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This Article 13 report was prepared by the Secretariat of the 

Commission for Environmental Cooperation (CEC). The information 

contained herein does not necessarily refl ect the views of the CEC or 

the governments of Canada, Mexico or the United States of America.

The report is published in the three languages of the CEC: 

English, French and Spanish. However, as the text was originally 

prepared in English and thereafter translated, in the case of disputed 

meaning, reference should be made to the English version. 

Reproduction of this document in whole or in part and in any 

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acknowledgement of the source is made. The CEC would 

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uses this document as a source.

Published by the Communications Department of the CEC Secretariat.

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PREFACE 3

EXECUTIVE SUMMARY 4

1. INTRODUCTION 9

2. GREEN BUILDING IN NORTH AMERICA 15

A. FEATURES OF GREEN BUILDING 16

B. HOW WIDESPREAD IS GREEN BUILDING? 17

C. RATING SYSTEMS 18

D. A PROCESS OF CONTINUAL IMPROVEMENT 18

3. A FOUNDATIONAL DRIVER FOR CHANGE 21

A. THE NEGATIVE ENVIRONMENTAL IMPACTS OF CURRENT BUILDING PRACTICES 22

B. BENEFITS OF GREEN BUILDING 23

4. CLIMATE CHANGE CRISIS AND BUILDINGS 33

A. GREEN BUILDING AND GHG EMISSIONS 34

B. CALLING FOR AGGRESSIVE IMPROVEMENT IN NORTH AMERICA 36

5. GREEN BUILDING ENERGY SCENARIOS FOR 2030 39

A. MODELING AGGRESSIVE ENERGY-SAVING SCENARIOS 40

B. COUNTRY-SPECIFIC RESULTS 42

C. GENERAL CONCLUSIONS 47

6. DRIVERS AND BARRIERS TO IMPROVEMENT 49

A. MOMENTUM TOWARD GREEN BUILDING IN THE UNITED STATES AND CANADA 50

B. MOMENTUM TOWARD GREEN BUILDING IN MEXICO 52

C. BARRIERS TO GREEN BUILDINGS 54

7. PROMOTING MUTUALLY BENEFICIAL COOPERATION 59

8. RECOMMENDATIONS FOR NORTH AMERICA 63

THE SECRETARIAT’S RECOMMENDATIONS ON MAKING GREEN BUILDING 

STANDARD PRACTICE IN NORTH AMERICA 65

APPENDIX: ADVISORY GROUP STATEMENT 71 

TABLE 

OF 

CONTENTS

3

The Commission for Environmental Cooperation (CEC) is an international organization 

created by Canada, Mexico, and the United States under the North American Agreement 

on Environmental Cooperation (NAAEC). The CEC was established to address regional 

environmental concerns, help prevent potential trade and environmental confl icts, and 

promote the effective enforcement of environmental law. The Agreement complements 

the environmental provisions of the North American Free Trade Agreement (NAFTA).

At the behest of Executive Directors William Kennedy and Adrián Vázquez, Tim 

Whitehouse and Geoff Garver of the CEC Secretariat prepared this report pursuant 

to Article 13 of the NAAEC. Article 13 is a section of the NAAEC that gives the CEC 

Secretariat authority to prepare reports on important environmental issues and present 

them to the governments and people of Canada, Mexico, and the United States.

Previous Article 13 reports have addressed the effects of transgenic maize in Mexico, 

environmental challenges and opportunities of an evolving continental electricity market, 

an agenda for preserving transboundary migratory bird habitat on the Upper San Pedro 

River, an agenda for cooperation to address long-range transport of air pollution in North 

America, and the death of migratory birds at the Silva Reservoir in Guanajuato, Mexico.

The CEC Secretariat would like to acknowledge the many individuals and organizations 

that contributed time and energy to the successful completion of this report. Special 

mention goes to the CEC Advisory Group on Green Building, chaired by Jonathan 

Westeinde, whose members have worked under a very tight deadline to develop the 

Statement and Advice on Recommendations that represent the core of this Secretariat 

report (see listing of Advisory Group members on page 10). The Secretariat would like 

to thank each one of them for their extraordinary dedication and collegiality over the 

course of the last two years. The Secretariat would also like to thank the authors of the 

background papers that were developed as part of this process (see list on page 11) and 

the many government and public participants who provided comments at the workshop 

and the symposium.

A draft of this report was provided to the NAAEC Parties, the Advisory Group and the 

background paper authors for confi dential review and comment. Comments were 

received from Martin Adelaar, Jennifer Atlee, Alison Kinn Bennett, Odón de Buen, 

Guillermo Casar, Roger Peters, José Picciotto, Marta Niño Sulkowska, Leanne Tobias, 

Cesar Trevino, Douglas Webber, Jonathan Westeinde, and Fernando Mayagoitia Wintron. 

Environment Canada and the US Environmental Protection Agency provided additional 

comments from interagency reviews of the draft report.

The CEC Secretariat would also like to thank Nils Larsson and Jean Cinq-Mars of iiSBE 

and Joel Ann Todd, a green building consultant, for their advice in designing the study, 

selecting the Advisory Group and authors of the background papers, and preparing for 

and conducting the fi rst Advisory Group meeting in June 2006. Finally, the Secretariat 

would like to thank the Secretariat staff members who helped in the development of this 

report. These include: Doris Millan, Sophia Noguera, Katia Opalka, José Otero, Paolo 

Solano, and Jeffrey Stoub. 

PREFACE
4GREEN BUILDING IN NORTH AMERICA: OPPORTUNITIES AND CHALLENGES

INTRODUCTION

In this report, the Secretariat of the Commission for Environmental Cooperation (CEC) recommends that 

North American leaders make green building a foundational driver for environmental, social, and economic 

improvement in Canada, Mexico, and the United States. 

What is green building and how can it become such an important instrument for change?

Green building1

 refers to the use of environmentally preferable practices and materials in the design, 

location, construction, operation and disposal of buildings. It applies to both renovation and retrofi tting of 

existing buildings and construction of new buildings, whether residential or commercial public or private.

By continually improving how we locate, design, build, operate, and retrofi t buildings, North American 

leaders can signifi cantly improve the well-being of North America. Advanced energy-saving technologies 

applied in buildings can result in enormous reductions in demand for fossil fuels and emissions of 

greenhouse gases (GHG). Better design and building practices can also help address environmental 

challenges such as natural resource depletion, waste disposal, and air, water, and soil pollution. Green 

building can also help achieve gains in human health and prosperity. 

Despite this potential for transformation, green building represents only a small percentage of building in 

North America. By some estimates, green building currently accounts for about two percent of the new 

non-residential building market in the United States and 0.3 percent of the residential market. In Canada, 

green building trends are generally thought to be similar to those in the United States. In Mexico, there are 

no reliable fi gures showing the extent to which green building exists in the marketplace. Although the green 

building market is expected to grow rapidly in all three countries in the coming years, a substantial shift from 

the status quo is needed to make these high-performance buildings the norm in North America. 

GREEN BUILDING AND THE ENVIRONMENT

In Canada, Mexico, and the United States, commercial and residential building operations account for about 

20, 30, and 40 percent of the primary energy consumption, respectively. They typically also account for 20 

to 25 percent of the landfi ll waste and 5 to 12 percent of the water consumption. The United States Green 

Building Council estimates that green building, on average, currently reduces energy use by 30 percent, 

carbon emissions by 35 percent, water use by 30 to 50 percent, and generates waste cost savings of 50 to 

90 percent. 

Substantial research supports the health and productivity benefi ts of green features, such as daylighting, 

increased natural air ventilation and moisture reduction, and the use of low-emitting fl oor carpets, glues, 

paints and other interior fi nishes and furnishings. In the United States, the annual cost of building-related 

sickness is estimated to be at $58 billion. According to researchers, green building has the potential to 

generate an additional $200 billion annually in the United States in worker performance by creating offi ces 

with improved indoor air quality.

Buildings also affect our quality of life, infrastructure development, and transportation systems. Beyond 

individual buildings, poor site development often leads to ineffi cient land use, resulting in greater energy 

consumption and travel time, loss of productivity, polluted runoff to surface water and wastewater treatment 

systems, loss of agricultural lands, fragmented habitats, and fi scal stress to local communities.

1 The CEC uses the term “edifi cación sustentable” as the Spanish translation of “green building,” although a more precise translation of “edifi cación sustentable” might be “sustainable building.” “Sustainability” generally encompasses environmental, economic and social aspects. 

While the focus here is on the environmental aspects of buildings, we emphasize that to be sustainable, construction and development must also 

account for economic and social concerns.

EXECUTIVE

SUMMARY
5

BUILDINGS AND CLIMATE CHANGE

Reports from leading scientists throughout the world underline the need for urgent action on climate 

change. The Intergovernmental Panel on Climate Change (IPCC) projects that without more immediate 

action to limit greenhouse gas emissions, global warming could cause irreversible and possibly catastrophic 

consequences.

Every year, the energy used by buildings in North America causes more than 2,200 megatons of CO2

to be released into the atmosphere, about 35 percent of the continent’s total. Recent studies by the 

Intergovernmental Panel on Climate Change (IPCC), McKinsey & Company (an international consulting fi rm), 

and Vattenfall (a Swedish utility company), indicate that improved building practices are some of the quickest 

and cheapest ways to reduce signifi cantly greenhouse gas emissions, often with net economic benefi t. An 

increasing number of organizations, institutions, and government entities in North America are calling for 

aggressive energy performance improvements in the building sector. In short, green building represents 

some of the ripest “low-hanging fruit” for achieving signifi cant reductions in climate change emissions.

A background study commissioned by the CEC Secretariat as part of this study signals the tremendous 

possibilities in terms of energy improvements and greenhouse gas emissions reductions in the building 

sector by 2030 and suggests a path forward toward zero net-energy and carbon-neutral buildings. A rapidly 

increasing market uptake of currently available and emerging advanced energy-saving technologies could 

result in annual reductions of 1711 megatonnes (MT) of CO2

 into the atmosphere in North America by 

2030, compared to a business-as-usual approach. This is nearly equivalent to the 1756 MT of CO2 emissions 

from the transportation sector in the United States in 2000. With these dramatic reductions in energy 

requirements, renewable energy could provide additional energy needs, making the widespread adoption of 

zero net-energy and carbon-neutral buildings possible.

MOVING THE GREEN BUILDING AGENDA FORWARD

In the United States and Canada, many efforts are currently underway to accelerate the market 

uptake of green building. Economics are helping to drive these changes. Studies show that the cost 

premium to deliver sustainable properties to the market has declined considerably in recent years, 

and that experienced teams are delivering them at costs competitive with conventional buildings. 

There is, however, a cost to organizations to gain the experience necessary to achieve this. In addition, 

studies show that the signifi cant life-cycle fi nancial benefi ts of green design more than make up for 

the additional initial cost associated with green building. Unfortunately, in many cases, due to policy, 

ownership, and business structures, the benefi ts of green building do not accrue to those making the 

investment. Research presented in the background papers to this report shows how governments at 

all levels are working to address these and other obstacles to infl uence the uptake of green building 

through the integrated use of building codes; zoning regulations; tax-based incentives; and preferential 

treatment for green developers (such as fast-track permitting). In addition, green building practices 

are also being spurred by demand offset programs (in which a developer reduces energy and water 

demand as a condition of permitting); preferred purchasing; tax shifting; and government-supported 

research, development, and educational programs.

Mexico has a tradition of architecture that favors environmentally sensitive, small-footprint building 

practices and designs. Policy efforts to promote green building are relatively new and generally focused on 

the housing sector. The country’s National Housing Commission (Comisión Nacional de Vivienda—Conavi) 

is documenting green practices and working to defi ne criteria for green homes. Infonavit, a large housing 

fund in Mexico supported by mandatory employer and employee contributions, has created a “green 

mortgage” program.
6GREEN BUILDING IN NORTH AMERICA: OPPORTUNITIES AND CHALLENGES

The Comisión Nacional para el Ahorro de Energía (National Commission for Energy Effi ciency—

Conae) recently began work to implement a solar water heater program. This initiative, along 

with green procurement guidelines, leasing and public sector services, is sure to play a part in the 

process. Also, new hotels in some environmentally sensitive areas are integrating technology to 

reduce their environmental footprint and a number of private corporations are designing their 

headquarters to be more environmentally effi cient. 

Current market forces and government programs alone, however, will not drive the necessary 

changes in the building industry. Key barriers to a market transformation in North America include: 

the predominant practice by governments and institutions of separating capital and operating 

budgets instead of using life-cycle budgeting; the split incentive problem, where the one who pays 

for the green features often does not realize its benefi ts; a tendency to rely on business-as-usual 

approaches in view of the perceived cost, risk, and uncertainty of green building; limited awareness 

and knowledge of green building; and lack of coordination and consistency in government policies 

affecting building. 

In Mexico, additional barriers include the paucity of urban planning and building regulations 

that address sustainability issues, the lack of a widely-used certifi cation system for green building 

practices, limited implementation of existing standards, and the lack of data on energy and water 

use in buildings.

PROMOTING MUTUALLY BENEFICIAL COOPERATION

Similarities and differences within North America present an opportunity for governmental and 

nongovernmental institutions and industry in the three countries to work to improve the building 

sector. This effort can help strengthen the economies of North America by spurring new markets 

and business opportunities for manufacturers, utilities, and other companies. Europe has strong 

green building programs and segments of Asia and Latin America are beginning to embrace green 

building. Green building will help ensure North American competitiveness in the global market 

for products, technologies, and practices essential to North America’s future. These include more 

effi cient heating and cooling systems, advanced building materials, water-reclamation systems, higheffi ciency appliances, advanced insulation systems, energy-effi cient lighting, and many more.

RECOMMENDATIONS FOR NORTH AMERICA

With these drivers and barriers, regional variations and global changes pushing and pulling the 

markets in different directions, what can North American leaders do to help ensure green building 

becomes standard practice in North America?

As part of the development of this report, the CEC Secretariat’s Green Building Advisory 

Group issued a Statement and Advice on Recommendations for the Secretariat. The Advice on 

Recommendations sets forth a specifi c path for how North America can accelerate the market 

uptake of green building and make it the standard practice for all new and existing buildings. 

The CEC Secretariat has adopted the Advisory Group’s Advice on Recommendations as its 

recommendations for this report. These recommendations are designed to support and build on the 

many ongoing efforts already occurring in North America by the federal, state/provincial and local 

governments as well as many industry, trade and nongovernmental organizations.
7

Among other things, these recommendations call upon North American government, industry and 

nongovernmental leaders to:

(1) Work together to develop a lasting and achievable vision for green building in North America. 

This vision will help drive targets and strategies for green building and could result in the creation of 

a common set of principles and planning tools for green building, with each country having region/

context-appropriate policies and programs to address differences in building codes, regulatory 

environments, climate, and economic and social conditions.

