The promotion of sustainable practices is playing an increasingly important role in a wide range of industries. In line with this trend, the construction and building industry is gradually moving towards deploying green building techniques given its impact on the climate. According to the World Green Building Council, the construction sector accounts for 36 per cent of worldwide energy consumption and 39 per cent of global carbon dioxide emissions. With the population increasing, sustainable construction has become even more critical to reduce carbon emissions. Green or sustainable buildings are designed and built with the goal of minimising their environmental impact while maximising efficiency, resource utilisation and occupant comfort. Developing these buildings involves the use of new technologies, materials, and design ideas to make places that are sustainable and good for the environment.
Green buildings have various features that make them distinct from traditional buildings. These attributes include energy efficiency as these buildings are designed to consume less energy by incorporating tools such as advanced insulation, energy-efficient lighting systems and high-performance windows. Energy optimising systems in heating, ventilation, and air conditioning further reduce energy consumption, resulting in lower utility bills and reduced greenhouse gas emissions. Second, these buildings make use of sustainable/ locally sourced materials during construction to reduce the environmental impact of construction activities. Some of the other features are water conservation, storm water management and renewable energy generation.
Green building trends
The uptake of green buildings is key to meeting India’s ambitious climate goals, especially to become net zero by 2070. As per the Observer Research Foundation, buildings account for over 40 per cent of the country’s total energy consumption, and this is growing at 8 per cent per year. Additionally, the study states that if traditional, inefficient building practices continue, buildings will be responsible for more than 70 per cent of emissions by 2050.
Several regulatory measures have been initiated by the central government in this space. In 2001, a Leadership in Energy and Environmental Design (LEED) India committee was established by the Indian Green Building Council (IGBC). Further, TERI’s Green Rating for Integrated Habitat Assessment (GRIHA) was introduced. GRIHA has been approved by the central government as the national building rating system.
According to a working paper by the Institute for Social and Economic Change (ISEC), green building ratings were first adopted by corporate houses such as the Godrej Group, Tatas and M&M, as well as airports in Bengaluru, Mumbai, Hyderabad and New Delhi, which are managed by GMR. IT parks, malls, residential buildings, educational institutions, airports, factories, government buildings, hospitals, hotels, and other institutions are among those approaching the IGBC and taking the green route. As reported by the IGBC, 11,053 projects with a green footprint of over 10.27 billion sq. ft. have been established. Of these, 3,653 projects are certified and fully operational.
To facilitate the deployment of green building measures, the government provides several incentives. IGBC-rated green buildings can avail a bunch of benefits that vary across different states. These include tax benefits for developers of LEED-certified buildings. Developers can claim up to 100 per cent depreciation on the cost of green building assets, such as solar panels, rainwater harvesting systems and waste management systems. Low-interest loans are granted through the Indian Renewable Energy Development Agency for building projects with green certifications. Moreover, the Pradhan Mantri Awas Yojana and the Eco-Niwas Samhita, or green housing initiative, are expected to significantly enhance the country’s green residential building sector.
Cost trends
Green buildings are perceived to be more expensive than the standard traditional ones. In the case of green buildings, lifetime payback includes operational cost savings, credits for lowering carbon emissions, and potentially greater rental or capital values. A working paper titled “Promoting Green Buildings towards Achieving Sustainable Development Goals: A Review”, published by the Institute for Social and Economic Change in July 2021, reported some key insights regarding green building costs. As per the report, the IGBC platinum green structures, which were earlier 15 per cent more expensive, are now 9-12 per cent more expensive than non-green structures. Second, although cost premium estimates for green building construction differ, platinum LEED buildings in India have a longer payback period than gold or silver-rated buildings. The designated ratings by IGBC for certifying green buildings are silver, gold and platinum ratings. The cost of these buildings also differs according to different types of ratings under which the project is executed.
The cost is likely to decrease over time as the green construction sector develops. In addition, different raw materials that used to be imported from distant locations are available locally, which further lowers expenses. Also, with an increase in knowledge about sustainable practices, establishing such buildings can be more innovative and cost-effective.
As per a report titled “World Green Building Trends 2018”, published by Dodge Data and Analytics, Indian respondents were found to be more conservative in their expectations for one-year operating cost savings for new green and retrofit projects. Their five-year expectations for new green projects were more stable. They were, however, found to be more conservative about payback time frames on new projects than they were about green retrofits, possibly because that market is still niche.
Outlook
As per data from Fortune Business Insights, in 2022, the market size for green building materials across the world was estimated to be $377.03 billion. The market is expected to grow from $422.27 billion in 2023 to $951.15 billion in 2030, with a compound annual growth rate of 12.3 per cent during the time of the forecast. While green buildings may have greater initial construction costs, they provide long-term benefits such as higher energy efficiency, lower operational expenses, and a smaller environmental footprint. These advantages can more than compensate for the initial cost differential, making green buildings more financially appealing in the long run. Furthermore, the actual cost difference between green and regular structures might vary significantly depending on project parameters and region. To overcome the financial constraints in setting up such projects and make the country more self-reliant, the government has been actively bringing in incentives for developers, and promoting domestic technologies and in-house inputs.
In line with the emerging need for innovation in the construction industry, the Surat Municipal Corporation, in September 2023, launched a Clean Construction Manual for worksite engineers, supervisors and workers. The objective of the manual is to reduce air pollution and ensure the adoption of sustainable practices in the city’s construction sector. The manual comprises detailed steps to ensure air quality monitoring, movement of building materials, site cleaning, and sustainable construction and demolition waste management practices.
A report by The Energy and Resources Institute highlights that if urban buildings adopt the concept of green buildings, it is possible to save up to 8,400 MW of electricity annually, which is enough to light 550,000 homes. Thus, it would be useful to make the technologies and resources available for such projects accessible to small builders as well as to ensure mass uptake of this concept. Going forward, green buildings in the country can revolutionise the incorporation of sustainability on a large scale.
By Nikita Choubey
