Its estimated that the global value of real estate is US$217 trillion – that’s roughly 2.7 times the GDP of the entire world. Of this, $162 trillion worth is residential, $29 trillion worth is commercial and $26 trillion worth is agricultural land. A conservative estimate is that global real estate consumes 40% of global energy annually and accounts for more than 20% of international carbon emissions.
In India and in many parts around the world, people live and work in buildings that are typically powered, heated and cooled using energy from fossil fuels. If these buildings are not retrofitted with energy efficiency measures, there is a real risk these assets becoming a burden to the society in the coming years, especially as we draw closer to the deadline.
Strangely the government in India doesn’t seem to be in a hurry to popularise green construction in the country. While our Finance Minister presenting the Budget for 2019-20 preferred to ignore Green construction completely, the Budget finds special mention about Electric Vehicles and the government’s goal of making India a global hub of manufacturing of EVs. Recently the GST Council also reduced GST rate on EVs from 12% to 5%. To make electric vehicle affordable to consumers, the government has decided to provide additional income tax deduction of 1.5 lakh on the interest paid on loans taken to purchase electric vehicles. This amounts to a benefit of around 2.5 lakh over the loan period to the taxpayers who take loans to purchase electric vehicle. There is nothing wrong in incentivising usage of electric vehicles as the vehicular traffic is one of the major reasons for GHGs. What is surprising is the government’s attitude of indifference towards green construction. That’s really baffling.
Indeed, vehicular traffic is one of the largest polluters of environment but so is the construction sector. Around 40 per cent of global energy related emissions come from buildings and construction. If you can subsidise and incentivise the EV purchase you should also offer similar benefits to those who buy Green Houses! But the government is not thinking on similar lines. One readymade answer from the government has always been – it’s the state subject and have to be dealt with at the state level. But so is the agriculture and water and the central government has come out with special programs in that sector. The government should realise that unless Green Construction and Green Buildings are promoted in the country it would be impossible for India to achieve GHG emission targets by 2030.
At least, the government should have acted on the lines of European Union when in 2010 a directive on energy performance made it mandatory for all European properties to hold an energy performance certificate and monitor energy use from heating and air conditioning. Later on, these energy performance certificates could have been used to enforce minimum standards of energy efficiency for all residential and commercial property.
Always remember that the cost of achieving an energy transition is less daunting, because the cost of not acting is more expensive. In fact, as we approach the deadline, the cost of achieving an energy transition will become more expensive than its today.
It should be noted that world -USA, UK, Australia and many others – are moving towards net zero energy buildings while in India energy efficient buildings account for not even 1% of the structures though the concept has been in existence in the country since the beginning of the century. Latest budget could have been a good platform for the government to announce its comprehensive policies leading to net zero energy environment. Fortunately for us, we will be seeing next budget in six months or so and let’s hope that it contains more “Green Lines.”