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Sustainable Construction: Analysis of Its Costs and Financial Benefits

Authors:
International Journal of Innovative Research in Engineering & Management (IJIREM)
ISSN: 2350-0557, Volume-3, Issue-6, November-2016
DOI: 10.21276/ijirem.2016.3.6.12
Copyright © 2016. Innovative Research Publications. All Rights Reserved 522
Sustainable Construction: Analysis of Its Costs and
Financial Benefits
V. Sumateja Reddy
Student of Architecture, IGBC Accredited Professional and GRIHA Certified Professional,
Andhra University, Andhra Pradesh, India
ABSTRACT
Buildings consume a significant amount of our natural
resources and have a wide range of environmental impacts.
These economical and environmental concerns are a key
driver behind the sustainable design movement. Selecting eco
friendly building materials and methods are one way to
minimize a building’s economical impact. In fact, energy
efficiency reductions in the construction and operation of
buildings, offers one of the most significant opportunities to
reduce financial burden to owners. The main objective of this
paper is illustrated how the sustainable or green buildings
benefits and impact on the stakeholder.
Keywords: Buildings, CO2, Green Buildings, Goals,
Economical Benefits
I. INTRODUCTION
Buildings including construction, operations and
deconstruction impacts, use approximately 15% of the
world’s fresh water resources, 40% of the world's energy
and produce approximately 30% of the world's greenhouse
gas emissions. The analyst forecast global market to grow
at a CAGR of 9.6% during the period 2016-2020.To
prevent the worst effects of global climate change and
minimize other negative environmental impacts, it is
therefore important to address the environmental impacts
of buildings.
Key financial benefits of new green construction
generally relate to lower operational costs, lower energy,
waste and water costs, lower maintenance costs, and
increased productivity and health. The latter, while
difficult to measure/ prove, have come to be regarded as
the holy grail of green building given that labor costs for
most businesses comprise the overwhelming majority of
costs. Building green also presents opportunities for
incentives to offset any higher initial (capital) costs and
may result in increased occupancy rates and rental rates,
insurance discounts and higher property value.
“Green” or “sustainable” buildings use key resources
like energy, water, materials, and land much more
efficiently than buildings that are simply built to code.
They also create healthier work, learning, and living
environments, with more natural light and cleaner air, and
contribute to improved employee and health, comfort, and
productivity. Sustainable buildings are cost-effective,
saving taxpayer dollars by reducing operations and
maintenance costs, as well as by lowering utility bills
Figure 3 Financial Benefits of Green Buildings Summary
of Findings (per sft ) Source: Capital E Analysis Category
Net Present Value Energy Savings $5.80
Emissions Savings $1.20
Water Savings $0.50
Operations and Maintenance Savings $8.50
Productivity and Health Benefits $36.90 to $55.30
Subtotal $52.90 to $71.30
Average Extra Cost of Building Green (-3.00 to -$5.00)
Total Net Benefit $50 to $65
II. GOALS OF GREEN BUILDINGS
The basic goal of green building is attractive,
comfortable, affordable shelter that does no harm to the
Earth in its manufacture, or its use or disposal. This
overarching goal is driven by four further goals:
1. Reducing impacts on the Earth from constructing
buildings and their materials
2. Reducing impacts which arise during occupancy
3. Reducing the impact of the structure at the end of its life
4. Creating a more desirable human experience
Figure 1: Goals of Green Buildings
Incresed
building
valuation
and ROI
Reduce
solid
waste
Conserve
natural
resource
Decrese
greenhouse
gasses
Enhance
occupent
health
Improve
air and
water
quality
Sustainable Construction: Analysis of Its Costs and Financial Benefits
Copyright © 2016. Innovative Research Publications. All Rights Reserved 523
III. TRIPLE BOTTOM-LINE BENEFITS
Green building is not a simple development trend; it
is an approach to building suited to the demands of its
time, whose relevance and importance will only continue
to increase. The benefits of green building are manifold,
and may be categorized along three fronts: environmental,
economic, and social.
