IFC, CREDAI Promote Green Buildings in India through EDGE Certification

New Delhi—IFC, a member of the World Bank Group, and the Confederation of Real Estate Developers' Associations of India (CREDAI), apex body of private real estate developers, have partnered to promote green buildings in the country through IFC’s EDGE certification.

EDGE stands for ‘Excellence in Design for Greater Efficiencies’, and is a standard that focuses on energy and water efficiency in buildings. Fast, easy to use, and affordable, EDGE empowers builders and home-owners to choose environment-friendly technical solutions while capturing costs and projected savings. More information is available at www.ifc.org/edge.

CREDAI will encourage its members, including local chapters, to incorporate resource efficiency in their design using EDGE. To qualify for the certification, these efficiencies must result in savings of at least 20 percent in energy, water, and materials over the local standard practices. IFC will train members and share global best practices and knowledge with CREDAI on green building technologies.

“This partnership has the potential to transform the housing market and put India in a leading position to apply a green rating system for homes on a large scale,” said Geetamber Anand, President (Elect), CREDAI, at its “Clean India – Skilled India – Strong India” Conclave. “Only two percent of the buildings are currently resource-efficient, pointing to the huge opportunity.”

By 2050, India will be home to 1.6 billion people and most of this growth will come from cities, where the residential needs will double. This rapid expansion in construction would require buildings that are less resource-intensive yet meets the aspirations of today’s growing middle class.

“Green buildings are a compelling need and IFC will be working in this fast growing Indian market,” said Serge Devieux, IFC’s Regional Director for South Asia. “We aim to help builders introduce cost-effective green features into their designs and work with financial institutions and the government, to support their widespread adoption.”

IFC has invested $600 million in green buildings globally in the last five years. In addition, IFC has ongoing advisory programs in more than 10 countries. In India, IFC’s clients -- VBHC, an affordable housing developer, and SAMHI, a budget business hotel developer -- have benefited from the use of EDGE.

Recommendations of New York green building codes

 By Yatin Pandya | Place: Ahmedabad; Source: DNA

After having looked at the lessons learnt from the New York city’s initiative, steered by the rich mayor Bloomberg and the speaker, at creating Green code taskforce to make New York city’s buildings 75% more energy efficient in 20 years, here is a summary of the 111 recommendations which all in an integrated manner would achieve this.

Environment, health, Costs & savings being the major criteria, the recommendations have been generated in ten major themes in response to climate change.

The ten themes include: Overarching code issues (seven recommendations), health and toxicity (20), energy & carbon emissions-fundamentals (17), energy & carbon emissions- energy efficiency (28), energy & carbon emissions-operations and maintenance (six), building resilience (nine), resource conservation (five), water efficiency(seven), storm water (seven), urban ecology (five).

The following is the representative list of the kind of concerns and directives covered in the recommendations:
Add environmental protection as fundamental principle of the construction codes, don’t exempt existing buildings from green codes, consolidate regulation of landscape practices, streamline approvals for green technologies & projects, enhance code training for architects & engineers, limit harmful emissions from carpets, limit harmful emissions from paints & glues, ensure ventilation airflow in residences, convene task force on recycling fluorescent light bulbs, phase out toxic & inefficient light fixture components, promote stair use through signage, build new homes to Energy Star® Standard, limit heat loss through exterior walls, increase allowable size of solar shades, provide window screens to encourage natural ventilation, reduce artificial lighting.

In sunlit spaces, ensure operable windows in residential buildings, allow large solar rooftop installations, improve energy modelling for building design, improve energy & water efficiency.

Upon sale of residences, increase lighting efficiency in apartment buildings, encourage installation of energy star® appliances, reduce overheating in apartments, turn off equipment in empty hotel rooms, reduce artificial lighting in sunlit lobbies & hallways, limit after-hours retail lighting, insulate pipes exposed during construction, reduce lighting power requirements for offices.

It recommended the analysis of strategies to maintain habitability during power outages, ensure toilets & sinks can operate during blackouts,include climate change in environmental impact statements, recycle construction waste, use recycled aggregate in concrete, provide recycling areas in apartment buildings, use recycled asphalt, protect forests by using sustainable wood, upgrade inefficient toilets, showerheads & faucets during renovations, facilitate use of recycled water, reduce use of drinking water to clean sidewalks, stop wasting drinking water for cooling, increase biodiversity in public landscapes, increase biodiversity in sidewalk plantings, preserve “100-year old” trees.

