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San Francisco weighs green-building law

The city may pass the most far-reaching ordinance in the US in March. It would require most new commercial and residential high-rises to meet Leadership in Energy and Environmental Design (LEED) standards.

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"Four years ago, when we were ...first making the business case for green buildings, I sat on a cross-country flight next to a very agnostic developer," says Christine Ervin, one of the original designers of LEED. "He was very ho-hum, rather blasé, about the whole thing, until I mentioned expedited permitting. And he said, 'That, little lady, would get my attention.' "

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There are now fewer "agnostic" builders out there as costs for green building have fallen, savings from energy efficiency become ever more attractive, and research indicates green building helps attract workers and keep them productive.

"I've heard any number of developers say that if you're putting up a non-green building today, watch out, because you will have an obsolete product ... within just a couple of years," says Ms. Ervin.

Proposals such as San Francisco's suggest building owners have reason to worry about costly retrofitting. The plan affects new commercial buildings larger than 5,000 square feet, residential buildings over 75 feet in height, and renovations on buildings larger than 25,000 square feet. The standards gradually ratchet up, going from an immediate target of LEED Certified to a 2012 target of LEED Gold.

If enacted, the ordinance would create some winners and losers, say experts. One initial loss: jobs. So says the city's independent economic analysis unit in a review of an earlier – though similar – proposal. Over 20 years, the analysts project a loss of 265 to 2,476 jobs and between $66 million and $631 million in gross city product. That's because the higher cost of LEED Gold will discourage some construction spending.

The green premium, however, diminishes over time as demand drives down costs. Builders say that LEED's lowest rung, LEED Certified, is reaching cost parity with conventional building as green supplies and expertise grow commonplace.

On the other hand, green suppliers will be winners. One supplier already benefiting is Lewis Buchner. His business, Ecotimber in San Rafael, Calif., offers builders a compelling trifecta: His wood flooring has no urea formaldehyde, meets standards set by the Forest Stewardship Council (FSC), and in some markets, comes from within 500 miles. All three count toward separate LEED credits. He admits that the 500-mile credit can be difficult to supply. "We have a lot of angst about the fact that we've got maple flooring being made at a very good FSC factory in Asia, but we are shipping logs to Asia and back," he says. The environmental equations aren't simple. He notes that ocean shipment is more fuel efficient than trucking.

The 500-mile credit is an example of how LEED can single out one parameter in a complex environmental picture, says Arpad Horvath, professor of civil and environmental engineering at the University of California, Berkeley. "Trying to minimize our environmental impact in shipping might come at the cost of increasing some other environmental stressors," he says. "I think LEED and other policies ought to be thought of as a guidance that's inspiring further discussion."