Big New Ideas make taxpayers nervous, especially when politicians claim they won’t cost anything.
One of the hottest BNIs making taxpayers twitch is the Leadership in Energy and Environmental Design standard for environmentally sensitive buildings.
Dubbed LEED, it sounds great, and we all love the environment, but is the business case really as rosy as lobbyists and government press releases say?
The Yukon government just committed to achieving LEED for all its new commercial and industrial buildings.
How much will this cost?
The government’s climate change action plan says vaguely that LEED “will help reduce long-term operation costs,” but is silent on how much extra such buildings will cost to construct. Either the government isn’t telling us, or they don’t really know; neither of which inspire taxpayer confidence.
Ottawa’s new Greenstone building in Yellowknife is LEED-certified and expected to save up to $100,000 in energy costs per year. That sounds great, but how much extra did it cost to build? Nothing? Five million dollars?
Spending $5 million to save $100,000 per year would be as foolish as, say, the Yukon government investing $36 million in asset backed commercial paper and getting just $1,200 in interest. The Maple Leafs will win the Stanley Cup before your investment pays back.
So let’s take a beady-eyed look at the economics of LEED buildings.
In the end, we may decide that the extra cost is worth it if it helps the environment. But let’s not get bamboozled like the citizens of Montreal did when they fell for the old Olympic-economic-spinoffs ploy and spent 30 years paying off a stadium debt.
LEED is an American standard that has been adopted, with a few changes, in Canada.
Your building can get points in six categories: sustainable sites, water efficiency, energy and atmosphere, materials, indoor environment and innovation. You need 26 points to be certified, more for Silver, Gold and more than double for Platinum.
Some of the LEED points are easy to get, even in the Yukon, such as on-site renewable energy or access to public transit. A few minor items, such as using locally produced materials, are more difficult.
Some elements of Yellowknife’s Greenstone building definitely appear more costly.
The giant glass wall in front of the atrium looks spectacular, but not many cost-conscious enterprises put giant glass atriums on the buildings where they store their employees. There are other smart, environmentally conscious features, including solar panels and a system to capture rainwater from the roof and use it in the toilets instead of fresh water.
In an old joke come true, there is also an elaborate system to capture the hot air generated at government meetings. Sensors detect movement, if any, in Greenstone’s meeting rooms and begin recirculating the air, which is then stripped of its heat before being vented outside. New oxygen is then pumped into the meeting rooms, presumably improving federal decision-making.
All of this sounds very expensive. But the giant glass wall is facing south and captures a large amount of solar energy.
The solar panels cut electricity consumption by five per cent and the hot air collection system both saves energy and reduces the chances of costly mould and employee health problems. The long-run operating costs are expected to be lower than an older building of the same size.
LEED buildings also have many common-sense elements that cost very little in new construction.
Orienting your building and its windows towards the sun to capture passive solar energy costs nothing. Some clever people in the new Whitehorse Copper development are doing exactly this, instead of letting their house’s orientation be dictated by the street layout.
Greenstone cost about $18 million, or about $90 thousand per hot-air-generating federal official located in the building.
It works out to $2,500 per square metre. This is higher than the Canadian average of around $2,000 indicated in recent studies, but after the added costs of northern locations and government project management, it is not absurdly higher.
Other studies have found incremental capital costs for LEED to be in the zero to 10 per cent range, although this depends on whether the architects are shooting for the lowest level of LEED certification, or Platinum.
Greenstone is not the only building in the North that is LEED certified.
The Joamie school in Nunavut was built to the standard and the new Coast Mountain store in the old Taku Hotel building is also in the process of LEED certification. It’s highly promising that a private-sector firm found the business case for LEED attractive.
So what’s the conclusion on LEED?
The practices LEED encourages definitely make for better, greener buildings. And the long-run operating costs are lower. But anyone building one will still have to watch construction costs carefully.
Expect to hear more about this as the Yukon government builds a new jail, expands the airport and pushes forward with plans for a new hospital in Watson Lake and to rebuild F.H. Collins school.
LEED would make all of these buildings much better places to work, learn or serve your sentence.
But if LEED drives construction costs too high, other things will have to be cut. Can the jail’s budget afford both high-quality rehabilitation facilities and a rooftop rainwater-collection system?
The good news is that if the ancient Taku building can achieve LEED status, then our jails and schools probably can too.
Keith Halliday is a Yukon economist and author of the Aurore of the Yukon series of historical children’s adventure novels. His next book Game On Yukon! appears shortly.