Thus these recommendations have been argued with data, cost repercussions and human responses. They have looked at technology to policy change to operational and maintenance to public health and ecological dimensions. We need to relook at our development codes at least in our local milieu but in the entirety of vision and clarify them with depth of issues and breadth of its far reaching implication.

Carbon credit and how you can make money from it

Carbon dioxide, the most important greenhouse gas produced by combustion of fuels, has become a cause of global panic as its concentration in the Earth's atmosphere has been rising alarmingly.

This devil, however, is now turning into a product that helps people, countries, consultants, traders, corporations and even farmers earn billions of rupees. This was an unimaginable trading opportunity not more than a decade ago.

Carbon credits are a part of international emission trading norms. They incentivise companies or countries that emit less carbon. The total annual emissions are capped and the market allocates a monetary value to any shortfall through trading. Businesses can exchange, buy or sell carbon credits in international markets at the prevailing market price. India and China are likely to emerge as the biggest sellers and Europe is going to be the biggest buyers of carbon credits.

Last year global carbon credit trading was estimated at $5 billion, with India's contribution at around $1 billion. India is one of the countries that have 'credits' for emitting less carbon. India and China have surplus credit to offer to countries that have a deficit.

India has generated some 30 million carbon credits and has roughly another 140 million to push into the world market. Waste disposal units, plantation companies, chemical plants and municipal corporations can sell the carbon credits and make money.

Carbon, like any other commodity, has begun to be traded on India's Multi Commodity Exchange since last the fortnight. MCX has become first exchange in Asia to trade carbon credits.

So how do you trade in carbon credits? Who can trade in them, and at what price? Joseph Massey, Deputy Managing Director, MCX, spoke to Managing Editor Sheela Bhatt to explain the futures trading in carbon, and related issues.

What is carbon credit?

As nations have progressed we have been emitting carbon, or gases which result in warming of the globe. Some decades ago a debate started on how to reduce the emission of harmful gases that contributes to the greenhouse effect that causes global warming. So, countries came together and signed an agreement named the Kyoto Protocol.

The Kyoto Protocol has created a mechanism under which countries that have been emitting more carbon and other gases (greenhouse gases include ozone, carbon dioxide, methane, nitrous oxide and even water vapour) have voluntarily decided that they will bring down the level of carbon they are emitting to the levels of early 1990s.

Developed countries, mostly European, had said that they will bring down the level in the period from 2008 to 2012. In 2008, these developed countries have decided on different norms to bring down the level of emission fixed for their companies and factories.

A company has two ways to reduce emissions. One, it can reduce the GHG (greenhouse gases) by adopting new technology or improving upon the existing technology to attain the new norms for emission of gases. Or it can tie up with developing nations and help them set up new technology that is eco-friendly, thereby helping developing country or its companies 'earn' credits.

India, China and some other Asian countries have the advantage because they are developing countries. Any company, factories or farm owner in India can get linked to United Nations Framework Convention on Climate Change and know the 'standard' level of carbon emission allowed for its outfit or activity. The extent to which I am emitting less carbon (as per standard fixed by UNFCCC) I get credited in a developing country. This is called carbon credit.

These credits are bought over by the companies of developed countries -- mostly Europeans -- because the United States has not signed the Kyoto Protocol.

How does it work in real life?

Assume that British Petroleum is running a plant in the United Kingdom. Say, that it is emitting more gases than the accepted norms of the UNFCCC. It can tie up with its own subsidiary in, say, India or China under the Clean Development Mechanism. It can buy the 'carbon credit' by making Indian or Chinese plant more eco-savvy with the help of technology transfer. It can tie up with any other company like Indian Oil or anybody else, in the open market.

In December 2008, an audit will be done of their efforts to reduce gases and their actual level of emission. China and India are ensuring that new technologies for energy savings are adopted so that they become entitled for more carbon credits. They are selling their credits to their counterparts in Europe. This is how a market for carbon credit is created.

Every year European companies are required to meet certain norms, beginning 2008. By 2012, they will achieve the required standard of carbon emission. So, in the coming five years there will be a lot of carbon credit deals.

What is Clean Development Mechanism?

Under the CDM you can cut the deal for carbon credit. Under the UNFCCC, charter any company from the developed world can tie up with a company in the developing country that is a signatory to the Kyoto Protocol. These companies in developing countries must adopt newer technologies, emitting lesser gases, and save energy.

