Key political trends in green building

Green building continues as a major push, with net-zero energy buildings at the forefront.

By Jerry Yudelson, PE, Green Building Initiative, Portland, Ore. March 13, 2015

The Republican takeover of Congress in November means that we’re unlikely to see new federal legislation affecting or mandating green building. That is good news for those who believe in free choice in the marketplace for green building certification. However, the November 2014 release of the fifth report of the UN Intergovernmental Panel on Climate Change, with its ever more dire predictions of massive disruption from global warming, will likely move some states and many cities to start taking matters into their own hands,particularly with regard to incentives, ordinances, and rules around the subject of increasing energy efficiency in buildings.

In the past 3 years, concerns over climate change and new financing mechanisms have led to continued growth in energy-efficiency green building retrofits. This trend appears to be strongest in corporate and commercial real estate, along with municipal buildings, universities,schools, and hospitals (the MUSH market), where energy service companies (ESCOs) are looking for sustainable investments.

Along with the growth of the energy retrofit market, net-zero energy buildings are seeing increasing market interest. Developers of commercial and even residential buildings have begun to showcase net-zero energy designs to gain competitive advantage. This trend has been developing for about 5 years and now seems ready for takeoff, especially as more mechanical engineers figure out how to design low energy use intensity (EUI, or thousands of Btus per sq ft per year) buildings on conventional budgets.

Green buildings, especially larger commercial and institutional building portfolios, will increasingly be managed by cloud-based big data platforms. This trend is reflected by a large number of new entrants and new products in fields of building automation, facility management, wireless controls, and building services information management during the past 3 years.

For green building certification, the federal government (General Services Administration,or GSA; Dept. of Defense, or DOD; and Dept. of Energy, or DOE) have put two building certifications on an equal footing for government projects, Green Globes and U.S. Green Building Council’s LEED. This trend was reinforced by DOE’s new rule for federal projects,announced in October 2014. The rule said, in summary, if any government agency is going to use a green building rating system, it has to be one of the designated two or any other that has an open consensus process, and these systems must provide ongoing monitoring and reporting of energy and water use. Offering agencies free choice among competing rating systems gives engineers and building owners greater control.

Green building is experiencing rapid expansion globally, but certification commitment has slowed down in the U.S. cumulatively. As of mid-2014 only about 0.5% of the 5 million U.S.nonresidential buildings had been certified to either Green Globes or LEED, indicating that there are significant market headwinds to certification at current costs. 

As the new construction market continues to grow, private building owners may begin to see the increased value of having a third-party rating assessment on their buildings, since it doubles as a quality assurance program for the increasingly busy building owner and as a differentiator to the public marketplace and to investors. But this must be done at significantly lower overall costs than at present.

Green building performance disclosure also continues as a major trend. In the U.S., this trend is highlighted by disclosure requirements enacted in 2013 by more than 30 major cities around the country, and laws that require commercial building owners to disclose actual green building performance to all new tenants and buyers and, in some places, to the public. This trend will spread rapidly, as it is the easiest way to secure and monitor reductions in carbon emissions from commercial and governmental buildings.

Jerry Yudelson is president of the Green Building Initiative, a green building nonprofit.A professional engineer, Yudelson is the author of 13 books on green building, water conservation, and sustainable development. He is also a National Peer Professional for the GSA.