Green Buildings and Energy Efficiency

Fangzhu Zhang & Philip Cooke, Centre for Advanced Studies, Cardiff University,
UK, email: zhangf4@cardiff.ac.uk.
1. Introduction:
Today, buildings worldwide account for up to 40% of total end-use energy. The US,
OECD/ Europe and Russia consume most of their energy in the building sector (about
40%) (Figure 1) (IEA, 2008). There is over 50% saving potential in the building
sector and thus it is considered as a potential sector to meet the challenges of global
energy and climate change. Due to energy-intensive industrial production in China,
the building sector only accounts for 19% of energy demand. But the share in China
will grow swiftly with its economic development and urbanisation. The building
sector is a driver of the world economy. For example, it contributed 9% of GDP in
China and the EU. According to a report by McGraw-Hill Construction, the green
building market in both the residential and non-residential sectors was predicted to
increase from $36 bn in 2009 to $60 bn in 2010 and in a range of $96-$140 bn by
2013. There is a significant opportunity for those entering this market (McGraw-Hill
Construction, 2008).

Figure 1: Global energy demand by sector in 2005 (source: IEA, 2008)

Building heating and cooling are the most energy-intensive activities, followed by
electricity use for lighting and appliances (Harvey, 2009). Greenhouse gas emissions
from buildings energy use significantly exceed those from transportation. The
increasing demand for residential and commercial building spaces in developing
countries will further push up energy consumption from building. It was predicted by
International Panel on Climate Change (IPCC) that CO2 emissions from buildings
(including through the use of electricity) could increase from 8.6 billion tonnes in
2004 to 15.6 in 2030 under a high growth scenario (Figure 2) (Levine et al., 2007).
Developing countries will contribute substantial increases in CO2 from the building
sector. But such a building boom also offers an opportunity to commercialise energyefficient technologies to reduce CO2 emission. Improved efficiency in the building
sector and de-carbonising the power sector could offer significant potential emissions
reduction.

Figure 2. CO2 emissions from building sector under high growth scenario (including
the use of electricity). (Source: Levine et al., 2007).
Much effort has sought to apply renewable materials and renewable energy resources
in buildings in order to use energy efficiently and to reduce the carbon footprint.
Reducing energy use at lower costs in buildings will offer greater potential to meet
CO2 reduction targets than any other sectors. The energy used for heating and cooling
can be reduced through ventilation, heat sinks, the use of solar panel and improved
insulation. Electricity can be reduced through improved LED lighting or increased use
of natural lighting and the use of energy-efficient appliances. Integrated building
design and the modification of building shapes, orientation and materials can also
reduce energy use (UNEP, 2008). It was reported that good practice regarding green
buildings can reduce greenhouse gas emissions by as much as 70-80% (WBCSD,
2009). The main issues for green building include raising global energy awareness,
changing consumer behaviour, setting building energy codes and evolving energyefficiency design and technologies.
2. Building industry
2.1 Urbanisation
With economic development, total global energy consumption is dramatically
increasing over decades. Total energy use in buildings depends on population size and
density, and energy efficiency. Rising standards of living result in more energy
services required for heating, cooling, lighting and communicating. Aging populations
and changing life styles lead to more single-person households. Urbanisation,
especially in developing countries, demands higher-rise buildings in urban areas.
Energy use in high-rise buildings is more efficient than that in conventional buildings,
especially than detached houses in the developed countries. But the impact of global
urbanisation on energy consumption could be reversed if the emerging prosperity
encourages people to leave city centres and live in a countryside life style, commut
daily to the city centre, clearly results in increases of energy use not only in the
buildings but also transport. The global urban population is expected to grow from
47% of the total in 2000 to 70% in 2050. Figure 3 shows the rising urban population
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trend in developing countries like China, India and Brazil. The urban populations of
China and India are continuing to grow rapidly to 2050, reaching 1 billion in China
and 0.9 billion in India, respectively. By 2050, it is predicted that about 73% of the
Chinese population will be urban, increasing from 40% in 2005 (WBCSD, 2009).
Brazils urbanisation rate is beginning to reach saturation level and it is a much more
urban country than others. The construction boom, especially in China, is increasing
building energy demand dramatically with economic development and living standard
improvement.

Figure 3. The rising urban population in developing countries (China, India, Brazil)
(WBCSD, 2009).
2.2. Building types: Commercial and residential buildings
In the property market, there are two types of buildings: commercial and residential
buildings. The total existing building floors in 2003 was highest in China, as shown in
Figure 4a. China has a higher percentage of residential space and much less floor
space per capita than other countries like the US (Figure 4b) (WBSCD, 2007). Energy
use for building in the US is significantly higher than in the other countries and is
continuing increasing to Year 2030 (Figure 5). Energy consumption in China will
grow rapidly to approach European levels by 2030. During this period, commercial
building energy use in China will increase more than double. Energy consumption in
Japan will remain the same level as now and only increase moderately in Western
Europe. The consumption of Brazil is growing too, but not as fast as India or China.

a
b
Figure 4: Existing building floor spaces (a) and average floor space per person (b)
(Source: WBCSD, 2007)

Figure 5. Building energy projection by regions in 2003 and 2030 (Source: IEA,
2008).
2.3 Energy use by end-use
Energy consumption in residential building was about 82 EJ in 2005 and the
associated CO2 emissions were 4.5 Gt CO2, including indirect emissions from
electricity use (IEA, 2008). Energy consumption includes space and water heating,
cooling, lighting and the use of appliances. As shown Figure 6, space heating is the
most important energy use in residential buildings, accounting for over 50% of total
end energy use. Although energy consumption by space heating has increased due to
urbanisation and increased floor space over the years, its share of total energy
consumption reduced from 58% in 1990 to 53% in 2005 because of higher energy
efficiency of space heating equipment and improved building insulation.