To work toward this vision, the recommendations call for the creation of national, multi-stakeholder 

task forces in each of the three countries, coordinated by the environment or other appropriate 

ministry of each country and linked internationally through a cooperative mechanism such as the 

CEC. These task forces would promote aggressive and consolidated approaches for accelerating 

the achievement of this vision at the North American level, with united and integrated participation 

of representatives of all components of the building sector and civil society.

(2) Set clearly defi ned targets with the goal of achieving the most rapid possible adoption of green 

building in North America, including setting aggressive, realistic targets for carbon-neutral or net 

zero-energy buildings. Modeling should be conducted and targets set for other environmental 

parameters such as water use, wastewater generation, land conversion, use of environmentallypreferable materials, embodied energy and waste loads, and to monitor performance for continual 

improvements. 

(3) Implement a set of strategies for enhancing, accelerating and integrating ongoing or new 

efforts in support of green building. These strategies should include efforts to promote private 

sector fi nancing and proper valuation methods, and to increase knowledge through research and 

development, capacity building, outreach, and the use of labels and disclosures on green building 

performance. These efforts are particularly important for Mexico, considering its urgent need 

for affordable housing and the need for widely recognized green building rating systems and a 

nationally-coordinated framework that will support and enhance existing Mexican policies and 

programs that favor green building.

North American governments at all levels should build on their progress to date and, as swiftly as 

possible, adopt comprehensive and ambitious policies requiring all government procurement in the 

building sector to achieve high levels of green building performance, with a fi rm commitment to 

continual improvement over time.

These efforts should also push for continual improvement in policies, regulations, and codes and 

develop and enforce effective mechanisms to monitor implementation. These include tax and other 

fi nancial incentives, such as graduated utility rates that encourage conservation, non-tax incentives 

like expedited permitting, priority plan review, and density bonuses, among others. Over time, 

government should emphasize the appropriate use of mandates, in addition to incentives, with the 

view toward the advancement of green building performance targets. It is critical that all policies 

and programs related to green building be integrated with comprehensive urban development 

programs geared toward the development of sustainable communities. 

Finally, the recommendations call for North American leaders to promote North American and global 

cooperation in green building in such areas as trade in materials, conducting joint or coordinated 

research programs, and to promote the sharing of data, information, and best practices.
8GREEN BUILDING IN NORTH AMERICA: OPPORTUNITIES AND CHALLENGES

SEATTLE CITY HALL

SEATTLE, WASHINGTON
TWO

GREEN BUILDING IN NORTH AMERICA

9

INTRODUCTION 1

PHOTO: ERIK STUHAUG
10GREEN BUILDING IN NORTH AMERICA: OPPORTUNITIES AND CHALLENGES

THIS REPORT PRESENTS NORTH AMERICAN LEADERS WITH A TRINATIONAL 

PLAN FOR MAKING GREEN BUILDING A FOUNDATIONAL DRIVER FOR 

CHANGE IN CANADA, MEXICO, AND THE UNITED STATES. THE REPORT 

WAS PREPARED OVER TWO YEARS, WITH THE HELP OF LEADING NORTH 

AMERICAN EXPERTS ON GREEN BUILDING AND INPUT FROM THE NAAEC 

PARTIES AND THE PUBLIC. THROUGH THIS PROCESS, THE CEC SECRETARIAT 

IDENTIFIED THE KEY OPPORTUNITIES AND CHALLENGES FACING GREEN 

BUILDING IN NORTH AMERICA. 

THE PROCESS

To examine the status of green building in North America, as well as some of 

the drivers and barriers to its development and implementation, in February 

of 2006 the Secretariat of the CEC initiated this study. 

Throughout, the Secretariat has relied heavily on the input and work of an 

international Advisory Group convened by the Secretariat (see listing below), 

background papers developed by leading experts in Canada, Mexico, and 

the United States (see page 11), and materials presented and input received 

at two Secretariat-sponsored public meetings. 

INTRODUCTION

1

JONATHAN WESTEINDE (CHAIR) Windmill Development Group

ANNE AUGER Offi ce of Energy Effi ciency at Natural Resources Canada

BOB BERKEBILE BNIM Architects

PETER BUSBY Busby Perkins + Will

GUILLERMO CASAR MARCOS Ingenieros Civiles Asociados

PATRICIA CLAREY Health Net of California and member of the CEC Joint Public Advisory Committee

KAREN COOK EECOM

EVANGELINA HIRATA NAGASAKO Comisión Nacional de Vivienda (Conavi)

DONALD R. HORN Offi ce of Applied Science at the US General Services Administration’s Public Buildings Service

BENOIT LABONTÉ Borough of Ville-Marie, Montreal

SUSAN L. MACLAURIN GWL Realty Advisors

JUAN C. MATA SANDOVAL Secretaría de Energía

DAVID MORILLÓN GÁLVEZ Universidad Nacional Autónoma de México

SCOTT MULDAVIN The Muldavin Company, Inc.

ROGER PETERS Pembina Institute

JOSÉ PICCIOTTO Picciotto Architects

DIANE SUGIMURA Department of Planning and Development, Seattle

KAARIN TAIPALE Helsinki School of Economics’ Center for Knowledge and Innovation Research

CÉSAR ULISES TREVIÑO Mexico Green Building Council

ROBERT WATSON ECOTECH International

GREEN BUILDING ADVISORY GROUP MEMBERS
11

PAPER 1: Green Building Energy Scenarios for 2030

Marbek Resource Consultants (Martin Adelaar and Mark Pasini), 

Lawrence Berkeley Laboratory (Stephen Selkowitz), 

Odón de Buen

PAPER 2: Toward Sustainable Financing and Strong Markets for Green Building

Sinergia Capital 

(Luis Antonio García Díaz)

Paper 2a: Green Building Market and 

Finance in Mexico

Malachite LLC (Leanne Tobias) Paper 2b: US Green Building Finance Review

Chris Corps Paper 2c: Valuing Sustainability

PAPER 3: Institutional Efforts for Green Building

Mario Molina Center Paper 3a: The Case of Mexico 

Alex Wilson, Jennifer Atlee, 

Halsall Associates (Doug Webber)

Paper 3b: Approaches in Canada and 

the United States 

PAPER 4: Residential Green Building in North America

Fernando Mayagoitia Paper 4a: Working Toward Accessible and 

Sustainable Housing in Mexico

Steven Winter Paper 4b: Promoting Residential Green Building in 

North America: A Perspective from the United States 

The Sheltair Group (Innes Hood) Paper 4c: The Benefi ts of a North American 

Strategy: A Perspective from Canada

GREEN BUILDING BACKGROUND PAPERS

ONE

INTRODUCTION
12GREEN BUILDING IN NORTH AMERICA: OPPORTUNITIES AND CHALLENGES

Advisory Group members included prominent developers and architects, 

sustainability and energy experts, real estate appraisers and brokers, 

together with local and national government representatives. The 

Advisory Group provided direction to the Secretariat throughout the 

development of this report. It also developed a Statement and Advice 

on Recommendations that provides a vision, targets, and strategies 

for making green building a reality in North America. Throughout this 

report, we have borrowed heavily from the Advisory Group Statement 

and adopted their advice to us on the recommendations to include in 

this report.

The background papers address the impact by 2030 of several building 

energy scenarios, fi nancing and market consolidation of green 

building, institutional efforts for increasing green building, and issues 

associated with accessible and sustainable housing. The background 

papers provide detailed information and analysis on many of the issues 

discussed in this report. The complete set of background papers is 

available on CEC’s website at <www.cec.org/greenbuilding>.

The public meetings included a workshop in Mexico City in February 

of 2007 and a symposium held in conjunction with a meeting of the 

CEC’s Joint Public Advisory Committee in Seattle in May of 2007. These 

meetings provided a unique opportunity for a wide-ranging dialogue 

with Advisory Group members, authors of the background papers, 

government and industry leaders, and interested members of the public 

on the status and progress of green building in North America and on 

ideas for improving the market penetration of green building.

ONE

INTRODUCTION
13

CONTENT OF THIS REPORT

This report has eight sections. After this introduction, the second section 

looks at the development of green building principles in North America; the 

third section examines how the benefi ts of green building can be a powerful 

tool to improve the well-being of North America; the fourth section looks at 

buildings and their role in the climate change crisis; the fi fth section examines 

green building energy scenarios for 2030 and the enormous potential for 

green building to achieve energy effi ciency improvements and greenhouse 

gas reductions; the sixth section looks at the policies and practices behind 

the momentum toward green building and some of the barriers that 

impede the more widespread uptake of green building; the seventh section 

examines some of the benefi ts of promoting green building cooperation on 

a North American-scale; and the last section provides the CEC Secretariat’s 

recommendations, which adopt the Advice on Recommendations put forth 

by the Secretariat’s Advisory Group on green building. 

WHAT THIS REPORT DOES NOT ADDRESS

Due to resource and time constraints, this report focuses largely on energyrelated environmental issues associated with green building. It spends less 

time addressing topics such as water use and wastewater generation, land 

conversion, use of environmentally-preferable materials, embodied energy 

and waste loads, and issues associated with how green building can help 

improve worker health and productivity.

Non-energy-related environmental issues are an integral part of green 

building. To address these issues in greater detail, this paper recommends 

that an appropriate organization carry out modeling similar to the modeling 

carried out in background paper 1: Green Building Energy Scenarios for 2030

for these other environmental aspects, along with related policy analysis.

A NOTE ON DATA

A notable lack of geographic balance exists in the literature and data on the 

benefi ts and environmental performance and market penetration of green 

building. Much of the data and information in this report comes from the 

United States, followed by Canada and then Mexico: refl ecting the general 

availability of green building information in the three countries. The report’s 

recommendations suggest how to address some of these data gaps.

ONE

INTRODUCTION
14GREEN BUILDING IN NORTH AMERICA: OPPORTUNITIES AND CHALLENGES

111 SOUTH WACKER DRIVE

CHICAGO, ILLINOIS
TWO

GREEN BUILDING IN NORTH AMERICA

15

GREEN 

BUILDING 

IN NORTH 

AMERICA 2

PHOTO: JAMES STEINKAMP PHOTOGRAPHY
16GREEN BUILDING IN NORTH AMERICA: OPPORTUNITIES AND CHALLENGES

THROUGHOUT NORTH AMERICA, GREEN BUILDING DESIGNERS AND 

BUILDERS ARE CREATING BUILDINGS THAT DRAMATICALLY LOWER 

ENERGY CONSUMPTION, USE RENEWABLE ENERGY, CONSERVE WATER, 

HARNESS NATURAL SOURCES OF LIGHT AND VENTILATION, USE 

ENVIRONMENTALLY PREFERABLE MATERIALS, MINIMIZE WASTE, AND 

CREATE HEALTHY AND PRODUCTIVE ENVIRONMENTS.

A. FEATURES OF GREEN BUILDING

Modern building practices often demonstrate little regard for energy 

effi ciency or the larger economic, environmental or social impacts of the built 

environment. Green building attempts to break with these practices. Early 

efforts to bring change to the building sector in the 1960s through the 1980s 

generally focused on single issues such as energy effi ciency and conservation 

of natural resources. Green building now integrates a wide range of building 

design, construction, and operation and maintenance practices to provide 

healthier living and working environments and minimize environmental 

impacts. Crucial to the success of green building has been the application 

of integrated design principles—a whole-building-systems approach, which 

brings together the key stakeholders and design professionals as a core 

team to work collaboratively from the early planning stages through to the 

building’s occupation.

Green building features can include high-tech, modern practices such as 

(to name only a few) sensor-controlled and compact fl uorescent lighting, 

high-effi ciency heat pumps, geothermal heating, photovoltaic cell arrays 

and solar chimneys, on-site cleaning and reuse of wastewater; as well as 

simple and often time-tested practices like attention to building orientation 

and design, increased use of fresh air and natural light, improved insulation, 

radiant cooling systems that take advantage of naturally occurring conditions, 

managed forest or salvaged lumber products, recycled concrete aggregates, 

green roofs, rainwater collection, waterless urinals, facilities for bicyclists, 

permeable pavers, cork fl ooring, and use of local products.

Current green building practices are not limited to one type of building or 

market niche, geographic location or business model. Increasingly, green 

building is seen as part of comprehensive urban development programs 

geared toward development of sustainable communities with emphasis 

on integrating green building with sustainable urban infrastructure for 

transportation, gas and electric utilities, potable water, waste disposal and 

recycling, storm water and wastewater management and sewage.

GREEN 

BUILDING 

IN NORTH 

AMERICA

2
TWO

GREEN BUILDING IN NORTH AMERICA

17

B. HOW WIDESPREAD IS GREEN BUILDING?

The number of green buildings certifi ed as part of voluntary rating programs, 

market surveys, and anecdotal evidence indicate tremendous growth in 

this fi eld, although that number remains very small. Without widespread 

performance data and agreed upon performance benchmarks for comparison, 

no method exists to determine precisely how many buildings are green.

By some estimates, green building currently accounts for about 2 percent of 

the new non-residential building market in the United States and is expected to 

grow to between 5 and 10 percent by 2010. The estimates for green residential 

buildings are even smaller, at 0.3 percent of the market; this market is also 

expected to grow due to high consumer confi dence and a growth in the number 

of green builders.2

 The increased number of green building organizations is 

evidence of the growing interest and enthusiasm in this sector. The largest 

green building organization in the United States, the US Green Building Council 

(USGBC), has over 12,000 member organizations and estimates the green 

building industry—almost non-existent a decade ago—is now worth upwards 

of $12 billion. While similar surveys on the green construction market have not 

been conducted in Canada, green building trends generally are considered to 

be similar to those in the United States. The Canada Green Building Council 

(CaGBC), launched in 2002, has 1400 members. 

In Mexico, there are no current estimates on the number of green buildings. 

However, the country has a tradition of architecture that favors environmentally 

sensitive, low impact building practices and designs. Over the past three 

decades, a growing network of teachers, researchers, and practitioners has 

developed in the fi eld of solar and bioclimatic architecture. This effort resulted 

in the creation in 2002 of the Red Nacional de Arquitectura Bioclimática, which 

has been active in Mexico and throughout Latin America. That same year, the 

Mexico Green Building Council was formed (MxGBC). It was re-launched in 

2005 in Monterrey but, with 32 members, remains quite small in comparison 

to the USGBC and the CaGBC.

2 Green Building Smart Market Report, McGraw Hill Construction and USGBC, 2006 <http://construction.ecnext.

com/coms2/summary_0249-229622_ITM_analytics>. 
18GREEN BUILDING IN NORTH AMERICA: OPPORTUNITIES AND CHALLENGES

TWO

GREEN BUILDING IN NORTH AMERICA

C. RATING SYSTEMS 

Since the early 1990s, a number of organizations in the United States and 

Canada have developed green building rating systems that provide specifi c 

performance objectives and frameworks for assessing overall building design 

and/or performance. 

