GREEN BUILDINGS
Move aside transportation, let's talk about buildings emissions.
The buildings and construction sector accounts for 37% of energy-related CO2 emissions. For context, the global transportation sector accounts for 23% of energy-related CO2 emissions. Yet how many people talk about EVs rather than green buildings? We'll wait.
The United Nations released a report on Buildings and Construction in 2021, titled "2021 Global Status Report for Buildings and Construction", which stated that the building and construction sector accounted for 36% of global final energy consumption, and 37% of energy related CO2 emissions. In the same report, and particularly to reference the huge impact this sector has, it stated that the global transportation sector accounts for 26% of global final energy consumption, and 23% of energy related CO2 emissions.
IFC estimates that 70% of buildings required in India by 2030 still need to be built. Think about that for a second. We've not even built one-third of the buildings that we will need to build over the next 8 years. Given that this sector contributes to almost 40% of global energy-related CO2 emissions, and that India will be constructing new buildings at a high velocity over the next decade, we are presented with a compelling opportunity to influence change. If we build green today, we can move the needle on global SDGs tomorrow. Now for the tough part - what does "building green" really mean?
"What Makes a Building Green?" - 5 Key Parameters
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1. Construction materials and efficiency of building design
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2. Energy efficiency
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3. Water use and management
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4. Waste management and recycling
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5. Indoor environmental quality (IEQ)
Note: While the definition for green buildings can vary significantly, these five key aspects are consistent across most definitions:
We're simply not solving for the fundamental issues in this sector. Developers tend to focus on energy efficiency (2) and indoor environmental quality (5), both of which are important components of making buildings greener, that also happen to interact with people directly. For example, indoor air quality vastly improves human health and employee satisfaction in offices, likely leading to higher productivity and retention. Developers are also recognising the need for effective water management and waste management systems, due to catalysts from government policy and their own needs.
However, when it comes to construction materials, developers have not fully accepted the concept of embodied carbon in the construction of such buildings. In addition, developers are still hesitant about alternative materials. This is not without reason. Many new materials have not reached the scale of commercialization such that they have been completely de-risked, and for such large projects, it's important to do so. Out of the five key aspects, construction materials is the only one that remains to see fundamental progress.
Cement, concrete and steel are still the primary materials used in building construction in India. According to the Global Cement and Concrete Association (GCCA), around 14 billion cubic metres of concrete are cast each year. Cement production alone accounts for as much as 7% of global CO2 emissions. It's obvious that one must take embodied carbon in construction materials into consideration in order to determine whether a building is truly "green" or not. Put simply, if you fit out a concrete building with all the "green" features of smart meters for energy efficiency and indoor air filters for air purification, you're not acknowledging the fact that the entire concrete structure itself has created massive amounts of GHG emissions during its production. In fact, despite all those nice green features, you'll likely not even come close to offsetting those GHG emissions in the first place.
In order to build truly "green" buildings, we need to go beyond the easy fixes, and fundamentally restructure the way we think about the materials used in constructing new buildings.
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Technology that modifies low-quality waste-wood into timber
Bricks that are made from materials that can sequester CO2
Photovoltaic windows which can generate renewable energy
Three emerging technologies for alternative construction materials:
While these technologies have not reached a critical level of adoption and scale, we are observing growing interest in this space from developers as well as entrepreneurs.
In India, buildings across the nation are advertised as being ‘green’. In 2021, India was ranked third globally in the U.S. Green Building Council’s (USGBC) list of top 10 countries and regions, outside the US, for Leadership in Energy and Environmental Design (LEED) rated buildings. While this is a positive step, the number of green buildings in India in relation to its total population is still extremely low. In addition, when it comes to geographic distribution, most green buildings are concentrated in a few Tier 1 cities with a handful of green buildings in Tier 2 cities. In order to increase adoption across the country, demand for green buildings needs to increase from home buyers and demand for green materials needs to increase from developers.
Are green buildings really that much more expensive? The high cost of green buildings is often cited as a deterrent to green building adoption, however, research shows that there are major misconceptions about this. According to IFC, in some cases, the perceived additional cost is as high as 30%, whereas the actual cost ranges from savings of 0.5% to 12% in additional costs. CII estimates that in India, platinum-rated buildings now only cost 2-3% more than conventional buildings while gold-rated buildings are the equivalent cost of conventional buildings. However, despite this, it is estimated that only 6-7% of new constructions in India can be classified as green buildings. This highlights the importance of creating awareness about the actual cost disparity and the payback periods for green buildings, given their lower operational cost.
There are agencies and tools that rate buildings based on certain parameters, both in India and globally. In India, many State Governments are making these standards mandatory. In addition, the Central Government and a number of State Governments are providing incentives such as property tax exemptions and additional floor area ratio (FAR), free of charge, for green buildings.
While rating agencies and government incentives are important to induce wide-scale adoption, the concept of green buildings has not advanced significantly in the past decade and policies and mandatory standards are not moving fast enough to keep pace with urbanisation and construction. This raises the question - Are rating agencies and tool providers setting the bar high enough or are they inadvertently leading to greenwashing and hindering the advancement of sustainable building technologies?
So what needs to happen to enable adoption of green buildings that are actually "green"?
Education & Awareness
Greater awareness needs to be cultivated around the current impact of the sector as well as the ways in which technology can be adopted to reduce this impact. In addition, education around the cost of green buildings needs to be improved to eliminate current misconceptions.
Improved Policy & Incentives
Governments should improve policy and formalise regulatory frameworks. Governments should also provide more incentives, particularly in terms of construction materials, to increase adoption of green buildings across the country.
Higher Standards
Rating agencies should take on a greater role in terms of advancing the industry by setting higher requirements for green buildings. This would improve standards across the board and would increase the number of buildings that are actually "built green".
Partner's Note: At Peak, we like breaking down complex issues into their core components. Green buildings is an area of particular fascination for us, because it is such an important component of the global climate crises, yet it receives such little attention. Imagining a city with wood buildings all around really gets us going. We're always looking to catalyze areas that others aren't looking at. Even within buildings, there are so many different potential solutions to be solved for. Sarah hits the nail on the head when focusing on embodied carbon. The low-hanging fruit, like energy efficiency in buildings and indoor air pollution, are easy fixes. It's when you understand the level of embodied carbon in the production process of steel and cement, that you really scratch your head and wonder - are we focusing our attention on the right problem here? The buildings opportunity is an extremely large opportunity in India, given the statistics. Let's all find a way to build in it together.