Figure 6. Household energy use by end-use, among the surveyed countries of IEA 19.
(Source: IEA, 2008)

Electricity used for household appliances grew from 1990 to 2005. It accounts for
21% of total residential building energy consumption in 2005 (IEA, 2008). With
economic development and change of life styles, more appliances are used, including
large appliances such as refrigerators, freezers, washing machines, dishwashers and
televisions, and a wide range of small appliances like PC, telephone and other home
electronics. In some countries, air conditioning is one of the key household appliances
now. In many IEA countries, regulation policies for appliance energy efficiency have
shown significant on improvement in appliance unit energy consumption. In contrast,
the share of water heating fell from 17% in 1990 to 16% in 2005. Lighting and
cooking remain at the same level, accounting for 5% of total energy consumption, not
much difference during the period.
Energy use differs widely by home size and building type. Average home size is
200m2 in the US and only 40 m2 in India (WBCSD, 2009). Average household energy
consumption varies due to culture, climate and wealth (Figure 7). Space heating is
dominant in Europe, while water heating is the main energy use in Japan. Lighting
and appliances, water heating and space heating share similar portions (28-33%) of
household energy use in China, while cooking is the main energy use in India,
especially in rural India, where many houses have no electricity access and biomass is
the main energy source for cooking. With the rising wealth in developing countries,
more energy will be used for electric appliances to meet the increasing living quality.

Figure 7. Global differences in home size and energy use (Source: WBCSD, 2009).

2.4 Building energy by sources

Electricity and natural gas are the main energy commodities used in OECD countries,
accounting for over 70% of total energy demand in 2005, while renewable (mostly
traditional biomass) and coal contributed much higher shares of energy consumption
in China, India and South Africa than developed countries (Figure 8), but the share is
decreasing due to inefficient traditional biomass use. Development and urbanisation
are associated with increased electricity use, which significantly increased energy
demand in China and India during the past years (IEA, 2008). District heating remains
the dominant energy use in Russia with a share of 48%. Total household energy use is
increasing globally, except for Russia from 1990 to 2005. More efficient renewable
energy resources are sought to meet the increased energy demand.

Figure 8. Household energy use by energy commodity (Source: IEA, 2008)

3. Energy efficiency in buildings
More than 40% CO2 emissions in developed countries come from heating, cooling
and powering buildings. It was estimated that cutting UK building emissions by 25%
would have a similar impact to take every car off the road in the UK. For existing
buildings, good insulation, efficient boiler, window glazing and recovering heat from
ventilation systems are efficient ways to reduce emissions. The benefits of energy
efficiency in building are summarised as following:
Energy efficiency in buildings is compelling, cost effective and can help
consumers to save money in the long term
Energy efficiency in buildings help to meet energy targets and resource energy
shortage
Energy efficiency is good for industry and creates new jobs for companies.

3.1 Building material and technologies

Siemens has proven with its energy efficiency solutions that every building has
already today an energy efficiency improvement potential of 20-30% on average
(www.siemens.com). This can be achieved by optimizing the building management
system, lighting, heating and cooling system, water and energy distribution and many
more areas (Griggs, 2009). Energy-efficient buildings with guaranteed lower energy
costs can be operated at no cost for the customer, because the savings pay for the
investment. Siemens has realised more than 1000 building projects worldwide with
guaranteed savings of around
2 billion as well as CO2 reductions of 1.4 million tons.
The examples of energy-efficient technologies are listed as the following:
3.1.1 Energy generation:
Solar panels can be attached to the roofs of building and mini-wind turbines can be
attached to walls to generate electricity from natural resources. Biomass boilers can
provide heating and hot waters. More renewable resources are explored for generating
energy widely (more detail, see GRIEG review report by Zhang & Cooke, 2008).
3.1.2 Heating/cooling technology:
Most of energy use in building goes to heating, ventilation and air conditioning
(HVAC) cooling, accounting for 55% of energy use in residential buildings and 35%
in commercial buildings (Scott, 2009). Efficient boilers and air conditioners are
required to be properly maintained to keep them efficient. The heat generated from
computers and other electronic appliances can be recycled to heat the building if the
rooms are properly designed. Heat pumps and heat exchangers can transfer heat from
IT server rooms to other parts of a building or to heat up water.
3.1.3 Insulation:
Insulation is the first step to measure for efficient energy use of building. Investing a
new technology boiler is not good if the insulation issue is not checked. The heat from
the expensive kit will be wasted. Roof insulation is particularly important for
residential building. Over a quarter of a homes heat escapes through the roof. A
green roof is the one of green designs to supply green-effect pleasant views. The grass
carpet on the roof not only insulates the building but also absorbs water and helps to
avoid flooding. Glass technology is another area to improve building insulation.
Double glazing or even triple glazing windows keep the heat in buildings. Smart
windows allow light through but block infrared and ultraviolet radiation that produces
heat. More advanced electronic windows can automatically turn darker and block
sunlight in a response to sunshine.
3.1.4 Lighting:
Lighting accounts for 4% of energy consumption in houses and up to 30% of energy
use in commercial buildings (Scott, 2009). Light control and smart meters are being
promoted as good practice to reduce energy use in buildings. Light control consists of
a network of sensors that can turn off lights when no people are present. Smart meters
can monitor where and how energy is used in the building, and thus helps to identify
the solution to improve energy efficiency. LED (Light emitting diode) lighting has
grown from use in mobile phone screens to backlight for notebook, PC and now to
illuminate TV and monitor. It promises to share the global lighting market. LED
lighting offers better brightness and contrast, energy savings, ten times as efficient as

traditional bulbs. The global LED market is predicted to reach $14 billion in 2013, as
shown in Figure 9 (Nuttall, 2010). Major players include GE, Philips, Siemens and
Cree. The Silicon valley-based company, Bridgelux, has made technology
improvement to apply LEDs for home, street and retail lighting. It is estimated that
about 20% of world electricity is used to power lighting. It will reduce electricity
demand by 75% if use LED lighting (Nuttall, 2010). Cities like San Francisco and
New York installed LED street lamps and retails like Walmart and Starbucks are
replacing conventional bulbs with LED bulbs to cut energy consumption. A number
of countries are regulating incandescent light bulbs into obsolescence, with the EU to
the forefront.

