Today’s buildings generate 19 percent of GHG emissions and consume 40 percent of electricity globally. By 2050, the built environment is expected to double due to high population growth and urbanization trends. Most of this growth will occur in emerging markets, particularly in middle-income countries. The adoption of resource-efficient building practices offers a chance to secure emission cuts at a low cost and lock in energy and water savings for decades.
Currently only a small number of buildings are designed and certified as green. IFC, a member of the World Bank Group, aims to catalyze a virtuous cycle of supply and demand for resource-efficient building construction and ownership through the Green Buildings Market Transformation Program (GBMTP). The main thrust of the GBMTP is to create a paradigm shift by setting a metrics-driven definition of what constitutes a green building (the EDGE standard of 20 percent less energy use, 20 percent less water use, and 20 percent less embodied energy in materials), creating a mechanism to reward property developers through green building certification, improving the public policy environment by supporting green codes and voluntary certification incentives, and promoting direct investment by assisting ground-breaking developers and financial institutions.
Green buildings are a $16 trillion investment opportunity through 2030. In Asia, green buildings are a $3 trillion opportunity through 2025 and at least a $14 billion opportunity in the Philippines. Green buildings have an attractive return on investment, as most building types in the Philippines can reach 20% efficiency with low upfront costs and significant utility bills savings. It is high time that we unlock this potential, with the private sector at the center to bring in the financing, tools and innovations. Environmentally-friendly construction offers opportunities to secure emission cuts at a low cost and to lock in long-term energy and water savings.
In the Philippines, IFC is working with developers and the banking sector to expand green buildings in the country. D+C
An innovation of IFC, EDGE (“Excellence in Design for Greater Efficiencies”) provides market leaders with the opportunity to gain a competitive advantage by differentiating their products and adding value to the lives of their customers. EDGE brings speed, market intelligence and an investment focus to the next generation of green building certification in 144 countries. IFC created EDGE to respond to the need for a measurable and credible solution to prove the business case for building green and unlock financial investment. EDGE includes a cloud-based platform to calculate the cost of going green and utility savings. The state-of-the-art engine has a sophisticated set of city-based climate and cost data, consumption patterns and algorithms for predicting the most accurate performance results. A project must achieve a minimum standard of 20 percent less energy, water and embodied energy in materials, or can be taken all the way to zero net carbon status. EDGE is part of a holistic strategy to steer construction in rapidly urbanizing economies onto a more low-carbon path. It’s an example of IFC’s commitment to creating markets that are competitive, sustainable, inclusive and resilient.
The World Green Building Council defines the path to reach the Paris Agreement target in limiting global warming to below 2oC as the following: all new buildings must be net zero carbon by 2030 and all new and existing buildings must be net zero carbon by 2050. IFC’s EDGE program and the World Green Building Council are working together to expand awareness, develop technical skillsets, and encourage the financial sector to support this target.
About Resilience Tool
As the global climate continues to change, developing economies face mounting losses from severe floods, droughts and storms. The rising frequency and strength of climate change-related impacts are already posing challenges to buildings and will increasingly do so in the future. Typhoon Mangkhut in the Philippines alone affected 270,000 people. Damage from flooding in March of 2019 caused $8 billion in global damage according to Aon’s Global Catastrophe Report. These damages are caused by infrastructure unable to handle large-scale weather events, which are increasing in frequency and severity. Resilience and risk mitigation planning must become more pronounced in the construction sector.
Depending on a building’s location and construction characteristics, the impacts of climate change can have undesirable effects for the building’s safety, habitability, and financial performance. The latter can be negatively affected by unforeseen and additional capital and operational expenditures needed to address damages from acute climate-related events (e.g. effects of extreme precipitation affecting structural integrity), as well as chronic conditions (e.g. increase in sea level rise) that ultimately can significantly change a building’s valuation.
Failure to include climate resilience in building design and construction will lead to locking in risks for years to come. IFC is now developing a tool to help the construction sector assess the resilience of their projects.
IFC—a sister organization of the World Bank and member of the World Bank Group—is the largest global development institution focused on the private sector in emerging markets. We work with more than 2,000 businesses worldwide, using our capital, expertise, and influence to create markets and opportunities in the toughest areas of the world. In fiscal year 2018, we delivered more than $23 billion in long-term financing for developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity. For more information, visit www.ifc.org
WORDS+IMAGES: EDGE (Excellence in Design for Greater Efficiencies)