, the NBI study authors included. However,or a small, highly variable dataset, the median is a better metric to use because

Some critiques

have unavorablycompared the

buildings in the

NBI study with

the perormance

averages in the

Commercial

Building Energy

Consumption

Survey o the

Energy Inormation

Administration.


22/36


it fuctuates much less as the data expands. O course, the larger the dataset,the more robust the mean value becomes.

There is no doubt that CBECS uses the mean value or all o its datasets, butthe question is never asked whether it shoulduse this measurement or certainsets o data. Its obvious or the coherence o the CBECS report that a commonstatistical measurement be used, which is why the mean is used consistentlythroughout and most o the datasets support the use o that measure.

Mean Energy Consumption in CBECS or Dierent Building Groups

90s Buildings -Cohorts

EUI-SiteEnergy

EUI-PrimaryEnergy

Source

1992 CBECS(Buildings built

1990-92)

69 157 Table 3.2-Total EnergyConsumption by Major

Fuel, 1992

1995 CBECS(Buildings built

1990-92)

115 242 1995 CBECS-Table 1.Total Consumption

Tables

(Buildings built1990-95)

105 225 1995 CBECS-Table 1.Total Consumption

Tables

1999 CBECS(Buildings built in

the 1990s

98 220 Table C1: Total EnergyConsumption by Major

Fuel

2003 CBECS(Buildings built in

the 1990s

89 201 2003 CBECS Table C1(Non-Mall Buildings)

p. 249

2003 CBECS

(Buildings built2000-03)

80 187 2003 CBECS Table C1

(Non-Mall Buildings)p. 249

However, as shown in the table above, or small datasets the CBECS-derivedmean is wildly variablethe 1990-1992 energy use intensity (EUI) meanfuctuates by over 65% between the 1992 and 1995 CBECS surveyswhichsimply conrms the statistical preerence or the use o the median until the datais suciently feshed out to provide a useul mean value. Indeed, we can seehow the value o the EUI or 1990s buildings becomes less variable over time,but still signicantly dierent rom the initial survey values.

The other issue involves the mix o buildings in the underlying dataset,particularly the impact o high- and low-energy energy buildings on the overallEUI. The LEED dataset has approximately 17% o its buildings in the high-energycategory, compared with 11% in the CBECS survey. In addition, CBECS includessuch low-energy building types as vacant buildings and warehouses, comprising8% o the foor area, whereas none o these buildings were included in NBIsLEED analysis.

One peer-reviewed

paper noted thatwhen the energy

values rom CBECS

and the original NBI

study are compared

between like

categories, such as

oces, the energy-

saving benets o

LEED are apparent.


23/36


Comparison o High Energy-Using Buildings in CBECS and NBI

LEED Study

High Energy Buildings in LEED High Energy Buildings in CBECS

Occupancy % o Sample Occupancy % o Sample

Data Center 5.0% Other 2.4%

Health care 1.0% Health Care 4.4%

Supermarket 1.7% Food Sales 1.8%

Recreation 1.7% Food Service 2.3%Lab (Other in CBECS) 8.3%

Total 17% Total 11%

NBIs Cathy Turner, in her peer-reviewed paper presented at the 2008 ACEEESummer Study on Energy Eciency in Buildings, noted that when the energyvalues rom CBECS and the original NBI study are compared between likecategories, such as oces, the energy-saving benets o LEED are apparent.

The table below shows the impact o using the median versus the mean value,

though the only conclusion that can be drawn is that the early LEED buildingsevaluated by NBI have saved less than anticipatedcertainly not that LEEDbuildings use more energy than an average building.

LEED and CBECS Ofce EUIs by Size(Source: Green Building Perormance Evaluation: Measured Results rom LEED-New Construction Buildings,Cathy Turner, Mark Frankel, New Buildings Institute, 2008 ACEEE Summer Study on Energy Eciency inBuildings)

Size Range CBECS LEED Median values LEED Mean values

(Square Feet)Site EUI(kBtu/SF)

Site EUI(kBtu/SF)

LEED/CBECS

Site EUI(kBtu/SF)

LEED/CBECS

Under 25,000 80 46 58% 46 58%

25,001-100,000 91 66 73% 72 79%

100,001-200,000 101 77 76% 78 77%

Over 200,000 105 80 76% 79 75%

Size-WeightedAverage

94(all bldgs.)