Figure 9. Global LED market (Data source: iSupply)

According to an IEA report, lighting accounts for 19% the worlds electricity
consumption and produces 1.9Gt of CO2 annually (Tomlinson, 2009). LED lighting
and smart-control are more efficient than traditional lighting technologies. However,
they are more expensive than conventional lamps. The market transformation from
conventional lighting to LEDs requires financial support from government to support
the LED market. China is the first country to establish a large LED programme,
installing 210,000 LED street lamps in 21 cities in China. If outdoor lighting
worldwide were completely to take up LED and smart control technologies, the
energy saving would be enough to charge up 60 million plug-in hybrid cars annually
(Tomlinson, 2009).
3.2 Integrated building design
Today, it is possible to apply green materials and advanced technologies in the
building design projects to consume less energy. Building design for green buildings
involves many professionals across different areas. Many factors need to be taken into
account, including climate, building share, comfort levels, material and systems, and
health. Figure 10 illustrates the interrelationships among these four main influences
on energy efficiency and the key energy consumers. It shows that energy use are
affected by many factors, for example, four factors including design, building
envelope, equipment and infrastructure all have impacts on the energy needs for
heating, ventilation and air conditioning (HVAC). HVAC systems consume the most

energy, accounting for 37% of total energy use in buildings. Integrated building
design requires all participants including owners, architects, engineers and others
involve at the early phase of the building project. Building energy performance
depends not only on the performance of an individual technology but also on how
these perform as an integrated system. The building envelope is the starting point of
energy efficient buildings, interacting with HAVC system and lighting, while design
will bring together all elements influences on energy efficiency (WBSCD, 2007).

Figure 10. Design impacts on energy use (Source: WBCSD, 2007)

An integrated design process involves all relevant participants from the start.
Integration of both passive and active measures is crucial to effective building design
and construction. Figure 11 indicates that integrated design approaches will achieve
the best performance in terms of energy saving. Integrated design approaches could
reduce energy use by as much as 72% (WBSCD, 2009). But projects could be more
expensive than individual solutions and thus require financial support and incentives
from government regulation to reinforce this holistic approach.

Figure 11. Integrated building design as best solution to reduce energy consumption
(Source: WBSCD, 2009).

3.3 Energy efficient buildings

3.3.1 Zero-energy or Zero-carbon new buildings
Zero-energy building, net zero energy building or Zero-carbon building is a
general term applied to a buildings use with zero net energy consumption and zero
carbon emissions annually. As pointed out before, much building energy is wasted
because of poor design, inadequate technology and inappropriate practices. The
concept of Zero-energy building has been introduced recently to focus on energy
consumption. The carbon emissions generated from on-site or off-site fossil fuel uses
are balanced by the amount of on-site renewable energy production, so it is also called
as zero-carbon building. Zero-energy buildings are usually built with significant
energy-saving features such as building orientation, solar panel roofs and super
insulated HAVC system. The goal of green building is to increase the efficiency of
resource use (including energy, water and materials) and reduce the buildings
negative impacts on the environment during the buildings lifecycle. Zero energy
buildings achieve one key green building goal of reducing energy use and greenhouse
gas emissions. They may or may not be considered green in all areas such as
reducing waste etc, but they reduce ecological impact. Meanwhile, many green
building certification programs worldwide do not require a building to have net zero
energy use, only require a building to reduce energy use below the standard limit by
law.
The UK government made its commitment to be the first in the world to require zero
carbon homes as a law from 2016. Energy efficiency standard will be required of new
homes. For example, Barratt, one of leading house builder plans to build 195 zerocarbon homes on a disused hospital site near Bristol (Fickling, 2009). The labour
government invested an extra 3.2 million to boost long-term research into building
design and energy efficiency. The research tests new technologies and material to
provide valuable evidence for future standards and how to drive down energy bills. To
encourage zero carbon homes, an exemption from stamp duty land tax is planned. In
Wales, the plan of zero carbon building as the standard for all new homes is to be met
earlier in 2011. Some cases of green buildings are listed as followed:
Case study 1: Senedd,-the green building for the National Assembly for Wales, UK
The home of the national Assembly for Wales, the Senedd building, costs some 67
million and was completed in 2006. It has won important award for sustainable
construction to recognize the green principles within its design (BBC, 2009). It has
low environmental impact achieved through the use of renewable and low energy
solutions to generate heat and maintain the building. For example, the roof plane
around the top building turns down to form a funnel into the debating chamber,
allowing ventilation and natural light. Natural ventilation is used in nearly all areas of
the building. Offices do not have air conditioning as outlets in the floor push cool air
into the rooms. The earth heat exchange system uses the earth as both a heat source
and a heat sink. A biomass boiler fuelled by local wood chips helps to reduce carbondioxide emission. Rainwater is collected on to roof and used to supply the toilets and
window washing.

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Case study 2: Vstra Hamnen (Western Harbour), Malm, Sweden

Swedens first stage housing estate of the Western Harbour was developed in 2001.
The houses are designed as sustainable buildings with well-insulated and highefficiency electrical equipment to minimise heat and electricity consumption, using
100% renewable energy supply. The waste management system is designed to use
waste and sewage as an energy source. Each unit is designed to use no more than
105kW/m2/year, including household electricity.
Case study 3: Googleplex, California, USA
In the US, zero energy building research is supported by the US Department of
Energy (DOE) Building America Program. DOE plans to invest a $40 million fund
during 2008-2012 to develop net-zero-energy homes that consume 50% to 70% less
energy than conventional homes (DOE, 2007). Googleplex, Googles headquarters in
Mountain View, California is an example of a zero-energy commercial building with
a 1.6 megawatt photovoltaic campus-wide renewable power system. Google has
developed advanced technology for major reductions in computer-server energy
consumption which is becoming a part of zero-energy commercial building design.
Case study 4: Pearl River Tower, Guangzhou, China
In China, one example of zero-energy office building is the 71-story Pearl River
Tower, designed by Skidmore, Owings & Merrill LLP (SOM) in China (SOM, 2010).
It will be used as headquarters of Guangdong Tobacco Corporation and became as
one of the most energy-efficient skyscrapers in the world when it is completed in
2010. It uses both modest energy efficiency, and a big distributed renewable energy
generation from both solar and wind. The 2.3-million square-foot tower redefines
sustainable design by incorporating the latest sustainable technology and engineering
advancements, including wind turbines, solar panels, double skin curtain wall, chilled
ceiling system, under floor ventilation air, and daylight harvesting. The tower has
received economic support from government subsidies that support the application of
renewable energy technologies.
3.3.2 Passivhaus or Passive house in EU
Passive house (Passivhaus in German) refers to energy efficiency buildings mainly
built in Europe. It requires little energy for space heating or cooling. Passive houses
can be warmed not only by the sun, but also by the heat from appliances and even
from occupants bodies (Rosenthal, 2008). Up to date, about 15,000 to 20,000 passive
houses have been built worldwide, most of them in German-speaking countries or
Scandinavia, including residential homes and offices, new and renovated buildings.
According to a report by the World Business Council for Sustainable Development
(WBCSD, 2007), there are five key elements for passive houses:
!
The envelope - all components should be highly insulated
!
Air-tightness - stop air leakage through unsealed joints
!
Ventilation - use a mechanical system with heat recovery
!
Thermal bridges - control heat loss from poorly insulated points such as window
and doors
!
Windows-minimise heat loss in winter and heat gain in summer.

