Credibility in an Age of Skepticism

There has been quite a dust-up over last week's energy efficiency feasibility study by NAIOP, the Commercial Real Estate Development Association.  The study challenged the economic feasibility of developing office buildings with 30% and 50% energy efficiency targets.  Essentially, the study concluded: 

Using energy models, the report found that 30 percent and 50 percent improvements in energy efficiency over code were not financially feasible for most new, Class A office construction. Developers striving for the 30 percent target would not recoup the cost of their initial energy efficiency investments within a 10-year period, while the 50 percent target was far beyond their reach, the study said.

The study set off a storm of controversy, resulting in the USGBC and others to decry the methodology and conclusions of the NAIOP study. 

However, the NAIOP study highlights some very important flaws in the current analysis of green buildings. 

1. We need to stop measuring certification, and start measuring performance.  If we had good, apples-to-apples measurements of energy efficiency, water savings, indoor air quality, vehicle miles travelled by occupants and occupant satisfaction which we could compare across building types, it would be easier to deflect the misinformation being espoused by green building skeptics.

2. We need to start incorporating carbon costs. NAIOP's main argument is that achieving 30-50% energy efficiency is not cost effective.  If building carbon costs and other environmental externalities were measured as a component of the cost-benefit analysis, even a flawed study like the NAIOP would have a hard time showing that the costs outweighed the benefits.

3. We need policies which mandate measurement and verification.  In order to collect solid information about building performance over time.  To do so, public policies should incorporate energy efficiency, water savings, indoor air quality, vehicle miles travelled by occupants and occupant satisfaction reporting as components of their green building regulation. 

By effectively incorporating costs and developing solid performance measurements, we can acheive credible green building arguments (as well as improving the performance of the buildings themselves) which will give the green building movement credibility in an age of skepticism. 

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Comments (3) Read through and enter the discussion with the form at the end
Dave Garrett - March 10, 2009 12:43 PM

I like your posting and totally agree that more measurement would lead to more credibility. Most of the tracking metrics you list in #3 are great measures that would work well, but there are a couple I would take issue with. I think that vehicle miles traveled by occupants would be really hard to nail down and occupant satisfaction is too subjective and not closely related enough to energy efficiency.

In the end, the issue (from a developer perspective) is that RE developers are not seeing the rent increases they want from these investments. Perhaps its a question of measuring the right things AND figuring out how to sell the overall long-term cost reductions to tenants.

Geary Morris - March 10, 2009 12:48 PM

I agree completely. No matter what type of Energy source is used on your building, be conventional or alternative, if that energy is leaking out of the building envelope, it has all been a waste.
Ratings, Scores, Platinum or Gold, mean nothing at all if the Building Does Not Perform!
All Buildings Must be tested and verified for tightness.
That is Cost Effective!

Mark Rabkin - March 10, 2009 12:51 PM

Shameless plug in #3 for the think tank. I love it.

For Dave - my response to developers is that we shouldn't ask them to raise rates for green buildings, we should find ways to help them reduce operating and overhead costs instead.

For example, take a building that rents at $20 a square foot and pays $17 a square foot in overhead. If you reduce the overhead to $15 a square foot, you could lease the space at $19 and make more money!


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