Each of these rating systems allocate points in areas such as energy use, water 

use, pollution, material and product inputs, indoor air quality and occupant 

comfort, transport, site ecology, and other sustainable design features. Many 

of these organizations are looking at ways to move from rating only building 

design to evaluation of actual performance over time. Their differences stem 

from the standard development process, philosophy on particular issues, and 

stringency, rather than the areas the rating systems evaluate.

D. A PROCESS OF CONTINUAL IMPROVEMENT

In all three countries, efforts are underway to collect broad quantitative 

information to better assess the performance of buildings and the lifecycle environmental impacts of the materials and systems they incorporate. 

There remains a shortage of data regarding the real performance and 

impacts of building design and operation strategies. Increased access to 

this kind of data will help ensure that green buildings actually perform in 

a manner superior to conventional buildings, and help to identify ways to 

push for continued improvements in the building sector.

The process of continual improvement has the potential to dramatically 

change the building sector. Most current green building efforts focus 

on minimizing environmental impacts. With proper organizational 

leadership and policy drivers, buildings in the future could be designed for 

disassembly, reuse and recycling, and have systems that clean the water 

and air, provide habitat for plants and wildlife, and generate and release 

renewable energy into the electrical grid.
TWO

GREEN BUILDING IN NORTH AMERICA

19

EXAMPLES OF GREEN BUILDING RATING SYSTEMS

 The Leadership in Energy and Environmental Design (LEED) Green 

Building Rating SystemTM, developed and managed by the USGBC, 

is the most widely used rating system in North America. Buildings are 

given ratings of platinum, gold, silver, or “certifi ed,” based on green 

building attributes. LEED is evolving rapidly; in the United States, at 

least nine types of specifi c programs exist, including those for new 

commercial construction and major renovation projects, existing 

building operation and maintenance, commercial interiors, homes, 

schools, neighborhoods and retail. USGBC is also developing LEED® 

for Healthcare, and LEED for Labs.

- The Canada Green Building Council has a license from the 

USGBC to administer LEED in Canada. A number of the original 

US LEED products have been modifi ed to suit the Canadian 

market. The CaGBC is now in the process of developing a more 

integrated set of LEED products that rely on the measured 

performance of completed buildings as a basis for setting 

performance targets. 

- The Mexico Green Building Council is working to adapt to 

Mexico the LEED rating system for commercial buildings in 

Mexico by 2008.

 Green Globes, formed by groups in Canada and the United States 

as an alternative to LEED, emphasizes ease of use, low cost and user 

education through its web-based application. 

 The Building Owners and Managers Association (BOMA) Canada 

launched a variant of Green Globes, GoGreen, which rates existing 

commercial offi ce buildings. 

 The Built Green Society of Canada manages Built Green, a certifi cation 

program for new single-family homes and row houses. It currently 

operates in Alberta and British Columbia.

 The National Association of Home Builders (NAHB) and the 

International Codes Council are partnering with the American National 

Standards Institute on residential green standards by late 2008.
20GREEN BUILDING IN NORTH AMERICA: OPPORTUNITIES AND CHALLENGES

HEIFER INTERNATIONAL HEADQUARTERS

LITTLE ROCK, ARKANSAS
TWO

GREEN BUILDING IN NORTH AMERICA

21

A 

FOUNDATIONAL 

DRIVER FOR 

CHANGE 3

PHOTO: HEIFER INTERNATIONAL
22GREEN BUILDING IN NORTH AMERICA: OPPORTUNITIES AND CHALLENGES

IF WE CONTINUALLY IMPROVE HOW WE DESIGN, LOCATE AND 

CONSTRUCT OUR BUILDINGS, GREEN BUILDING CAN BECOME A DRIVER 

FOR FUNDAMENTALLY IMPROVING THE WAY WE LIVE. 

A. THE NEGATIVE ENVIRONMENTAL IMPACTS OF CURRENT 

BUILDING PRACTICES

Environmental impacts of buildings occur throughout all life stages of a building—

site selection, design, location, construction, use, renovation, and demolition. 

Building decisions made throughout these life stages also affect business value, 

worker health and productivity, and social or “quality of life” issues. 

Direct environmental impacts that result from the construction and operation of 

buildings include greenhouse gases and other air emissions related to energy 

use, water use and discharge, storm water runoff, impacts related to building 

materials, solid waste from various stages of a building’s life, and indoor air 

quality. Secondary impacts are generally associated with building product lifecycles, infrastructure development, and transportation systems. 

Data collected from Canada, Mexico and the United States illustrate these impacts.

In Canada, buildings are responsible for: 

33 percent of all energy used;

50 percent of natural resources consumed;

12 percent of non-industrial water used;

25 percent of landfi ll waste generated;

10 percent of airborne particulates produced; and

35 percent of greenhouse gases emitted.3

In Mexico, buildings are responsible for:

17 percent of all energy used;

 25 percent of all electricity used;

 20 percent of all carbon dioxide emissions;

 5 percent of potable water consumption; and

20 percent of the waste generated.4

In the United States, buildings account for:

40 percent of total energy use;

 12 percent of the total water consumption;

 68 percent of total electricity consumption;

 38 percent of total carbon dioxide emissions; and 

60 percent of total non-industrial waste generation.5

3 CaGBC Municipal Green Building Toolkit, Chapter 1, p. 2. 

4 E-mail from David Morillón Gálvez, Universidad Nacional Autónoma de México, 13 August 2007.

5 See <http://www.epa.gov/greenbuilding/pubs/whybuild.htm>.

A 

FOUNDATIONAL 

DRIVER FOR 

CHANGE

3
23

The impact is especially profound in terms of greenhouse gas emissions. Every 

year, buildings in North America cause more than 2,200 MT of CO2

 to be released 

into the atmosphere, about 35 percent of the continent’s total. Hundreds of coalfi red power plants, a key source of greenhouse gas emissions, are currently on the 

drawing boards in the United States. According to one report, 76 percent of the 

energy produced by these plants will go to operate buildings.6

Beyond individual buildings, poor patterns of building development often lead 

to congestion and ineffi cient use of land, resulting in greater energy consumption 

and travel time, loss of productivity, polluted runoff to surface water and 

wastewater treatment systems, loss of agricultural lands, fragmented habitats, 

and fi scal stress to local communities. Two case studies from Toronto indicate that 

residents of sprawling neighborhoods tend to emit more greenhouse gases per 

person and suffer more traffi c fatalities.7

Urban water run-off is another important building-related impact. Buildings, 

and transportation infrastructure that serve them, replace natural surfaces 

with impermeable materials, typically creating runoff that washes pollutants 

and sediments into surface water. Urban runoff is the fourth-leading cause of 

impairment of rivers, third-leading for lakes, and second for estuaries in the United 

States,8

 and a signifi cant problem in many parts of Mexico and Canada as well. In 

Mexico City, most rainwater fl ows on impermeable surfaces to the city drainage 

system; only a small proportion (11 percent) is recharged into the aquifer, causing 

a greater dependence on neighboring basins and increasing 

the risk of fl ooding.9

B. BENEFITS OF GREEN BUILDING

The benefi ts of green building are well-documented. The USGBC estimates that 

green building, on average, currently reduces energy use by 30 percent, carbon 

emissions by 35 percent, and water use by 30 to 50 percent, and generates waste 

cost savings of 50 to 90 percent.10 In addition, green building can help foster 

stronger communities and provide important benefi ts to human health and 

productivity.

The following profi les are offered as examples of new and retrofi tted construction 

in different climates in the three countries as a modest attempt to illustrate 

something of the variety possible in commercial, institutional, and residential 

green building. Further information about the buildings profi led is available on 

the CEC website at <cec.org/greenbuilding>.

6 See <www.architecture2030.org/2030_challenge/index.html>.

7 Comparing High and Low Residential Density: Life-Cycle Analysis of Energy Use and Greenhouse Gas Emissions, J. Urban 

Plng and Devel, 132(1), pp. 10–21 (March 2006). 

8 National Water Quality Inventory: 2000 Report. US Environmental Protection Agency. 2000. <www.epa.gov/305b/

2000report>. 

9 Agua y Sustentabilidad en la Ciudad de México. See <http://redalyc.uaemex.mx/redalyc/pdf/312/31204702.pdf>. 

Estudios demográfi cos y urbanos, El Colegio de México, 2001.

10 See <http://www.usgbc.org/News/USGBCInTheNewsDetails.aspx?ID=3288>.

THREE

A FOUNDATIONAL DRIVER FOR CHANGE
24

THE CORPORATIVO 

INSURGENTES 553

Mexico City, Mexico

BY EMPHASIZING NATURAL LIGHTING 

AND TEMPERATURE CONTROL, 

EXTERIOR BLINDS AND BUILDING 

ORIENTATION, THE CORPORATIVO 

INSURGENTES 553, HOTEL FIESTA INN, 

IN MEXICO CITY, IS ABLE TO REDUCE 

ENERGY CONSUMPTION FOR AIR 

CONDITIONING BY 30 PERCENT AND 

FOR LIGHTING BY 10 PERCENT OVER 

A CONVENTIONAL BUILDING. 

Ã

1 

SAVING ENERGY 

Green building addresses climate change and other energy-related air emissions 

in two basic ways: fi rst (and most importantly), by reducing the amount of energy 

used to light, heat, cool and operate buildings and their appliances, and second, 

by substituting for what currently is mostly carbon-based energy with alternatives 

that do not involve the production of greenhouse gases and other harmful air 

emissions. It is common now for more advanced green buildings to routinely 

reduce energy usage by 30, 40, or even 50 percent over conventional buildings, 

with the most effi cient buildings now performing more than 70 percent better 

than conventional properties.

THREE

A FOUNDATIONAL DRIVER FOR CHANGE

// more information: cec.org/greenbuilding

Photos: José Picciotto
25

3 

THE LEWIS AND CLARK BUILDING 

OF THE MISSOURI DEPARTMENT OF 

NATURAL RESOURCES, BUILT ON A 

RELATIVELY MODEST STATE BUDGET, 

IS 59 PERCENT MORE ENERGY 

EFFICIENT THAN CONVENTIONAL 

BUILDINGS AND USES SOLAR PANELS 

TO GENERATE 2.51 PERCENT OF THE 

BUILDING’S ENERGY USAGE. 

Ã

Photos: Scott Myers/Missouri Department of National Resources

THE NOW HOUSETM IN TORONTO IS A 

RETROFIT OF AN EXISTING HOME. SOLAR 

PANELS FOR HEATING WATER, IMPROVED 

INSULATION, NEW WINDOWS AND 

APPLIANCES, A HEAT RECOVERY SYSTEM, 

AND PHANTOM LOAD SWITCHES WILL 

REDUCE ANNUAL GREENHOUSE GAS 

EMISSIONS FROM THE HOUSE BY 

60 PERCENT, FROM 9.7 TONNES TO 

3.7 TONNES. 

Ã

THE NOW HOUSETM

Toronto, Ontario, Canada

2 

THE LEWIS AND 

CLARK BUILDING

Jefferson City, Missouri, United States

Photo: The Now HouseTM Project
26

Photos: Alise O’Brien (Interiors), Debbie Franke (Exteriors)

THREE

A FOUNDATIONAL DRIVER FOR CHANGE

ALBERICI CORPORATION 

HEADQUARTERS

Overland, Missouri, United States

AT THE ALBERICI CORPORATION HEADQUARTERS IN OVERLAND, 

MISSOURI, THE REUSE OF RAINWATER, ALONG WITH THE USE OF 

WATER-EFFICIENT FIXTURES, RESULTS IN A 70-PERCENT REDUCTION 

IN POTABLE WATER USE, SAVING 500,000 GALLONS OF WATER 

ANNUALLY. SPECIFICS INCLUDE:

INDOOR POTABLE WATER USE: 288,000 GAL/YR (1,090,000 LITERS/YR); 

 OUTDOOR POTABLE WATER USE: 0 GAL/YR (0 LITERS/YR); 

 TOTAL POTABLE WATER USE: 288,000 GAL/YR (1,090,000 LITERS/YR); 

 POTABLE WATER USE PER OCCUPANT: 1,390 GAL/YR (5,250 LITERS/YR).

Ã

4 

IMPROVING WATER USAGE

Green building uses a number of techniques to improve water quality and 

availability. These techniques can help reduce water usage, provide for on-site 

cleaning and reuse of wastewater, and on-site fi ltering of storm water. Water 

management is a signifi cant cost and an important environmental issue in all 

three countries. Water stress is particularly high in parts of Mexico, the United 

States, and western Canada.
27

THREE

A FOUNDATIONAL DRIVER FOR CHANGE

6 

5 

VANCOUVER ISLAND 

TECHNOLOGY PARK

Victoria, British Columbia, Canada

AT THE VANCOUVER ISLAND TECHNOLOGY PARK, 100 PERCENT OF 

STORM WATER IS TREATED AND INFILTRATED ON-SITE THROUGH 

THE USE OF GRASS SWALES, GRASS/GRAVEL PAVING SYSTEMS, 

AND STORM WATER TREATMENT AND RETENTION PONDS. 

Ã

CINEPOLIS 

HEADQUARTERS

Morelia, Michoacán, Mexico

ONE RECENT AREA OF FOCUS IN MEXICO 

HAS BEEN ON GREEN ROOFS AS A WAY 

TO RECHARGE AQUIFERS, REDUCE STORM 

WATER RUN-OFF, FILTER POLLUTANTS OUT OF 

RAIN WATER, PROVIDE WILDLIFE HABITATS, 

IMPROVE ROOF AESTHETICS, AS WELL AS 

REDUCE THE HEATING AND COOLING LOADS 

OF BUILDINGS AND THE URBAN HEAT ISLAND 

EFFECT. WHEN FINISHED IN 2008, THE CINEPOLIS 

HEADQUARTERS IN MICHOACÁN WILL FEATURE

EXPANSIVE GREEN ROOF TECHNIQUES.

Ã

Photos: Cannon Design

Photos: KMD Architects
28

REDUCING WASTE

Reducing waste through better product design, recycling, and re-use of materials will 

result in tremendous reductions in both raw material usage and also in associated 

environmental impacts, as well as the cost to the private sector and local governments 

of disposing of these materials. Building-related construction and demolition debris 

totals approximately 136 million tons per year in the United States, accounting for 

nearly 60 percent of the total non-industrial waste generation there.11 An estimated 20 

to 30 percent of building-related construction and demolition debris is recovered for 

processing and recycling. In Canada, construction, renovation, and demolition waste 

accounts for about 17 to 21 percent of the total mass of waste landfi lled annually.12 The 

volume of demolition waste in Mexico City is estimated between 3,500 and 5,000 tons 

a day.13 Reducing construction waste and creating reusable and recyclable building 

components are key strategies in addressing these environmental impacts.

