iques. Among the financial benefits that governments can offer to subsidize environmentally friendly projects are tax breaks, fast-track permits, or lower prices on land that is under their control. (See “The Critical Enabler,” by Gary M. Rahl, s+b, Summer 2008.)
More farsighted governments should be encouraged to take these steps because of the potential positive spillover from sustainable, healthy buildings: lower health-care costs; increased employment in advanced engineering, construction, and facility management; additional investment from global companies; and improved public relations for cities, regions, or countries. Such bragging rights, as well as bottom-line economic gains, were a prime motivator behind Abu Dhabi’s Masdar City, another UAE project, touted by its developers as the “world’s first zero-carbon, zero-waste, car-free” urban community. Initiated by a government-owned development company, which invested US$4 billion in Masdar City out of a total yearly budget of $22 billion, the 1,500-acre site is likely to begin construction this year. It will include a special economic zone housing companies involved in alternative energies and sustainability research, and it is forecasted to attract more than 1,500 businesses and generate billions in macroeconomic benefits for Abu Dhabi.
Governments in Europe have also taken tentative steps to corral some of the benefits of sustainable development. Switzerland and Denmark have adopted stringent construction regulations with strict, specific guidelines for energy consumption, depending on the size and type of building. The European Commission calculated that if Denmark’s rules were applied throughout the E.U., projected energy consumption could be reduced by up to two-thirds. Germany, for its part, has offered tax incentives to homeowners who build new homes or retrofit existing homes according to energy-friendly guidelines.
Investors, developers, and property owners must also wake up to the economic opportunities that sustainable buildings present. This means looking at costs from the perspective of the building’s total life cycle, including planning, construction, operations, and even demolition. Moreover, innovative developers should look at the revenue side. A variety of studies have quantified the impact of clean air and a pleasant environment and found that they lead to higher productivity and lower tenant turnover in office buildings, longer visits by shoppers and increased purchases in retail environments, and improved sleep and higher levels of concentration in residential properties.
Consumers, too, must become aware of the impact of their choices and behaviors. This was made plain in a somewhat unorthodox way recently in South Korea, where citizens typically keep the thermostat high during chilly winters and the air conditioning working overtime during hot and humid summer months. According to an economist who has studied energy usage in buildings, the nation could reduce its energy consumption by 10 percent if the population simply kept room temperature at 72 degrees during cold weather. To help improve citizens’ bad habits, South Korea’s largest broadcasting company recently visited the homes of the foreign community living in Seoul to film a documentary meant to educate Koreans on how and why foreigners use significantly less energy.
Nick Beglinger is managing partner of Maxmakers, a Swiss company active in sustainable real estate and infrastructure development, including Abu Dhabi’s Masdar City.
Tariq Hussain is Maxmakers’ northeast Asia representative, based in Seoul, Korea.