Only a portion of the total earnings of carbon credits of the company can be transferred to the company of the developed countries under CDM. There is a fixed quota on buying of credit by companies in Europe.

How does MCX trade carbon credits?

This entire process was not understood well by many. Those who knew about the possibility of earning profits, adopted new technologies, saved credits and sold it to improve their bottomline.

Many companies did not apply to get credit even though they had new technologies. Some companies used management consultancies to make their plan greener to emit less GHG. These management consultancies then scouted for buyers to sell carbon credits. It was a bilateral deal.

However, the price to sell carbon credits at was not available on a public platform. The price range people were getting used to was about Euro 15 or maybe less per tonne of carbon. Today, one tonne of carbon credit fetches around Euro 22. It is traded on the European Climate Exchange. Therefore, you emit one tonne less and you get Euro 22. Emit less and increase/add to your profit.

We at the MCX decided to trade carbon credits because we are in to futures trading. Let people judge if they want to hold on to their accumulated carbon credits or sell them now.

MCX is the futures exchange. People here are getting price signals for the carbon for the delivery in next five years. Our exchange is only for Indians and Indian companies. Every year, in the month of December, the contract expires and at that time people who have bought or sold carbon will have to give or take delivery. They can fulfill the deal prior to December too, but most people will wait until December because that is the time to meet the norms in Europe.

Say, if the Indian buyer thinks that the current price is low for him he will wait before selling his credits. The Indian government has not fixed any norms nor has it made it compulsory to reduce carbon emissions to a certain level. So, people who are coming to buy from Indians are actually financial investors. They are thinking that if the Europeans are unable to meet their target of reducing the emission levels by 2009 or 2010 or 2012, then the demand for the carbon will increase and then they may make more money.

So investors are willing to buy now to sell later. There is a huge requirement of carbon credits in Europe before 2012. Only those Indian companies that meet the UNFCCC norms and take up new technologies will be entitled to sell carbon credits.

There are parameters set and detailed audit is done before you get the entitlement to sell the credit. In India, already 300 to 400 companies have carbon credits after meeting UNFCCC norms. Till MCX came along, these companies were not getting best-suited price. Some were getting Euro 15 and some were getting Euro 18 through bilateral agreements. When the contract expires in December, it is expected that prices will be firm up then.

On MCX we already have power, energy and metal companies who are trading. These companies are high-energy consuming companies. They need better technology to emit less carbon.

Is this market also good for the small investors?

These carbon credits are with the large manufacturing companies who are adopting UNFCCC norms. Retail investors can come in the market and buy the contract if they think the market of carbon is going to firm up. Like any other asset they can buy these too. It is kept in the form of an electronic certificate.

We are keeping the registry and the ownership will travel from the original owner to the next buyer. In the short-term, large investors are likely to come and later we expect banks to get into the market too. This business is a function of money, and someone will have to hold on to these big transactions to sell at the appropriate time.

Isn't it bit dubious to allow polluters in Europe to buy carbon credit and get away with it?

It is incorrect to say that because under UNFCCC the polluters cannot buy 100 per cent of the carbon credits they are required to reduce. Say, out of 100 per cent they have to induce 75 per cent locally by various means in their own country. They can buy only 25 per cent of carbon credits from developing countries.

Tell us what's the flip side of your business?

Like in the case of any other asset, its price is determined by a function of demand and supply. Now, norms are known and on that basis European companies will meet the target between December 2008 and 2012. People are wondering how much credit will be available in market at that time. To what extent would norms be met by European companies. . .

As December gets closer, it is possible that some government might tinker with these norms a little if the targets could not be met. If these norms are changed, prices can go through a correction. But, as of now, there is a very transparent mechanism in which the norms for the next five years have been fixed.

Governments have become signatories to the Kyoto Protocol and they have set the norms to reduce the level of carbon emission. Already companies are on way to meeting their target.

Other than this, it's a question of having correct information. How much will be the demand for carbon credit some years from now? How much will the supply be? It is a safe market because it is a matter of having more information on the extent of demand and supply of carbon credit market.

Source: rediff.com

Here’s what to look for if you want to purchase a house that’s environmentally friendly

By Sari Krieger of The Wall Street Journal

For homebuyers, green is fast becoming a priority — whether it's because they want to reduce their energy costs, minimize their carbon footprint or improve indoor air quality.

Here are 10 questions that prospective buyers or renters ought to ask to find out how green a house or apartment is.