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Case Study 1: Techische Universitat Darmstadt, Germany

The first Passive houses were built in Darmstadt, Germany in 1990 and the
Passivhaus Institution was founded there in 1996 to promote and control the standard.
The architect engineers built passive house using ultra-thick insulation and complex
doors and windows so that barely any heat escapes and barely any cold seeps in.
Techische Universitate Darmstadt won first prize for solar the decathlon in 2007.
In 2005, Ireland launched the first standardized passive house in the world,
Scandinavian Homes (http://www.scanhome.ie/ ). This concept makes the design and
construction of passive house a standardised process. In Norway, a research centre on
zero emission building was established in 2009 to develop environmentally friendly
energy technologies and raise the level of Norwegian expertise in this area. Over next
few years, the research centre aims to develop competitive products and solutions for
existing and new buildings (http://www.zeb.no/). Recently, the European parliament
has proposed that new building meet passive-house standards with 90% heat
efficiency by 2011 (Fickling, 2009).
3.3.3 Renovation for existing buildings:
Studies from EU15 show that consumption in existing building for heating and
cooling can be more than halved through renovation. In the US, it is estimated that up
to 50% of the energy in buildings is lost due to inadequate insulation. Efficient HVAC
systems and renewable energy can reduce use of fossil fuels even further.
In the developed countries, two-thirds of the buildings expected to exist in 2050 have
already built. It indicates renovation of existing buildings can play an important role
to cut emissions from buildings. Emission reduction targets will not be met unless the
existing building stock is comprehensively refurbished. Retrofit is more difficult than
new building. Renovation provides a stimulus for the bottom end of the US building
industry. $5 billion was committed in the US economic stimulus package to support
one million low-income homes by improved roof insulation and HVAC systems
(Fickling, 2009). This programme has multiple benefits that will provide jobs for
recession-hit construction companies, especially SMEs, reduce energy bills for
homeowners and reduce CO2 emission.
Case study 1: the Empire State Building, New York.
It is reported that the Empire State Building, New York, as a pioneer of green building
renovation, is undertaking a radical refurbishment to cut its energy use and reduce
greenhouse gas emissions by 40%. The annual energy savings are $4.4 million a year
as payback for the retrofit cost of $20 million (Harvey, 2009). 6,500 windows of the
skyscraper will have new triple-glazed insulated glass to cut the energy use for
cooling in the summer and heating in the winter. The retrofit of the Empire State
Building attracts huge international attention to create replicable process for reducing
energy consumption and environmental impact. Some efficient measures are very
straightforward, for example, turning off the lights and computers when offices are
empty. Changing lighting systems, installing smart meters, insulation, window
glazing and efficient boilers all contribute to cut energy use of the building. Modern
combined heat and power (CHP) systems can generate electricity while recycling the
resulting heat. They are becoming popular in industrial installations.

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Case study 2: Non-residential example - Elizabeth II court, Winchester, UK

The refurbishment transformed this 1960s office block into a modern, efficient and
sustainable working environment for Hampshire County Council in the UK. It has
reduced carbon emissions for the building from 90kg CO2/m2/annum to 30kg
CO2/m2/annum. With a 70% increase in space utilisation and a reduction of 70% CO2
emission, the council will achieve major cost saving (UK GBC, 2009).
Similar improvement has been achieved for a recent renovation of a 1930s brick
terrace house in south London by architects ECD and Hyde Housing Association
through improving insulation, changing to a more efficient boiler, installing triple
glazing and recovering heat from a ventilation system (Fickling, 2009).
Case study 3: Non-residential example - Savoy Hotel, London
The Savoy Hotel, based in London, is another iconic building going green. A 40%
energy cut and 3,000 tonnes of carbon mission reduction a year are anticipated after
the 100 million retrofit. The payback term will be six-seven years. The hotel will
install it own combined heat and power plant to generate its own electricity and power.
It is possible cost-effectively to reduce carbon emissions by 50% from the majority of
homes and buildings (UK Green Building Council, 2009). The above cases are
successful practices showing proof the financial benefits of the renovation of existing
non-residential buildings. There are significant barriers for residential home retrofit.
Homeowners are typically concerned more about upfront cost of retrofits and
underestimate the saving of energy consumption from retrofits. They may also move
before recouping the retrofits cost. Also if the house is rented, landlords have to pay
the initial cost and cant share this cost with tenants although tenants will benefit from
energy saving. There is lack of information on the value of sustainable building, lifecycle cost assessments and return-on-investment calculations in the current housing
market. These barriers undermine the opportunities of for upgrading existing domestic
energy efficiency.
3.4. Green building rating systems
3.4.1 The Building Research Establishment Environmental Assessment Method
(BREEAM)
The Building Research Establishment Environmental Assessment Method (BREEAM)
was developed in the UK in 1990. It is the first to address environmental assessment
methods for buildings around the world (Retzlaff, 2009). It sets the standard for best
practice in sustainable design and has become the de-facto measure used to describe a
building's environmental performance. Credits are awarded in nine categories
according to performance, including management; health and wellbeing; energy;
transport; water; materials; waste; land use and ecology; and pollution. These credits
are then added together to produce a single overall score on a scale of Pass, Good,
Very Good, Excellent and Outstanding (http://www.breeam.org/). Since 1990, there
has been a rapid increase in the number of buildings registered under the scheme. To
date, there are almost 200,000 buildings certified and just under a million buildings in
total registered under the scheme.

