I was lucky to get the English translation of the Three Star System that I previously posted. This has been my most popular post to date, so I’m following that up today with a presentation that should shed more light on the Three Star Rating System.
Gunnar Hubbard, a LEED expert and Principal at Fore Solutions, recently gave a great presentation at a green building event at the Canadian Embassy in Beijing detailing the differences between Three Star and LEED. I’ve embedded that presentation below.
Gunnar Hubbard- LEED vs Three Star Green Building Rating Systems
On slide 22, Gunnar notes that the growth of LEED registered projects in China and Dubai far outpaces any other non-US country. China has nearly 150 LEED registered projects and about 20 LEED certified projects.
According to statistics from my advisor Borong Lin, associate professor in Tsinghua University’s Department of Building Sciences, China has only 10 buildings certified under the Three Star Rating System. But growth is strong: there are between 50-100 buildings going for certification this year.
Professor Lin says that the government is currently drafting a regulation that will require all new government buildings to achieve at least a 1-star rating. The government will also be drafting a list of incentives for developers who pursue certification. These incentives will include tax breaks, lower interest rates and preferential financing, and increased Floor-to-Area Ratio incentives. All of these incentives will bring down the upfront cost premium for Three Star buildings, currently about 2% for 1-Star all the way up to 10% for 3-Star. Both of these policies are expected to be unveiled next year. This is great news, and these steps are exactly what I advocated for in my Bottom Up Approach.
Pegging incentives and regulations to Three Star will be a huge driver for growth in the number of buildings seeking certification. One of the big reasons so many buildings in the US have pursued LEED is because municipalities and states have pegged their policies to LEED. As China increasingly pegs their policies to Three Star, expect to see more buildings pursuing this system. I would also expect that any Chinese building seeking LEED will also seek Three Star. This dual certification ensures the best of all worlds: an international, third-party certification that appeals to multinational tenants as well as a local certification that allows for accessing of green building incentives and helps drive market transformation.
Professor Lin captured the interplay between LEED and Three Star with a great metaphor: LEED and Three Star are like two climbers taking different paths to the top of a mountain. LEED already has already started trekking up the mountain, and Three Star has been able to learn what worked and what didn’t work by watching LEED's path. Both hope to get to the top, but it isn’t a race. There is room for everybody at the top, and hopefully they can help each other out on the way. The important thing is that they reach the top of the mountain. As Gunnar notes on Slide 5, the goal of ALL rating systems is market transformation. Hopefully the Three Star Rating System will reach the top of the mountain soon and achieve the goal of transforming the real estate market in China into a greener, healthier place.