62 66% 68 72%

LEED Savings 34% 28%


24/36


MaterialsImpacts

Reusing More,Wasting Less

Although buildings use approximately 40% o all materials produced, theMaterials & Resources category in LEED was downgraded in importance in theLEED 2009 update. However, data on the environmental impacts o buildingsis improving somewhat, particularly in the quantication o embodied energy.The window manuacturer Serious Materials commissioned Lawrence BerkeleyNational Laboratory to quantiy embodied energy in building materials and thisanalysis shows that approximately 8% o all energy use in the United States goesto residential and non-residential building materials.

As LEED moves toward a more normalized liecycle assessment basis orevaluating the onsite, upstream and downstream impacts, we believe that wewill better be able to evaluate these impacts comprehensively.

Building & Materials Reuse Reusing buildings is becoming more commonor LEED certied projects, with 12-15% o LEED NC and LEED CS projectsreporting signicant reuse o buildings and interior components, up rom 12%reported in our 2008 study. In square ootage terms this exceeds 68 millionsquare eet to date. Our calculations show that this gure will exceed one billionsquare eet by 2020 and two billion square eet by 2030.

Embodied Energy ImpactsLast year we inadvertently omitted the embodiedenergy impacts o building reuse, so this years gures are signicantly larger

than last years. We estimate that building and materials reuse in LEED buildingshave saved cumulatively almost 17 million barrels o oil equivalent in embodiedenergy, which will grow thirtyold to over 510 million barrels equivalent by 2030,which is approximately equivalent to the amount o oil currently imported romSaudi Arabia.

Construction & Demolition Waste Aggregate data show that over 60% othe C&D waste generated by LEED NC projects is diverted. CS and CI projectsare estimated to have a weighted waste diversion rate o approximately 54%.Between cumulative certied and built to projects, we estimate that LEED

buildings have recycled or reused elsewhere a total o nearly 25 million tons oconstruction waste so ar. These diversion gures are expected to mushroom toover 400 million tons in 2020 and 780 million tons in 2030.

Green Materials Impacts The varied use o materials and the lack o good datamake an evaluation o materials other environmental impacts dicult. For thisreason LEED chose to evaluate several materials categories on a dollar basis, asdid we.

2009 2020 2030

Green BuildingMaterials

Spending in LEED$7,100,000,000 $120,700,000,000 $233,900,000,000

Although buildings

use approximately

40% o all materials

produced, the

Materials &Resources category

in LEED was

downgraded in

importance in the

LEED 2009 update.


25/36


Based on average materials costs, local and recycled-content building materialsrepresented approximately $7 billion in cumulative spending through 2009. By2030, cumulative spending in this area is expected to exceed $230 billion. Inspite o greatly increased LEED foor area orecasts, our materials value guresare only slightly higher than the values calculated last year. This year we actoredin the potential or materials having overlapping sustainability characteristics.For example, a local material might also have recycled content. We also shouldnote that these gures are conservative because they do not include the value

o materials that are evaluated based on their indoor environmental qualitycharacteristics, such as paints and adhesives.

Certied Wood Approximately 38% o LEED projects speciy ForestStewardship Council (FSC) certied wood or hal the value o the orestproducts in the project. Based on average non-residential wood use estimatesand the penetration o the certied wood credit in LEED our evaluation showsthat to date over 220 million board-eet equivalent o certied wood has beeninstalled in LEED projects. I current penetration rates continue, this utilizationwill exceed 8 billion board eet by 2030.

LEED Building Materials Facts2009 2020 2030

Building Reuse (Millionsquare eet)*

68 1,062 2,030

Annual Energy savings

(Million barrels o oilequivalent)

16.7 267.3 512.9

Materials Expenditures

($US billions)$7.1 $120.7 $233.9

C&D Waste Diverted

(Million tons)

24.6 405.0 782.0

Certifed Wood Use (Million board eet)

NC Projects 188.1 2,566.3 4.8

CS Projects 25.8 595.5 1,194.1

CI Projects 9.1 996.2 2,174.1

Total 223.0 4,158.0 8,169.0* Based on LEED NC and LEED CS only

Approximately 38%

o LEED NC projectsspeciy Forest

Stewardship Council

(FSC) certied

wood.


