Recession is the best time to go Green

Michael Bloomberg, Mayor of New York City and Chair of the C40 Cities
Climate Leadership Group (C40) says- “For the first time in history, half of the world’s people live in cities and together are responsible for more than 70 percent of the world’s greenhouse gas production. Collectively, the C40 cities account for approximately 21 percent of the global Gross Domestic Product. Roughly 12 percent of the world’s carbon emissions are produced in our metropolitan areas. And nearly one of every 12 people on Earth lives in or near our cities’ limits.Granted there is no single solution for confronting global climate change. Still, the best scientific data tells us that it is long past time to address this challenge, and that cities must lead the way. This report represents a critical first step in our leadership – as individual Mayors and as a collective – towards a common, sustainable future.” C40 cities report city-wide GHG emissions totaling 609.5 million* metric tons CO2-e. This figure is equivalent to the total emissions from a country like Canada.

World over there is a slump in the Realty market. With many a nations almost folding over in Europe and the US yet to recover form the disaster of 2008, there are many who would want to toss the wisdom of Environmental concern for short-term (disastrous) gains, in almost all sectors of business.The conventional “wisdom” prevails over more slower yet saner approach. In this context when the exponents of Green Building try to move their agenda forward, all they get is a patient hearing. And it more often than not, ends there.

As per Nielsen Report on Sustainable Efforts & Environmental Concerns Around the World -“There are many possible reasons for declines in concern about climate change/global warming. Focus on immediate worries such as job security, local school quality, crime and economic well-being have all diminished media attention for climate stories in the past two years. In the face of other pressing concerns, a public “caring capacity” for climate change has been tested,” said Dr. Maxwell T. Boykoff, Senior Visiting Research Associate, Environmental Change Institute, University of Oxford. “Without continued attention paid to global warming/climate change in the media, such concerns may have faded from the collective public conscience.”

So when consultants who wants to promote as President Barak Obama says – “Better Building Initiative” not many takers are available.This is happening because while Governments all around are good at providing  lip service to Global Warming & Climate change, strong policy decisions are not being taken. Now it is also a well understood fact that should one choose to do an Energy Efficient Building -‘Green’ Building as it is popularly known, up to 20% CAPEX; 20% OPEX & 20% GHG can be reduced. This is something which even the Indian Green Building Council (IGBC), the Green arm of the Confederation of Indian Industries (CII) and compatriot of LEED – United States Green Building Council;  too agrees.

It is also a well known fact that 40% of GHG emissions and 60% of waste which is detrimental to our Ecosystem comes from Buildings or building related works.So there is clear & present danger. This danger must be addressed by all who understand the Environment Impact in our daily lives.

Now having these above numbers it makes enormous sense that during recession one must adopt the practice of making more Energy Efficient Buildings. Whether they follow the matrix set out in LEED rating system or India’s National rating GRIHA is more a matter of choice. A cheaper building a better living standard would almost always reduce expenditure in areas of   Safety,Health & Environment.

India which strives to be a Global player is as usual set to miss the bus, while Brazil & South Africa have taken the lead in taking the initiative for the C40 Cities for CDP, India has not and is in the same boat as China. For India it would be better to pursue the Environmental policy vigorously because of some fundamental reasons, the most important being that while the world was in turmoil in 2008 India was not greatly affected. This gives it the chance to become a leader in the Renewable Energy space by creating policy both at the power plant level but most importantly at the tail end level of roof-top RE. With the Indian people still woefully short of basic needs like Electricity & Water, having a strong Environmental policy and effective implementation of Green Building measure would keep India in good stead in every sense of security and prosperity a Country requires.

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Popularity of Green Buildings: The Side Effects

Yesterday I was reading a construction magazine. It was the standard “Ho-hum” more like an information bulletin than anything to do with articles on building industry in India. So what struck me most were the advertisements, especially the new project launch adverts.

Almost each of them had in some way other named their project “Green”.It was either starting with the words like -“Green Acres“; Green Woods, the name of the company + Green. Some were highlighting how much greenery it was providing in terms of parks or flower-beds.

Now I know for a fact that as of today India has between its two Green Building rating system – IGBC–LEED & TERI- GRIHA less than 2000 projects registered. So how was it that in the area of Mumbai & surrounding every second building is “Green”?

