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Greenbuild 2008 - Building Priorities Briefing

GREENBUILD 2008 -- In this month's special-edition briefing: the Greenbuild Int'l Conference and Expo is the world's biggest event on sustainability in the built environment. Global economic conditions and the elections made this a very interesting year for the conference. (podcast) (photos)

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Theme music by Alexander Blu
Energy Minute music by Chris Keister

Program notes and transcript

Two months before Greenbuild 2008, a credit crisis in the United States brought the global finance industry to its knees. Oil prices collapsed from all-time highs. Canada elected a conservative government that opposed carbon constraints.

Pundits leapt at the opportunity to declare the demise of the entire green movement. Then, two weeks before Greenbuild, the U.S. elections redirected the conversation. American journalists are still trying to get their arms around the concept of cap-and-trade, while also staying on top of increasingly perplexing bailout plans for failed companies.

Index to Greenbuild 2008 Day-by-Day at Energy Priorities

A carbon policy clearly would fuel the growth of renewable energy, but what effect would it have on green building, where the focus is on efficiency and environmental impacts not directly related to carbon? Is green building just an altruistic fad that businesses can no longer afford, or will the financial benefits of green buildings make their non-green counterparts obsolete?

One weathervane for interest in green building is the attendance at Greenbuild -- up by a third over last year, coming very close to topping 30,000 this year. Let's just say, this is not where the pessimists come to commiserate.

The theme this year was "Revolutionary Green," playing off the role of the host city of Boston in the American revolution.

Greenbuild is undergoing some changes of its own-- perhaps more evolutionary than revolutionary. At past Greenbuilds I've lamented that the focus was more on landscaping and landfills, while hardly any attention was paid to energy in buildings.

This year, no more. Concerns about PVC and impervious pavement have taken a back seat to two prominent themes: social equity, and energy efficiency. The LEED rating system is even being tweaked to put more emphasis on using less energy in certified green buildings. Let's jump into the conference.



Building Conference Attendance
Greenbuild 2008 = 30,000 attendees, 1,400 exhibitors
Batimat Int'l Building Exhibition in Paris, 2007 = 447,738 attendees, 2,700 exhibitors (sustainability became a key issue after the Grenelle Environment Forum.)
AHR Expo Dallas 2007 = 28,000 attendees
AHR Expo NY 2008 = 38,000 attendees, 1,884 exhibitors (does not count exhibitor staff of 19,000)

Keynotes
The night before the conference, I got an e-mail from the US Green Building Council, the organizers of Greenbuild, advising me to be in line at 6:00 AM for the opening keynote addresses.

Music in auditorium: Beatles "Revolution"

By 8 o'clock there were 10,000 people in the auditorium. It's like a wave of excitement from the elections carried over to the conference. Plus, the keynotes each year set a festival-like tone for the days ahead.

Attendees who have been the lone voice in their companies or communities suddenly find themselves in a hall with thousands of kindred spirits. The excitement was beyond palpable -- it was electric.

There will be plenty of quotes and sound bytes from Greenbuild -- the keynote speakers were really quite good -- so what I've done is to pick out a few longer clips, with a minimum of editing, so you can hear those quotes in context.

Rick Fedrizzi
Here's Rick Fedrizzi, the founding CEO of the U.S. Green Building Council, and Master of Ceremonies for the keynote session.

"This morning I stand before you as full of hope and optimism as I have ever been...the pessimist would have us believe the financial crisis could put an end to this movement...people ask is it over, are we done... the truth is, we are just getting started. The bad decisions and greed of others will not defeat our commitment to change. (applause) Even in the face of so great a challenge, we will not waver..."
Desmond Tutu image on EnergyPriorities.com

Greenbuild 2008 keynote -- Archbishop Desmond Tutu and USGBC CEO Rick Fedrizzi backstage at Greenbuild 2008. (USGBC photo)

Fedrizzi made more mentions of energy than we've heard in any previous year's keynote.

Green efficient buildings with efficient technologies and appliances can meet America's incremental electricity demand. Committing to energy efficiency in our buildings can create new green jobs, about 2.5 million of them in just 3 years. Let's commit to using what's abundant: renewable energy... Scaling the available technologies to deliver industrial quantities should be the moon shot challenge of this time. And I believe we can do it. What if the buildings we build were net generators of electricity, instead of our nation's biggest consumers? What if our homes, schools and offices were all micro utilities, putting more energy into the grid than they took out? How many power plants wouldn't we need?"