26/36


IndoorEnvironmental

Quality

Cleaner Air Leadsto Healthy Prots

Early conventional wisdom had it that green principally was a sot publicrelations gimmick that maybe could be justied by savings in operations costs.Now, this thinking is increasingly being shown to be the product o the 90/10Syndrome where people spend 90% o their time quantiying 10% o thebenets. While operational savings are real and important, we believe that thenancial benets in LEED are largely achieved through the enhancement oemployee productivity. Salaries represent approximately 90% o the money fowthrough a building, the rest being amortized construction costs and operations

and maintenance, including utilities.

For our estimates o green building benets rom LEED, we assume aconservative range o 1%-2% productivity increase in built-to and LEED-certied projects, respectively, rom the aggregate o the indoor environmentalquality measures rewarded by LEED.

We calculated that

at least 580,000

employees are

currently enjoying

improved indoor

environments in

LEED buildings.


27/36


We believe that our productivity estimates understate the true benets ogreen, particularly in light o recent research by the University o San Diego onLEED and Energy Star certied buildings, as well as that done by CB RichardEllis (CBRE) on LEED and BREEAM certied projects internationally. The SanDiego study o 5,000 tenants in 124 buildings ound that or tenants sel-reporting higher productivity and ewer sick days taken, these increases wereapproximately 6%.

While not all buildings reported these benets, the studies reviewed by theUniversity o San Diego researchers covering a range o work situations showedproductivity increases rom green building measures ranging rom 1% inmanuacturing to over 25% in an Australian law oce.

And green buildings also are putting building owners on the Yellow Brick Road.CBRE ound that certied green buildings showed an income increase o 6%through a combination o higher occupancy and higher rents. When capitalizedat prevailing rates, this increase was ound to increase building value an averageo $5 million.

Taking an average o the number o employees aected by various eatures o

green buildings, we calculated that at least 580,000 employees are currentlyenjoying improved indoor environments in LEED buildings. Presuming thatLEED foor spaceparticularly LEED EBcontinues to grow through the next 10to 15 years, the green building workorce is expected to approach 29 millionby 2020, becoming almost 64 million strong by 2030.

Our results reinorce the notion that the bottom line o green is black: anestimated $230 million to $450 million has already been saved through addedproductivity o the green building workorce. Given continued growth in greenbuildings, we expect this number to grow signicantly in the uture: reachingbetween $11 billion and $22 billion by 2020, and totaling between $25 billionand $49 billion by 2030.


28/36


The LEED Green Building Rating System has been a key, transormative elementin moving the building industry in America and abroad toward sustainability.

As demonstrated by our research, LEED buildings conserve the land, save waterand energy, reduce materials impacts and result in better, more productiveindoor environments. The market has embraced LEED because it allows peopleto do well, while doing good.

The general scientic consensus is that in order to maintain global carbon

dioxide levels at less than twice pre-industrial levels, carbon dioxide emissionswould need to be reduced by 80% below the levels o the year 2000 by2050. CO

2concentrations in excess o 500 ppm are eared to give rise to

unmanageable global warming. Unmanageable means global warmingcannot be mitigated or adapted to and, as John Holdren, Director o the WhiteHouse Oce o Science and Technology Policy, has said, the only alternativeis to suer. To put the magnitude o this challenge in perspective, in spite oprojected foor space increases o 150%, total building sector emissions in 2050will need to be only 20% o their current levels.

Robert Socolow and Stephen Pacala o Princeton University have suggested that

these reductions can be split into wedges o global actions, each o whichresults in annual CO2

reductions o 4 billion tons by 2050. Applying eight othese wedges beore 2050 would allow emissions and CO

2levels to stabilize.

One o these wedges is energy eciency in buildings. The Princeton analysisindicates that a 25% reduction in global building electricity use would be equalto one 4 billion ton CO

2reduction wedge. Some large buildings are claiming

to approach carbon neutrality, so in theory buildings could squeeze out twowedges instead o just one.

Under our airly aggressive uptake orecast or LEED, by 2030 approximately10% o a wedge is accomplished in the US alone. However, this means thatLEED-equivalent and beyond standards will still need to increase tenold by

2050.

