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For health reasons I'd renovate . i read years ago about how homes leach chemicles for at least v20 years. If you buy an older house most have already been leached out, except for abestes I guess .
Be sure and check where the drywall came from too . Chinese drywall is very dangerous, Google it '.
We didn't have that choice because we already owned the land so we had to build .
The nasty leeching tends to be from surface and finish materials -- e.g. formaldehyde from paneling. Sulfurs from recent Chinese drywall, as you noted. Vapors from carpet. Some paints have nasty VOC, etc.
Doing a remodel of an existing will encounter all those, as well, as the new interior finish could have all those if not specifically selected not.
Older buildings and houses (pre 1978) also typically may have lead paint, lead in solder in the plumbing. They may have aluminum wiring if from the late 1960s/ Chromium and Arsenic if older pressure-treated wood is present, and PCP (Pentachlorophenol) if the building had been treated for insects, including termites, on and on.
Digging up in messing around old messes is not necessarily such a Green Idea anymore than digging up Coal and Oil.
The answer is, way too complicated to answer with just the information you provided.
For example, how close to net zero would the renovations get you? I presume since you didn't mention it, you wouldn't be getting that close.
And what kinds of materials would you be using for either new construction or the renovation? How much would be repurposed or sourced locally?
Are we talking about the same property, that has an existing old building on it that you will either renovate or tear down, or two different properties? If the latter, what are the differences in the site and location's environmental impact--transportation options, runoff impact, etc?
And of course, are you renovating a 200-yr old building or a 50-yr old building? Both will have their own peculiarities and environmental impacts.
It is all far too nuanced to simply give an A or B answer here. There is more to a property's environmental footprint than just their energy consumption (although that is a significant factor). I would recommend looking at the USGBC's checklists for both new construction residential and renovations, and see which option 'scores' better. If you've already gone so far as to calculate the costs and feasibility of new construction and renovation, you should already have either an architect or a builder, hopefully a LEED AP, who can help you decipher any terminology or credits you don't understand.
I chose to renovate a 70 yr. old mostly concrete home rather than tear down and build new:
Replaced single pane windows w/ storms to double pane aluminum clad wood frame low-E argon filled with UVA blocking film. Added insulation at attic level to R-38 and wall insulation to R-21. Concrete Hardyboard overlayed over new insulation will be significantly low maint. and reduce the need to paint. Using low VOC paint inside and other low VOC chemicals for tile installation (grout/sealant). Repurposing much of the wood trim that required removal as well as re-purposing old windows (cold frames and for other garden/workshed structures. Old kitchen cabinets will be re-used in basement & garage. New appliances in original 70 yr. old kitchen will all be efficient/energy star when rating is available. Old stove (1951 model) will be saved for canning stove in garage (to avoid heating up house in late summer). New heavy gauge metal roof (cool color reflective) replaces 40+ yr. old asphalt shingles, placed reflective insulative foil layer beneath to reflect 75% of all heat that passes through and it will outlive me. Geothermal heat pump HVAC installed replacing 25 yr. old inefficient propane forced gas furnace. Rainwater collection cistern restored to functioning status will be used for back-up water source and for garden watering.
To me "green" means making use of what you have and making it better rather than replacing in entirety. YMMV
Kind of points to the underlying silliness of the whole LEED accounting system.
LEED guidelines can make a lot of sense for new buildings, particularly large office buildings, public sector buildings, etc. where the scale of the energy usage means that a modest increase in engineering and capital costs upfront can save massive amounts of money over the lifespan of the building.
but they do need to bring down the red tape, and to focus on quantifiable metrics. I've seen lots of builders go to the trouble of the LEED certification because they expect that people will increasingly be concerned about energy costs.
which is good, as long as the specific LEED points are relevant (frankly, there do seem to be some ways to kind of game the system - putting bike racks outside your building, etc., are cool, but a bit of a stretch, IMO).
back to the embodied energy issue, it's in everyone's best interest to keep structures usable as long as possible. Manufacturing building materials like concrete is an incredibly polluting process, for example.
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