The theme of the conference is "Revolutionary Green."

"Revolution is a powerful word, in the right hands can result in amazing achievement. Think about the intellectual, artistic, political and social revolutions throughout history that have resulted in so much good and so much measurable change. And although we could measure our progress by the number of LEED registrations... or in negawatts... or in carbon emissions avoided... but the single metric that really counts is that we are changing people's minds about what really matters. The green building movement is founded on a revolution of ideas, and in that are the seeds of change...change in technologies...change in strategy...change that is practical and doable. Change that you as individuals can take credit for. And the change we're in charge of is improving the buildings we build and the communities that we shape."

Fedrizzi said the theme represents moving beyond the revolution of ideas, and achieving a revolution of values and priorities.

"We have elected a new leader in president-elect Barak Obama who has inspired us with a clear vision of change. (applause) ...With him we stand in a seismic shift in priorities unlike our nation has seen since World War II. And yet we are surrounded by forces that would love to pull us backward to the perception that what is known is safe, and what worked in the past is as good as it gets. We have to tell those who still cling to a status quo of fear-mongering and divisiveness and institutional arrogance, 'your time is up.' (applause) To those who think that polluting our land and pillaging what's left of our resources is the only way our economy can survive, think again -- or just think! (applause) ...Please understand this will never happen again, not on our watch"

Archbishop Desmond Tutu
The headliner for the opening of Greenbuild was Archbishop Desmond Tutu. The Nobel Peace Laureate has led a crusade against poverty and human rights abuses in South Africa and around the world.

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Greenbuild image on EnergyPriorities.com

Greenbuild 2008 keynote -- Archbishop Tutu is the headliner. He has led a crusade for social justice and racial conciliation in South Africa as then-General Secretary of the South African Council of Churches.

Tutu asked the audience to applaud themselves for their accomplishments as part of the green revolution.
"Now you are part of a revolution that has turned around the moral climate. It's becoming part of the texture of our morality, that not to care about the environment is like not caring about human rights violations -- that is what you have accomplished."

He said the American elections ushered in a new era. He recounted people he has met in parts of the world where climate change is affecting people today.

"Climate change is no theory about something that may happen. We know it is a reality now, for many of our sisters and brothers, it is already a disaster happening now."

In Greenland, he said, the ice is too thin to support their way of life. In the South Pacific the sea is rising over islands and contaminating the drinking water. In Africa, drought is shrinking pastures and people are fighting over what's left.

"There is enough in our world for everyone's needs, but not enough for anyone's greed. When God sees us spending obscene amounts of money on budgets of death and destruction, when we know full well that a minute fraction of those defense budgets would ensure that God's children everywhere would have clean water to drink." (applause)

The connection between Greenbuild and the Archbishop's work is immediately clear -- the poorest nations will suffer most from the effects of global warming. But His Excellency's address signals something much deeper -- the transition of Greenbuild itself, within just a couple of years, from a conference about recycled carpet, to a forum about humanity.

Music in auditorium: Africa Children's Choir

Conference
The Greenbuild conference is impressive in its scope, considering it's on a topic that was practically unheard of just a few years ago.

In any given hour the attendees could choose to hear world-class speakers, or attend any of 16 concurrent educational sessions, or hit the expo hall with 14 hundred exhibiting vendors.

Technology was more in evidence this year. Apparently, architects can't resist the iPhone. Quite a few people were using Twitter during the conference. Greenbuild streamed live video from the conference, and of course hundreds of attendees were posting to their blogs.

Now, let's get back to the question of whether green building is a fad. Last year at Greenbuild there was one session about the business case for green buildings; this year there was an entire track on green real estate, and a flurry of new and updated reports released at the conference, establishing the real value of building green.

The business case for green buildings
If green building is a fad, it's a big one. Over the past couple of years, green buildings have steadily become the new norm for commercial real estate, especially in Class A office space. Nationally, LEED-certified square footage has grown by more than 60 percent this year.

Since before LEED began, the big question has been whether sustainable buildings pay off, and exactly how. In light of recent economic trends, is the green building industry a bubble about to burst -- or could an energy or carbon policy in the United States make this sector one of the first to recover.

We did several interviews with Greenbuild speakers along these lines -- and by the way you'll find in-depth articles at building-priorities-dot-com. Here are some of the key points from those interviews.

McGraw-Hill Construction image on EnergyPriorities.com

"2009 Green Outlook: Trends Driving Change" is one of three reports released by McGraw-Hill Construction today at Greenbuild 2008.

