(This article was first published in 2007)
It’s practically official that the scientific debate about climate change is over, and that with the release of the recent Stern Report in October 2006, the debate about the economics of climate change is almost over as well. What this leaves us with is what is in effect a political decision of when we act.
The Stern Report makes it very clear that if greenhouse gasses emissions are to be brought under control, and limited to 550ppm, then we can not afford to act at some point in the future, we have to act now. The argument that Stern puts forth is not driven by a simple ecological argument but a careful study that considers the economic impacts for global warming. It is argued that if we act now we can spend a little as 1% of GDP on averting the consequences of a worst-case scenario for climate change. If we delay then the costs has been estimated to rise to 5% of GDP. If a broader range of risks are considered then this could rise to more than 20% of GDP.
There are currently two emissions scenarios for the North East; low emissions and high emissions. It is predicted that by 2080 temperatures will have risen by anything between 1.5 and 4.5 degrees Celsius. With this in mind global warming may begin to sound like a good idea, everyone enjoys a cold beer on a warm day. Sadly such illusions are just that, illusions. Warmer weather is not the only implication of global warming, rainfall is also predicted to increase by 10-28% and due to the melting of the polar ice caps areas of the northeast coast will become submerged, in some cases making towns and villages uninhabitable. The conclusion of the Stern Report was that sustainable development is the key to avoiding some of the less desirable, and more costly, implications of climate change.
Statistics
A number of recent studies assessing design in the property market have noted that changes are afoot. One, by Gensler, found that 65% of property directors regard energy efficiency as a cost control issue, while 20% see it as a corporate responsibility. The most significant finding was that ninety per cent of businesses would be more willing to pay for energy-efficient buildings than for iconic ones – a larger number than developers currently believe.
This survey is backed up by further research conducted by the CBI and property consultants GVA Grimley. In this case more than 75% of respondents said that they are willing to pay more, through higher service charges or rents, to occupy premises that are, energy-efficient, water-efficient and environmentally friendly. The statistics are revealing on paper, but whether or not developers are willing to invest in such buildings in reality is another question altogether. Undoubtedly this risk is one of the reasons developers are reticent about commissioning such costly, sustainable buildings. That sustainable energy efficient buildings cost more is a very damaging myth that has been put to the test in a study the British Research Establishment the report actually demonstrates that contrary is true; capital cost savings can be achieved whilst improving a buildings sustainability. The Stern report suggests that failure to act now will only incur further, and more significant, costs in the future.
Opinion shift
Popular opinion is starting to shift, so it is not only cost driving new sustainable commissions, but also a genuine recognition that we are sitting on an environmental time bomb. The CBI research also showed that firms recognise other benefits of occupying ‘green’ property, such as raising staff satisfaction, increased productivity and improved company image. Buildings consume 50 per cent of the energy generated in the UK and, as natural resources drain and energy prices rise, so do company bills.
In January 2000 the Journal of Property Management noted that a 1% increase in productivity is equal to a typical company’s total annual energy cost; opt for a well designed highly insulated building that reduces energy bills and enables productivity gains and the bills will pay themselves. Firms in the finance and business service sector in particular placed a high level of importance on the corporate benefits of greener buildings.
In 2007 the Energy Performance Directive came into full force making it a legal requirement to assess and display the energy performance of a building. Given issues raised by a recent Confederation of British Industry (CBI) survey, it seems that the marketplace will be placing specific demands on developers in the coming years.
The Energy Performance Directive will put considerable pressure on developers, forcing them, via market forces, to abandon commissioning cheap, disposable buildings. My advice is not to shy away from outlay costs of sustainable buildings, but consider the long-term financial benefits of them. It will come as no surprise by now that energy performance and sustainability, or should I say reduced carbon emissions, fit hand in glove.
Whatever the reasons for investing in an energy efficient sustainable building, the issue is one that many companies can’t afford to ignore, especially if they want to remain profitable in the long term.
About the author:
Mark Siddall, principle at low energy architectural practice LEAP, is an architect and energy consultant specialising in low energy and PassivHaus design. He was project architect for the Racecourse Passivhaus scheme and has a keen interest building performance. In addition to architectural services his practice provides project enabling and education for clients, design teams and constructors.
LEAP website: www.leap4.it