Well the answer is quite simple actually. We as Indians are born smart or at least some of us think we are ( in a population of 1. 20 Billion & counting “some” is quite large actually). Now the US of A gave us the word “Green Building” when we imported their sustainable building rating system LEED  { leadership in Energy & Environmental Design }. Nothing wrong with that, we Indians always have a fascination for all things imported and this LEED perhaps is the best thing that ever came to our shores.

The problem begins when the so called smart people, especially the “hobby builders/developer” as I like to call them start to use the term “Green” in their projects. Now what are “Hobby builders”- these usually are a group of investors whose main business may have given them a little spare cash and this they would like to invest in the building industry as in India – Roti, Kapada aur Maakan ( Food clothing & Shelter ) is an ever-growing demand. So these businessmen like to earn a little extra on the side. As profit is the main motive for at-least some of them, they use every trick in the book to popularize their product. They visit a few “Expo’s” collect a few brochures of the best builders and blindly copy the words therein. They neither understand what a Green Building mean nor would they ever spend that initial extra to make the building they build Energy Efficient Buildings, which by the way – “Green Building” stands for. Therefore one would find a clutch of fancy named buildings coming up which would usually be very poorly designed and inefficient in terms of saving of Energy & Water.

However there is hope, at least for an optimist like me. In the process of naming their project “Green” they are planting a few trees & having some soft-landscapes within the project. If one visits projects which were built just before the word Green started begin popular, especially in high density areas, it is a sad sight to behold. Ugly, ill-ventilated and with absolutely no space for a Green patch.

Although for every LEED or GRIHA rated building being designed in India at-least 500 “non-green” buildings are coming up. With Global Warming becoming a threatening reality each passing day, hope the so-called “Green” builders would truly start off on the path towards Energy Efficiency and Environmentally responsible   building design.

 

Climate change – the most significant emerging risks facing the world today

Climate change—often referred to as “global warming”—is one of the most significant emerging risks facing the world today, presenting tremendous challenges to the environment, to the world economy, and to individual businesses. It is also one of the most difficult risks to mitigate. This is a complex global issue at the intersection of science, risk, and public policy.

Ceres which directs the Investor Network on Climate Risk, a group of 78 institutional investors from the U.S., Europe, and Canada who collectively manage over $7 trillion in assets. In an annual report has noted that, despite the financial crisis, a growing number of political, financial and business leaders are calling for immediate action to drastically reduce global warming pollution. Climate change related catastrophic losses in 2008 to the economy were the third highest ever , exceeding $200 billion globally in 2008, including $40 billion in losses from Hurricanes Ike and Gustav in the U.S. alone, according to global insurer Munich Re. Climate trends are creating risks on both sides of the insurance house—underwriting and investment. But these trends also create vast opportunities, from product innovation to investment alpha, for insurers to be part of the global warming solution. For the first time, fighting climate change is seen not just as a long-term imperative but also as a short-term stimulus for a struggling economy. Property insurance companies are driving the majority of the activity (home owner, commercial, and auto)For the first time, two insurers, Zurich and Liberty Mutual, have introduced directors and officers’ coverage specifically tailored to address liability risks associated with climate change.

◆ Almost all of the climate-related innovations in liability insurance for directors and officers, political risk, professional liability, and environmental liability have appeared in the past year. Both Zurich and Liberty Mutual launched products specifically designed to cover boards of directors in the event of climate change litigation, a significant development given pending lawsuits that could allocate significant costs to major emitters of greenhouse gases.

The business risks from climate change include:
• the strong threat of increasingly volatile weather conditions,
• rising sea levels, and new health impacts;
• resulting impacts on insurance markets, business resources,
• personnel, and corporate preparedness;
• increasing legal and regulatory pressures; and
• mounting public and shareholder activism.

Therefore Climate change—and how to respond to it—is not “yet another” issue for insurers. It is, rather, bound up in the very fabric of the industry and its business environment, namely:
◆ Loss-model accuracy
◆ Regulation
◆ Balance sheet strength, risk-based capital, and solvency
◆ Competitiveness
◆ Emerging markets
◆ Reputation & trust
◆ Customer retention
◆Corporate governance, investor relations, and disclosure

Litigation Risks from climate change include:
With a growing perception among the public, government officials, and businesses that climate change causes damage, the likelihood increases that lawsuits may be filed against those believed to contribute to the buildup of GHGs. Companies could find themselves embroiled in courtroom battles on a number of fronts.

