Make Green Building an Attractive Proposition

Look around us and we find that people are more environmentally aware today than ever before. This is evident from the buying behaviour and consumption choices that we make. Whether it’s at a shopping mall, car showroom or even the corner grocery store, a growing class of consumers is increasingly making environmentally-friendly choices –in the matter of food and beverages, housing, private transport, and other consumption patterns.

Changes in consumer buying behavior are also influencing the policies and actions of companies across industries, leading to the creation of new products and services. For instance, some of the biggest and most powerful car companies in the world are now engaged in a race to introduce environment-friendly cars with the focus on reducing pollution and waste and maximizing fuel efficiency.  Increasing number of companies are creating product designs and labels to match this shift in consumer behavior and help buyers make responsible choices. As a result, we see today more eco-friendly product designs and products made from materials that are recycled, renewable, and are less carbon-intensive.

Developers find value in green building

As in other industries, the number of environmentally-committed consumers and companies is growing fast in the real estate industry as well. Sustainable models in real estate development are becoming popular globally, and gaining traction in India too. As a developer, I see more and more real estate players find business value and opportunities in adopting sustainable development methods. According to the World Green Council, which conducted a study in over 60 countries, real estate firms are shifting business toward green building, with 51% respondents planning more than 60% of their work to be green by 2015. The WGC defines a green building as one that “uses less energy, water and natural resources, creates less waste and is healthier for the people living inside compared to a standard building”.

As a developing country, India faces the challenges of increasing pollution and depleting resources. Sustainable development in real estate can effectively address these concerns by designing and constructing buildings that conserve resources such as water and electricity, and encourage the use of recycled material. The term “sustainable development” is defined as development to achieve the needs of the present generation without compromising future generation’s needs. Introducing building features that help users to make intelligent choices in the matter of consumption of resources such as water and power in ways that the concerns of the environment and those of our social and economic ecosystems are effectively addressed is an important feature of sustainable development in real estate.

This awareness is prompting a number of developers to embrace green building. The importance of the impact that buildings have on human health, environment and the economy is dawning fast on developers. It is encouraging more private developers in India to plan and design their projects with a view to maximizing energy conservation and environmental sustainability.

Statistics offered by the Indian Green Building Council reveal that green building footprint is expanding. While there are only 442 certified and fully functional green buildings in India currently, the Council has 2,235 green building projects and 1.65 billion square feet of green building footprint registered with it of which over half is accounted for by the home segment. And the number of green buildings is anticipated to grow to about one lakh by 2025, say IGBC estimates. Apart from residential blocks, this increase will include hospitals, hotels, offices, institutions, colleges, convention centers and IT parks. The growth trend in green building in India is remarkable considering that it signifies a marked improvement from the situation in 2001 when there was only one green building in the country.

Use of new techniques, technology in green building

Developers are turning their focus on green building techniques and practices by scaling up the use of alternate sources of energy and renewable resources. This is encouraging the industry to take into account such concepts as ‘whole life carbon costing’, which considers the full environmental impact of a project across its entire lifespan. To reduce the carbon footprint, more and more buildings are being designed to take advantage of solar panels, wind turbines, rainwater harvesting systems, composting systems, etc. A 600-watt solar panel and a 650-watt wind turbine are enough to provide 4-5 hours of daily energy supply for a two to three member household living in a 2 BHK. Similarly, use of new construction techniques such as using packed gravel or permeable concrete instead of conventional concrete or asphalt enhances replenishment of ground water.

The world over, there is documented evidence of substantial energy savings and reduction in costs accruing to buildings that are sustainable and environmentally-friendly. Though the construction cost of such buildings is a little higher compared to the ones built along conventional lines, in the long run green buildings help save about 15-20% of the total running and maintenance cost, especially for office premises and IT parks. A CII report says that green buildings can typically lead to 30-50% energy savings and 20-30% water savings over their lifecycle.

How to promote green building

The growing interest in sustainable development has the potential to bring about a profound shift in the real estate industry. With a little push on the policy front and with some tax incentives, the green building trend in India’s real estate development can come into its own, as it has in countries like the UK, the US, Japan, France, South Korea, and China among others. According to the KPMG Green Tax Index, which explores how governments use their tax systems to respond to the challenges of energy security, water and resource scarcity, pollution and climate change, these six countries most actively use their tax code to drive sustainable developments and achieve green policy goals in areas such as energy efficiency, water efficiency, carbon emissions, green innovation and green buildings.

In India too, exploring various policy interventions at different levels can help to make sustainable development a grassroots agenda. For instance, framing policies that lower the tax component on all aspects of green building construction (design, material, solar or wind and other renewable energy sources plants, rain-water harvesting plants etc.) will surely give an impetus to more sustainable activity and green investments in the real estate industry. Other incentives such as providing additional floor space, granting transferable development rights and interest subvention can go a long way to promote green buildings.

These incentives are important considering that sustainability – whether in the real estate or other sectors – is still an incipient trend in India. That is all the more reason why all of us, including the government, need to come together to make sustainable development grow and flourish.

About P. Sahel

As Vice Chairman of Lotus Greens, Sahel is responsible for giving directions on overall business strategy and key investments decisions of the firm. Being one of the founding members of Lotus Greens, Sahel has been instrumental in formulating various company policies, setting up systems and processes, and building a strong team of professionals. Prior to Lotus Greens, Sahel worked for more than 16 years in some of India’s largest and most respected real estate companies like Jones Lang LaSalle for 13 years as the Managing Director of the Markets & Solution Development and DLF prior to that. The views expressed are personal

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