Green Building Market in Asia Pacific – an Irreversible Trend
What is a Green Building?
A ‘green’, or ‘sustainable’ building, is a structure designed to be environmentally friendly and resource-efficient. Green buildings are usually constructed with certain purposes in mind: to protect occupant health, enhance efficiency in the use of energy, water or other resources, and reduce the production of pollutants. The concept was developed in response to resource limitations and concerns about pollution, so green buildings are often constructed using products and materials that are reusable and which reduce consumption of natural resources.
According to the Buildings Energy Data Book, the global energy consumption of the building sector has increased in the past two decades from 348.4 quad (an energy unit equal to 1015 BTU) in 1990 to 522 quad in 2010. The compound annual growth rate (CAGR) was 2.04%. Amongst all countries around the world, China had the fastest growth rate and its consumption in 1990, 2000 and 2010 were 27.0, 36.4 and 104.6 quad respectively. In 2010 it shared the largest portion (20.0%) of the world’s total consumption. Aside from China, other developing countries and regions such as India, Africa and the Middle East were also reporting relatively fast growth in energy consumption from their building related sectors.
No Universal Green Building Rating System
Many countries have national Green Building Councils which set standards and rating systems, which buildings must meet in order to qualify as green buildings. However, these standards and rating systems vary from country to country, and no universally agreed system has yet been established. Some of the standards adopted in Asia Pacific countries are listed in the table below:
Although there is no universal rating system for green buildings, Leadership in Energy and Environmental Design (LEED), launched in the USA in 1998, is the most widely adopted system. It is reported that the LEED system is becoming increasingly international as non-US registration has grown steadily. By 2010, 72% of the cumulative floor area registered with LEED was built inside the US and 28% was built outside the US. By 2011, the proportion of cumulative floor area in international projects had increased to 32%. On a single year basis, 44% of the floor area registered with LEED was international in 2011. As a leading international green building certification system, LEED has registration or certification of projects in 131 out of the 196 countries in the world. The total floor area registered is almost 3 billion square feet. On top of this, LEED India and LEED Canada combined have registered more than 1.5 billion square feet of green building floor area.
India – One of the Fastest Growing Countries in Green Building Development
The Indian green building sector is developing quickly. The total floor area of LEED pre-certified green buildings being built or ready to build is 1.2 billion square feet and there are another 105 million square feet of ready to build or being built buildings certified under the Indian green building rating system (the Green Rating for Integrated Habitat Assessment or GRIHA). It is reported that there was a total of 25 billion square feet of built-up space in India, as of mid-2012, and it is forecasted that this will increase to 50 billion square feet by 2020 and 100 billion square feet by 2030. It is also expected that green buildings could make up 20% of construction projects in the future, especially in the new cities developing along the Delhi Mumbai Industrial Corridor (DMIC).
In the past ten years, the number of certified and registered green building projects has increased rapidly. In 2002, there was only one project registered and none certified. The growth in numbers has started to speed up since 2007. At that time the number of certified and registered projects had increased to 15 and 80, respectively. By 2012, the most up-to-date data indicate that 253 projects are certified and 1673 projects registered.
China – Directed by the National Plan
In 2011, the urbanization rate of China was 51.27% and it is predicted that the percentage of urban residents will increase to 55% by 2020 and 70% by 2035. One effect of urbanization has been increased demand for high-rise residential and commercial buildings as part of an increase in demand for living and working space. According to the Ministry of Housing and Urban-Rural Development of China, around two billion square meters of new buildings are built each year under the current urbanization rate. A majority of these buildings are high energy consumption. Currently, the building sector consumes more than 33% of China’s yearly total energy consumption.