The Little Picture I we assume that this 80% reduction were to be spreadevenly, then buildings CO

2ootprint on a per square oot basis would need to

decline steadily each year, by roughly 1.6% or a total o 16% improvement by2009.

The good news is that LEED buildings are still somewhat ahead in terms o theirown perormance relative to this goal. The bad news is that the entire buildingsector must hit this reduction target.

Indeed, LEED buildings better perormance still barely makes a dent in reducing

o building sector CO2 emissions, even as ar out as 2030. We need moresavings, and aster, in order to reduce total emissions at the necessary scale,scope and speed.

How much more and how much more quickly? Last year our back-o-the-envelope guesstimate was that by 2010, average LEED buildings needed tobe at least 35% more ecient than average buildings and that the LEED EBstandard will need to penetrate 50% more rapidly than our projections in orderto stay on track. While LEED EB penetration did increase signicantly beyond

The Big Picture

Can LEED Makea Dent in Climate

Change?

As demonstrated by

our research, LEED

buildings conserve

the land, save

water and energy,

reduce materials

impacts and result

in better, moreproductive indoor

environments.


29/36


last years estimates, the energy-saving perormance o the average LEEDbuilding decreased somewhat.

We are cautiously optimistic that USGBC improvements to the LEED system willhalt this perormance slide in the mid-term, but the current market downturnmakes short-term predictions nearly impossible.

The eciency perormance o certied LEED EB projects and their growingpenetration is encouraging, but even our High Case savings orecast would need

to double and be coupled with signicant improvements in minimum eciencystandards in order to have even a remote chance o hitting the building wedgeeven in the United States.

Market Transormation Realistically, LEED cannot do it all by itsel. LEED isa vital part o the market transormation process that combines market pullwith regulatory push. On the market-pull side, LEED was designed to lead byimproving the perormance o the top quartile o buildings and in ewer than10 years it appears to nearly have succeeded in achieving this market shareobjective. However, LEED will need to be supported by accelerating the uptakeo energy eciency measures in the mass market.

Additional market mechanisms in the orm o technology incentives and energyprices that refect true environmental and social costs will also be needed toaccomplish these goals. Regulators must enable utilities to signicantly rampup their energy eciency incentive programs. Grid connection ees could beestablished that reward ecient grid-smart buildings with low to no ees,while code-minimum buildings should get socked with hety hook-up ees.Banks and insurance companies must increase their current oerings or greenbuildings to refect the lower risks o green buildings, as well as help minimizetotal extra initial costs o green. Non-economic incentives, such as acceleratedpermit approval and project density bonuses or advanced levels o eciencywill also help improve green uptake.

In addition, policymakers must price carbon.

We know with 100% certainty that zero is the only price that is precisely wrong.

No matter what price is put on carbon, approximately right will be better thanwhat we have now.

This is a policy decision, since our current 18th century market structure is notcapable o pricing social goods (like the survival o the human species) withoutintervention.

Building codes

will need toimprove by greater

amounts and more

requently.


30/36


This is our second comprehensive evaluation o the environmental impacts ogreen buildings as represented by the LEED Green Building Rating System. TheGreen Building Market & Impact Report continues to be a work in progress.Although we were pleased with how many new sources o real data on buildingperormance were available this year compared with last year, many aspects oour assessment still stem rom educated guesses.

In true American tradition, we hope to continue improving and expanding theGBMIR, but we dont want to do so without your eedback. We expanded ourLEED market section and tried to get a bit more under the skin o the doesLEED save energy question, and we looked at international trends a bit more,but so what? Is this important to you, our readers?

Please give us your thoughts on how to make the report better next year. Whatare the green building perormance and analytical issues you are dying to knowaboutor know even better than we do? Send your ideas and comments [email protected].

Whats Next?

Feedback wanted
mailto:[email protected]:[email protected]:[email protected]


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Floor Area Calculations The calculation o environmental impacts in this reporthas its oundation in a spreadsheet model that quanties and projects the totalfoor space o certied and registered LEED NC, LEED CS, LEED CI, LEEDEBOM and LEED or Schools and LEED or Retail Application Guide projects.Based on data available rom the USGBC and the methodology describedbelow, we calculated foor area streams o LEED Certied and built-to LEEDprojects into the uture.

