TABLE 3-1 Financial Benefits of Green Buildings—Summary of Findings (per square foot)


20-Year Net Present Value

Energy savings


Emissions savings


Water savings


Operations and maintenance savings


Productivity and health value




Average extra cost of building green

(–3.00 to –$5.00)

Total 20-year net benefit


SOURCE: Kats (2003).

drivers were measured: lighting control, ventilation control, temperature control, and the amount of daylighting. These four drivers are a subset of a larger number of factors that affect productivity and health. For buildings certified at the LEED Certified and Silver levels, productivity and health increased about 1 percent. For buildings certified at the Gold and Platinum levels, the increase was about 1.5 percent or 7 minutes of employee time saved per day, noted Kats. The largest cost for a public or a private entity is the cost of its employees; these numbers translate into a net saving of $34–55 per square foot, depending on the level of certification. He concluded that an initial cost premium of $3–5 per square foot results in a net return of $50–65 per square foot net over a 20-year period at a 7 percent discount rate (Kats, 2003). There were additional significant financial benefits that the study was not able to quantify, including insurance, employment, equity, security, and brand appreciation.

Green Schools

Another recent study that gathered objective information on green buildings examined the costs and benefits of 30 green schools (Kats, 2006). Although the data came from a national sample of schools, the energy costs and teacher earnings were calculated on the basis of Massachusetts-specific costs. Both the conventional and the green school buildings averaged approximately 125,000 square feet for 900 students. The average cost premium for the 30 green schools in 10 states nationally was 1.65 percent, which translates into a cost premium of $3–4 per square foot. The study results showed an energy savings of 33 percent and a water savings of 32 percent (Kats, 2006). There were also substantial academic gains. In one example, two conventional schools were combined into a newly constructed green school in North Carolina. For the three years prior to the move, only 60 percent of the students achieved state-level standards on mathematics and

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