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The Economics of Green Building: What Does It Take to Achieve True Sustainability

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21 Jul 2025

8 Min Read

Mr Leong Boon Tik (Academic Contributor)
IN THIS ARTICLE
Mr Leong Boon Tik

Contributed by Mr Leong Boon Tik, whose research explores sustainable environmental management. He can be reached at boontik.leong@taylors.edu.my.

Buildings are the silent giants of our cities — housing people, powering economies, and shaping how we live. But they’re also one of the planet’s biggest pollution contributor. In fact, buildings are responsible for nearly 40% of global carbon emissions, mostly from energy use and the production of construction materials and operating the building. Yet, only a small percentage are built with sustainability in mind.

 

As the world faces rising temperatures, resource scarcity, and growing environmental pressure, there’s a global push to rethink how we build. Green buildings promise a smarter way forward — designed to minimise impact on the planet while creating healthier spaces for people. But there’s one question that keeps surfacing: is sustainability affordable?

Understanding the Economics of Green Buildings

Before diving into numbers, it’s important to understand what we mean by ‘green’ or ‘sustainable’ buildings.

 

Sustainability, as defined by the Brundtland Report (1987), is about meeting our current needs without compromising the ability of future generations to meet theirs. In the context of buildings, this means using resources wisely, reducing environmental harm, and creating spaces that are efficient, adaptable, and built to last.

 

Green buildings typically incorporate:

  • Energy-efficient design, including better insulation, natural lighting, and smart ventilation.
  • Sustainable materials, like recycled steel or bamboo that reduce carbon emissions and waste.
  • Healthier indoor environments, using non-toxic materials and natural airflow.
  • Smart technologies that optimise energy and water use.
Difference tier of Leed Certificate

These buildings are often measured through certification systems like LEED (USA), BREEAM (UK), Green Star (Australia), and GBI (Malaysia). But beyond ticking boxes, the real challenge is balancing performance with cost.

While green buildings may require higher initial investment for better materials, energy modelling, and specialised labour, they often generate long-term savings through reduced utility bills, lower maintenance, and increased property value.

The Hidden Costs of Going Green

Sustainable construction is full of potential, but getting there isn’t always straightforward. One of the biggest barriers is the range of hidden costs that go beyond what’s visible on the drawing board.

 

 

Sustainable Materials
Bamboo

Eco-friendly materials such as bamboo, recycled steel, or low-carbon concrete — often come at a premium. While they’re better for the environment, these materials can be harder to source, especially if they need to be produced locally to reduce transportation emissions. This limits options and increases prices, particularly in countries where the green supply chain is still developing.

 

 

Smart and Green Technology
The roof of the factory covered with solar panels

Features like solar panels, energy-efficient HVAC (Heating, Ventilation, and Air Conditioning) systems, rainwater harvesting, or automated lighting aren’t cheap. They often require not only the equipment itself but also careful integration and ongoing maintenance. For smaller developers or first-time homeowners, these costs may feel like a luxury rather than a necessity — even if the long-term returns are positive.

 

 

Regulatory and Certification Costs
Greenery in Kuala Lumpur

Green certifications require paperwork, energy modelling, audits, and compliance reports — all of which come with time and cost. While certifications can increase a property’s market value or attract tenants, the process can feel like a bureaucratic barrier rather than a helpful guide.

Who’s Supporting the Shift?

Despite the challenges, progress is happening — thanks in part to targeted support from governments and the growing commitment of private industry.

 

 

Government-Led Incentives in Malaysia
 

Malaysia has introduced several forward-thinking policies to support green construction:

 

 

These initiatives help reduce the cost gap and promote a shift in the construction industry, but they also need wider awareness and easier access to reach smaller players.

 

 

 

Private Sector Innovation
 

Meanwhile, private developers are beginning to invest in eco-materials such as Wood Plastic Composite (WPC) — a more sustainable alternative to timber. Though still emerging, green bonds are also gaining attention. These are special financial instruments designed to fund environmentally responsible projects, with potential to become a major source of funding for future green developments.

Wood Plastic Composite

Wood Plastic Composite (WPC) blends plastic waste and wood fibres into a durable building material. It looks like timber but doesn’t warp, rot, or splinter. Better yet, it helps reduce landfill waste — and needs no painting or varnishing. It's already being used in decking, fencing, and even building façades.

Together, these efforts show that sustainability is no longer just a moral obligation — it’s becoming part of the business strategy.

What Does It Take to Achieve True Sustainability?

Achieving true sustainability in green building means more than adding solar panels or choosing recycled materials. It requires a complete shift in how we think about construction — from planning and investment to training and collaboration.

 

 

 

Thinking Long-Term
 

One of the biggest challenges is the way the industry measures success. Many developers still focus on short-term profits and quick returns, which can make green solutions seem too costly at first. True sustainability means looking at the bigger picture: lower energy bills, better indoor environments, and long-lasting value for owners and communities. Buildings should be judged not only by what they cost to build, but by what they save in the long run.

 

 

 

Stronger Collaboration Across the Industry
 

Sustainable buildings cannot be created in isolation. It takes cooperation between architects, engineers, contractors, suppliers, and even city planners. Governments must play their part by offering incentives and clear regulations, while businesses and universities help train professionals with the right knowledge and tools. When different parts of the industry work together with a shared vision, change becomes possible.

 

 

 

Skilled and Sustainability-Minded Talent
 

To build better, we need people who understand how to design and construct sustainably. This includes architects who can apply passive cooling strategies, engineers who can calculate energy performance, and builders who know how to work with eco-friendly materials. Training and education are essential, starting from foundation-level studies all the way to specialised degrees in sustainable design and construction.

Traditional Wooden House with Red Metal Roof in a Misty Mountain Village

Green buildings need to reflect local culture, climate, and available materials. A design that works well in London might not suit a city like Kuala Lumpur or Jakarta. True sustainability respects local context. It also needs to be scalable — not just for high-end offices or luxury homes, but for schools, public housing, and community centres too. This is how sustainable design becomes part of everyday life.

Gain essential skills for sustainable architecture — environmental literacy, green certifications, eco-materials, BIM, low-impact construction, and policy ethics. Learn to analyse performance and collaborate effectively to drive real-world green design impact.

— Mr Leong Boon Tik

Conclusion

Making green buildings mainstream isn’t just about lowering the cost: it’s about rethinking how we define value.

 

Instead of focusing only on the cheapest way to build, we need to consider lifecycle costs, long-term health benefits, and the environmental legacy left behind. Sustainability must be seen not as a premium feature, but as the baseline standard — one that future generations will thank us for.

Curious about the systems, strategies, and technologies behind truly sustainable construction? Start your journey with the Foundation in Natural and Built Environments and progress into the Sustainable Digital Construction Management degree. Learn to design, manage, and lead projects that deliver more than just green labels — and create real, lasting impact.
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