One of the major objectives of the 12th Five-Year Plan is energy saving and carbon dioxide reduction. The government hopes that both energy consumption and carbon dioxide emissions will be reduced through the implementation of green building construction. In the 12th Five-Year Plan, four reasons were outlined as the major drivers for the promotion of green buildings:
1. Green building is a measure to realize the objective of energy conservation and emission reduction
2. Green building is a way to improve the living standards of citizens
3. Green building is a strategy to change the development model of urbanization
4. Green building transforms the traditional construction industry to a new green era
In response the Chinese government’s green building policy has set up five objectives for the green building industrial players to achieve:
1. Making breakthroughs to further develop green building technologies
2. Establish a more well-developed green building assessment and standard system
3. Research and develop a set of new green building products, materials, crafts and construction facilities
4. Demonstrate and apply green building technologies when participating on large scale projects
5. Build up a cross-technologies green building platform
Singapore – Government Leads the Way
Singapore is a tiny country with limited land and resources, it is imperative for this country to develop sustainable and green construction to save energy and reduce pollution. The Singaporean Government has launched its initiatives for the promotion of green buildings since 2005. From 2005 to 2011, the green building gross area of Singapore has increased and in 2011 stood at 28 million meter square.
The government has set two targets for the building sector:
1. At least 80% of the country’s buildings will be green structures by 2030.
2. To achieve a 70% recycling rate by 2030, to remove the need for landfill.
In order to achieve these targets, the Singaporean government has already set out a master plan for sustainable construction in 2006 which lets the country move forward in a multi-faceted manner in green building technology and management.
Korea – Another Government Leading the Green Building Market
Currently, the building sector’s consumption of energy accounts for 25% of Korea’s national energy consumption. It is predicted that the amount of national energy consumption will continue to increase and, by 2020, the amount of energy consumption will be 250% more than 1990 levels. Korea is a country highly dependent on imported sources for energy; therefore the Korean government plans to increase the efficiency of energy use to prevent a future energy crisis. Similar to other countries, Korea aims at reducing 30% of green house gas emissions by 2020. By estimation, the residential and commercial sectors emit 25.6% of the country’s total green house gas emissions at the current time. In order to help the country achieve a low carbon economy, the Korean government has set up some directions for the development of green cities and buildings:
1. Strengthen the design standards for green builders
2. Reinforce the criteria for energy use
3. Supply 1 million green homes and promote environmental-friendly certification
4. Expand the use of renewable energy in public buildings
5. Promote environmentally friendly certifications
(Source: PriceWaterHouse)
The Korean government also set up a target that all new multi-family housing must be “zero energy” by 2025.
In order to encourage industrial players to engage in more green building projects, the Korean government has offered some policy and fiscal incentives including energy pricing reforms, the establishment of a national carbon market, the adoption of tax reforms to benefit low carbon goods, the provision of feed-in tariffs, the provision of subsidies and the allowance for exemptions on building acquisitions and registration taxes.
Conclusion
Natural resources are limited and the industrialization of the world in the latter half of the 20th century has caused many environmental problems. Energy conservation and carbon dioxide emission reduction are issues that do not allow for delay. These two topics are vital missions for different sectors. For example, energy sectors are exploring renewable resources such as solar, wind, hydroelectric or geothermal energy. For the transportation sector, electrical, hybrid or LNG vehicles are gradually replacing diesel or gasoline vehicles. Even in the fashion industry the green concept has started growing: H&M, a famous Swedish fashion retailer, endeavors to build a green image for the company by producing fashion with environmental friendly materials.
The building industry, a big consumer of the world’s energy, shares more than one-fifth of the world’s total energy consumption, and thus is an essential sector for energy conservation. As a result, the green building concept has become more widely adopted over the past ten years. Different countries have already set up guidelines and objectives for achieving some green targets. The UK has set a target that all new buildings will have to meet zero carbon standards from 2019 onwards - France established a similar target and it will be in effect in 2020. Moreover, governments of some major countries in Asia such as China, India and Singapore have also established directions or blueprints for green building development. Based on these governmental policies, it is predicted that there will be more and more green elements in the design, construction and operation of the building industry supply chain in the coming decades.
A detailed research report on this topic is available here