Green light for sus­tain­able de­vel­op­ment

The suc­cess story of sus­tain­able real es­tate de­vel­op­ment in In­dia is equally de­pen­dent on con­sumers and de­vel­op­ers

HT Estates - - HTESTATES - Anuj Puri

The real es­tate sec­tor in In­dia is one of the largest driv­ers of the coun­try’s eco­nomic growth. Real es­tate in In­dia pro­vides large scale em­ploy­ment and con­trib­utes mas­sively to the coun­try’s GDP. While real es­tate is vig­or­ously driving growth, it is also true that it is ad­versely im­pact­ing the en­vi­ron­ment.

So how do we cur­tail this im­pact on the en­vi­ron­ment? The an­swer is, by a more de­ter­mined adop­tion of the con­cept of sus­tain­able de­vel­op­ment. Sus­tain­able de­vel­op­ment is all about lim­it­ing the de­struc­tion of nat­u­ral re­sources and con­sump­tion of its gifts, and en­sur­ing that we keep the planet green and alive.

In­dia is by no means lag­ging be­hind on the sus­tain­able de­vel­op­ment front. The fact that the num­ber of cer­ti­fied green build­ings in In­dia have surged over the last four to five years is a direct in­di­ca­tion to the grow­ing pop­u­lar­ity of the ‘sus­tain­abil­ity’ con­cept. How­ever, we have a lot of catch­ing up to do with more de­vel­oped coun­tries.

While there is a more than de­cent sat­u­ra­tion of space com­mit­ted for ‘green’ cer­ti­fi­ca­tion in In­dia to­day, it is nowhere close to be­ing enough if we con­sider the space under de­vel­op­ment and the num­ber of ex­ist­ing build­ings. How does this sce­nario look for de­vel­op­ers? There is no deny­ing that this is a very chal­leng­ing en­vi­ron­ment for de­vel­op­ers with funds com­mit­ted for de­vel­op­ment of projects. They need to be able to find oc­cu­piers or buy­ers in or­der to re­cover the cost of cap­i­tal and the in­vest­ment. This means that the growth story of sus­tain­able real es­tate in In­dia de­pends on con­sumers prof­fer­ing de­mand for as much as on de­vel­op­ers gen­er­at­ing sup­ply of green build­ings.

In In­dia, IGBC has li­censed the LEED Green Build­ing Stan­dard from the US. Green Build­ing Coun­cil, which is re­spon­si­ble for cer­ti­fy­ing LEED build­ings in In­dia. There are other rat­ing sys­tems that are more lo­calised; the most sig­nif­i­cant among them is the TERI GRIHA. So, there is no lack of routes for ‘green’ cer­ti­fi­ca­tions for de­vel­op­ers in In­dia. How­ever, there is still a se­ri­ous lack of state-level in­cen­tives for de­vel­op­ers and oc­cu­piers of cer­ti­fied build­ings.

A large num­ber of cor­po­rates are now es­tab­lish­ing and start­ing sus­tain­abil­ity com­mit­ments. Com­mer­cial de­vel­op­ment in the top tier 1 cities has shown a sig­nif­i­cant in­crease in projects com­mit­ted to green cer­ti­fi­ca­tion. How­ever, there is still a vis­i­ble lack of ‘green’ pen­e­tra­tion in tier 2 cities, and the res­i­den­tial sec­tor has by no means risen re­sound­ingly to the oc­ca­sion as yet. This is sig­nif­i­cant, be­cause the biggest share of real es­tate de­vel­op­ment and ab­sorp­tion in In­dia is vested in the res­i­den­tial sec­tor.

There has to be a much clearer ben­e­fit state­ment for con­sumers of green real es­tate in the coun­try for this sce­nario to change for the bet­ter. Build­ings ac­count for up to 40% of the to­tal en­ergy con­sump­tion in In­dia, and com­mer­cial and res­i­den­tial real es­tate com­bined will ac­count for more than 2000 TWH of en­ergy con­sump­tion by 2030 (more than dou­ble of the fig­ure in 2012). Of this, more than 60% will be con­sumed by res­i­den­tial. There­fore, stake­hold­ers of the res­i­den­tial real es­tate sec­tor in In­dia def­i­nitely need greater en­cour­age­ment to go green.

Sadly, the re­al­ity is that most home­buy­ers in In­dia are still quite averse to pay­ing an extra pre­mium for a green res­i­den­tial pro­ject. Ob­vi­ously, de­vel­op­ers will not fall over them­selves to cater to a seg­ment wherein de­mand is lack­ing. There is there­fore a pro­nounced and dis­tinct need for in­cen­tives to boost the de­vel­op­ment and con­sump­tion of sus­tain­able real es­tate de­vel­op­ment in In­dia.

Greater aware­ness is a key fac­tor in in­creas­ing de­mand for green real es­tate, and the im­pe­tus for this aware­ness has to hinge on two as­pects and driv­ers - the first is cost. Home­buy­ers need to be con­vinced that their to­tal ownership cost, in­clud­ing main­te­nance, over the life cy­cle of the prop­erty will ac­tu­ally im­ply sig­nif­i­cant sav­ings. The sec­ond as­pect is that de­vel­op­ers and con­sumers of green real es­tate must be­come more sen­si­tised to their con­tri­bu­tion to sus­tain­able living over the long term.

States should be­come more se­ri­ous about sub­si­dis­ing de­vel­op­ment of green spa­ces so that de­vel­op­ers can keep their de­vel­op­ment cost at par with non­green spa­ces. This will en­sure that th­ese de­vel­op­ers will not have to levy an extra pre­mium on the buy­ers. When sales of a pro­ject are pos­i­tively im­pacted by green cer­ti­fi­ca­tion, de­vel­op­ers will have a clear ra­tio­nale to adopt the sus­tain­able de­vel­op­ment route.

Also, bod­ies like the IGBC and TERI should take a cue from the con­sumer prod­uct mar­ket and bring out a more ‘ palat­able’ ver­sion of the ben­e­fits of green homes. For ex­am­ple, if we con­sider en­ergy star-rated prod­ucts in the con­sumer seg­ment, a 5-star rat­ing for an air con­di­tioner be­comes an at­trac­tive propo­si­tion for buy­ers be­cause they know ex­actly how they ben­e­fit from it. Al­ready, the Bureau of En­ergy Ef­fi­ciency has a star rat­ing sys­tem for the en­ergy ef­fi­ciency quo­tient of build­ings.The purview of this sys­tem should be ex­tended through state spon­sor­ship to cover a more ‘holis­tic’ sus­tain­abil­ity in­dex.

As a coun­try, In­dia has an en­ergy deficit of around 12%, and this is only set to in­crease once elec­tri­fi­ca­tion of the coun­try’s ge­og­ra­phy is en­hanced over the sub­se­quent two five year plans. The key to mak­ing ownership of green spa­ces more at­trac­tive to home­own­ers is to in­crease aware­ness. The res­i­den­tial real es­tate sec­tor is the biggest fo­cus area in this re­gard, and this is the seg­ment wherein the con­cept of ‘go­ing green’ must be trans­formed from a cam­paign cov­er­ing a lim­ited few into a de­ter­mined mass move­ment.

THINKSTOCK

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