The Big Picture with Erin Brereton: Green Building Is Popular, Profitable

It’s clear California supports green building.

Starting Nov. 1, all new San Francisco buildings will be required to meet the city’s new green building standards, which were developed by the Green Building Task Force.

Two weeks ago, San Jose, Calif., adopted mandatory green building standards for all new construction.

The state of California also has general green building standards designed to increase energy and water efficiency, material conservation and air quality.

The currently voluntary building code alterations—which Governor Arnold Schwarzenegger called a move “to ensure that when we break ground on all new buildings … we are promoting green building and energy-efficient new technologies”—will affect government buildings, low-rise residential buildings, schools and more.

And they won’t be voluntary forever: The state’s green building code changes will become mandatory in 2010.

That’s good news—because two recently released reports suggest green building may also give California’s economy a boost.

•    Building breaks. Starting in the 1970s, the state adopted building codes and home appliance standards to cut electricity use.

The efforts saved Californians $56 billion between 1972 and 2006 and created about 1.5 million jobs, according to a recent UC Berkley study.

•    Citizen cuts. Personal energy consumption reduction is also helping the state, according to a study by Next 10, a California-based nonprofit environmental organization.

Tough mandates requiring Californians to reduce their carbon footprints and use more homegrown renewable energy will increase the state’s economy by $76 billion by 2020, the Los Angeles Times reports.

Much has been made of green building’s extra expense.

While it’s true green building adds to the upfront cost, it isn’t much—green building currently adds about 5 percent or less to a project, according to estimates from the World Business Council for Sustainable Development.

Still, the extra expense of building green means that many developers and clients continue see it as a luxury.

Despite the fact that half of Britain’s carbon emissions are linked to its buildings, according to government figures, a recent study of more than 100 U.K. real estate directors found that environmental and energy efficiency concerns had dropped to the bottom of the agenda.

Sustainability came in at No. 10 on a list of the 10 most important building planning factors, the Financial Times reported in early October.

No. 10? Really? Just about three months ago, the San Jose Mercury News was calling green building a clever and valuable marketing tool, saying that builders were "trying to woo customers with green building techniques and energy-saving features."

A National Association of Home Builders study found that 90 percent of homebuilders were employing green ideas in 2007, according to the Economist.

However, homebuilding and sales have struggled in the past year.

And, starting in summer, talk of a recession began picking up speed, due to the slow economy and the rising food and energy costs that tore into household spending.

Spending anything extra—even 5 percent—may be a hard argument for builders to make these days.

Luckily, green enthusiasts and the building industry now have some extra information to prove that green building does offer advantages beyond basic environmental responsibility.

Because, as it turns out, green isn’t just good for the earth—it’s also good for the economy.