Climate changeby CW Guest Columnist on Jan 16, 2013
Residential and commercial buildings account for more than a third of total energy use and its associated greenhouse gas emissions in the world.
A report by the United Nations Environment Programme and Sustainable Buildings & Construction Initiative (UNEP-SBCI) shows that the “huge potential of the building and construction sector for combating climate change remains virtually untapped”.
The report states further that greenhouse emissions from buildings worldwide are set to increase sharply over the next two decades, and a major contributor is the construction industry.
The building and construction sector has the largest potential for cutting greenhouse emissions responsible for global warming. The way we design, build, manage and operate buildings has a major impact on the environment and this planet.
Left to their own devices, environmental protection and preservation are not foremost on the agenda of most construction companies and property developers. Maximising profits is usually key, and ‘going green’ is perceived as an expensive indulgence. Similarly, buyers and investors are more concerned with the cost of the product and their returns.
Investing in the future should not just be about financial gain. There must be a balance, and our focus should shift to investing in environmental management and sustainability for future generations.
Recognising the compelling need to take positive action, environmentally-conscious governments around the world have devised various strategies to encourage the private sector to build and invest in sustainable development. These incentives come in the form of stimulus packages and enactments of distinct legislation and regulations to curtail environmental pollution and damage.
Specific laws should be enacted for sustainable development, focusing on energy efficiency and greenhouse gas mitigation. In addition, the government should strengthen and empower the relevant agencies and local authorities charged with enforcement of these regulatory standards.
Poor enforcement of these new policies, programmes and legislation developed and enacted will curtail all the efforts made to mitigate, adapt to and counter climate change.
A carrot-and-stick approach could be adopted to encourage developers and construction companies to design, develop and build green buildings and infrastructure.
Existing environmental laws should be scrutinised and, if need be, revamped. Certain jurisdictions have already enacted laws to impose levies and penalties on companies which use toxic materials. In fact, incentives are given to encourage the use of non-toxic and ‘green’ building materials.
A green-building stimulus package to spur responsible development could include the following incentives: tax exemptions and reductions; capital subsidies, grants, subsidised loans, rebates; priority in building permit processing and expedited plan review; increased floor-to-area ratios, which allow a developer to construct more building area than allowed by applicable zoning; incentives for procurement and use of recycled materials and building materials which are environment-friendly; and publicity and awards given to companies which undertake and promote green projects.
Incentives could be given to financial institutions to provide attractive interest rates for projects that focus on sustainable development.
In fact, obtaining the relevant certification for compliance with green building criteria should be a material obligation under these financing agreements. Failure to obtain such certification could then trigger a default provision in the financing agreement.
Sharifah S. Hamzah is a partner at Al Tamimi & Company.