11 See <www.epa.gov/greenbuilding/pubs/gbstats.pdf>.

12 See <www3.gov.ab.ca/env/waste/aow/crd/publications/CRD_Report_All.pdf>, citing information from Statistics Canada.

13 Soluciones para Residuos de la Construcción <http://www.guanajuato.gob.mx/iee/expo-pdf/soluciones.pdf>. 

Instituto de Ecología del Estado de Guanajuato.

THREE

A FOUNDATIONAL DRIVER FOR CHANGE

HEIFER INTERNATIONAL 

HEADQUARTERS

Little Rock, Arkansas, United States

7 

Photos: Heifer International

THE HEIFER INTERNATIONAL HEADQUARTERS IN LITTLE 

ROCK, ARKANSAS, PROVIDES AN EXAMPLE OF HOW A GREEN 

BUILDING CAN WORK TO REDUCE WASTE AND CONSTRUCTION 

DEBRIS. SIXTY PERCENT OF THE ORIGINAL 22-ACRE SITE WAS 

PAVED. USING AN INDUSTRIAL CRUSHER, HOWEVER, THE 

PROJECT TEAM GROUND THE EXISTING WAREHOUSE BUILDINGS 

AND PAVING INTO FILL MATERIAL FOR USE ON THE PROJECT. 

APPROXIMATELY 97 PERCENT OF THE EXISTING BUILDING AND 

PAVING MATERIAL, BY WEIGHT, WAS RECYCLED, GENERATING 

SAVINGS IN FILL MATERIAL THAT PAID FOR THE MAJORITY 

OF DEMOLITION. DURING THE CONSTRUCTION PHASE, THE 

PROJECT TEAM RECYCLED 75 PERCENT (BY WEIGHT) OF THE 

BUILDING’S CONSTRUCTION WASTE.

Ã
29

THREE

A FOUNDATIONAL DRIVER FOR CHANGE

BUILDING STRONG COMMUNITIES

Green building is a key component to building healthy, vibrant, and economically 

strong communities. Leading communities throughout the world recognize that 

people want to live in places with a strong sense of community, attractive and 

comfortable homes, walkable streets, and plentiful green spaces, and proximity to 

transit, shops, and work. 

DOCKSIDE GREEN IS AN EXAMPLE OF A COMPREHENSIVE 

GREEN DEVELOPMENT. THIS 1.3 MILLION SQ. FT. MIXEDUSE SUSTAINABLE COMMUNITY IS UNDER DEVELOPMENT 

ON A 15-ACRE FORMER BROWNFIELDS SITE IN VICTORIA, 

BRITISH COLUMBIA. THE PROJECT INCLUDES RESIDENTIAL, 

OFFICE, AND COMMERCIAL SPACES, AS WELL AS LIGHT 

INDUSTRIAL ASSETS. IT IS A PEDESTRIAN- AND BIKEFRIENDLY NEIGHBORHOOD LOCATED BETWEEN THE CITY’S 

DOWNTOWN AND THE UPPER HARBOR. THE BUILDINGS 

ARE BEING DESIGNED TO USE 45 TO 55 PERCENT LESS 

ENERGY THAN THE CANADIAN MODEL NATIONAL ENERGY 

CODE SPECIFIES. ALL SEWAGE GENERATED IS TREATED 

ON-SITE. POTABLE WATER USE IS 65 PERCENT LESS THAN 

IN TRADITIONAL DEVELOPMENTS. ENVIRONMENTALLYFRIENDLY PRODUCTS ARE USED THROUGHOUT, AND THE 

DEVELOPMENT HAS A GOAL TO REUSE OR RECYCLE 90 

PERCENT OF THE CONSTRUCTION WASTE ON-SITE.

Ã

DOCKSIDE GREEN 8 Victoria, British Columbia, Canada

Photos: Windmill Development Group
THREE

A FOUNDATIONAL DRIVER FOR CHANGE

IMPROVING HUMAN HEALTH AND PRODUCTIVITY

While energy-related issues drive much of the green building policy 

discussion, for many businesses, energy costs represent a marginal cost of 

doing business as compared with the salaries of employees. Substantial 

research supports the benefi ts to human health and productivity from 

green features such as daylighting, increased natural air ventilation, and 

moisture reduction, and the use of low-emitting fl oor carpets, glues, paint 

and other interior fi nishes and furnishings.14

Poor indoor air quality exacerbates asthma, allergies, and the spread of 

infl uenza, and is the cause of sick building syndrome and contributes to 

Legionnaires’ disease. In the United States, the annual cost of buildingrelated sickness is estimated to be $58 billion. According to researchers, 

green building has the potential to generate an additional $200 billion 

annually in worker performance in the United States by creating offi ces 

with better indoor air.15

14 See <http://gaia.lbl.gov/IHP/>.

15 See <http://www.aia.org/aiarchitect/thisweek05/tw1021/tw1021plantsatwork.cfm>.

CK CHOI BUILDING

Vancouver, British Columbia, Canada

Photos: UBC Sustainability Offi ce/ Matsuzaki Architects Inc.

THE CK CHOI BUILDING IN VANCOUVER IS AN EXAMPLE OF POTENTIAL 

HEALTH BENEFITS OF GREEN BUILDING. THE OCCUPANTS ENJOY NATURAL 

DAYLIGHTING AND FRESH AIR AT ALL TIMES. AIR QUALITY IS ENHANCED 

THROUGH CAREFUL MATERIAL CHOICES; CARPET WAS LAID WITHOUT 

ADHESIVES, MILLWORK WAS CONSTRUCTED FROM FORMALDEHYDE-FREE 

BOARDS, AND FINISHES ARE SOLVENT-FREE/LOW EMISSION PRODUCTS.

9 

Ã
31

THREE

A FOUNDATIONAL DRIVER FOR CHANGE

THE SOLAIRE

Battery Park City, New York, 

United States

10 

THE SOLAIRE IN NEW YORK CITY IS A 

LEED GOLD RESIDENTIAL BUILDING 

FOR WHICH A RENT PREMIUM OF FIVE 

PERCENT OVER NEARBY COMPARABLE 

BUILDINGS HAS BEEN ATTRIBUTED 

TO HEALTH BENEFITS DUE TO THE 

BUILDING’S HIGH INDOOR AIR QUALITY.

Ã

Photos: © Jeff Goldberg/Esto
32GREEN BUILDING IN NORTH AMERICA: OPPORTUNITIES AND CHALLENGES

F10 HOUSE

CHICAGO, ILLINOIS
TWO

GREEN BUILDING IN NORTH AMERICA

33

4

PHOTO: DOUG SNOWER PHOTOGRAPHY

CLIMATE

 CHANGE 

CRISIS AND 

BUILDINGS
34GREEN BUILDING IN NORTH AMERICA: OPPORTUNITIES AND CHALLENGES

A PROCESS OF CONTINUALLY IMPROVING THE PERFORMANCE OF 

BUILDINGS CAN FUNDAMENTALLY ADDRESS THE CLIMATE CHANGE CRISIS.

A. GREEN BUILDING AND GHG EMISSIONS 

Reports from leading scientists throughout the world underline the need for 

urgent global action on climate change. The IPCC projects that without more 

immediate action to limit greenhouse gas emissions, global warming could 

cause irreversible and possibly catastrophic consequences. 

Three recent reports illustrate that energy-effi cient buildings are one of the 

quickest and cheapest ways to reduce signifi cantly greenhouse gas emissions.

MITIGATING CLIMATE CHANGE WITH NET ECONOMIC BENEFIT

According to a recent IPCC report,

16 buildings represent the greatest opportunity 

for considerable reductions in CO2

 emissions. Its fourth assessment report states 

that about 30 percent of the projected global greenhouse gas emissions in the 

building sector can be avoided by 2030 with net economic benefi t. According 

to the report, limiting CO2 emissions would also improve indoor and outdoor air 

quality, improve social welfare, and enhance energy security.

CURBING GLOBAL ENERGY DEMAND GROWTH

A recent study by the international consulting fi rm McKinsey & Company 

indicates that building energy effi ciency measures are some of the cheapest and 

most cost-effective ways to reduce carbon emissions worldwide.17 It also notes 

that these measures would require no reduction in quality of life or comfort.

THE COSTS OF CUTTING CARBON IN DIFFERENT WAYS

A study by a Swedish power utility fi nds that energy effi ciency measures, such 

as improving insulation and water heaters and switching to low-energy lighting 

systems, can save money and cut tremendous amounts of greenhouse gas 

emissions. Insulation improvements alone could save more than 1.7 gigatonnes 

of CO2

 by 2030, lighting improvement could eliminate close to 0.4 gigatonnes, 

and water heating improvements of about 0.5 gigatonnes. According to the 

study, the investment costs to achieve these savings would be more than 

compensated for by a decrease in the costs for the energy.18 See Figure A.

16 Background paper 2b, Institutional Efforts for Green Building: Approaches in Canada and the United States. IPCC, 2007, 

Climate Change 2007: Mitigation of Climate Change. Contribution of Working Group III to the Fourth Assessment Report of the Intergovernmental Panel on Climate Change. B. Metz, O.R. Davidson, P.R. Bosch, R. Dave, L.A. Meyer (eds.), 

Cambridge University Press, United Kingdom and New York, NY USA. See <www.ipcc.ch/SPM040507.pdf>.

17 Curbing Energy Demand Growth, The Energy Productivity Opportunity, May 2007, McKinsey & Company, <http://

www.mckinsey.com/mgi/publications/Curbing_Global_Energy/index.asp>. 

18 Climate Map, Vattenfall, 2007. See <http://www.vattenfall.com/www/ccc/ccc/569512nextx/573859globa/574118cost/index.jsp?origin=search>.

CLIMATE 

CHANGE 

CRISIS AND 

BUILDINGS

4
35

FOUR

CLIMATE CHANGE CRISIS AND BUILDINGS

Wind

Marginal cost abatement - example

Abatement potential

100

50

0

-50

-100

-150

0 5 10 15 20 25 30

FIGURE A. Global Cost Curve

Source: <http://www.vattenfall.com/www/ccc/ccc/569512nextx/573859globa/574118cost/index.jsp?origin=search>. 

Used by permission of Vattenfall.
36GREEN BUILDING IN NORTH AMERICA: OPPORTUNITIES AND CHALLENGES

B. CALLING FOR AGGRESSIVE IMPROVEMENT IN NORTH AMERICA

An increasing number of organizations and institutions in North America are 

calling for aggressive energy performance improvements in the building sector. 

A number of important efforts are looking at ways to achieve widespread 

adoption of carbon-neutral and net zero-energy buildings in North America. 

These terms are defi ned in the following box.

FOUR

CLIMATE CHANGE CRISIS AND BUILDINGS

WHAT IS MEANT BY 

“ CARBON-NEUTRAL” AND 

“ NET ZERO-ENERGY” ?

Defi nitions vary and are often used interchangeably but “carbonneutral” buildings are generally understood to be those that require 

no GHG-emitting energy to operate. They do this by combining onand off-site renewable energy generation with ultra-effi cient building 

materials and equipment. 

A number of defi nitions exist for net zero-energy. Generally, however, 

the term is used to designate buildings that generate as much energy 

as they use over the course of a specifi c period of time, usually a year, 

but they can use carbon-based energy from the grid when needed. 

The carbon-based energy would then be replaced with surplus 

renewable energy when the latter is generated on-site. 

Both terms consider only the energy used to operate a building, not 

the energy involved in producing the building materials, which can 

be signifi cant. The common factor between these terms is that to 

achieve the goals they embody will require considerable forethought 

and effi ciency in the energetic design and practice for the building. 
37

FOUR

CLIMATE CHANGE CRISIS AND BUILDINGS

AIA 2030 CHALLENGE

In 2005, the American Institute of Architects (AIA) issued the 2030 Challenge, which 

sets forth a target and schedule to be achieved by carbon-neutral buildings by 

2030. The Royal Architectural Institute of Canada (RAIC), the US Council of Mayors, 

and the International Council for Local Environmental Initiatives (ICLEI) have joined 

this initiative. In addition, over 650 US cities have adopted it.19 In 2007, the AIA, the 

American Society of Heating, Refrigerating and Air-Conditioning Engineers (ASHRE), 

Architecture 2030, the Illuminating Engineering Society of North America (IENA), 

and the US Green Building Council, supported by the United States Department of 

Energy, signed a memorandum of understanding focusing on designing net zeroenergy buildings, with a fi nal goal of carbon-neutral buildings by 2030.20

WBCSD

The World Business Council for Sustainable Development (WBCSD) began 

working in 2006 toward developing a path to net zero-energy buildings by 2050. 

The WBCSD effort is initially targeting China, India, Brazil, the United States and 

the European Union for creation of these buildings. The core group of companies 

supporting this effort includes United Technologies, LaFarge, CEMEX, Kansai, EDF, 

Philips, Dupont, Gaz de France, Sonae Sierra and Tokyo Electric Power Company.21

OTHER CALLS FOR AGGRESSIVE IMPROVEMENTS 

In 2006, the Canadian government launched the fi rst phase of a net zero-energy housing 

initiative. This initial phase is part of a fi ve-year, community-scale demonstration aimed 

at completing 1,500 net zero-energy homes across Canada by 2011.22 The Living 

Building Challenge, operated by the USGBC’s Cascadia Chapter, requires a number of 

performance benchmarks, including the requirement that 100 percent of the building’s 

energy needs must be supplied by on-site renewable energy on a net annual basis.23

The United States Department of Energy’s Building America program conducts research 

in partnership with the private sector to produce homes on a community scale that 

consume on average 30 to 90 percent less energy than conventional homes, with 

the goal of developing by 2020 zero energy homes (ZEH) that produce more on-site 

renewable energy than they consume from the grid.24 The California Solar Initiative, 

launched in 2007, aims for installation of 3,000 megawatts of new, solar-produced 

electricity at one million new and existing residential and commercial buildings by 2017.25

19 See <www.architecture2030.org>.

20 See <www.usgbc.org/News/PressReleaseDetails.aspx?ID=3124>.

21 World Business Council for Sustainable Development. The True Cost of Green Building, <www.wbcsd.org/plugins/DocSearch/details.asp?type=DocDet&ObjectId=MjU5NTM>.

22 See <http://cmhc.ca/en/en_001.cfm>.

23 See <http://www.cascadiagbc.org/news/lbc/living-site-1.0.pdf>.

24 See <http://www.eere.energy.gov/buildings/building_america/>. For additional information on research toward the ZEH 

goal by organizations such as the National Association of Home Builders Research Center, see <http://www.toolbase.

org/ToolbaseResources/level3.aspx?BucketID=2&CategoryID=58>.

