Effective legislation will benefit energy efficient building sector, study shows

Legislation can impact commercial real estate

More than 75 percent of global real estate and construction industry executives believe that current energy efficiency legislation can benefit the commercial building sector, according to a report commissioned by the Global Buildings Performance Network (GBPN).

The study, which was conducted by The Economist Intelligence Unit, was aimed at industry executives in the USA, China, India and the European Union, with respondents asked a number of questions regarding their approach to energy efficiency initiatives and the effect of current legislation in their respective countries.

With commercial buildings coming under an energy efficiency spotlight, the study highlighted a number of key findings from its global respondents. Legislation was considered to be key in all territories with 34 percent of the industry believing that a lack of enforcement of regulations was a major obstacle to continued investment in efficiency, with 75 percent believing that there was an opportunity for commercial real estate to implement deep energy efficiency retrofits as, and when, further government incentives become available.

With 27 percent of the respondents based in the U.S, the work of DOE-sponsored initiatives such as the Energy Efficient Buildings Hub (EEB Hub) in the Greater Philadelphia region is seen as a model for national retrofit implementation. However, the study shows that despite such high-profile public-private sector collaborations, there is an apparent level of disinformation affecting the growth of the industry.

Respondents to the survey were divided on the true cost of commercial building energy consumption with 33 percent underestimating the financial significance of using energy efficient building materials. According to the GBPN, the cost of constructing an energy efficient building is between 5 and 15 percent more than a standard build, however 66 percent of respondents stated that it was significantly higher.

Respondents did admit that the message is gaining momentum, with 63 percent saying that it impacts on their investment decisions with over 50 percent taking a long-term view of potential payback. However, many of the executives interviewed would approve of government-mandated legislation to drive investment, with 68 percent believing that either a carbon tax or a limit on emissions would level the playing field for commercial construction companies.

"The market needs clear long-term signals, rational expectations and opportunities for a reasonable return on investment," wrote the authors of the report. "But with buildings responsible for such a large proportion of global greenhouse gas emissions, it is a task that should be embraced with urgency by both governments and the private sector."