2000-2009: We used actual historical gures rom the US Green BuildingCouncil though 2008. For 2009, we used actual project gures through theend o September 2009 and assumed that 4th quarter results would mirror 3rdquarter registrations and certications. Due to some reporting issues, we haveproject counts or LEED Version 3, but not foor area. We used historical averagefoor area by rating system to estimate foor area additions rom the 2009 (V3)rating systems.

2020 and 2030 Projections: Based on reported construction starts and LEEDproject registration data, we can estimate a penetration o LEED projects inthe market. This penetration data served as the starting point or making a bestguess on the uture trajectory o LEED. We modeled our post-2009 projections

o LEED registrations based on a Pearl-Reed growth curve, which is an S-shaped unction that trends toward an upward limit. Pearl-Reed curves oten areused to simulate and predict technology penetration trends.

We assume that the maximum penetration o LEED registered projects is 25% inany given construction year or any given standard. This orms the upward limito the Pearl-Reed S-curve. Each standard, based on historical perormance andmarket size has a dierent curve. Using historical data, we then made a best tto a Pearl-Reed curve and used this curve to project registrations orward.

We then graduate the registered projects to certied projects. On average,based on historical certication rates to date, about 70% o CS, CI and EBOM

projects that register ultimately certiy, though NC projects seem to only certiyabout 60% o registered projects. Projects register at dierent points in theirdesign/construction process and that produces a wide range o time spentregistered in the system prior to certicationrom 4 months to over 4 years,with an average o just under 3 years. Projects that register, but do not certiyare classied as built-to LEED (see below).

International Projects The number o overseas LEED projects has grown torepresent over 25% o all the foor area in the system. However, because o theineasibility o developing environmental perormance baselines or the over 100countries where LEED projects are registered, the commercial model evaluates

only the environmental impacts o green buildings in the U.S. As an order omagnitude, however it would be sae to say that the global environmentalimpact o LEED is at least 25% larger than is reported here.

Built to LEED In evaluating the impacts o LEED we also created a categorywe call built to LEED. Generally, these are projects that register, but dontcertiyapproximately 30% o registered projects to date according to ourresearch. While we do not expect these buildings to achieve the same level o

Appendix

:Methodolog

y


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green perormance o LEED certied buildings, the perormance is not zero andin aggregate, their environmental impact is not trivial. Though we do not havemeasured gures to corroborate the impact o LEED on these buildings, weassume that their achievement is hal that o a certied project.

Site/Land-Use Impacts Methodology According to research by the NaturalResources Deense Council (NRDC), location-ecient developmentacombination o density and transit accessibilityresults in a 30% reduction invehicle miles traveled. We use this gure as a proxy or the range o measuresused in LEED or reduce travel demand.

For the various site-related impacts, we calculated an average plot size basedon average project foor area and an estimated average foor-area ratio (FAR) oreach project.

Water Savings We derived baseline water consumption gures rom the USGeological Survey (USGS) gure or daily water use in order to obtain an annualper square oot gure or water consumption in commercial buildings. Thisserved as a baseline case against which LEED water savings were measured.

Plumbing and Cooling Tower Savings To derive water savings estimates in

this area, we took a weighted average o the percentage o water saved inLEED buildings based on the percentage o projects that have achieved speciccredit ratings and quantiable (20% or 30%) water savings requirements. Inorder to ascertain total savings, we rst multiplied the percentage savings bythe baseline gallons o water consumed per square oot o commercial space.Taking climate disparities into considerationi.e. warmer climates demandmore air conditioning, and thus buildings in warm climates use more water incooling tower applicationsas well as the water consumption levels that dieraccording to the age o buildings, we conservatively took 13 gallons o waterper square oot per day as the baseline number against which we compared NCand CS buildings, and 22 gallons against which we compared existing buildings

We nally used the derived gallons o water per square oot per day saved ingreen buildings and multiplied it by total LEED foor area to yield an aggregategure.