It's important to understand where owners find the greatest value in green commercial buildings, so the return on investment can be estimated consistently. In a meeting in Boston prior to the opening of Greenbuild, McGraw-Hill Construction released the results of three major studies.

Harvey Bernstein, McGraw-Hill's vice president of Industry Analytics, told us the decrease in operating costs is the most pronounced benefit of green buildings, followed by the increase in building values.

Operating costs in green buildings are about 13 percent lower, and building values are about 11 percent higher, than for their non-green counterparts. Of course the two figures are related, but the overall benefit is clear. Some of the other results: ROI is almost 10 percent higher; occupancy and rents are each higher by more than 6 percent.

Betsy Boyle, the Manager of the Real Estate Program at Ceres, says anyone who pays utility bills will have lower energy costs in a green building because the shell is better insulated and the systems are more efficient than in typical buildings.

Boyle also brought up an important factor not highlighted by McGraw-Hill: productivity. For most businesses, labor is the largest expense line item -- much larger than energy costs -- so a tiny increase in productivity can have a big impact on the bottom line. Studies have shown that worker productivity improves in green buildings.

We did an article from last year's Greenbuild conference, about the role of productivity in "The business case for green buildings." Liberty Property Trust provided some great stats for that article.

Green, a stable building sector during a recession
Even with a strong business case under normal circumstances, how will an economic downturn affect demand for green commercial real estate?

Companies are closing offices and postponing expansions. Even in New York, the unfinished LEED-hopeful 11 Times Square and the LEED Gold 7 World Trade Center have reportedly had problems leasing space.

The credit crunch in particular has put the brakes on some new building projects and made it difficult to get financing on major renovations.

But there is a bright side. Betsy Boyle says it makes sense that the demand for green real estate will continue to grow as more companies realize they can cut their operating costs by occupying higher performing buildings.

For developers, Harvey Bernstein says green building is where the opportunity is in a down market, because green building is less affected than non-green building.

McGraw-Hill Construction anticipates as much as a 3X growth in market share for green buildings between 2008 and 20-13.

Norm Miller is a professor and director of Real Estate Academic Programs at the University of San Diego, and a panelist in the Greenbuild session, "Does Green Pay Off?" He says green real estate will do better than non-green, but if researchers don't carefully qualify when leases were signed, it could look like LEED buildings rent for less than non-LEED older buildings with established leases.

Carbon
Meanwhile, for the first time, we have a real probability of placing a price on carbon nationally in the US. Carbon constraints are most likely to start by regulating power plants, not real estate, at least not right away.

But that doesn't mean building owners are exempt from regulatory risk. New policies have been moving forward regionally, through carbon disclosure requirements and new building codes. Boyle says there are two ways green building owners could benefit from a carbon cap and trade system.

First, --and this is one of the big arguments against carbon policy-- a price on carbon would make energy prices go up for commercial customers. But that means efficient buildings would have relatively lower operating costs and higher returns on investment.

As carbon markets mature, Boyle says she'd expect to see the value of more efficient buildings significantly increase.

Second, for building owners who make investments in energy efficiency, secondary markets are emerging at the state level, where owners can sell credits to utilities equivalent to the amount of energy they save. Where building owners know they’ll be able to recoup a certain percentage of the cost, and at the same time lower their operating costs and boost the value of their properties, this is yet another incentive to make those investments.


The latest data from McGraw-Hill Construction and Ceres, and others like CoStar, RREEF Research and the USGBC, are all very promising. The industry is still learning, though, how best to measure and report the real advantages and costs of green building.

Whether or not we see federal carbon policies in this administration, and whether or not we emerge from this recession quickly, investors and creditors are paying close attention to the decisions companies make about their real estate. Customers and insurers are asking about carbon footprints, and tenants are looking at LEED ratings. Green building has been creating jobs and addressing other urban issues. Venture capital investor Nancy Floyd, speaking at the conference, called green building a bright spot in the recession. She said it's not just green building, it's better building.

One panelist speaking off the record told me that he thinks investor participation in the green building movement has been hugely overstated. Tenants looking for sustainable space to lease have few options, because the vast majority of green property development has been undertaken by owner-occupants. Why is that? One reason is the effect of the split incentive. That brings us to this month's Energy Minute.

Program notes for the Energy Minute are in a separate article.

Back to the program...