Figure 2: Benefits of sustainable construction
1. Environmental Benefits like Emissions Reduction.
Water Conservation, Storm water Management,
Temperature Moderation and Waste Reduction.
2. Economic Benefits like Energy and Water Savings,
Increased Property Values, Decreased Infrastructure
Strain, Improved Employee Attendance, Increased
Employee Productivity, Sales Improvements,
Development of Local Talent Pool.
Table.1
Green building benefits (USGBC)
26% Less energy
30% Less Indore waste
50% Less solid waste
33% Less CO2 emission
30% Less water usage
3.Social Benefits like Improved Health, Improved Schools,
Healthier Lifestyles and Recreation.
IV. THE ECONOMICAL IMPACT OF BUILDINGS
It is generally recognized that buildings consumes large
amount of water, wood, energy and natural resources used
in the economy. Green buildings provide a potential
promising to help address a way of challenges facing
globally, such as:
The high cost of electric power.
Worsening electric grid constraints, with associated
power quality and availability problems.
Pending water shortage and waste disposal issues.
Growing concern over the cost of global warming.
The rising incidence of allergies and asthma,
especially in children.
The health and productivity of workers.
The effect of the physical school environment on
children’s abilities to learn and
Increasing expenses of maintaining and operating state
facilities over time.
According to the U.S. Environmental Protection
Agency and the USGBC, construction and operation of the
buildings results in the following consumption of
resources:
72% of electricity resources
39% of total energy used
17% fresh water flows and
Raw materials
As well, construction and operation of all buildings results
in the following generation of waste materials:
25%-40% of municipal solid waste
50% of CFCs
35% of CO2 emission and
Other air emissions and water discharge
A building is green in the true sense only when all the
processes related to the building, throughout its life cycle,
such as site planning, design, service design, construction,
and operation, are environmental friendly and economical
V. THE MAJOR FINALCIAL BENEFITS OF
BUILDING GREEN FOR NEW CNSTRUCTION
According to the Construction Marketplace
SmartMarket Report, commercial green buildings have
demonstrated an 8-9% decrease in operating cost, a 7.5%
increase in building value and a 6.6% return on investment
improvement. According to the Greening of Corporate
America SmartMarket Report, commercial green buildings
experience a 3.5% occupancy ratio increase and a 3% rent
ratio increase. In a comparison of ENERGY STAR
buildings and market comparables in the first quarter of
2008, ENERGY STAR buildings achieved 3.6% higher
occupancy rates. Green building is the practice of building
or renovating structures to be energy and resource efficient
throughout a building's life-cycle from sitting to design,
construction, operation, maintenance, renovation and
deconstruction. Green buildings use natural resources
efficiently and fewer in quantity and reduce wastage, this
leads to lower both utility bills and impact on the
environment. These benefits range from being fairly
predictable (energy, waste, and water savings) to relatively
uncertain (productivity/health benefits). Energy and water
International Journal of Innovative Research in Engineering & Management (IJIREM)
Copyright © 2016. Innovative Research Publications. All Rights Reserved
savings can be predicted with reasonable precision,
measured, and monitored over time. In contra
productivity and health gains are much less precisely
understood and far harder to predict with accuracy.
main benefits of building green are included the following:
Figure 3: Economic
al benefits of green buildings
1. Reduce energy consumption
2. Decreased use of natural resources
3. Lower first costs
4. Lower churn cost
5. Annual water cost saving
6. Lower greenhouse gas emissions and air pollution
7. Improve attendance and i
mprove productivity
8. Lower
costs of facility maintenance and repair
9. Other benefits to the building owner and
10. Indirect benefits to society
1. Reduce energy consumption
Energy is a substantial and
widely recognized cost of building operations that can be
reduced through energy
efficiency and related measures
that are part of green building design.
Green building
energy savings primarily come from reduced electricity
purchases and secondarily from reduced peak energy
demand. On average, green buildings are 28% more
efficient than
conventional buildings and generate 2% of
their power on-site from photovoltaic’s
(PV).