Reputation Risks:
Health risks: Climate change also poses a threat through potential impacts on the spread of diseases. A recent study by Harvard Medical School, for example, concluded that rising temperatures and extreme weather affect the breeding and spread of disease vectors such as mosquitoes that carry malaria and ticks that carry Lyme disease. Rising temperatures may also increase the growth of ragweed pollen and cause a rise in the incidence of asthma, according to the 2005 study. Air pollution could also worsen in some areas, with a related rise in respiratory illnesses. The economic consequences in terms of cost to company and government health plans could be significant.
Although most consumers do not currently consider climate change to be a front-burner issue, it is likely to become a mainstream consumer concern by 2010, according to Brand Value at Risk From Climate Change, a study conducted by the Carbon Trust with Lippincott Mercer, a Marsh sister company. In part, climate change will gain visibility among consumers in the coming years through the impacts of media reports on severe weather, increased regulations, political debate, and an increase in products marketed as climate-friendly. A number of companies from a range of industries are already promoting themselves as environmentally friendly and, specifically, climate change-friendly.

Regulatory Risk from Climate change:
As government agencies and world bodies put regulations in place limiting emissions, enforcement action can be expected against companies found not to be in compliance.
Such companies may then face significant costs from fines or from fighting against the regulations—or against allegations of having violated them—in court.

Risk from Shareholders:
Lawsuits from shareholders could centre on whether a company suffered financially due to a lack of planning for climate risks by directors. For example, it’s conceivable that a power company may choose to do nothing to limit emissions, and then the federal government could pass legislation requiring CO2 limits. Companies that had not prepared for the possibility could find themselves at a disadvantage to competitors that did prepare.

Competitiveness Risks:
A company that manages the above risks—physical, regulatory, shareholder, litigation, and reputation—more effectively than others in its industry may gain a competitive advantage. For example, if a manufacturing firm undertakes a comprehensive effort to reduce its energy consumption, it may significantly reduce energy costs, discover ways to streamline its processes, exceed shareholder expectations, and project a positive environmental image. Many companies are now aggressively developing new products as part of environmentally friendly strategies.

Corporate need to;
• understand and assess their exposures to natural hazards;
• analyze infrastructure damage;
• identify the need for upgrades to buildings and business practices; and
• obtain advice on risk-reduction measures.

Note: The article has been condensed from various prestigious publications & condensed for easy reading.

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Building A Low Carbon Economy with Energy Efficient Buildings

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The building sector can and should play a role in achieving the deep GHG reductions that science tells us are necessary to combat the threat of global warming. The building sector contribution to GHG emissions is mainly driven by its end use of, or demand for, electricity. This is a key difference from many other sectors where the main issue is emissions from the supply of energy. The building sector as a whole could reduce its share of GHG emissions by 30-35 per cent whilst accommodating growth in the overall number of buildings by 2050. This can be achieved by using today’s technology to significantly reduce the energy needed by residential and commercial buildings to perform the same services. For example, by replacing equipment with more energy-efficient models, at the natural replacement rate, and upgrading the performance of the building shell.

Detailed ‘bottom up’ analysis of energy efficiency opportunities suggests that net cost savings can be achievable in the medium to long-term. Rather than a cost per tonne of GHG abatement, many energy efficiency options have a positive financial payback in addition to providing abatement benefits. The payback period, can vary from a matter of months to many years. This finding is consistent with a large collection of case studies within the Country and overseas. When coupled with a broad-based GHG abatement target and a supporting policy environment, additional energy efficiency investments by the buildings sector would reduce the costs of change for the building sector and the economy at large.

Despite being cost neutral in the medium to long-term, achieving the additional GHG abatement action from the building sector faces challenges as well as opportunities.

1.Adopting energy efficiency strategies requires upfront investment by businesses and households to become more energy-efficient.

2.The benefits, or payback of these investments, are gradual, accruing over the medium to long-term, as savings on energy bills.

3.The building sector will need some additional incentives to overcome the impediments to change. These need to address a range of issues, such as the need to spur behavioural change, particularly to encourage adoption, and to offset the required upfront, direct capital expenditures.

4.Essentially, there is a need to encourage the rebuilding of our current building stock to upgrade the energy efficiency of assets within buildings to deliver a more   sustainable outcome.

5.The pay-off from investing in the energy efficiency potential of the building sector would flow through the entire economy by reducing the cost that others would face to  achieve their reduction in GHG emissions.

It is vital for government and the community at large to recognize the evidence showing the valuable role that demand side management and energy efficiency in the building sector can play in GHG abatement. Significant gains are available now without the need to invent and apply new technologies. They do not involve substantial risk or uncertainty and would provide significant gains now and into the future.