25 See <http://www.gosolarcalifornia.ca.gov/>.
38GREEN BUILDING IN NORTH AMERICA: OPPORTUNITIES AND CHALLENGES

US EPA NATIONAL COMPUTER CENTER 

RESEARCH TRIANGLE PARK, NORTH CAROLINA
TWO

GREEN BUILDING IN NORTH AMERICA

39

GREEN BUILDING 

ENERGY 

SCENARIOS 

FOR 2030 5

PHOTO: BILL TOUCHBERRY
40GREEN BUILDING IN NORTH AMERICA: OPPORTUNITIES AND CHALLENGES

WHAT WOULD BE THE ENVIRONMENTAL BENEFITS OF SIGNIFICANT 

MARKET PENETRATION OF CARBON-NEUTRAL OR NET ZERO-ENERGY 

BUILDINGS? A BACKGROUND PAPER SUPPORTING THIS REPORT, GREEN 

BUILDING ENERGY SCENARIOS FOR 2030, EXAMINES THE POTENTIAL 

ENERGY PERFORMANCE IMPROVEMENTS ATTAINABLE BY 2030 IN 

THE NORTH AMERICAN BUILDING MARKET. THE STUDY FINDS THAT 

ENORMOUS REDUCTIONS IN ENERGY USE AND GREENHOUSE GAS 

EMISSIONS FROM NEW AND EXISTING BUILDINGS ARE TECHNICALLY 

ACHIEVABLE BY 2030 WITH AGGRESSIVE MARKET UPTAKE OF EXISTING 

AND EMERGING TECHNOLOGIES AND CONSTRUCTION METHODS. 

A. MODELING AGGRESSIVE ENERGY-SAVING SCENARIOS

The authors of the background paper modeled energy usage and GHG 

emissions projections to 2030 in three scenarios, called for purposes of this 

paper the Business-as-Usual scenario (BAU), the AIA or 2030 Challenge

scenario, and the Deep Green scenario. 

BUSINESS-AS-USUAL SCENARIO

The Business-as-Usual (BAU) scenario models energy and GHG emissions 

projections by using an extrapolation of current stock growth rates coupled 

with energy use intensities typical of new construction today, and assumes no 

signifi cant policy initiatives that would fundamentally change current trends 

with respect to either new building codes or retrofi t or renovation initiatives. 

AIA OR 2030 CHALLENGE SCENARIO

The AIA or 2030 Challenge scenario uses modeling assumptions based on the 

AIA’s 2030 Challenge, which sets out a schedule of continually improving energy 

performance targets based on reductions in the amount of fossil fuel needed 

to operate buildings. The scenario adopts a carbon-neutral end state for new 

buildings and greatly reduced fossil fuel use for existing buildings that undergo 

major renovations and retrofi ts.

DEEP GREEN SCENARIO

The Deep Green scenario relies on a rapidly increasing market uptake of specifi c 

and currently available and emerging advanced energy savings technologies 

based on building archetypes, which are physical depictions of “representative” 

buildings (see box).26

26 The Deep Green scenario was developed by the authors of background paper 1: Green Building Energy Scenarios 

for 2030 (Marbek Resource Consultants Ltd., Odón de Buen and Lawrence Berkeley National Laboratory). For more 

information, consult that paper.

GREEN 

BUILDING

 ENERGY

 SCENARIOS 

FOR 2030

5
41

FIVE

GREEN BUILDING ENERGY SCENARIOS FOR 2030

Establishing this scenario involves modeling an accelerating market penetration 

of two advanced-performance building archetypes—“Super-Effi cient” 1 (SE1, the 

most effi cient building) and “Super Effi cient” 2 (SE2, a highly effi cient building), 

for new commercial and residential buildings and for renovations and retrofi ts to 

existing commercial and residential buildings.27 Each archetype embodies current 

and emerging yet proven technologies and building practices commercially 

available today. Modifi ed versions of the savings estimates associated with each 

effi cient building archetype were used for modeling the United States scenarios 

to address the range of climates throughout the country. 

By modeling energy improvements based on building archetypes, the Deep 

Green scenario helps test the feasibility of achieving the fossil fuel reduction 

targets modeled in the AIA or 2030 Challenge scenario. In establishing the Deep 

Green scenario, the authors did not presuppose that it would result in greater 

energy savings and CO2

 reductions than the AIA or 2030 Challenge scenario.

27 The background paper describes in detail the commercial and residential building categories modeled for each country, 

as well as the main energy end uses for commercial and residential buildings.

ABOUT THE BUILDING ARCHETYPES

The SE1 archetypes for new buildings achieve roughly 80 to 85 percent improvement for 

residential, and 60 to 65 percent for commercial, in whole-building energy savings relative to the 

base year archetype. The SE1 archetypes represent the best available technical performance 

using state-of-the-art building envelope construction materials and methods as well as state-ofthe-art energy consumption equipment.

For both new commercial and residential buildings, the SE2 archetypes achieve roughly 50 to 60 

percent whole building energy savings relative to the base year archetype. The SE2 archetypes 

use more cost effective and conventional equipment to achieve building performance well 

beyond current conventional practice. 

Using a combination of modeling and judgment, the effi ciency improvements for SE1 and SE2 

archetypes for renovations and retrofi ts of buildings were assumed to be between 40 and 75 

percent, depending on the archetype and whether a renovation or retrofi t was undertaken.
42GREEN BUILDING IN NORTH AMERICA: OPPORTUNITIES AND CHALLENGES

FIVE

GREEN BUILDING ENERGY SCENARIOS FOR 2030

To complete this scenario, the authors developed the roll-out schedules for uptake 

of the various archetypes based on a series of progressively greater uptake of 

advanced energy-saving technologies to 2030. For the United States, the results 

were adopted to US climates based upon the US author’s engineering judgment.

The methodology described in these three scenarios does not attempt to 

predict the specifi c impacts of evolving policy and attitudes on investments in 

effi ciency in the building sector. This study illustrates potentials for change rather 

than predictors of what the future will look like and helps identify policy and 

technical issues that must be explored more exhaustively in the future. 

B. COUNTRY-SPECIFIC RESULTS

Figures B, C and D show the results of modeling the greenhouse gas emissions 

for the Business-as-Usual, AIA or 2030 Challenge, and Deep Green scenarios. 

They also provide 1990 GHG emissions levels as a point of reference for the 

Kyoto targets.28

THE RESULTS EXPLAINED BY COUNTRY 

The Business-as-Usual projections, when applied to the North American 

buildings stock and factoring in predicted stock growth and the existing patterns 

of stock energy consumption, indicate that aggregate energy use and associated 

carbon emissions will continue to grow, as follows: 

In Canada, a Business-as-Usual approach will result in a 28-percent increase 

in energy consumption in the residential sector and 39 percent in the 

commercial sector. This will result in an additional 46 MT of CO2

 released to 

the atmosphere in 2030 compared with current emissions.

In Mexico, a Business-as-Usual approach will result in a 152-percent increase 

in energy consumption in the residential sector and 144 percent in the 

commercial sector. This will result in an additional 119 MT of CO2

 released 

to the atmosphere in 2030 compared with current emissions.

In the United States, a Business-as-Usual approach will result in 23-percent 

increase in energy consumption in the residential sector and 36 percent 

in the commercial sector. This will result in an additional 680 MT of CO2

released to the atmosphere in 2030 compared with current emissions.

For comparison, in 2000, the transportation sector in Canada was responsible for 

the release of 173.7 MT of CO2 into the atmosphere; in the United States, it was 

responsible for the release of 1756.8. MT; in Mexico, the amount was 110.6 MT.29

28 Refer to background paper 1 (section 2.3.2) for a general explanation of how the energy use fi gures cited below were 

derived. Data supporting the energy use percentages given here come from Figures 3.31 through 3.50. The coeffi cient 

for converting these data to carbon emission equivalents is discussed in section 2.3.4 of that paper. Note also that data 

on 1990 commercial GHG emissions were not available for Mexico.

29 See <http://unfccc.int/di/DetailedByParty/Setup.do>.
43

The AIA or 2030 Challenge scenario results in enormous reductions in energy 

used and greenhouse gases emitted:

In Canada, the AIA or 2030 Challenge scenario results in an annual energyuse reduction of 77 percent in the residential sector and 46 percent in the 

commercial sector by 2030, compared to the Business-as-Usual scenario. 

This is equivalent to annual reductions of 112 MT of CO2

 released to the 

atmosphere compared to the Business-as-Usual approach.

In Mexico, the AIA or 2030 Challenge scenario results in an annual energyuse reduction of 56 percent in the residential sector and 62 percent in the 

commercial sector by 2030, compared to the Business-as-Usual scenario. 

This is equivalent to annual reductions of 103 MT of CO2

 released to the 

atmosphere compared to the Business-as-Usual approach.

In the United States, the AIA or 2030 Challenge scenario results in an annual 

energy-use reduction of 27 percent in the residential sector and 41 percent in 

the commercial sector by 2030, compared to the Business-as-Usual scenario. 

This is equivalent to annual reductions of 980 MT of CO2

 released to the 

atmosphere compared to the Business-as-Usual approach.

The Deep Green scenario also results in enormous reductions in energy usage 

and greenhouse gases. These savings are generally in-line with the savings in the 

AIA or 2030 Challenge scenario, although they can differ based on country and 

building type, and the modeling assumptions regarding the market penetration 

of new buildings and the percentage of existing buildings undergoing 

renovations or retrofi ts.

In Canada, the Deep Green scenario results in an annual energy-use 

reduction of 62 percent in the residential sector and 51 percent in the 

commercial sector by 2030, compared to the Business-as-Usual scenario. 

This is equivalent to annual reductions of 103 MT of CO2

 released to the 

atmosphere, compared to the Business-as-Usual approach.

In Mexico, the Deep Green scenario results in an annual energy-use reduction 

of 70 percent in the residential sector and 55 percent in the commercial sector 

by 2030, compared to the Business-as-Usual scenario. This is equivalent to 

annual reductions of 120 MT of CO2

 released to the atmosphere, compared 

to the Business-as-Usual approach.

In the United States, the Deep Green scenario results in an annual energyuse reduction of 50 percent in the residential sector and 50 percent in the 

commercial sector by 2030, compared to the Business-as-Usual scenario. 

This is equivalent to annual reductions of 1488 MT of CO2

 released to the 

atmosphere, compared to the Business-as-Usual approach.

FIVE

GREEN BUILDING ENERGY SCENARIOS FOR 2030
100

90

80

70

60

50

40

30

20

10

0

 2005 2010 2015 2020 2025 2030

 2005 2010 2015 2020 2025 2030

100

90

80

70

60

50

40

30

20

10

0

FIVE

GREEN BUILDING ENERGY SCENARIOS FOR 2030

RESIDENTIAL GHG EMISSIONS BY SCENARIO - CANADA

MT CO2 MT CO2

COMMERCIAL GHG EMISSIONS BY SCENARIO - CANADA

GREEN BUILDING IN NORTH AMERICA: OPPORTUNITIES AND CHALLENGES

44

AIA

BAU

DEEP GREEN

1990 LEVEL

AIA

BAU

DEEP GREEN

1990 LEVEL

FIGURE B : CANADA

Predictions by Scenario for Canada’s Residential 

and Commercial GHG Emissions 
 2005 2010 2015 2020 2025 2030

160

140

120

100

80

60

40

20

0

45

40

35

30

25

20

15

10

5

0

MT CO2 MT CO2

 2005 2010 2015 2020 2025 2030

FIVE

GREEN BUILDING ENERGY SCENARIOS FOR 2030

RESIDENTIAL GHG EMISSIONS BY SCENARIO - MEXICO

COMMERCIAL GHG EMISSIONS BY SCENARIO - MEXICO

45

AIA

BAU

DEEP GREEN

1990 LEVEL

AIA

BAU

DEEP GREEN

FIGURE C : MEXICO

Predictions by Scenario for Mexico’s Residential 

and Commercial GHG Emissions
FIVE

GREEN BUILDING ENERGY SCENARIOS FOR 2030

GREEN BUILDING IN NORTH AMERICA: OPPORTUNITIES AND CHALLENGES

46

 2005 2010 2015 2020 2025 2030

 2005 2010 2015 2020 2025 2030

1600

1400

1200

1000

800

600

400

200

0

MT CO2 MT CO2

RESIDENTIAL GHG EMISSIONS BY SCENARIO - UNITED STATES

1400

1200

1000

800

600

400

200

0

AIA

BAU

DEEP GREEN

1990 LEVEL

AIA

BAU

DEEP GREEN

1990 LEVEL

FIGURE D : UNITED STATES

Predictions by Scenario for US Residential 

and Commercial GHG Emissions

COMMERCIAL GHG EMISSIONS BY SCENARIO - UNITED STATES
47

C. GENERAL CONCLUSIONS

The study underscores several important points:

Enormous energy improvements and greenhouse gas reductions in the 

building sector are possible using existing and emerging technologies. 

A rapidly increasing market uptake of currently available and emerging 

advanced energy savings technologies could result by 2030 in annual 

reductions of CO2

 into the atmosphere in North America of 1711 

megatonnes, compared to a Business-as-Usual approach. This is nearly 

equivalent to the 1756 MT CO2 emitted by the entire transportation sector 

in the United States in 2000.

Widespread use of ultra-effi cient building materials and equipment, 

like those found in SE1 and SE2, coupled with improvements in design 

process, fi nancing, construction and operations, will help pave the way 

for net zero-energy and carbon-neutral buildings by drastically reducing 

the amount of energy needed to run a building. With these dramatic 

reductions, renewable energy could provide the additional energy needs 

making the widespread adoption of net zero-energy and carbon-neutral 

buildings possible.

The challenge facing policy makers is how to establish the conditions 

needed for these signifi cant changes to take place over a relatively short 

span of time. The technologies incorporated into the new and renovated 

SE1 and SE2 archetypes currently represent a small share of the market and 

the integration strategies and other process changes needed are not yet 

common practice.

Although the study indicates that the greatest energy improvements 

for individual buildings compared to conventional methods are in new 

construction, it underscores that, overall, the majority of potential effi ciency 

gains in Canada and the United States lies in renovating or retrofi tting the 

existing building stock. In Mexico, new construction represents the majority 

of effi ciency gains.

The Deep Green and AIA or 2030 Challenge scenarios would allow the 

United States and Canada to reduce greenhouse gases produced by the 

building sector to below 1990 levels; in Mexico, greenhouse gas emissions 

would remain above 1990 levels because of the growth projected in the 

residential and commercial sectors.