On average 25-
30% more energy efficient
;Characterized by even lower
electricity peak consumption
;More likely to gen
erate renewable energy on
likely to purchase grid power generated from renewable
energy sources r
educe heating, cooling, and lighting loads
through climate-
responsive design and conservation
practices
Employ renewable energy sources such as
lighting, passive solar heating,
photovoltaic’s,
geothermal, and groundwater cooling
Financial
benefits
energy
consumptio
n
natural
resources
lower churn
cost
lower first
cost
reduce water
consumption
resale
value
reduce
material
use
lower
greenhouse
gas
International Journal of Innovative Research in Engineering & Management (IJIREM)
ISSN: 2350-0557, Volume
-
DOI:
10.21276/ijirem.2016.3.6.1
Copyright © 2016. Innovative Research Publications. All Rights Reserved
savings can be predicted with reasonable precision,
measured, and monitored over time. In contra
st,
productivity and health gains are much less precisely
understood and far harder to predict with accuracy.
The
main benefits of building green are included the following:
al benefits of green buildings
6. Lower greenhouse gas emissions and air pollution
mprove productivity
costs of facility maintenance and repair
Energy is a substantial and
widely recognized cost of building operations that can be
efficiency and related measures
Green building
energy savings primarily come from reduced electricity
purchases and secondarily from reduced peak energy
demand. On average, green buildings are 28% more
conventional buildings and generate 2% of
(PV).
30% more energy efficient
electricity peak consumption
erate renewable energy on
-site; More
likely to purchase grid power generated from renewable
educe heating, cooling, and lighting loads
responsive design and conservation
Employ renewable energy sources such as
day
photovoltaic’s,
Specify efficient HVAC
and
consider part-
load conditions and utility interface
requirements
Optimize building performance by employing energy
modeling programs and optimize system
strategies by using occupancy
other air quality alarms
Monitor project performance through a policy
of commissioning
, metering, annual reporting, and
periodic re-commissioning and
Integrate water saving technologies to
burden of providing potable water.
2.
Decreased use of natural resources
Green buildings also utilize fewer materials, through
efficient design and elimination of unnecessary finish
materials.
3. Lower first costs
Sustainable design team inclu
ding the owners; designing
team; landscape designers; O&M staff; health, safety and
security experts; the green contractor; cost consultants;
occupant representatives needs work together from the
start, seeking an integrated design. The team develops
inno
vative solutions that meet energy, environmental, and
social goals while keeping cost
within
4. Lower churn cost
M
any sustainable buildings include a raised system that
creates an under floor plenum used for HVAC air
distribution
modular partitions, modular work stations
modular power cabling and data systems
reduce churn costs.
5. Annual water cost saving
Green building encourages innovative water
strategies that help projects use water wisely. Project
can follow an integrated process to begin assessing
existing water resources, opportunities for reducing water
demand, and alternative water supplies. Effective
strategies include:
Figure 4: Water cost saving
lower churn
cost
Water cost saving
recycling
rainwat
er
harvesti
ng
high
efficiency
plumbing
International Journal of Innovative Research in Engineering & Management (IJIREM)
-
3, Issue-6, November-2016
10.21276/ijirem.2016.3.6.1
2
524
and
lighting systems that
load conditions and utility interface
Optimize building performance by employing energy
modeling programs and optimize system
control
sensors CO
2
sensors and
Monitor project performance through a policy
, metering, annual reporting, and
commissioning and
Integrate water saving technologies to
reduce the energy
burden of providing potable water.
Decreased use of natural resources
Green buildings also utilize fewer materials, through
efficient design and elimination of unnecessary finish
ding the owners; designing
team; landscape designers; O&M staff; health, safety and
security experts; the green contractor; cost consultants;
occupant representatives needs work together from the
start, seeking an integrated design. The team develops
vative solutions that meet energy, environmental, and
within
budget.
any sustainable buildings include a raised system that
creates an under floor plenum used for HVAC air
modular partitions, modular work stations
and
modular power cabling and data systems
can significantly
Green building encourages innovative water
-saving
strategies that help projects use water wisely. Project
teams
can follow an integrated process to begin assessing
existing water resources, opportunities for reducing water
demand, and alternative water supplies. Effective
Figure 4: Water cost saving
Water cost saving
high
efficiency
plumbing
Sustainable Construction: Analysis of Its Costs and Financial Benefits
Copyright © 2016. Innovative Research Publications. All Rights Reserved 525
Switch to high-efficiency plumbing fixtures like ultra-
low-flow showerheads and faucets, dual flush toilets
and no-water urinals.
