GreenBuild Blog

Friday, March 02, 2007

Green Building Market Put at $50 Billion

The Natural Market Institute’s well regarded LOHAS (Lifestyles of Health and Sustainability) market studies recently put the green building market, including Energy Star products and homes, green homes, green materials and solar panels, at $49.7 billion for 2006. This estimate is probably higher than just for green buildings alone, which I would project at $25 billion, assuming $2 billion for new homes (assuming 10,000 homes at $200,000 each) and $23 billion for comemercial buildings (assuming 1,500 new LEED registrations at 100,000 sq.ft. each and $150 per sq.ft. construction cost.) At 45% materials cost for a typical project, the green building materials market is something less than $11 billion.

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Sunday, February 25, 2007

Thunder from Down Under

Jerry speaks at Green Cities I’ve just returned from the Australian “Green Cities” conference in Sydney in mid-February. There were more than 900 delegates and exhibitors in the beautiful Sydney Conference Center. On a per capita basis (Australia has about 20 million people), attendance was just about the same size as the U.S. Green Building Council’s Greenbuild show in Denver last November that attracted more than 13,300 people. The Australians have a “Green Star” rating system very similar to the American LEED system, with six Green Stars (World Class) equivalent to a LEED Platinum certification. Co-sponsored by the Australian Property Council (APC), and the Green Building Council of Australia, GBCA, the meeting ran for two full days.

To gauge the size of the organizations, the APC has about 80 staff members and appears to embrace ULI, NAIOP, BOMA and just about every other major commercial real estate organization in the country. Relatively new, the GBCA is about four years old, with about nine staff members, currently headed by Romilly Madew, a very dynamic woman. She headed a group that published a seminal work last year, detailing the business case for green buildings in Australia, which has had a major impact on moving the green building agenda forward there.

For me, the biggest takeaway understanding is that green building is being embraced big-time by the development community in Australia. The head of the APC, Peter Verwer, in his closing remarks, claimed that the development community in Australia (meaning the large developers) are sold on the importance of green buildings and is fully committed to building them. In this case, I’m a skeptic, but I will say that there was widespread enthusiasm among the delegates I talked to, even if they’re not always sure to what they’re committing.

I also went to Melbourne and presented our business case to a forum there, hosted by the GBCA and the Australian version of ASHRAE, the Australian Institute of Refrigeration, Air-Conditioning and Heating, AIRAH. The City of Melbourne has built the first six-star Green Star public building, the Council House Two, and has a serious plan to become “carbon neutral” as a city by 2020.

The biggest issue in most of Australia by far is a multi-year drought, the worst in 100 years, which has large cities such as Sydney and Melbourne under severe water restrictions. Everywhere I went, I saw dual-flush toilets in use in all newer buildings. I’m told that since 2003, every new home has had to install dual-flush toilets. What a simple and straightforward way to save half or more of water use from flushing toilets. Many people are installing rainwater catchment and graywater systems in their homes, as a way to save treasured garden plots. Before our own southwestern and western droughts get too severe, we should be emulating the Aussies.

We also heard from New Zealand, which has just begun a green building council, www.nzgbc.org, headed by Jane Henley. Quite a lot of interest there, but a much smaller country (about 4.5 million people), so just getting started.

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Thursday, February 01, 2007

North to Alaska!

Earlier this week I gave talks to almost 100 people in Anchorage and Fairbanks, on behalf of the Alaska chapter of the U.S. Green Building Council. With the fine leadership of many dedicated people, green building in the far north is taking off. Anchorage’s mayor is pushing a Sustainable Building Initiative, to get the city commited to LEED-certifying its future facilities. In Fairbanks, the Cold Climate Housing Research Center, led by Jack Hebert and Mike Musick, has just opened. They’re hoping for a LEED Gold certification for this $6 million research, testing and education facility. The day I arrived in Fairbanks, the temperature was a mild 16F (for January). The week before it had been -24F (daily high). A 40F swing in a few days is not unusual for interior Alaska. Check out the CCHRC and get on their mailing list. When you realize how thinly populated Alaska still is (about like the Dakotas, Vermont and Wyoming), you realize the difficulties of introducing green building ideas and techniques, and you really appreciate all the good people there who are doing this work.

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Wednesday, January 17, 2007

The Investors are Coming! The Investors are Coming!

The venture capital interest in the “green building market space” is a sure indicator that we’re making progress in mainstreaming green. As the saying goes, “if there’s enough horse manure around, there must be a pony somewhere.” (No analogy is intended of course between venture capital and horse manure!) Companies are investing in products and systems that reduce the use of toxic materials in construction, that make the construction process more efficient, that encourage green housing technologies, that help energy efficiency, that provide more ways to insulate homes and buildings with concrete and similar “structural insulated panels” (SIPs), and in many more avenues for making money in this $750 billion (construction value) industry. Not as big as the renewable energy and biofuels market, but a positive sign nonetheless. Look for this action to accelerate in 2007, particularly in companies that already have products and at least $1 to $2 million in sales, where a $5 to $10 million investment could quickly scale up in terms of sales.

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