Green Buildings – Legal and economic possibilities and limitations to increase the green building stock

Abstract: Buildings account for about thirty percent of the total emissions of greenhouse gases annually in the world. Forty percent of the world´s energy is consumed by buildings. Buildings are a large part of the world´s environmental problems and it´s hard to ignore this fact. The last decade, awareness of the negative environmental impact we humans have on our planet has increased, and many different environmental commitments flourish in the world today. One way for the construction and real estate sector to reduce its environmental footprint is through green buildings. The purpose of this thesis is to examine the economic and legal possibilities and limitations in order to increase the stock of green buildings. The thesis will be based on four questions: What are the incentives for green buildings, Does the law differ for green buildings compared to conventional buildings? Are other markets using green incentives?, What does property management companies think of green buildings? The study is based on literature studies and interviews with industry professionals. The results of the study show that green buildings mean many economic opportunities, such as lower operating and maintenance costs, higher property value, better indoor environment a stronger brand. One economic limitation is that many people mistakenly believe that green buildings means a higher investment cost, but it doesn’t have to be. The lack of knowledge regarding green buildings could mean that some choose not to build them, which is an indirect economic limitation. The Swedish car market and the real estate market in the US use tax reliefs and various forms of green bonuses to push environmental commitments, which is proved to work as environmental cars and green buildings increased in use and in stock. In Sweden there is no specific legislation for green buildings. Swedish buildings comply under the same laws, whether they are green or not. The laws to apply are the planning and building act, the environmental code and the law of energy declaration. In addition to these laws, there are also government regulations from Boverket in boverkets building regulations that has to be followed. These laws, rules and regulations demands certain building performances and are relatively tough. A green building has tougher demand on a building’s technical features than a conventional building has. In 2015 a new legislation was formed that prohibited municipalities to set higher demands on a buildings technical features, than what is in the law. The law is to be followed by the municipality when they operate as an administrative authority and when they enter into land allocation agreements. This means that municipalities themselves in these two cases can’t require a building with higher demands. But in those cases when the developer requires stricter requirements in partnership with municipalities, there is still a possibility to get a green building, as the law doesn’t mention this exception. By offering economic incentives, such as the US housing market and the Swedish car market does to push environmental commitments, it can be used on the Swedish housing market to increase the want to build green buildings. To increase the opportunities for municipalities to build green the law needs to change. Both these methods are expensive and time consuming. Since it within a few years probably will be a requirement for building companies and other companies to build, manage and offer green buildings in order to be able to compete on the market, the conclusion of the thesis is that it is more efficient to let the development of society take its time. The development will mean that the demand for green buildings will increase and in the future will make green building market position even stronger.