Landscaping Water Reductions To derive landscaping-related water savings,we similarly took a weighted average o the percentage o water saved in LEEDbuildings based on the percentage o projects that have achieved quantiedlandscaping water reductions. In order to ascertain total savings, we rstmultiplied the percentage savings times the baseline gallons o water consumedon landscaping per square oot o commercial space to get the per square ootsavings. As with plumbing and cooling tower use, we took geographic water

consumption disparities into consideration, and conservatively used 19 gallonso water per square oot per day as the baseline number o water used orlandscaping. We nally took the derived gallons o water per square oot savedin landscaping o green buildings and multiplied it by total LEED foor area toyield an aggregate gure.


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Wastewater Reductions:Wastewater gures were derived in a similar ashion,using an average o 40.9 gallons o water generated per square oot daily incommercial buildings. Considering that implied reduction in usage rom ecientcooling towers is not included, the nal estimated savings are believed to be aconservative estimate.

Energy Methodological Issues This year we used the 2003 CBECS (CommerciaBuilding Energy Consumption Survey) report as the primary data source or BaseCase primary energy, as opposed to DOEs Buildings Energy Data Book (BEDB).We elt that CBECS provided a more consistent and survey-based data sourceacross the range o calculations than the BEDB, which combines survey data withcalculations.

2009 Savings & Baseline Estimates vs. 2008 Report The two tables belowcompare the underlying inormation behind the calculated energy savings.

2009 Report

Base Case-Primary Energy

(kBtu/SF)% Savings in

LEED Projects

LEED PrimaryEnergy Savings

(kBtu/SF)

Low High Low High

LEED NC 2.0, 2.1 2091 22% 31% 44.5 63.6

LEED NC 2.2 1942 16% 24% 32.7 49.0

CS 2.0 773 15% 20% 11.6 15.4

EB/EBOM 1914 28% 37% 53.6 70.8

CI 14.11 Consistent with primary energy use in buildings built in the1990s per 2003 CBECS.

2 Consistent with primary energy use in buildings built in the 2000s per 2003 CBECS. Though we believethis dataset is too small to be reliable and that actual energy use in this cohort may be higher than the initialreporting, we use this gure as a conservatism.

3 Assumed to be 40% o New Construction baseline to refect smaller portion o load addressed by thestandard.

4 Consistent with primary energy use in all buildings surveyed in the 2003 CBECS, including mall buildings.

2008 Report

Base Case-Primary Energy

(kBtu/SF)% Savings in

LEED Projects

LEED PrimaryEnergy Savings

(kBtu/SF)

Low High Low High

NC/CS 241 25% 31% 60.1 75.1

EB 241 37% 88.3 N.A.

The data rom nearly 1,000 LEED Certied project scorecards provided thepercentage savings or the report. For the New Construction standards, we eltthat a range o values better refected the uncertainty around using predictedsavings as a long-term indicator o building perormance. The Low Case valuein the existing building category is based on the average score o certied LEEDEB projects and the High Case value is the average achieved by certied EBOMprojects to date.


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Renewable Energy Savings We used the breakdown o LEED projects thathave attained various percentages o on-site renewable energy generation toobtain a weighted average o total renewable source electricity green buildingshave contributed. We introduced a 20% measurement adjustment or LEEDCS foor area to refect the smaller baseline o consumption and to accountor potential double-counting o LEED CI projects. Finally, we assumed that allrenewable energy associated with LEED EB came in the orm o RECs and noton-site generated electricity.

Commissioning This year, as an additional conservatism, we have assumedthat the value o commissioning and M&V is represented in the energy savingsonly. Although less than 25% o the 640+ buildings in the updated 2009 LBNLreport on the value o commissioning were commissioned in the context oLEED, we assume that the value o energy and non-energy benets resultingrom commissioning are embedded in the LEED energy savings results.Consistent with this approach we also assumed that the achievement o M&Vcredits contributed exclusively to the persistence o energy savings and do notrepresent an independent benet o LEED.

Conservatisms Given the range o inconsistent data sources, we continue to

be conservative in our calculation methods. When ranges o impacts o LEEDmeasures were calculated, we used the low gures derived. In addition, we onlybased our savings on the LEED requirement, as opposed to thresholds actuallyachieved. For example, i a project purchased renewable electricity to cover 75%o its needs, that project only would be quantied at the 50% LEED threshold.Similarly, projects achieving energy eciency credit in between the pointthresholds are assumed to save at the lower level. In addition, we assume noree driver eectsor example improvements in the ASHRAE 90.1 standardor the developm

green building impact report 2009

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