Renewable energy
We usually report on the renewable energy innovations we find at Greenbuild, but not this year. It's not for a lack of them -- there were more here this year than ever before.

 photo on EnergyPriorities.com

"Renewable Energy World" covered building-integrated wind and solar exhibitors at Greenbuild 2008.

Collaborator and good friend Stephen Lacey, a reporter for RenewableEnergyWorld.com, and host of the Inside Renewable Energy podcast series, attended Greenbuild for the first time this year. Stephen posted articles, a podcast, and even some video interviews from the conference, all about building-integrated solar and wind. He talked with Aerovironment, Schuco Solar, Energy Peak, Tecta America, Mortenson Construction and others.

Closing plenary
One reason we come to conferences like Greenbuild is to hear from people who are looking way down the tracks -- or sometimes down totally different tracks -- to see where green building is headed long-term. The opening plenary focused on the human aspect of green building. The closing plenary was dedicated to the scientific philosophies and techniques involved in greener building and living.

E.O. Wilson is a Harvard University Research Professor emeritus and an honorary Curator at the Museum of Comparative Zoology.

"I'd like to call your attention...to something of an imbalance in the way that we are turning green, and that is, the emphasis today...is primarily on the physical environment, such as climate change... There has been less attention paid to the living environment. This precious resource took tens of millions of years to evolve to its present condition. Our lives depend on it because we are, above all things, a biological species living in a biological world."

Janine Benyus is a consultant and author of the book Biomimicry: Innovation Inspired by Nature. She's the co-founder of the Biomimicry Guild and founder of the Biomimicry Institute.

"There's a term called ecological performance standards. See what you think of this. A building project -- this is way beyond LEED -- should do at least as well in terms of ecosystem services as the native ecosystem that it's replacing. We know...what a native forest in New England does in terms of absorbing gallons of water after a storm...sequestering CO2...or cooling the air. We have those figures. What if we took those metrics and said, That's what our building project has to do."

Moderator Kevin Klose, President of National Public Radio, guided the discussion. It was all very interesting and sometimes entertaining.

(Wilson) Having spent my life studying ants, another social insect, you don't want to go to them [as an example of how human society should live]. Everything is driven by instinct. Males are tolerated in the colony for only a brief time... (full clip not transcribed)... My point is, for the human problem we need a human solution, and that means learning a lot more about humans (laughter) ...than about apes and ants."
(Klose) "Janine, would you care to add...(laughing)"
(Benyus) "I will echo that, and then you're out. (laughter, applause)"

Greenbuild 2009
There is a sense of urgency in the green building movement, and it may seem esoteric to talk about studying species we haven't discovered yet, learning their ways, and adapting them to the built environment.

We need to do research with long-range benefits, but we can't just wait for those innovations to materialize. Right now, green building needs to implement the ideas we have, as widely as possible...

That will be a key topic at Greenbuild 2009 in Phoenix Arizona, November 11-13. The theme will be "Main Street Green - Connect to the Conversation." And we'll be there covering it for you.

Happy 2009
Energy Priorities magazine has been published since 2004, and then we launched the Building Priorities Briefing a year ago, in January of 2008. It's more work than we bargained for, but it's worth it. We're having a great time investigating innovative building technologies, interviewing fascinating people, and bringing the best ideas to business listeners like you. We hope you're enjoying the briefings on your PC, or your iPhone, and learning useful ideas while you're working, or working out, or just relaxing.

This is the last briefing of 2008. Happy holidays from all of us here at Energy Priorities magazine, and join us again in January!

For now, we'll leave you with this thought from USGBC chairman Rick Fedrizzi...

"It is about 'we the people.' It is not about Washington, and it is not about Wall Street. Change comes from within and it begins with us -- as individuals, as a community. This movement inherits a grand tradition of courageous transformational change. And we are capable of great good. We are capable of making every generation of this country understand...from the Boston Tea Party to the Berlin Wall. We are the people we've been waiting for. We're the people this country needs now more than ever, and we need to welcome the whole world to come along with us on this amazing journey. We are revolutionary green!" (applause)

Music in auditorium: Onerepublic "Say all I need"

Comments

Yes, Canada elected a conservative government that in fact opposed meaningful carbon constraints. But that election led to a minority government, supported by less than 37% of votes cast, and the result should not be taken to mean Canadians are unmindful of climate change. I believe that here, as elsewhere, every day more people recognize the dangers posed by climate change, the causal connection between it and human activities, and the urgent imperative to bring about meaningful change. Now, if our government - of whatever political stripe - would only show some meaningful leadership!