Install sub meters.
Choose native and adapted plants
Use xeriscaping.
Select efficient irrigation technologies
Water recycling or reuse measures and
Methods reduce water use in HVAC systems
6. Lower greenhouse gas emissions and air pollution one set
of environmental benefits from greening buildings that can
be fairly easily estimated is a lower air pollutant and CO2
emissions. Emissions are reduced by decreasing energy
use through energy-efficient design, use of
renewable energy and HVAC system.
Table 2: Emission coefficients for energy
consumption in commercial buildings
SO
2
NO
CO
2
Natural Gas Negligible 0.08 15.8
Electricity 0.97 0.45 55.62
Sustainable design principles can significantly reduce
these impacts
7. Lower absenteeism and improve productivity
Sustainable design futures improve performance in
attention and concentration level; improve performance on
logical thinking tasks; improve organizational level
performance; self rating of productivity.
8. Lower costs of facility maintenance and repair
Sustainable design aim s to increase durability and ease
of maintenance.
Using durable, long lasting can decrease
maintenance cost and repairs
Low VOC paints offers durability
Using sustainable landscaping techniques
decrease cost and
Managing storm water with natural methods
9. Other benefits to the building owner
Better worker retention and recruitment
Lower cost of dealing with complaints
Decreased risk, liability, and insurance rates
Greater building longevity and
Better resale value
10. Indirect benefits to society- The value t society of
environmental preservation and pollution reduction in
municipal infrastructure requirements, local and
regional economic growth
Figure 5: Financial benefits
VI. CONCLUSION
Green building is the practice of building or
renovating structures to be energy and resource efficient
throughout a building's life-cycle from sitting to design,
construction, operation, maintenance, renovation and
deconstruction. The financial benefits of green buildings
include lower energy, waste disposal, and water costs,
lower environmental and emissions costs, lower operations
and maintenance costs, and savings from increased
productivity and health. This paper concludes that how the
sustainable construction is benefit to all stakeholders.
REFERENCE
[1] http://www.usgbc.org/articles/green-building-facts.
[2] usgbc economic impact study sept,2015
[3] gbcsa.org.za/greenstar/greenstar.php.
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[7]http://www.legrand.com/EN/green-building-
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Sustainable
Planning
Design &
construction
energy
conservation
Green
materials
Finalcial
benefits
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Purpose The dearth of green standards (GS) in sub-Saharan Africa is alarming and the green cost premiums (GCP) in seeking certification in emerging markets are scanty. This paper studied the Building Energy-Efficiency Code of Nigeria (BEEC) and estimated the potential GCPs associated with the various energy-efficiency ratings. Design/methodology/approach The study retrofitted 150 conventional residential bungalow and maisonette buildings using BEEC's energy-efficiency interventions and performed analytical estimating of the retrofitted designs. The mean cost premium associated with each energy-efficiency intervention is presented as well as their financial benefits and payback periods. The benefits are achievable financial-savings due to a reduction in energy consumption and savings in electricity payment estimated from the average energy demands of each building. An independent t -test was further conducted to determine the cost differential between energy-efficient design (ED) and conventional design over a five-year period. Findings The potential GCPs and their payback periods are actually less than feared. The study showed that less than 5% and 21% extra funding would be required to achieve 1 to 4-Star and 5-Star energy-efficiency ratings involving passive design interventions and photovoltaic systems. Passive and active design interventions produced a financial savings of $8.08/m ² in electricity payment and $2.84/m ² per annum in energy consumption reduction. The financial-savings ($10.92/m ² ) was objective to pay-off the GCPs in less than four years. The independent t -test analysis showed the cost of ED is more economical after four years into the project lifecycle. Originality/value The research provides cost benchmarks for navigating cost planning and budgetary decisions during ED implementation and births a departure point for advancing energy-efficient construction in developing markets from the rational economic decision perspective.