1

2

3

4

5

FIVE

GREEN BUILDING ENERGY SCENARIOS FOR 2030
48GREEN BUILDING IN NORTH AMERICA: OPPORTUNITIES AND CHALLENGES

LOUIS-CHARLAND BUILDING 

MONTRÉAL, QUÉBEC
TWO

GREEN BUILDING IN NORTH AMERICA

49

DRIVERS 

AND 

BARRIERS TO 

IMPROVEMENT 6

PHOTO: JEFF STOUB/CEC
50GREEN BUILDING IN NORTH AMERICA: OPPORTUNITIES AND CHALLENGES

WHILE THE CLIMATE CHANGE CRISIS HAS BEEN AN IMPORTANT 

FACTOR IN RAISING AWARENESS AND INTEREST IN GREEN BUILDING, 

THE SECTOR REMAINS RELATIVELY SMALL AND LARGE BARRIERS EXIST 

TO ITS RAPID EXPANSION IN THE MARKETPLACE.

A. MOMENTUM TOWARD GREEN BUILDING IN THE UNITED 

STATES AND CANADA

Signifi cant momentum exists toward green building in the United States and 

Canada. Many in the real estate community are beginning to sense that green 

building represents a broad structural change in the market that demands a 

strategic response. This structural change results from increasing demand for 

green real estate and changing patterns of government policy and regulation 

that are leading to increased information on green building, better green 

materials, a more experienced construction industry, and enhanced efforts by 

nongovernmental organizations, the government, and the fi nancial sector to 

promote green building. 

MARKET FORCES

Economic forces are helping to drive these changes. Studies show that the cost 

premium to deliver sustainable properties to the market in the United States and 

Canada has declined considerably in recent years; they can be delivered at costs 

competitive with conventional buildings. In addition, case studies show that the 

life-cycle fi nancial benefi ts of green design signifi cantly outweigh the additional 

initial cost associated with green building.30

Corporations that drive building decisions through their selection of properties to 

lease and/or buy are showing great interest in green building.31 In addition, private 

real estate investors have dramatically increased their interest in sustainable real 

estate. A number of green real estate investment funds have been formed, or 

are in formation. Major pension fund investors in Canada and the United States 

are targeting sustainable investments and major real estate investment trade 

associations are escalating their educational efforts to their members. Although 

green standards for single-family housing are relatively new and the market 

remains incredibly small at 0.3 percent, surveys indicate a marked increase in 

green residences certifi ed under voluntary regional and national programs.32

30 See background paper 2b for a more detailed discussion.

31 In a May 2007 McGraw/Hill/Siemens survey of 190 corporate real estate executives (84 percent of which were CFOs or 

CEOs), 60 percent saw value in sustainability now and 88 percent expected to see value in three years. In an early 2007 

survey of 300 corporate real estate executives at a Jones LaSalle/CoreNet summit in Asia, 64 percent of respondents 

expressed an interest in spending more for greater sustainability. Sources: Ben Breslau and Reic H. Fowles, “Sustainability Perspectives and Trends in Corporate Real Estate,” Jones Lang LaSalle and CoreNet Gobal, 2007.

32 Green Building Smart Market Report, McGraw Hill Construction and USGBC, 2006. See <http://construction.ecnext.

com/coms2/summary_0249-229622_ITM_analytics>.

DRIVERS 

AND 

BARRIERS TO 

IMPROVEMENT

6
51

SIX

DRIVERS AND BARRIERS TO IMPROVEMENT

In addition to the traditional rationale of cost savings and productivity benefi ts, 

reputation, recruiting benefi ts, and new sustainability reporting requirements 

promulgated by groups such as the Global Reporting Initiative and Carbon 

Disclosure Project are driving these changes. Other factors include corporate 

leadership from the World Business Council for Sustainable Development, the 

Climate Group, the United Nations Environment Program’s Property Working 

Group and Sustainable Building and Construction Initiative, CoreNet Global 

(Corporate Real Estate Executive’s primary trade group), and recent real estate 

decisions by many leading multinational corporations.

GOVERNMENT PROGRAMS

Government regulations and programs are helping to drive the market. These programs 

are generally driven in large part by a desire to save energy and water costs and to 

improve living and working conditions. Research presented in the background papers 

to this report shows how governments at all levels are working to address these, and 

other, obstacles to infl uence the uptake of green building through the integrated use of 

building codes, zoning regulations, tax-based incentives, and preferential treatment for 

green developers (such as fast-track permitting). In addition, green building practices are 

also being spurred by demand offset programs (in which a developer reduces energy 

and water demand as a condition of permitting), preferred purchasing, and governmentsupported research, development, educational programs, and tax shifting.

Federal, state, and provincial governments’ preferred-purchasing policies in the 

construction, buying, leasing or renovating of buildings are helping to provide market 

pull by creating demand for new products and services and leading to the development 

of educational resources and tools that other consumers can use. In the past two 

years, the United States and Canada have set specifi c standards for sustainability and 

energy effi ciency throughout their federal building stocks. For example, the Energy 

Independence and Security Act, adopted in December 2007, aims to cut energy use 

in federal buildings in the United States by 30 percent by 2015 and requires new and 

renovated federal buildings to signifi cantly reduce their reliance on energy from fossil 

fuels. Compared with existing federal buildings, federal buildings built or renovated in 

2010 must cut their fossil-fuel dependency by 55 percent and by 2030, new or renovated 

federal buildings must eliminate their use of fossil fuel energy.33

Many state, provincial, and local governments have also adopted or moved to adopt 

legislation to address environmental impacts of buildings. Municipal programs have 

helped accelerate the dissemination and use of green technologies through the use 

of local codes and programs. Most of these have required that public buildings meet 

minimum levels of green building design or performance; increasingly a number of 

jurisdictions have begun to impose green building requirements for private construction.

33 See <http://www1.eere.energy.gov/femp/sustainable/news_detail.html?news_id=11500>
52GREEN BUILDING IN NORTH AMERICA: OPPORTUNITIES AND CHALLENGES

SIX

DRIVERS AND BARRIERS TO IMPROVEMENT

Government and nongovernmental research programs and challenges are also 

extremely important in moving the market forward. The US EPA’s Lifecycle Building 

Challenge is designed to encourage innovation toward buildings designed for 

adoption and disassembly with the aim of full recovery of systems, components, 

and materials.34 The goal of the Living Building Challenge, developed and 

implemented by USGBC’s Cascadia Chapter, is to create true sustainability in 

buildings. Examples of some of the 16 performance requirements are:

1. Net zero-energy—100 percent of the building’s energy needs supplied 

by on-site renewable energy on an annual basis.

2. Net zero-water—100 percent of occupants’ water use must come from 

captured precipitation or reused water that is appropriately purifi ed 

without the use of chemicals.

3. Sustainable water discharge—100 percent of the storm water and 

building water discharge must be handled on-site.

Other performance requirements include materials selection and use, indoor air 

quality requirements, transport limitations and construction waste management.

B. MOMENTUM TOWARD GREEN BUILDING IN MEXICO

In Mexico, urban growth pressures, housing needs, corporate social responsibility 

strategies, and certain tourist developments are helping to build greater interest in 

green building. While in Mexico many buildings and residences already embody 

green building practices, such as energy effi ciency and water conservation, the 

widespread institutional drivers that exist in the United States and Canada do not, 

for the most part, yet exist.

Mexico is facing tremendous urban growth pressures. Mexico City has seen an infl ux of 

4.7 million people in the past 25 years, compared to 1.9 million in Toronto or 0.5 million 

in Houston. Other large cities located along the US-Mexico border, particularly on the 

Mexican side, have seen an even larger relative population increase. For example, 

Tijuana tripled its population between 1980 and 2005, while San Diego saw a 45 percent 

increase over the same period. In Canada, cities such as Toronto and Vancouver, where 

immigration drives growth, populations have increased more than 50 percent since 

1986. In Mexico, per capita income and gross domestic product (GDP) are substantially 

lower than in the United States or Canada, compounding serious housing and 

infrastructure needs due to the accelerated population growth in urban areas. 

The number of households in Mexico is projected to double by 2030. The 

government has set a goal of providing 1,000,000 new housing units per year by 2010 

and continuing at that rate through 2030. This extraordinary growth will put enormous 

pressures on infrastructure and urban services, particularly in the hot and arid coastal 

and northern areas, where a signifi cant portion of this new growth will occur.

34 See <http://www.epa.gov/region09/waste/solid/construction/lifecyclebuilding/>.
53

SIX

DRIVERS AND BARRIERS TO IMPROVEMENT

In Mexico, water availability is a national security issue. Eighty percent of the 

population lives in hot, arid environments. More than 20 percent of Mexico’s 

housing units have no connection to municipal wastewater systems and almost 

15 percent lack piped water. Estimates are that Mexico receives 3,845 cubic meters 

of water per inhabitant per year,35 which is less than the 5,000 cubic meters per 

inhabitant threshold that the World Health Organization considers low.

The government is responding by instituting a number of efforts to promote the 

uptake of green principles and practices in the residential sector, particularly in 

housing developments with government involvement. Mexico’s National Housing 

Commission (Conavi) has been documenting green practices and is working 

on defi ning criteria and regulations for homes to receive government subsidies 

to incorporate water and energy conservation technologies (such as thermal 

insulation and effi cient lighting), and the use of solar energy for hot water, and 

on-site power generation. 

Also, Infonavit, a large housing fund supported by mandatory employer and 

employee contributions, has created a “green mortgage” program (“hipoteca 

verde”) that will increase the amount of credit available towards the purchase of 

a home and grant longer mortgage repayment terms for homes that integrate 

“green” elements. An example of the type of construction the government is 

trying is promote is the “casa ecológica,” built in Ciudad Juárez in 2000.36 Built as 

part of a social housing project for the climatic extremes of northern Chihuahua, 

it features the following bioclimatic innovations:

 1. Solar chimney, to draw out hot air generated indoors.

 2. Induction of fresh air taken from the outside and carried underground 

 to the inside.

 3. Ceiling heat trap to provide heating in winter, which allows heat

 generated during the day to be used at night.

 4. Optimal façade orientation.

 5. Water-saving devices in bathroom furnishings.

 6. Energy-effi cient lamps.

 7. Greywater treatment.

 8. Solar water heating panels.

 9. Manual for proper system usage.

 10. Housing system behavior monitoring.

These strategies are already being considered in large developments, such as 

Valle las Palmas in Tijuana, Baja California, where close to ten thousand homes for 

low income families will be built in the next decade.

35 See <http://www.fao.org/nr/water/aquastat/main/index.stm>.

36 Designed by the architectural fi rm of CONDAK – PULTE S. de R. L. de C.V., Armando Deffi s C., contractor.
54GREEN BUILDING IN NORTH AMERICA: OPPORTUNITIES AND CHALLENGES

Mexico City currently is considering green building legislation, the fi rst of its kind 

in Mexico. It allows developers to increase the construction potential between 

140 to 210 percent on a site provided they implement energy and water effi cient 

technologies.37 In addition, both municipal and national offi cials are expressing an 

interest in the development of green building rating systems for Mexico.

The National Energy Savings Commission (Comisión Nacional para el Ahorro de 

Energía—Conae) recently began work to implement a solar water heater program. This 

initiative, along with green procurement guidelines, is sure to play a part in the process.

The tourism industry has great potential to introduce green products and build strong 

markets for green building. According to statistics from its Tourism Secretariat (Sectur), 

Mexico received 21.35 million international visitors in 2006. Revenue generated by these 

tourists reached a record high of US$12.18 billion. The Loreto Bay resort currently under 

development aims to produce more energy from renewable resources than it consumes, 

harvest or produce more potable water than it uses, and create more biodiversity, more 

biomass, and more habitat than existed on-site before development started. However, 

some observers have expressed concern that certain regions in Mexico will see a 

signifi cant increase in vacation homes and tourist developments targeting people from 

the United States, Canada, and elsewhere, who will seek properties with air conditioning 

and other features that can drive up energy demand.

C. BARRIERS TO GREEN BUILDINGS

Despite momentum in all three countries, signifi cant barriers impede green building 

growth and result in a tendency to rely on business-as-usual approaches. In Mexico, 

these barriers are further compounded by the lack of building regulations, codes, urban 

planning tools, and consensus-based, widely accepted green building rating systems.

Some of the barriers identifi ed for all three countries are:

SEPARATE CAPITAL AND OPERATING BUDGETS

Many governments at the federal, state, and local level, as well as public and private 

institutions, appropriate funds for real estate acquisitions independently from funds 

for property operations. This separation creates an accounting scenario where the 

savings from the operation of green buildings is not used to offset any initial higher 

construction costs. 

Understanding the life-cycle costs of a building is still a signifi cant challenge. 

A building’s initial construction costs typically may represent only 20 to 30 

percent of the building’s entire costs over its useful life, underscoring the need 

to consider not just the initial cost of the building but also the year-to-year 

operating costs. As well, owners of investment property typically evaluate 

construction and operating costs over a holding period of ten years or fewer.

37 Proyecto de Norma de Ordenación General para la Producción de Vivienda Sustentable de Interés Social y Popular <http://

www.seduvi.df.gob.mx/programas/descargas/proyectosendesarrollo.pdf>. Secretaría de Desarrollo Urbano y Vivienda del 

Distrito Federal.

SIX

DRIVERS AND BARRIERS TO IMPROVEMENT
55

SIX

DRIVERS AND BARRIERS TO IMPROVEMENT

SPLIT INCENTIVES 

Often the one paying the bill and the one capturing the benefi ts differ. 

A developer may not be interested in paying for green features when 

the benefi ts will be passed on to the new owners or tenants—unless, 

of course, he is able recoup the additional cost of green features in 

the sale price or project income realized. The split incentive problem 

is particularly evident for new homes and condominiums and for nonowner-occupied existing commercial buildings where, because of high 

turnover rates, owners may want short payback periods on energy-saving 

investments. 

HIGHER PERCEIVED—OR ACTUAL—FIRST COSTS

Higher perceived or actual fi rst costs of many green building strategies 

and technologies are a signifi cant disincentive. A survey released in 

August 2007 by the World Business Council on Sustainable Development 

found that key players in the real estate industry overstated the cost of 

green building by an average of 300 percent, estimating the cost to be 

17 percent above conventional construction, more than triple the cost 

estimated by the study’s authors of 5 percent. Researchers interviewed 

1,423 people in Japan, China, Brazil, the United States, Spain, France, 

and Germany.38

Another key cost barrier is the uncertainty that developers, real 

estate professionals, and some capital providers feel about green 

building. Developers and other decision-makers may have contractors, 

subcontractors, materials, and service providers lined up for traditional 

building or retrofi tting; moving to green building may require new 

service providers, materials vendors, and the implementation of an 

integrated design process in order to build green at a comparable cost. 

