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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 energy-efficient technologies to reduce CO2 emission. Improved efficiency in the building sector and de-carbonising the power sector could offer significant potential emissions reduction.

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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 energy-efficiency 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). Brazil’s 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)

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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)

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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).

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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.

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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 home’s 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

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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 world’s 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

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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).

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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 building’s 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 building’s negative impacts on the environment during the building’s 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 zero-carbon 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 carbon-dioxide emission. Rainwater is collected on to roof and used to supply the toilets and window washing.

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Case study 2: Västra Hamnen (Western Harbour), Malmö, Sweden Sweden’s first stage housing estate of the Western Harbour was developed in 2001. The houses are designed as sustainable buildings with well-insulated and high-efficiency 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, Google’s 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 retrofit’s cost. Also if the house is rented, landlords have to pay the initial cost and can’t share this cost with tenants although tenants will benefit from energy saving. There is lack of information on the value of sustainable building, life-cycle 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 Saving ( per square foot)

(based on 20-year net present value) Energy savings $5.8 Emission savings $1.2 Water savings $0.5 Operations and maintenance savings $8.5 Productivity and health benefits $36.9-$55.3 Subtotal $52.9-$71.3 Average extra cost of building green (-$3 -$5) Total 20-year net benefit $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.

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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).

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Table 2. List of working projects of Regenerative Ventures. (Information from: WGBC, 2009) Company Partners Project Soladigm Regenerative Ventures

Khosla Ventures Sigmas Partners

Raised $21 million to develop technologies utilising glass and optical coatings that significant reduce energy use

Serious Material

Regenerative Ventures Mesirow Capital et al.

Total investment of $130 M on various 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 Corp.

Regenerative Ventures Vinod Khosla

Developing recycled process of cement production

Integrity Block

Regenerative Ventures

Developing sustainable building material to replace standard concrete block, use 40% less energy to produce.

4.2 Economic development 4.2.1 Europe Some 40% of the EU’s 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

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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 non-residential 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)

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4.2.3 China The building sector is China’s 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 Urban-Rural 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).

Plan: China medium and long term energy conservation plan Laws:

! Renewable energy law; ! Energy conservation Law

Regulations:

! Energy conservation regulation for civil buildings; ! Energy conservation for state-funded institutions

Legal environment

Support Measures:

! Special funds; ! Standards; ! Labelling; ! Assessment; ! Quality control

Six key areas ! 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

Demonstration projects

! 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 support special funds:

! Renewable application in buildings; ! Energy conservation for government and public

buildings ! Heating system metering and retrofit for existing

buildings in North China; ! Renewable energy-saving building materials

Financial mechanism

Private sector: ! such as EMC

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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 world-class 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).

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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).

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

emission reductions Cost 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 non-integration 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

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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 owner’s 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.

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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

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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 References: Baden, S., Fairely, P., Waide, P., and Laustsen, J. (2006) Hurdling financial barriers to low energy buildings: Experiences from the USA and Europe on financial incentives and monetizing building energy savings in private investment decisions. Proceedings of 2006 ACEEE Summer Study on Energy Efficiency in Buildings, American Council for an Energy Efficient Economy, Washington DC, August, 2006. BBC (2009) Senedd- the Green Building, online available on 01/03/2010: http://www.bbc.co.uk/wales/southeast/tours/places/pages/senedd_environment.shtml Bezdak, R. (2007) Renewable energy and energy efficiency: economic drivers for the 21st century. Online available on 01/03/2010: http://energycenter.org/ Department of Energy (DOE) US, (2007) Solar decathlon closing ceremony and awards, news date on 19/10/2007, online available on 01/03/2010: http://www.energy.gov/news/archives/5648.htm Eichholtz, P., Kok, N., Quigley, J. (2009a) Doing well by doing good? Green office buildings, working paper for the program of the University of California Energy Institute, online available on 01/03/2010: http://www.ucei.berkeley.edu/PDF/csemwp192.pdf. Eichholtz, P., Kok, N., Quigley, J. (2009b) Who rents green? Real property and corporate social responsibility, working paper for the program of the University of

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