NCPA - National Center for Policy Analysis


July 12, 2005

Environmentally friendly building standards (green building standards) may work well for some types of buildings but should not be made mandatory for all new government buildings, says Todd Myers, Director of the Center for Environmental Policy at the Washington Policy Center.

Mandating any green building standard limits the flexibility of builders to make choices appropriate to each particular structure. Still, governments chose to adopt the Leadership in Energy and Environmental Design (LEED) standard, which will likely raise the cost of housing for consumers and increase tax burdens.

Advocates of mandating green building standards argue it will only cost an addition zero to two percent in up front costs while cutting energy and other costs dramatically over time. However, the studies advocates cite for these statistics are flawed. Consider:

  • An estimated 16 percent of new government buildings use LEED compared to only 1 percent of new commercial buildings, indicating that if LEED's promise of dramatic energy savings were true, many more businesses would incorporate them into their construction.
  • In one study, LEED projects were found to be cost effective as advocated; however, the study only looked at projects where the owners chose to follow LEED and does not include cost estimates from projects where LEED was rejected due to cost or other considerations.
  • LEED standards, geared toward office buildings, are not suitable for other types of buildings like warehouses, schools and prison facilities, and LEED cost estimates do not take into account the long-term maintenance costs derived from adhering to LEED standards.

Rather than mandating such standards, governments should allow the ongoing development of a competitive system for voluntary green building standards. A dynamic market process will enable standards to continually improve by responding to the needs of consumers and builders, adjusting to new technology and experience, using competition to promote a variety of approaches, says Myers.

Source: Todd Myers, "Green Building Standards: Why Mandating a Good Idea Can Be Bad Policy," Competitive Enterprise Institute, On Point Number 96, May 12, 2005.


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