RISK AND UNCERTAINTY

Although investments and interest in green building are growing rapidly, for a 

number of complex and varied reasons, the fi nancial case for green building 

has not yet fi rmly taken hold in the real estate and development community. 

Background paper 2b, Toward Sustainable Financing and Strong Markets for 

Green Building: US Green Building Finance Review, outlines the following 

risks that exist in the real estate community regarding green buildings: 

Uncertainty over reliability of green building technologies;

Uncertainty over costs of developing of green real estate;

Uncertainty about the economic benefi ts of green real estate; and

Uncertainty about green building performance over time.

38 World Business Council for Sustainable Development. The True Cost of Green Building, <www.wbcsd.org/plugins/DocSearch/details.asp?type=DocDet&ObjectId=MjU5NTM>.
56GREEN BUILDING IN NORTH AMERICA: OPPORTUNITIES AND CHALLENGES

SIX

DRIVERS AND BARRIERS TO IMPROVEMENT

The author notes that in the United States, while capital is beginning to move into 

green commercial real estate investment, “many green developers report that 

lenders and investors are reluctant to recognize additional investment value in 

green features with respect to energy cost savings or consumer appeal.” Similarly, 

many commercial real estate lenders and investors feel that they are ‘fl ying blind’ 

when asked to assess the value of green commercial real estate projects, noting the 

lack of lending and investment guidelines dealing specifi cally with green buildings. 

LACK OF EXPERIENCED WORKFORCE

One impediment cited repeatedly by many during the Secretariat’s green building 

consultations but not explored well in the literature and research, is rapid industry 

expansion threatening to compound the problem of the lack of experienced workers 

and thus increasing the risk of inexperienced or untrained service providers entering 

the green building market in search of a premium on their services. 

LACK OF COORDINATION AND CONSISTENCY IN GOVERNMENT 

POLICIES AFFECTING BUILDING

The background papers on the topic of Institutional Efforts for Green Building 

(topic 3) discuss how the lack of coordination and consistency in government 

policies can act as a barrier to green building. For example, building codes can 

hinder the use of alternative building materials and innovative design strategies, 

unintentionally require environmentally harmful practices, and fail to require 

environmentally preferable practices. 

In terms of fi nancial incentives, Canada lacks a comprehensive federal act directed 

at individuals like the Energy Policy Act in the United States and provincial efforts 

are not always well coordinated. In Ontario, for example, municipalities are not 

permitted to mandate any performance requirements above those required by 

the Ontario Building Code.

LACK OF RESEARCH INVESTMENTS

A recent report found that US funding for research related to green building 

practices averaged $193 million per year from 2002 to 2005. This represents 

only 0.02 percent of the estimated annual value of US building construction and 

0.2 percent of all federal research.39 Advances in green building research can 

result in signifi cant consumer savings and a strong return on investments. The 

United States National Academy of Sciences found a number of remarkable 

returns-on-investments associated with green building features. For example, a 

DOE investment of $4 million in development of low-emissivity glazing yielded 

cumulative consumer cost savings of $8 billion through 2000. With electronic 

ballasts for fl uorescent lighting, DOE invested $6 million and consumers realized 

cumulative savings of $15 billion through 2000.40

39 US Green Building Council, Green Building Research Funding: An Assessment of Current Activity in the United States (April 

2007). See <http://www.usgbc.org/ShowFile.aspx?DocumentID=2465>.

40 National Academy of Sciences, 2001, Energy Research at DOE: Was it Worth It? Energy Effi ciency and Fossil Fuel Research, 

1978-2000. See <www.nap.edu/catalog.php?record_id=10165>.
57

SIX

DRIVERS AND BARRIERS TO IMPROVEMENT

ISSUES SPECIFIC TO MEXICO

In Mexico, policy initiatives to address energy use in buildings did not begin until 

the mid-1990s when the National Energy Savings Commission (Conae) promoted 

the design and implementation of mandatory energy effi ciency standards for 

lighting and the building’s envelope in non-residential buildings. 

In practice, authority for building regulations lies with municipalities. Of the 

2,500 municipalities, only 72 have their own building regulations. Absent local 

regulations, the municipalities use state regulations. In many cities (even in 

the largest ones) certain aspects of building regulations, such as those related 

to water and electrical systems, are not always fully enforced due to their 

quantity and technical complexity and the lack of capacity and unawareness of 

municipal offi cials. In general, building regulations in Mexico are highly variable 

from a topical and technical standpoint, and still lack the basic elements of a 

comprehensive or systematic focus for green building success (in particular, those 

that relate to energy effi ciency and the use of renewable energy).

Lack of specifi c data on energy and water use in buildings has been a 

signifi cant issue, as it tends to make policy initiatives and benchmarking of 

building performance more diffi cult. In addition, the fact that the Federal 

Electricity Commission (Comisión Federal de Electricidad—CFE) classifi es 

a large part of electricity consumption in commercial buildings—offi ces, 

hospitals, schools, shopping centers, hotels and department stores—as 

industrial (reporting them accordingly in the national energy reports), leads to 

a signifi cantly diminished importance of these buildings in energy consumption 

records, and thus is a major barrier to awakening interest in specifi c policy 

initiatives and independent certifi cation. 

An especially important issue in Mexico is the limitation of land use planning and 

real estate tax assessment, which lack environmental criteria, such as building 

height restrictions, densities, etc., necessary to attain green building objectives. 

Green housing regulations have been regarded as a driving factor, though they 

are still in the early draft stages. Initially, these regulations will apply only in the 

Federal District, which will cause disadvantages vis-à-vis other metropolitan areas 

in Mexico.41

Finally, another factor is that although buildings use electricity, their air quality 

impacts are not always well understood by local authorities because the power 

generation sources may come from outside their communities. However, 

climate change concerns and Mexico’s international commitments and its large 

dependence on fossil fuels for power generation have made policy-makers 

there more aware of the importance of the energy and environmental impacts 

of buildings.

41 See <http://www.funtener.org/importayconsumo.html>.
58GREEN BUILDING IN NORTH AMERICA: OPPORTUNITIES AND CHALLENGES

CARNEGIE INSTITUTION FOR SCIENCE,

DEPARTMENT OF GLOBAL ECOLOGY

PALO ALTO, CALIFORNIA
59

PROMOTING 

MUTUALLY 

BENEFICIAL 

COOPERATION 7

PHOTO: PETER AARON/ESTO
60GREEN BUILDING IN NORTH AMERICA: OPPORTUNITIES AND CHALLENGES

The relative newness of green building efforts presents an opportunity for 

the three countries to work together to improve the building sector. The 

building industry is changing rapidly. Product standards are increasingly 

international, with ongoing efforts to harmonize performance metrics 

across national boundaries. Building components designed in the United 

States may be manufactured in Mexico and assembled on-site in Canada. 

These types of changes underscore the benefi ts that can come from a 

North American effort to share resources and information, to promote 

international trade in environmentally-preferable building products and 

proven-yet-underutilized technologies, to support eco-labeling programs, 

to pursue joint research opportunities, and to disseminate research and 

training information. For example, work could be done to contribute to 

and harmonize Canadian, Mexican, and US building data via existing lifecycle inventory databases, analyze building material trade fl ows among 

the countries, support bioregional mapping efforts for use by standards 

developers in regionalizing national rating systems, develop life-cycle 

scenario modeling for building products, explore opportunities for reuse 

and recycling of construction debris among the countries, and promote 

technology and knowledge transfer among all three countries.

PROMOTING 

MUTUALLY 

BENEFICIAL 

COOPERATION

7
61

SEVEN

PROMOTING MUTUALLY BENEFICAL COOPERATION

This effort can help strengthen the economies of North America by spurring 

new markets and business opportunities for manufacturers, utilities, and other 

companies. The rest of the world is moving forward. Europe has strong green 

building programs and segments of Asia and Latin America are beginning 

to embrace it. In December 2006, the United Kingdom announced its goal 

that, by 2016, all new homes will be net zero-energy buildings,42 while 

Swedish residents are aiming to cut their GHG emissions in half by 205043 and 

municipalities are switching off oil-based heating even on the darkest days of 

winter.44 Asian economies are undertaking actions: LEED-India recently certifi ed 

its fi rst government sector green building by incorporating an evaporative 

cooling technique45 and China, the world’s largest construction market, 

adopted a new design standard mandating energy-saving technologies in 

public buildings.46 The world’s biggest solar energy producer is Germany, a 

country not known for sunny, hot weather.

Green building will help ensure North American competitiveness in the global 

market for products, technologies, and practices essential to North America’s 

future. Such products, technologies, and practices include heating and 

cooling systems, advanced building materials, water-reclamation systems, high 

effi ciency appliances, energy effi cient lighting, construction and demolition 

debris recycling, and many more.

42 See <http://aec.ihs.com/news/uk-tech-guidance.htm>.

43 Climate policy, see <http://www.sweden.gov.se/sb/d/5745/a/21787>. Government Offi ces of Sweden.

44 Swedish municipalities going fossil fuel free, Post Carbon Cities, 20 June 2007, 

see <http://postcarboncities.net/node/261>.

45 IGP Offi ce, Gulbarga – India’s fi rst green building in the government sector. GreenHabitat, September 2007, 

<http://www.igbc.in/igbc/mmbase/attachments/1651/Green_Habitate_newsletter.pdf>.

46 China pushing for energy-effi cient buildings. Worldwatch Institute, 25 January 2007. 

<http://www.worldwatch.org/node/4874>.
62GREEN BUILDING IN NORTH AMERICA: OPPORTUNITIES AND CHALLENGES

PHILIP MERRILL ENVIRONMENTAL CENTER 

ANNAPOLIS, MARYLAND
TWO

GREEN BUILDING IN NORTH AMERICA

63

PHOTO: PRAKASH PATEL

RECOMMENDATIONS

 FOR NORTH 

AMERICA 8
64GREEN BUILDING IN NORTH AMERICA: OPPORTUNITIES AND CHALLENGES

With these drivers and barriers, regional variations, and global changes 

pushing and pulling the markets in different directions, what can North 

American leaders do to help ensure green building becomes standard 

practice in North America?

As part of the development of this report, the CEC Secretariat’s 

Green Building Advisory Group issued a Statement and Advice on 

Recommendations for the Secretariat.47 This advice sets forth a specifi c 

path for how North America can accelerate the market uptake of green 

building and make it the standard practice for all new and existing 

buildings. The CEC Secretariat has adopted the Advisory Group’s advice 

as its recommendations for this report.

Today, there is strong and increasing momentum supporting green 

building. These recommendations are designed to support and build 

on the efforts already underway in North America at the federal, state/

provincial and local governmental levels, as well as among the many 

industry, trade and nongovernmental organizations. Efforts to implement 

these recommendations should begin right away and should not be 

cause for delaying or slowing any ongoing federal, state/provincial or 

local initiatives. Building decisions made today will have consequences 

that last for generations. 

With strong leadership, a clear vision, and the right mix of policies 

and practices, North America can make green building standard 

practice for all new and existing buildings. There is today strong and 

increasing momentum supporting green building. We must capitalize 

on that momentum.

47 The Advisory Group’s statement is found in the appendix. The entire Statement and Advice on 

Recommendations can be found at <www.cec.org/greenbuilding>.

RECOMMENDATIONS

FOR NORTH 

AMERICA

8
65

EIGHT

RECOMMENDATIONS FOR NORTH AMERICA

THE SECRETARIAT’S RECOMMENDATIONS ON MAKING 

GREEN BUILDING STANDARD PRACTICE IN NORTH 

AMERICA

Our top recommendations are to develop: 1) a common vision for 

green building in North America, 2) targets for enhancing building 

performance, and 3) strategies for helping to drive profound change in 

the North American building sector.

1. Develop a Lasting and Achievable Vision

North American government, industry and nongovernmental leaders 

should work together to develop a lasting and achievable vision for 

green building in North America. This vision could help drive targets 

and strategies for green building and could result in the creation of a 

common set of principles and planning tools for green building, with 

each country having region/context-appropriate policies and programs 

to address differences in building codes, regulatory environments, 

climate, and economic and social conditions. 

1.1 Adopt a vision. Our vision is that green building will evolve to 

be not only a way to “do less bad” environmentally, but into 

a continuous process for creating materials, buildings and 

communities which are healthy, restorative, and regenerative and 

for strengthening the economic, environmental, and social fabric 

of North America.

1.2 Work toward the vision. We recommend the creation of multistakeholder national task forces in each of the CEC countries, 

coordinated nationally by the environment or other appropriate 

ministry of each country and linked internationally through a 

cooperative mechanism such as the CEC, to promote aggressive 

and consolidated national approaches for accelerating the 

achievement of this vision at the North American level, with united 

and integrated participation of representatives of all components 

of the building sector. 
66GREEN BUILDING IN NORTH AMERICA: OPPORTUNITIES AND CHALLENGES

EIGHT

RECOMMENDATIONS FOR NORTH AMERICA

2. Set Targets to Enhance Performance

North American leaders should set clearly defi ned targets, with the goal of 

achieving the most rapid uptake of green building possible in North America. 

These targets will help drive performance by providing a means to measure 

progress toward a stated vision.

2.1 Set aggressive, realistic targets for carbon-neutral buildings. We recommend 

that national and subnational governments in North America set aggressive 

and realistic targets to reach carbon neutrality for all buildings, new and 

existing, understanding that the timeframe for achieving these targets 

may differ regionally or nationally based upon political, economic, and 

environmental considerations. We applaud and support the action of the 

more than 500 cities in the United States that have signed the United States 

Conference of Mayors’ Climate Protection Agreement and those who have 

adopted the carbon–neutral building targets set forth in the American 

Institute of Architects and the Royal Architectural Institute of Canada’s “2030 

Challenge.” We recommend that Canada and the United States adopt targets 

at least as strong as the targets in the 2030 Challenge. Noting that buildings in 

Mexico currently have a lower unit carbon footprint than those in Canada and 

the United States, and that the 2030 Challenge does not yet have institutional 

recognition in Mexico, we recommend that Mexico adopt the most aggressive 

target practicable for carbon-neutral buildings.

2.2 Conduct modeling and set targets for other environmental parameters. 

Noting the critical importance of environmental challenges in addition to energy 

and climate change, we recommend that modeling similar to that presented 

in the CEC background studies for greenhouse gas reductions associated with 

green building be used to establish aggressive and technically-achievable 

targets for other environmental parameters, such as water, land conversion, use 

of environmentally-preferable materials, embodied energy and waste loads. 

These targets should aim to:

meet water needs within the capacity of local watersheds;

maximize urban renewal and development of brownfi elds and minimize 

conversion of undeveloped or agricultural land;

ensure that non-renewable materials are 100 percent recycled;

minimize embodied energy in buildings; and

eliminate emissions of toxic substances into the air, water and land.

