Sustainable Building Technical Manual - Etn-presco.net

CHAPTER 1The Economics ofGreen BuildingsFew realize that construction, including new construction and building renovation,constitutes the nation’s largest manufacturing activity. 1 Over 70 percent of this effort isfocused on residential, commercial, industrial, and institutional buildings; the remaining30 percent on public works. Construction contributes $800 billion to the economy, or 13percent of the Gross Domestic Product (GDP), and provides nearly 10 million professionaland trade jobs. More than 50 percent of the nation’s reproducible wealth is invested inconstructed facilities. 2 Because of the building industry’s significant impact on thenational economy, even modest changes that promote resource efficiency in buildingconstruction and operations can make major contributions to economic prosperity andenvironmental improvement.AuthorDavid A. GottfriedSeveral parties—including owners, tenants, and the general public—bear the cost ofbuilding construction. The main direct cost expenditures fall within the categories ofbuilding construction, renovation, operation, and building-related infrastructure.Indirect cost expenditures stem from building-related occupant health and productivityproblems as well as external costs such as air and water pollution, waste generation, andhabitat destruction.A building’s “life” spans its planning; its design, construction and operation; and its ultimatereuse or demolition. Often, the entity responsible for design, construction, andinitial financing of a building is different from those operating the building, meeting itsoperational expenses, and paying employees’ salaries and benefits. However, the decisionsmade at the first phase of building design and construction can significantly affectthe costs and efficiencies of later phases.Viewed over a 30-year period, initial building costs account for approximately justtwo percent of the total, while operations and maintenance costs equal six percent,and personnel costs equal 92 percent. 3 Recent studies have shown that green buildingmeasures taken during construction or renovation can result in significant buildingo p e r ational savings, as well as increases in employee productivity. Therefore, buildingrelatedcosts are best revealed and understood when they are analyzed over the lifespan of a building.PART I: ECONOMICS AND ENVIRONMENT I.3