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3.4.2 The Leadership in Energy and Environmental Design (LEED)

The Leadership in Energy and Environmental Design (LEED) green building rating
system was developed by the US Green Building Council in 1998. LEED certified
buildings are supposed to use resources more efficiently when compared to
conventional buildings, providing healthier work and living environments. In the
process, LEED has defined what it means for a building to be sustainable and how
architects, engineers, builders, owners and developers should approach creating green
buildings (Yudelson 2008). A building can accrue points towards a LEED
certification in various categories, such as sustainable sites; water efficiency; energy
and atmosphere; materials and resources; indoor environmental quality and innovation
in design. There are four progressive levels of LEED rating systems: certified, silver,
gold and platinum. The initial LEED system covered only new construction and major
renovations of commercial and institutional developments. Additional LEED systems
for other types buildings were developed base on the original system, which is
referred to LEED for new construction (LEED-NC) to indicate its primary focus.
The LEED system was developed primarily on a voluntary basis and has been adopted
widely for green building projects. Figure 12 shows rapid growth of LEED for new
construction during 2000-2006 (Yudelson, 2008). It has grown to encompass more
than 14,000 projects in the US and cover over 30 countries (WGBC, 2009). Up to date,
there are over 6,900 LEED-certificated buildings all over the world (WGBC, 2009). It
is estimated that the annual CO2 saving from LEED building is about 3 million tons
from energy efficiency and renewable energies. It will grow to 130 million tons per
year by 2020 and 320 million tons annually by 2030 (Watson, 2009). It was expected
that the cost to achieve greener building exceeded conventional buildings. However,
based on a study of 40 US offices and schools with the LEED standard, it was found
that the costs of reaching LEED standards system are 0.66% for the first level, 1.9%
and 2.2% for silver and gold respectively. However, the cost of reaching the highest
level of LEED (platinum) is a 6.8% premium cost. Nevertheless these cost premiums
was substantially lower than previous estimation, as shown in Figure 13 (Kats, 2003).

Figure12. LEED new construction project growth during the period 2000-2006.
(Source: Yudelson, 2008).
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Figure 13. The green cost premium of LEED buildings (Source: Kats, 2003)
Green buildings provide financial benefits that conventional buildings do not, as
indicated in Table 1. The benefits are in lower energy, water and waste costs, lower
CO2 emissions and increased productivity and health, saving about $50-$70 per
square foot in a LEED building (Kats, 2003). Government is playing a significant role
in promoting green building through regulations. For example, LEED gold
certificated buildings will gain priority in planning permission. Tax credit is another
incentive approach for the promotion of green building.
A new LEED system for rating neighbourhood development is being developed by
USGBC to integrate the principle of smart growth, new urbanism and green building
into the first standard for neighbourhood design (WGBC, 2009). This may be of
particular interest to city and regional planners because of their focus on building
position, landscape and community sustainability. So far, there are many building
assessment systems in the world and no single system has emerged as the green
building industry standard in the world. Each assessment system has focused on
different aspects in practice such as health, technology or environment. They all
integrate environmental and sustainability issues into building industry.
Table 1: Financial benefits of green buildings (Source: Kats, 2003)
Category
Energy savings
Emission savings
Water savings
Operations and maintenance savings
Productivity and health benefits
Subtotal
Average extra cost of building green
Total 20-year net benefit

Saving ( per square foot)

(based on 20-year net present value)
$5.8
$1.2
$0.5
$8.5
$36.9-$55.3
$52.9-$71.3
(-$3 -$5)
$50-$65

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3.5 Green building planning

Innovations in technology and production processes have resulted in significant
changes in building industry. The future of buildings depends not only on innovation
by homebuilders, but also on promotion by planners. Planners are interested in
promoting innovative practices that conserve the environment, improve quality and
reduce costs (Koebel, 2008). The direct emissions from energy use in buildings are
only part of total footprints; moreover, structural green building planning can
contribute to the sustainability development in terms of building location and public
transportation (Harvey, 2009).
In order effectively to promote a green and sustainable building industry, planners
must understand the roles of different actors on the value chain of green building. The
builder usually is a small firm and partners with other material suppliers and labours
through subcontracts. The builder receives little benefit when innovation improves
building performance. Many buyers only live in new houses for a relatively short
period and are not directly involved in material and product decisions. Only a very
small portion of consumers is directly engaged in design and construction while most
consumers only purchase the property what it is available in the market after the
construction is completed by developers or builders. This business model suggests
that building industry could be resistant to green innovation in buildings. Koebel
(2008) has proposed strategies for planners to promote green buildings. Small builders
can use green innovation as a way to establish a market niche. These innovations
would be more environmentally-orientated rather than innovations related to cost
deduction. Larger builders are encouraged to be involved in demonstration projects to
promote the diffusion of innovation. Local planners could facilitate innovation by
helping to coordinate local and state regulation agencies approving new materials and
practices in building certification and site planning.
4 Green economy
4.1 Green building investment
It is predicted that energy efficiency in building and appliances can reduce 1.6 Gt CO2
in 2020 and up to 7Gt CO2 in 2050. About $158 billion per annum between 2010 and
2050 are required to diffuse the energy efficiency technologies globally (Tomlinson,
2009). According to study by McGraw Hill Construction (2008), about half of new
global commercial building projects will be planned as green buildings and 45% of
retrofitting projects on existing buildings are targeted to improve energy performance
(Figure 14). In terms of region, the fastest growing regional green building market is
Asia, where the population of firms largely dedicated to green building is expected to
jump from 36% today to 73% in 2013. More than half study firms expect to be largely
dedicated to green building (on over 60% of projects), up from 30% today. Over 85%
firms expect rapid or steady growth in sales and profit levels associated with green
building.

