FIGURE 3-1 The average cost premium associated with building green for U.S. buildings certified at the LEED Silver level has generally decreased over time. This is primarily due to familiarity with the process and the requirements of being LEED certified.

SOURCE: Modified from Kats and Capital E (2003).

was higher for green buildings—approximately 2 percent, or $3–5 per square foot—than nongreen buildings, noted Kats. However, he suggested that some of the cost premium can be attributed to the novelty of building green and the fact that many builders are on a learning curve. Construction costs decline as more green buildings are constructed and familiarity with green design increases, and when green building principles are incorporated early in the design process. For example, the average cost premium for a green building certified at the LEED Silver level has generally decreased over the past 10 years (Figure 3-1). An important message for institutions that engage in their first green building is that their next green building is likely to cost less, said Kats.

Health and Productivity Are the Drivers for the Benefits of Green Facilities

When quantifying benefits, Kats’s group focused on areas with the largest potential gain. Rent or amortized ownership account for approximately 5 percent of operating costs, and the direct and indirect costs of employees constitute 80–90 percent. Thus most studies look to this area of productivity and health for the largest impacts.

In a financial benefits summary of green buildings (Table 3-1), the study found that energy benefits saved $5.80 per square foot, while operating costs saved approximately $8.50 per square foot. For productivity and health, four

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