THE BUILDING SECTOR

The building sector can be viewed as being comprised of two broad elements:

Residential buildings — housing the population; and

Commercial buildings — housing a range of activities including retail trade, accommodation, business services, government and government agencies, recreation and cultural services and industry, which represents around two-thirds of national employment.

Component parts of the building sector are noted in chart

Residential Building	Commercial Building
Detached housesAttached dwellingsBuildings containing two or more soleoccupancy units	Wholesale tradeRetailAccommodation, cafes and restaurantsCommunication servicesFinance and insuranceProperty and business servicesGovernment administration and Defence Education Health and community services Cultural and recreational services Personal and other services

The estimate of greenhouse gas emissions due to energy consumption in the building sector takes account of:

1.  the amount of energy consumed;

2. the mix of fuels used;

3. the average greenhouse gas emissions from the different fuels (electricity is treated as a fuel); and

4.upstream emissions from transmission and other activities.

The electricity consumed within a building is only a part of the energy used to support that demand. A large amount of electricity and greenhouse gas emissions is also involved in distribution, transmission and generation. When reducing demand for electricity it is practical to eliminate the need for this upstream energy use and GHG emissions.

A larger proportion of GHG emissions are attributable to the building sector than its share of energy use because the building sector uses greenhouse gas intensive energy. Notably the building sector energy end use is dominated by electricity consumption which is dominated by coal fired generation located at the end of long transmission networks.

Emissions from the building sector are broadly of the same scale as emissions produced by the entire transport sector.

THE ABATEMENT POTENTIAL

The building sector could reduce its GHG emissions by 30–35 per cent by 2050 on an economical basis. Economic in this context means that the initial costs would be offset — and in many cases be more than offset — by subsequent energy savings over time.

The potential for increased energy efficiency in the building sector has been estimated through a bottom up analysis to identify energy efficiency opportunities in the building sector. The analysis:

1.Examine like-with-like replacement of energy inefficient appliances and building services with more energy-efficient equivalents;

2.focus on additional application of existing technologies;

3.take into account the costs of change and the expected benefits from reduced energy costs; and

4.factor in expected population growth and sustained economic growth which tends to bring pressure for increased energy use.

For the potential energy efficiency investments a much wider range of options exits. This set, however, generally represents the diversity of existing, mature technologies.

In the residential sector changes can be achieved through:

1. substitution for more energy-efficient light fittings;

2. greater use of natural light;

3.substitution for more efficient refrigeration;

4.adoption of more efficient hot water appliances with solar where possible;

5.adoption of appliances with a low standby energy use;

6. the introduction of more efficient heating and cooling mechanical systems; and better insulation.

In commercial buildings substantial savings to both costs and greenhouse gas emissions could be generated by:

1. improving air conditioning systems efficiency and including ‘economy’ cycles;

2.use of natural ventilation where possible;

3. the use of more efficient office appliances;

4.better insulation;

5.improved heating and ventilation;

6.the use of efficient light fixtures;

7.upgrading to more efficient water heating systems; and

8.where possible use of co-, and tri-generation (that is, using heat discharged from on-site power generation for water heating, and for absorption air-conditioning etc).

Energy efficiency measures would take time to be adopted by households and business. Analysis of the technical possibilities suggests the potential for GHG abatement is between 57 Mt and 66 Mt per annum by 2030. This would increase to between 86 Mt and 98 Mt by 2050.

Facts

• Buildings’ share of final energy consumption: 30-40%

• Global CO2 emissions from energy in buildings (2005): 9Gt

• Estimated growth by 2050 in all 6 EEB regions: 76%

• Growth in global population by 2050: 2.7 billion or 42%

Many energy efficiency projects are feasible with today’s energy costs. At energy prices proportionate to oil at US$ 60 per barrel, building energy efficiency investments in the six EEB regions (Brazil, China, Europe, India, Japan and the US) studied, totaling US$ 150 billion annually, will reduce related energy use and the corresponding carbon footprint in the range of 40% with five-year discounted paybacks for the owners. A further US$ 150 billion with paybacks between five and 10 years will add 12 percentage points and bring the total reduction to slightly more than half.

There are three key elements to

achieving progress:

– Use less energy

– Make more energy (locally)

– Share surplus energy (through an intelligent grid).

The most significant, long-term gains will come from using less energy.

Note: The data has been collected form various noted publications and condensed for easy understanding.

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