16

Figure 14. Global planned green building project types (Source: McGraw Hill
Construction, 2008)
Total venture capital investment in green technology was estimated about $3.9 billion
in the US in 2009, including $1 billion funding from the American Recovery and
Reinvestment Act for clean energy projects. Among these investments, technologies
such as solar and biofuel have received the most funding. There is still a financial
investment gap for green building technology commercialisation. Venture capitalists
were not interested in green building when LEED was introduced in 2000, but there is
an increase a trend of investment interest in green buildings and energy efficiency
technologies. The study found that green office buildings with LEED certification
could receive a premium in rental rates and sales prices compared with conventional
office buildings (Eichholtz et al., 2009a). They also reported that the investment
community has embraced the concept of socially responsible investment (SRI) to
improve company green image reputation, along with economic profitability and
improved employee well-being (Eichholtz et al., 2009b).
The founder of the US Green Building Council (USGBC) set up the Regenerative
Ventures Company to support green building technology development. The venture
company is partnering with entrepreneurs and corporate management teams to
establish and achieve goals in the sustainable building arena. The working projects of
Regenerative Ventures are listed in Table 2. These projects focus on new building
technology and materials. For example, the Soladigm Company received over $20 M
investment from several venture investors to develop next-generation green
technologies utilising glass and optical coatings which will significantly reduce
energy use in buildings. Serious Materials is developing a new product called
EcoRock to replace gypsum drywall. EcoRock uses 80% less energy to produce
and is made using 80% of post-industrial recycled waste material from steel and
cement plants. The company also develops other products including soundproof
drywall QuietRock; Quiethome Windows. Integrity Block Company is
developing sustainable building materials which can replace standard concrete block.
Their product, compacted-earth block, is made from a proprietary soil mix which is a
by-product from mining or quarrying (WGBC, 2009).

17

Table 2. List of working projects of Regenerative Ventures. (Information from:

WGBC, 2009)
Company
Partners
Project
Soladigm
Regenerative Ventures Raised $21 million to develop technologies
Khosla Ventures
utilising glass and optical coatings that
Sigmas Partners
significant reduce energy use
Serious
Regenerative Ventures Total investment of $130 M on various
Material
Mesirow Capital et al.
products:
EcoRock, a replacement of gypsum drywall,
that uses 80% less energy to produce and is
made of 80% port-industrial recycled
materials
QuietRock: a soundproof drywall
QuietWood;
Quiethome Windows
Calera
Regenerative Ventures Developing recycled process of cement
Corp.
Vinod Khosla
production
Integrity
Regenerative Ventures Developing sustainable building material to
Block
replace standard concrete block, use 40%
less energy to produce.
4.2 Economic development
4.2.1 Europe
Some 40% of the EUs energy is used in the building sector and accounts for 38% of
its emissions with a saving potential of 55% (Osterkorn, 2008). By 2020, the EU aims
to reduce CO2 emission by 20%, improve energy efficiency by 20% and consume
20% of energy from renewable resources. There is a target for each member state to
make all new building a passive house or zero-energy house by 2015. Energy
performance certification will be set for new and existing buildings. These goals are
ambitious. Progress has been made in some EU member states. Germany, UK, France
and Denmark have broadened the scope of their building codes to all building types
including refurbishments. Each member state has different regulations to meet the EU
target requirements. For example, Denmark requires all new buildings to reduce
energy consumption by 25-30%. The subsidies and incentives for efficient gas boilers
and efficient windows have helped green innovation products penetrate the market in
Denmark. In Germany, upgrading old boilers installed before 1978 with highly
efficient new boilers is compulsory with a subsidised loan through the KfW scheme.
In Portugal, legislation includes mandatory use of solar heaters in all buildings (Baden
et al., 2006). Green building, particularly refurbishment, offers a huge opportunity for
growth in green jobs. In the UK, it is estimated that a refurbishment programme of a
half a million homes per year in the domestic sector alone could create 50,000 jobs
(UK Green Building Council, 2009).
4.2.2 US
In the US, construction is the second largest industry accounting for 8% of GDP. It is
set to make all new building carbon neutral or zero emissions by 2030, improving new
construction efficiency by 50% and existing building efficiency by 25%. They will
18

start with federal government building first and plan to increase federal building
energy efficiency by 40% within five years through retrofit. Meanwhile, they also
supply financial support for the retrofits of low-income homes (Osterkorn, 2008).
The USGBC Green Jobs Study by consultant company Booz Allen Hamilton shows
that green building and energy efficiency industries supported more than 2 million
jobs and generated more than $100 billion in gross domestic product and wages in the
US during 2000-2008 (Figure 15) (USGBC, 2009). With new regulation to cut energy
use and apply more renewable energy and the financial crisis between 2008-2009
promoting energy users to cut costs, there is an increase in job opportunities in the
green building industry. Energy auditors, renovation builders, green building trainers
and energy efficiency project managers have all seen an increase in job opportunities.
The number of green jobs is increasing, mainly from construction of new nonresidential commercial and healthcare building. Builders, plumbers, electricians and
service technicians all see the evidence of increasing opportunities in the job market.
It is predicted that renewable energy and energy efficiency industries will create at
least 16,000 jobs. They will be worth about $1,900 billion in 2030 (Table 3) (Bezdak,
2007). Green innovation is perceived as contributing to the solution for the US to
recover from the financial crisis of 2008-2009.

