Dr Jeroen van der Heijden

2 April 2014 — Recently I questioned whether Green Star has caused the green building revolution the Green Building Council of Australia claims. I concluded that the “revolution” was very much contained to the high end of the office market in Australia’s central business districts.

In this contribution I will look at Green Star’s big sister in the United States, LEED, or Leadership in Environmental and Energy Design.

In particular, I seek to understand what we can learn from LEED. I do so because I received positive and critical replies to the Green Star article – some from people who consider me too critical about Green Star. They stressed its successes: even while facing the global financial crisis it still achieved to certify more than seven million square metres of Australia’s built-up space. Other replies came from people who considered my contribution not critical enough. They are concerned that Green Star may have become a business in itself where making profit overshadows achieving meaningful change in the Australian construction industry.

Perhaps a brief analysis of another benchmarking tool helps to balance both points of view. LEED is an interesting case to look at. It was introduced well before Green Star, in 1993. While LEED and Green Star differ to some extent, they are comparable on many aspects. LEED is applied in135 countries and regions. Around the globe 20,000 projects have been LEED certified, which reflects close to 900 million sq m of LEED certified space in the United States only. LEED may be considered the world’s most influential best-of-class benchmarking tool.

Absolute versus relative performance

The close to 900 million sq m of built-up space LEED has achieved in the United States is mind boggling. But what does this number mean in relative terms? The current built-up space in the United States was, by the end of 2013, assumed to be close to 32 billion sq m. This implies that it took LEED about 20 years to now cover at best three per cent of all built-up space in the United States. Again, this is, I feel, not all too revolutionary.

But, one may say, LEED was only introduced in 1993, so how fair is it to assess its impact on buildings constructed before 1993?

In the United States LEED seems to be predominantly used in the commercial sector, and is not gaining much traction in the residential sector (the 100,000 housing units with LEED certification stand in bleak contrast with the more than 100 million housing units in the United States). Yet, in the commercial sector roughly half of all certificates were awarded to existing buildings by 2011. So, what is the market share of LEED for building built since 1993, the year it was introduced?

It may be assumed that in the United States the total built-up space has grown by about two per cent a year over the last two decades, or about 110 billion sq m. With only half of LEED certificates awarded to new (predominantly commercial) built-up space this implies that LEED has, at best, influenced close to four per cent of this new built-up space developed since 1993.

Keeping further in mind that LEED certifies buildings in various classes, from ones that only just meet the mark to those that are actually world-leaders, it is of interest to note that only six per cent of LEED certificates are awarded in the highest tier – LEED Platinum.

A new 6 Star Green Star building at ANU is widely marketed as the greenest in the ACT. But what about the 150 non-Green Star buildings at the ANU campus?

Do LEED buildings outperform conventional ones?

Over the years, LEED has witnessed significant criticism. In its early days, the successes of LEED buildings in terms of energy reductions that were reported by the USGBC were questioned.

Like Green Star, LEED certifies both buildings “as designed” and “as built”. Both categories of certification are critiqued. After all, once built, a building may be fairly different from its design. Likewise, even when built to its design, only a building’s performance in operation will show true environmental credentials. This is why LEED, but also Green Star, has recently introduced an “in operation” category to certify buildings in use. This does not take away that a part of the currently 900 million sq m of certified LEED space likely does not perform as well as certified. Because old certificates (that is “as designed” and “as built”) do not expire it will be difficult for a lay person to understand the true value of the various certificates.

The new category “in operation” appears all the more important because the actual performance of these LEED buildings is still being questioned. For instance, there does not appear to be a correlation between the energy savings of a LEED-certified building and the number of credits the building was awarded. Studies have also indicated that LEED-certified buildings do not outperform conventional buildings in terms of energy usage and greenhouse gas emissions. In certain examples they even seem to perform worse. More strikingly, a building can be certified LEED Platinum, the highest tier of certification, even when it uses double the energy of a state-of-the-art sustainable building under some European building benchmarking tools

What does LEED certification mean?

Another oft heard critique is that the tool allows for gaming. Some of the criteria that LEED sets are easier or cheaper to meet than others. There are various “cheat sheets” available online that help designers and developers to pick the low hanging fruit within LEED.

LEED is also critiqued for not addressing the context of LEED-certified buildings or for not having a more holistic approach to urban sustainability. How can, for instance, the highly energy and water intensive casinos in the desert in Las Vegas be certified under LEED, critics wonder. Or, why does LEED not take into account issues such as the transport of “sustainable” building materials? After all, if these materials have to be transported for considerable distances, their environmental performance is de facto obsolete.

In other words, whilst the absolute numbers of LEED certified built-up space in the United States are truly impressive, these numbers look somewhat different when looked at more closely. The relative penetration of LEED is at best three per cent of all built up space in the United States, and at best eight per cent of all built up space constructed since LEED was introduced. Many certificates are awarded to the design of buildings, leaving at question whether they will actually achieve their environmental credentials. Finally, very little of LEED certificates are awarded to truly world-leading practice – that is Platinum-rated building.

From voluntary to mandatory: LEED as required by governments

In the United States governments are increasingly assimilating LEED criteria into their own construction regulations or they consider particular levels of LEED certification as sufficient to meet construction regulations. This is a very direct method of incorporating LEED into governmental regulation, and I have not heard of governments in Australia assimilating Green Star criteria in such a way.

What seems to be happening, however, is that governments require particular Green Star (or related) ratings for their own buildings. This is not dissimilar from what is happening in the United States. For instance, with the passage of the Local Law 86 in 2005, the City of New York requires that building projects that receive more than a specified amount of city government funding achieve a (low-tier) LEED rating. With 27 per cent of all LEED projects being government-owned or occupied in the United States, such governmental requirements have a significant impact on the performance and reach of LEED.