Article
Purpose The pertinent information about green buildings (GB) is laden with cost misperceptions (CM) that are paraded into adoption decisions without factual clarifications. The unsupported beliefs are fundamental to the disparaging low adoption of related technologies globally. The purpose of this paper is to explore the causes of CMs among construction stakeholders and why is it difficult to discredit this information? Design/methodology/approach The research adopted two-tier approaches involving a Delphi study and a questionnaire survey. Construction stakeholders and GB experts, totalling 415 were surveyed, while 12 professionals participated in the Delphi study. This study analysed data from 254 valid responses using Factor Analysis, Fussy Set Theory and Kruskal Wallis test to explain why CMs are prevalent. Findings The causes of CMs converge towards seven principal factors including low knowledge of GB practices, non-familiarity with performance metrics, inadequate evidence, poor-risk perceptions and reliance on the costs of exemplar projects. The results were explained using gaps in cost management, knowledge and sustainability accounting to show the critical improvements that can benefit GB adoption. Practical implications CMs are not abstract but develop from patterns that can be detected and understood within a specific context. Growing GB projects within a region would improve cost information, sustainability accounting, cost management and quality of evidence. GB cost information paraded into adoption decision processes are overestimated and overvalued beliefs of their financial implications. Tackling the important sources of CMs in the study is appropriate to improve rational decision-making aiding GB adoption. Originality/value This study untied causes of negative dispositions towards the cost of GB that distort stakeholders’ adoption decisions.
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Purpose Across the globe, the dearth of certainty about the cost of sustainable buildings (SBs) remains a critical disincentive to their adoption. This study explored the factually incorrect knowledge about the cost of SBs and their implications on adoption. Design/methodology/approach The study adopted sequenced mixed qualitative and quantitative approaches involving a literature review, Delphi study and survey. Semi-structured and structured self-study questionnaires were administered to a random sample of green building experts, researchers and registered construction professionals with deep knowledge of SB. The dataset from 254 stakeholders was analysed for commonality, principal components and critical misperceptions using multivariate approaches. Findings The predominant misperceptions in the study linked low adoption of SB to cost premium, portray cost premium as a property of luxury sustainable features and suggest related practices are suitable for exemplary projects only. The critical misperceptions produced various misinterpretations that inhibit the adoption of SB through the dearth of policies, increased complexities and inflation of budget to curb perceived risks. Practical implications The study buttressed the imperative to improve cost information, knowledge, skills and stakeholders' risk perceptions to increase SB adoption. The results provide insight into the regional misperceptions and knowledge gaps that could explain the low adoption of SB in a typical emerging green market. Originality/value The study showed that the prevalent knowledge about the cost of SB among construction stakeholders are unsupported beliefs and directs attention to emerging issues critical to SBs' adoption in emerging markets.
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The main research objective was establishing a simple but reliable methodology for the building design stage that would yield environmentally optimal buildings. A three-step methodology is proposed: (1) design variable grouping—four distinct groups were recognized according to their stage of major influence (production and construction, operational energy, maintenance to demolition, and an Integrated Group relevant to several life cycle stages), (2) generating the within group optimization methodology, and (3) integration.This paper presents the methodology developed for the grouping procedure, and its testing and application on a simple generic office module. Sensitivity analysis highlights the significance of electricity production fuel.
A methodology for design of environmentally optimal buildings by variable grouping. Building and Environment) The Costs and Financial Benefits of Green Buildings: A Report to California's Sustainable Building Task Force. Retrieved from: h
  • S Pushkar
  • R Becker
  • A Katz
Pushkar, S., Becker, R., & Katz, A.(2005). A methodology for design of environmentally optimal buildings by variable grouping. Building and Environment [12] Kats, Greg (2003, October) The Costs and Financial Benefits of Green Buildings: A Report to California's Sustainable Building Task Force. Retrieved from: h"p://www.calrecycle.ca.gov/greenbuilding/design/costben efit/report.pdf