Figure 15. The economic impact of green construction in the US (Source: USGBC,
2009).
Table 3. US renewable energy and energy efficiency industries in 2030 (Source:
Bezdak, 2007)

19

4.2.3 China
The building sector is Chinas 4th largest industry, contributing about 8.9% of GDP.
The Chinese government has set the goal to reduce energy consumption in the 11th
five-year plan (2005-2010). It is targeted to reduce building energy consumption by
50%; to improve energy efficiency of government institutions by saving 10% energy
per unit construction area and per capita; and to reduce electricity consumption of
appliances by 29 billion kWh (Osterkorn, 2008). The Ministry of Housing and UrbanRural Development, the Ministry of Finance, and the National Development and
Reform Commission have passed some laws and regulations on building standards
over the past few years (Table 4). Six key areas are focused on to promote energy
efficiency. State and local government supply financial support for a range of
demonstration projects in some major cities (The Climate Group, 2008). EMC is an
active private company in China which has been involved to develop energy-efficient
green buildings.
Table 4. Government policies on green building and energy efficiency in China.
(Information resource from: The Climate Group, 2008).
Legal
environment

Six key areas

Demonstration
projects

Financial
mechanism

Plan:
Laws:

China medium and long term energy conservation plan

!
Renewable energy law;
!
Energy conservation Law
Regulations:
!
Energy conservation regulation for civil buildings;
!
Energy conservation for state-funded institutions
!
Special funds;
Support
!
Standards;
Measures:
!
Labelling;
!
Assessment;
!
Quality control
!
50% energy conservation design standard for new buildings;
!
Heating system metering and retrofitting in North China;
!
Energy conservation in government and public buildings
!
Solar and geothermal renewable;
!
New building materials;
!
Building energy auditing and assessment
!
Energy conservation and retrofit demonstrations for government and
public building in 24 provinces and municipalities;
!
Heating system metering and retrofit demonstration for existing
building in 15 provinces and municipalities in North China;
!
212 demonstrations and promotion projects for renewable energy
applications in building in 25 million m2;
!
100 demonstration projects for green building and 100 demonstration
project for low-energy-consuming buildings;
!
Energy efficiency auditing and labelling for civil buildings in 18
provinces and municipalities;
!
Solar roof plan.
Government
!
Renewable application in buildings;
!
Energy conservation for government and public
support
buildings
special funds:
!
Heating system metering and retrofit for existing
buildings in North China;
!
Renewable energy-saving building materials
Private sector: ! such as EMC

20

With the explosion of the Chinese middle class, energy consumption by residential
building will grow at close to 5 percent annually, more than doubling by 2020
(McKinsey & Company, 2007). There are several barriers to improve energy
efficiency in buildings in China, including lack of rigorous enforcement of building
energy codes; lack of incentives to save energy due to fixed rate price of heat energy
and out-dated heating system design with coal-fired, heat-only boilers (WBCSD,
2009). As shown in Figure 16, building insulation comparison indicates that there is
big gap of insulation efficiency between Chinese city and global cities. At least one
third of buildings in China need an energy performance upgrade. This energy retrofits
in existing buildings could exceed US $380 billion at average of 200 Yuan (US$29)
per m2 (The Climate Group, 2008).

Figure 16. Building standards comparison among several global cities

(Source: McKinsey & Company (2007).
China has potential to improve green building. Constructing new buildings at worldclass insulation standards and installing energy-efficient heating and cooling packages
would help capture 8 QBTU of savings, contributing 6 percent of the global energy
productivity opportunity (McKinsey & Company, 2007). Total floor space in China is
currently 40 billion m2 and is expected to reach 70 billion m2 by 2020. According to
the estimation by The Climate Group (2008), the market of new green buildings
would be worth between US$220-400 billion, depending on the application scale of
green buildings among new buildings. Chinese government also has been encouraging
to upgrade heating system in China, particularly in the northern parts of China, which
would cost about US$30-44 billion (The Climate Group, 2008). In total, market
volume for green building including both new building and retrofit could be reach to
trillions of US dollars (Figure 17).

21

Figure 17. Potential market volume of green buildings in China by 2020.

(Source: The Climate Group, 2008)
4.3 Government policy
4.3.1 Successful instruments
The knowledge, technology and skill are already available to achieve green buildings,
but there are not being applied to improve energy efficiency in building industry.
They are several barriers across financiers and developers to develop green buildings.
Businesses in building industry need a supportive policy and regulatory framework to
achieve dramatic improvements in energy efficiency. Governments around the world
are making green building happen through regulations, such as tax incentives, density
bonuses, zero-energy new housing regulation and green government buildings
programs. For example, Austin, Texas government has successfully combined
different tools such as tax incentives, requirements and technical assistance in the
sustainable development initiatives. Table 5 shows the most successful instruments in
terms of the effectiveness of emission reduction and cost (WBCSD, 2007). Control
and regulatory instruments, including appliance standards and energy efficiency
obligation, have been cost-effective to reduce CO2 emission. While voluntary
certification and public leadership programs are voluntary-based and cost-effective
instruments, but the impact on emission reduction is relatively limited compared to
mandatory regulation policies. Financial incentives can help companies allocate
capital for energy efficiency plan, length payback times and mark energy-efficient
products more available (McKinsey & Company, 2010).

22

Table 5. List of effective policies on green buildings (Source: WBCSD, 2007)

Policy instruments
Effectiveness of
Cost
emission reductions effectiveness
Control and regulatory instruments
Appliance standards
High
High
Mandatory labelling and certification programs High
High
Energy efficiency obligations and quotas
High
High
Utility demand-side management programs
High
High
Economic and market-based instruments
Energy performance contracting
High
Medium high
Fiscal instruments and incentives
Tax exemptions and reductions
High
High
Support, information and voluntary action
Voluntary certification and labelling
Medium high
high
Public leadership programs
Medium high
high
Building codes policy has been recently introduced around the world, as we described
in Section 3. In addition to building codes, there are other relevant policies to improve
energy performance in building in different countries, as listed in Table 6 (WBSCD,
2007). For example, China adopted mandatory energy labelling for domestic
appliances, while building energy passport is required by the energy performance in
Building Directive in Europe. In Japan, Top Runner Program is pushing the
industry to develop high energy efficiency equipment (WBCSD, 2007).
Table 6. Examples of government action in addition to building codes (Source:
WBCSD, 2007)
Country
Policy
Brazil
Measures to improve the efficiency of lighting equipment
China
Mandatory energy labelling for domestic appliances, broadening
and updating voluntary energy labelling
EU
Building energy passport required by the energy performance in
Buildings Directive
India
Efficiency standards and new mandatory energy labelling for new
appliances and equipment
Japan
Top Runner efficiency standards for equipment
US
Energy efficiency programs for utility companies
4.3.2 Innovative financial mechanism
Financial considerations are critical to promote green buildings, as it appears to be
barrier to improve the advance of energy efficiency. The building industry is a
complex sector and characterised by the fragmentation of the value chain and nonintegration among elements. The participants include material and equipment
suppliers, building contractors, engineers, designers, investors, developers, estate
agents, owners and users. Investors and lenders are mainly concerned with the risk
and return equation and they usually pursue profit maximisation when they make the
final decision on building designs. Developers and agents all have short-term financial
interests. They usually do not directly benefit much from energy cost saving and thus
energy efficiency is not main factor in decision-making. Large parts of building stock