State and local governments throughout the United States also offer financial incentives to developers and building owners, such as tax-breaks, for having their buildings LEED-certified. For instance, the State of Maryland in the United States ran the Green Building Tax Credit Program from 2009 to 2012. The program provided developers with tax credits for the construction and retrofitting of energy efficient buildings. The program was closely linked to LEED. Tax credits would only be issued if a building, upon completion, met LEED Gold requirements and a LEED-accredited professional assessed the construction work once finished.

Risks of mandating LEED by governments

This uptake and mandating of LEED by governments is an interesting development and has not achieved much (scholarly) attention yet. Adopting standards developed by non-governmental organisations appears to be an easy and cost-effective way for governments to quickly introduce regulatory requirements that may help to improve the environmental performance of the built environment.

This strategy is, however, not without risks. Governments need to be careful in adopting private regulations such as LEED criteria as a baseline for their own construction codes or even supporting the use of these criteria. Private regulation emerges under a completely different set of accountability and legitimacy rules than public regulations. Although the administrative organisation behind LEED, the US Green Building Council (and the GBCA for that matter), represents a wide range of stakeholders, governments included, they do not have the democratic legitimacy that governments normally have.

Besides, by requiring LEED certification (or Green Star certification) for their own buildings governments raise barriers to the development of other benchmarking tools. Potential new tools (say, the application of Green Star in the United States, or EnviroDevelopment in Australia) will have a hard time to prove their value if they are de facto excluded from governmental clientele. This, I feel, has a negative impact on competition in the market for best-of-class benchmarking tools.

Take home lessons

This brief analysis of LEED provides some lessons for ratings tools.

First, after 20 years of LEED experience it seems apparent that best-of-class benchmarking is not attractive to the residential sector. While LEED has certified 100,000 housing units, these represent at best 20 million sq m of built-up space when considering that the average home size in the United States is 200 sq m. This is about 2.5 per cent of all LEED certified space. To make a difference in the residential sector other tools need to be developed, or other strategies need to be explored to make best-of-class benchmarking attractive to homeowners.

Second, best-of-class benchmarking holds a significant risk of a race to the bottom in standards. With best-of-class benchmarking being profitable to both its users and its administrators, new entrants to the market may introduce lower standards to achieve clientele. Administrators of these tools may start to think about how a race to the bottom can be prevented; and better, how a race to the top in standards may be achieved.

Third, with the proliferation of best-of-class benchmarking tools it will become even more unclear to a layperson what a particular certificate actually implies. A non-specialist most likely already finds it difficult to compare the value of an “as built” Gold certificate from 2003 with that of an “in performance” Gold certificate from 2013. But with the number of tools growing by the year it will be impossible for this non-specialist to understand the differences between, say, a LEED Platinum certificate and a 6 Star Green Star one. They are both awarded for maximum performance, are they not? Here administrators of the various tools may begin to better explain (on the publicly accessible parts of their websites) what each level of certification actually implies.

Finally, while the administrators of these tools should be proud of what has been achieved, society more broadly may start thinking a bit harder about how to speed up and scale of this performance. LEED and Green Star were intended to award leading practice in the industry. It is therefore worrisome to see that their market share is very limited, even in the market for new construction. The abundance of media attention for the tools may give the illusion of widespread leadership, and willingness in the construction industry to voluntarily move to higher levels of environmental and resource sustainability. Their low rates of application, however, seem to point to a lack of such leadership and willingness.

Dr Jeroen van der Heijden is an assistant professor at the University of Amsterdam and a Research Fellow at the Australian National University. He has studied close to 70 governance tools (such as LEED and Green Star) in Australia, Asia, Europe and North-America that seek to achieve leadership and a voluntary move in the construction industry to higher levels of environmental and resource sustainability.

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  1. Thanks Ellen and Nicholas

    Ellen, I fully agree, we need to start somewhere and we can only take one step at a time. But if it takes 20 years to change at best 3% of the market then it will take long (and I fear too long) for these tools to really have a transformative impact on the built environment. Each and every GreenStar Six Star and LEED Platinum building should be lauded (as is currently done), but we should also keep our eye on the bigger picture, the 90+% of buildings around the globe that do not show all too many environmental credentials.

    Nicholas, thanks for pointing this out to me. No, I have not compared the NCC and LEED or GreenStar criteria to such dept. I will surely look into it.

  2. It seems to me that Dr Jeroen forgets that tools such as LEED and Green Star address much more than energy and water efficiency for building operational performance. They are design rating tools Also, I would say we need to start somewhere and I think that’s what LEED and Greenstar have done. Now that rating tools such as these have addressed some ‘basics’ in the building and construction industries, now we can move towards things such as life cycle assessments and wider sustainability of the urban context these buildings sit within. One step at a time.

  3. Please thank Dr Jeroen for a well presented analysis of the energy rating certification tools currently in use.

    I was always sceptical of these tools’ usefulness of attractiveness to the residential construction sector.

    I was particularly interested in this:
    “In the United States governments are increasingly assimilating LEED criteria into their own construction regulations or they consider particular levels of LEED certification as sufficient to meet construction regulations. This is a very direct method of incorporating LEED into governmental regulation, and I have not heard of governments in Australia assimilating Green Star criteria in such a way.”

    I wonder whether Dr Jeroen has a view of the NCC Section J and its effectiveness in water and energy usage: – is it achieving, in all classes, more effective reductions in GHG emissions than what LEED seeks to do?