2.3 Monitor performance to support continual improvement. We recommend 

that national and subnational governments implement monitoring and testing 

protocols to track progress on achieving these targets for green buildings and 

to gather information to support continual improvement in implementation and 

policy development, including any necessary changes to targets and to policy and 

regulatory approaches. Results of monitoring should also be used to enhance the 

foundation for life-cycle analysis and costing of buildings.
67

EIGHT

RECOMMENDATIONS FOR NORTH AMERICA

3. Implement Strategies to Drive Change

North American leaders should implement an integrated set of strategies to 

transform the market to push for accelerated, continuous uptake and improvements 

in green building. We acknowledge the growing government and private sector 

activity in support of green building throughout North America and the progress 

made to date, and make the following recommendations with a view to enhancing, 

accelerating and integrating those efforts. 

3.1 Promote private sector fi nancing and proper valuation methods. We are 

convinced that the net benefi ts of developing green building should be suffi cient 

to attract existing capital at market prices for green building. We recommend 

that governmental and private sector leaders, with appropriate support from 

independent nongovernmental organizations:

 cooperate to promote the development and adoption of life-cycle assessment 

and costing tools that integrate capital and operating budgets;

pioneer special fi nancing vehicles, performance contracts, guarantees and 

leasing arrangements that favor green building and remove barriers such as 

“split incentives,” long payback periods, and other risks and uncertainties;

support efforts to develop fundamental valuation and underwriting information, 

methods and practices for the proper valuation of green building; and

support the gathering and analysis of post-occupancy fi nancial and 

environmental information that will improve knowledge of green building 

features and fi nancing. 

3.2 Raise awareness and knowledge through research and development, capacity 

building and outreach. Transforming the market requires raising the level of 

awareness and knowledge of building design, engineering and construction 

professionals, developers, building owners and users, investors, building valuation 

and fi nance experts, academics, and government offi cials at all levels about the 

vision, targets, and strategies for green building and on the particular benefi ts of 

integrated design and other issues that green building may raise for each of these 

market actors. We recommend that government and nongovernmental leaders 

promote awareness and knowledge of green building practices and benefi ts, by:

making a strong commitment to a comprehensive and integrated program of 

research, development, and demonstration on green building topics;

funding and conducting training, outreach, and education campaigns;

developing partnerships involving government, the building and development 

sector, academic institutions, and nonprofi t organizations; and 

supporting the use of labels and disclosures on green building performance.

These efforts are particularly important for Mexico, considering its urgent need 

for affordable housing and the need for widely-recognized green building rating 

systems and a nationally-coordinated framework that will build on and support 

existing Mexican policies and programs that favor green building.
68GREEN BUILDING IN NORTH AMERICA: OPPORTUNITIES AND CHALLENGES

EIGHT

RECOMMENDATIONS FOR NORTH AMERICA

3.3 Lead by example. As signifi cant market actors in building, buying, 

renovating and leasing building space, governments should play an 

important role in shaping the development of the market for green building 

in North America, at the same time achieving both signifi cant environmental 

benefi ts and long-term cost savings on behalf of North American taxpayers. 

We recommend that government at all levels build on their progress to date 

and, as swiftly as possible, adopt comprehensive and ambitious policies 

requiring all government procurement in the building sector to achieve high 

levels of green building performance, with a fi rm commitment to continual 

improvement over time. 

3.4 Push for continual improvement in policy. Governments at all levels should 

engage the private sector and civil society in instituting a cycle of policies 

and programs that support continued market development of green 

building, with a view to accelerated expansion of green building to the 

entire building sector. These policies and programs must address not only 

energy consumption, but also water, waste, land use, and other issues in 

both new and existing buildings. 

We recommend that:

The national governments, with appropriate coordination with subnational levels of government, should adopt new, or enhance existing, 

national policies and laws that will support the fastest possible uptake of 

green building, including mechanisms that create incentives for green 

building.

Governments at all levels should enhance the authority of municipal 

authorities to adopt and implement coherent, comprehensive and 

integrated policies and codes to promote or require green building and 

high energy performance in the private sector.

Existing policies and regulations on energy effi ciency and green building 

should be fully implemented and enhanced periodically as technology 

advances and sector performance improves.

Tax and other fi nancial incentives for green building be based on proof of 

performance, as opposed to amount of investment.

Graduated utility rates that encourage conservation and penalize 

excessive consumption should be utilized as well as non-tax incentives 

such as expedited permitting, priority plan review, density bonuses, 

preferential lending and insurance rates and preferential waivers for 

green building projects.

Effective mechanisms to monitor implementation of policies and codes 

related to green building should be developed and enforced.

Over time, government should emphasize the appropriate use of 

mandates in addition to incentives, with a view to continual advancement 

toward green building targets and performance.
69

EIGHT

RECOMMENDATIONS FOR NORTH AMERICA

We also recommend the development and use in each country of 

comprehensive, rigorous green building rating and certifi cation systems, 

with a view to integrating them into government policies, programs, and 

mandates. Government and civil leaders should cooperate to compile and 

continually update information on best practices and policies on green 

building, and promote dissemination and use of this information.

It is critical that all policies and programs related to green building be 

integrated with comprehensive urban development programs geared toward 

development of sustainable communities, with emphasis on integrating 

green building with sustainable urban infrastructure for transportation, gas 

and electric utilities, potable water, waste disposal and recycling, storm water 

and wastewater management and sewage. This requires special attention 

to extending green building to the many areas in North America facing 

shortages in affordable housing, including those with climatic conditions or 

other circumstances that present unique challenges.

3.5 Promote North American and global cooperation. The CEC and other 

organizations are well-placed to promote cooperation on green building at 

a North American level. We recommend that the governments of Canada, 

Mexico, and the United States engage the CEC and other appropriate 

organizations to promote North American use of green building materials, 

equipment, and services and joint or coordinated research on priority topics 

related to green building. The three countries, through the CEC and other 

appropriate organizations, should:

support the exchange of data and information on green building in North 

America, with a focus on facilitating the exchange of ideas and best 

practices among North American municipalities;

 facilitate linkages between the North American region and other regions of 

the world in regard to best practices and policies on green building; and

 promote cooperation on education and training information to enhance 

private and public sector knowledge of green building in North America, 

with a special focus on and increasing knowledge, expertise, and 

awareness of green building practices, programs, and policy approaches in 

Mexico by building upon existing mechanisms, capacity, and programs.
70GREEN BUILDING IN NORTH AMERICA: OPPORTUNITIES AND CHALLENGES
APPENDIX:

ADVISORY GROUP 

STATEMENT 
72GREEN BUILDING IN NORTH AMERICA: OPPORTUNITIES AND CHALLENGES

PREAMBLE

We are standing on the threshold of the largest opportunity in human history to 

increase signifi cantly the quality of life for all citizens of North America and the 

vitality of our social, economic and environmental systems.

North America is facing unprecedented challenges in areas such as climate 

change, concerns regarding the security of energy supplies and the depletion of 

water and natural resources.

These challenges are not insurmountable. Canada, Mexico and the United States 

have the resources, wealth and ingenuity to overcome these challenges and

create a sustainable, healthier and more productive North America. 

Success, however, will require a fundamental shift in the way we think about 

our environment. At the heart of this thinking should be a plan to make green 

building a foundational driver for change in North America. 

Green building is a generic term that refers to the use of environmentallypreferable practices and materials in the design, location, construction, 

operation, re-use and disposal of buildings. It applies to both renovation and 

retrofi tting of existing buildings and construction of new buildings, whether 

residential or commercial. Green building is a key component of building 

healthy, vibrant and economically strong communities.

We note that the CEC uses the term “edifi cación sustentable” as the Spanish 

translation of “green building,” although a more precise translation of 

“edifi cación sustentable” may be “sustainable building.” Sustainability generally 

encompasses environmental, economic and social aspects. While the focus here 

is on environmental aspects of building, we emphasize that to be sustainable, 

building must also account for economic and social concerns.

THE URGENCY OF GREEN BUILDING

Green building designers and builders are already creating buildings that 

dramatically lower energy consumption, use renewable energy, conserve water, 

harness natural sources of light and ventilation, use environmentally preferable 

materials, minimize waste and create healthy and productive environments. 

Examples highlighted in the CEC report and portfolio of green buildings 

in North America, and in a growing body of other information sources, 

demonstrate the potential of green building to achieve these benefi ts on a 

wide scale. 

For example, a large state offi ce building in Jefferson City, Missouri uses highly 

effi cient mechanical systems, advanced building envelop design, lighting with 

sensors and photovoltaic roof collectors, resulting in 59% more energy effi ciency 

than a conventional building. 

APPENDIX: 

ADVISORY GROUP 

STATEMENT 

(Excerpted from Advisory Group 

Statement and Advice on 

Recommendations,

CEC’s Green Building in North 

America Study, 8 November 2007)
73

APPENDIX 

ADVISORY GROUP STATEMENT

The museum and visitor center at the Xochicalco archeological site in Mexico 

uses 100 percent on-site solar power and is self-suffi cient for water nine months 

of the year. A university research facility in Vancouver, British Columbia needs no 

sewer connection, employing wastewater reduction strategies to cut waste by 90 

percent.

Despite clear benefi ts, green building represents only a very small portion of 

the North American building market. One key barrier to greater uptake of green 

building is the predominant practice of separating capital and operating budgets 

instead of using life-cycle budgeting. 

There is also a tendency to rely on Business-as-Usual approaches in view of the 

perceived cost, risk and uncertainty of green building. Other barriers include 

limited awareness and knowledge of green building and lack of coordination and 

consistency in government policies for building. Change will require signifi cant 

and sustained action, not just by individuals, but by all sectors of society.

The risks of not acting are too great. These risks include climate change crises 

with the potential for catastrophic events; continued and worsening energy 

dependency with attendant security implications; serious water shortages in 

several regions in North America; loss of economic vitality and competitiveness; 

and threats to human health and quality of life.

Green building is an essential, potent tool to combat all of these problems. 

We are convinced, for example, that green building is one of the quickest 

and cheapest ways to address climate change, with the potential to reduce 

signifi cantly greenhouse gas emissions. We note the following:

According to the United Nations’ Intergovernmental Panel on Climate 

Change, buildings represent the greatest opportunity for considerable 

reductions in CO2

 emissions, with net economic benefi t; 

A report by an international consulting fi rm indicates that building energy 

effi ciency measures are some of the most cost-effective and cheapest ways 

to reduce carbon emissions worldwide. The report also notes that these 

measures would require no reduction in quality of life or comfort. In our 

view, many of these measures in fact would increase our quality of life and 

public health; 

Background research undertaken in connection with the CEC Secretariat’s 

report on green building fi nds that with aggressive market uptake of 

existing and emerging technologies and methods for construction, 

renovation and retrofi tting of buildings, enormous reductions in energy 

use and greenhouse gas emissions from new and existing buildings are 

technically achievable by 2030.
74GREEN BUILDING IN NORTH AMERICA: OPPORTUNITIES AND CHALLENGES

Green building will also help ensure North American competitiveness in the 

global market for products, technologies and practices essential to North 

America’s future. Such products, technologies and practices include heating and 

cooling systems, advanced building materials, water-reclamation systems, high 

effi ciency appliances, energy effi cient lighting, advanced insulation systems and 

many more.

BUILDING TODAY IN NORTH AMERICA

Buildings have a massive economic and environmental footprint. Every day we 

learn more about how the design, location, construction and operation of buildings 

deeply impact economic productivity, human health and our natural world.

Currently, over 125 million commercial and residential buildings exist in Canada, 

Mexico and the United States. In the United States alone, the total built fl oor 

space covers over 27 billion square meters, or more than fi ve and a half times the 

size of Grand Canyon National Park. Just within Mexico City, there are more than 

3 million meters of high quality commercial offi ce space, an area more than 

170 times larger than the city’s zócalo square. 

Every year several million new buildings are constructed on the continent. In 

Canada, more than 123,000 new single-family homes were built in 2006. In the 

United States, an average of 1.24 million single-family homes are built every year. 

Mexico projects an average of one million new homes every year for the next 

twenty-fi ve years. 

Building—including material manufacturing and shipping, design and 

engineering jobs, construction, real estate, facilities management, and 

investments in buildings—comprises a signifi cant part of the economies of 

Canada, Mexico and the United States. According to the Organization for 

Economic Cooperation and Development, the building and construction 

industry typically represents 5 to 10 percent of total employment and 5 to 

15 percent of national gross domestic product. 

In Mexico, Canada, and the United States, commercial and residential 

buildings account for about 23 percent, 30 percent, and 40 percent of energy 

consumption, respectively. Every year, buildings in North America cause more 

than 2,200 megatons of CO2

 to be released into the atmosphere, about 

35 percent of the continent’s total CO2

 emissions. That makes the building 

sector one of the leading contributors of greenhouse emissions in North 

America. Canada’s residential building sector is responsible for approximately 

80 megatons of CO2

 emissions annually and its commercial building sector for 

approximately 69 megatons of CO2

. 

APPENDIX 

ADVISORY GROUP STATEMENT
75

APPENDIX 

ADVISORY GROUP STATEMENT

In the United States, residential buildings account for approximately 

1,210 megatons of CO2

 per year while commercial buildings are responsible for 

approximately 1,020 megatons of CO2

. In Mexico, residential buildings account for 

approximately 42 megatons of CO2

 emissions annually, while commercial buildings 

are responsible for approximately 20 megatons of CO2

. In 2001, the carbon 

associated with energy services to United States buildings alone constituted 8 

percent of total global emissions of CO2

, equal to all emissions from Japan and 

the United Kingdom combined. 

Buildings contribute signifi cantly to the use of key resources such as energy and 

water. For instance, in the United States, building operations consume 12 percent 

of fresh water supplies. In Canada, the building sector consumes half of all natural 

resources used and generates a quarter of all landfi ll waste. Worldwide, buildings 

consume around 40 percent of all raw materials. 

Poor indoor air quality exacerbates asthma, allergies and the spread of fl u, and is the 

cause of sick building syndrome and illnesses such as legionnaire’s disease. In the 

United States, the annual cost of building related sickness is estimated to be 

$60 billion. According to researchers, green building has the potential to generate 

an additional $200 billion annually in worker performance improvements by creating 

offi ces with better indoor environmental quality, including air and natural light.

Beyond individual buildings, our patterns of development also often lead to 

congestion and ineffi cient land use, which results in greater energy consumption 

and travel times, loss of productivity, polluted runoff to streams and waste water 

treatment systems, loss of agricultural lands, fragmented habitats, and fi scal stress 

on local communities.

With strong leadership, a clear vision, and the right mix of policies and practices, 

North America can make green building standard practice for all new and existing 

buildings. There is today strong and increasing momentum supporting green 

building. We must capitalize on that momentum.


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