23

are rented, the owners has no direct interest in green building investment to reduce
energy bills. Moreover, the ownerships of the buildings change several times during
the lifetime of green buildings. The initial owners investments on green building and
energy efficiency have limited financial returns from long-term energy cost saving.
The isolated roles and ineffective co-ordination between participants weak the
incentive for energy efficiency investment.
According to recent study by Baden et al. (2006), green buildings can achieve higher
rent value compared to standard buildings. Recently, green buildings have become
more attractive financially because of increased market demand for renewable energy
and energy efficiency credits. There are emerging energy service companies (ESCOs)
which engage in energy performance contracting. They take the arrangement of initial
investment of green buildings and life-cycle energy saving cost together, acting as
project developers. The energy service company installs and finances energy efficient
projects designed to provide energy at a contracted level and cost over a term, usually
7-10 years. Its compensation can be linked directly to the energy saving cost
(WBSCD, 2007). ESCO models have been supported by international organisations
such as the World Bank. However, ESCO developments in developing countries find
it often difficult to have sufficient collateral and track records to secure needed capital
(UNEP, 2008). Another solution is to establish energy-efficient investment funds
capitalising on the lower risk of mortgage lending on green buildings. These funds
could be attractive to socially responsible investment funds (WBSCD, 2009). The
energy efficient mortgage monetizes the energy savings of an energy efficient home
through the mortgage loan. For exiting homes, the upgraded products with energy
efficiency are financed though the mortgage loan using the monthly energy savings so
that no additional initial investment is required for existing building renovation.
4.3.3 Behaviour changes
New technology can help to raise awareness of energy waste and reduce it, especially
in commercial buildings. In developed countries, energy bill only represents a small
portion of the costs with high quality standard, thus are not aware energy waste in
residential buildings. The recent developed building management system (BMS) can
automate building energy consumption including lighting, heating and cooling. Other
technologies such as smart meters indicating individual energy consumption can also
alert users to potential energy savings. In Japan and the UK, utility companies usually
alert users to excessive consumption by providing comparative information about
energy use on bills and apply smart grid approaches to manage demand from different
users.
Significant behaviour changes and improved knowledge to create an energy-aware
culture are considered effective steps to improve energy efficiency in the building
industry. Figure 18 illustrates user behaviour having significant impacts on energy
consumption. A wasteful user consumes twice the energy of the conservation users. A
wide range of campaigns on energy saving have achieved a new mindset focusing on
public health and environment. Children in school are also encouraged to persuade
their parents to save energy. Leadership is essential to change a culture. It is important
for governments to show their leadership and commitment to energy saving via
providing important support for emerging green building technology.

24

Figure 18. The impacts of user behaviour on energy consumption in residential

buildings (Source: WBSCD, 2009).
5. Conclusions
A green building revolution is needed, exploring alternative approach through
improving energy efficiency to meet the challenges of global climate change and
energy security along with exploring renewable energy resources. Green building is
contributing to the solution to the many global issues associated with climate change,
human health and the quality of the environment. Research by Mckinsey Company
(2007) shows changes in building design and construction could reduce up to 6 billion
tons of carbon emissions through effective measures such as insulation, glazing, water
heating, air-conditioning and lighting etc. It is believed that green buildings will soon
become the norm in the building industry instead of only a niche market (Retzlaff,
2010). There is a move towards transformation from conventional buildings into
green buildings in the near future. More business opportunities occur and green
buildings mark a shift towards a green economy.
Progress has been made to build zero net energy new buildings with advanced green
technologies across the world. There are three main approaches to achieving energy
neutrality. First, is to cut building energy demand through using more energy-efficient
insulation and equipment. Second, renewable energy or wasted energy resources are
explored to produce energy to supply new buildings. Third, new buildings are created
to share energy through feeding surplus energy produced into an intelligent grid
infrastructure. As the capacity and pressures for green innovation in housing increase,
planners will play a role to increase the pace at which green innovations are adopted
and diffused, leading to increased efficiency, decreased costs, and improved
sustainability (Koebel, 2008). Large potential emission reductions can be made
through improved building regulation and standards. This is especially important in
large emerging economies. Many cities in developing countries like China are rapidly
urbanizing, demanding high rates of new building construction. The pressures of
buildings on the environment are even more intense than developed countries
(Retzlaff, 2009). For developed countries, retrofitting existing buildings is likely to
provide the greatest energy reduction and in many cases will be the most economic
solution (WBCSD, 2007). Upgrading existing building envelopes and heating and
25

cooling equipment represents a large opportunity for energy saving. Personal

commitment by individuals to change their behaviour in order to save energy is also
important and effective to reduce CO2 emission in buildings.
However, there are financial barriers for green building investment. The
fragmentation of the building industry gives no direct incentive to private investments
on green building. Thus private investments on improving energy performance of
buildings do not have significant impacts on promoting green buildings at large scale.
There is need for government to play a significant role in moving to a green building
revolution. The increasing challenges of climate change and energy efficiency have
driven governments to develop effective tools to promote green buildings. Green
building programmes and policies have been adapted at all levels of government in
the past decade. Local, regional and national initiatives are major drivers behind the
growth of green building. Recently, energy efficient mortgages have been introduced
to bridge the financial barrier to invest green building and improve building energy
efficiency in the US. They provide a public- private partnership model to promote
green building and energy efficiency. In order to develop a green economy,
innovation-oriented environmental policy is needed to cover the following concerns:
!
Environmental effectiveness,
!
Decoupling economic growth from environmental pressure
!
Cost-effectiveness
!
Take advantage of win-win opportunities
!
Market and socio-economic benefits
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