Health facilities have diverse thermal and electrical loads with challenging profiles and non-coincident peaks. This paper lays the basicoptimization algorithm, with two objectives, namely minimizing CO₂ emissions and reducing the pay-back period of the investment. Thealgorithm is based on the Rational Exergy Management Model and searches the optimum CHP capacity with the objective of maximum exergyefficiency. The algorithm also factors in the negative effect of tree cutting on CO₂ sequestration potential, which often occurs in the construction ofvery large new hospitals. Four building scenarios were analyzed, one which is a business as usual type of health facility building and the fourth oneis a near net-zero energy and exergy building. Results show that the optimization search may substantially increase the exergy efficiency, fuelsavings, and reduce CO₂ emission by up to 50%.