1. How big is it?
The bigger the home, the more energy it uses. The U.S. Green Building Council considers a "neutral size" home — basically what most people need, without what might be considered luxury space — to be 900 square feet for a one-bedroom home, 1,400 square feet for two bedrooms and 1,900 square feet for three bedrooms. A 100% increase in the size of the home adds anywhere from 15% to 50% to energy use.

2. Where is it?
Can you walk to public transportation? Are there sidewalks or easy places to walk in the neighborhood, so you don't always have to drive? How close are shopping centers and other places you would frequent? The Web site walkscore.com rates the walkability of cities, neighborhoods and individual addresses and shows the distances to stores, restaurants, schools and amusements.

3. How is it oriented?
South-facing windows can trim heating costs in the winter. Shade from trees to the south and west can reduce cooling costs in the summer.

4. Is it well-insulated, and are doors and windows sealed tightly against air leaks?
The U.S. Energy Star Web site, energystar.gov, features a calculator to help determine how much insulation you need, based on your location. To guard against air leaks, windows and exterior doors ideally should have an Energy Star rating, which indicates they meet a certain standard of efficiency in preventing the loss of heat in the winter and cooling in the summer. You may be able to feel air leaks, or you can hire an energy auditor to conduct a "door blower test" — a big fan placed in a doorway sucks air out of the home, creating easily detectable drafts rushing in from outside wherever there's a leak.

5. Has the indoor air quality been tested?
Well-insulated, well-sealed homes not only hold in heat and cooling, but also can retain toxins such as formaldehyde, mold, asbestos and lead. A test will show whether any toxins are present in levels that exceed the safe maximums established by the Environmental Protection Agency. You might also ask whether the home was constructed or renovated with nontoxic building materials and furnishings, such as low- and zero-emission paints and sealants and materials such as strawboard for the subflooring.

6. If it's an older home, have insulation, heating and cooling systems and appliances been upgraded?
Newer products are far more efficient than those bought several years ago. Also, has higher-efficiency lighting been installed?

7. How efficient is the water usage?
Are the kitchen and bathrooms equipped with water-efficient plumbing fixtures? If it's a house, does it have a water-conserving irrigation system for the grounds, and landscaping that minimizes the use of water? It may also have a rainwater collection and storage system, particularly in drier areas where water is increasingly scarce and costly.

8. What's on the roof?
A lighter-colored roof reflects more heat than a dark-colored roof, which absorbs heat, putting more strain on the cooling system. Does it have skylights that let in natural light?

9. Where did the home's materials come from?
Recycled or salvaged building materials reduce the home's impact on the environment. Also preferable are materials that are locally available, can be processed with less energy and water, are reusable or recyclable, are durable and are abundant in the environment.

10. Has it been certified green?
The U.S. Green Building Council, the Environmental Protection Agency and others offer ratings on homes, based on inspections by trained third-party professionals.

Source: msn real estate

Grab the 'green' real-estate boom

Real-estate moguls know there's good money in environment-friendly buildings. Here's how the little guy can play, too.

By Fast Company

If the workplace is any indication, you could almost believe corporate America really cares about the environment.

Goldman Sachs (GS, news, msgs), Hearst, IBM Corp. (IBM, news, msgs), JPMorgan Chase (JPM,news, msgs) and Toyota Motor (TM, news, msgs) all have made the move into "green" buildings. Bank of America (BAC, news, msgs) plans to build a 52-story eco-skyscraper near New York's Times Square, and Accenture (ACN, news, msgs) has leased green office space throughout the country.

Sustainable construction is one of the fastest-growing segments of the already-red-hot commercial-building industry. An estimated 5% of all new U.S. commercial construction received the U.S. Green Building Council's Leadership in Energy and Environmental Design (LEED) certification last year. And by 2010, 10% of all new commercial construction will be sustainable, according to McGraw-Hill's (MHP, news, msgs) 2006 Smart Market report. (The green trend in home construction is still in its infancy, although that's bound to change.)

Existing construction is getting an eco-lift too. Developers such as Hines and the Durst Organization, and some real-estate investment trusts (REITs), are snapping up half-empty office buildings and renovating them according to green standards. That can often bring 3% higher rents and a 7.5% increase in a building's value, according to the McGraw-Hill report.

On average, green buildings save 10% of utility costs each year -- and sometimes much more. Genzyme's(GENZ, news, msgs) corporate headquarters in Cambridge, Mass., spends 42% less on energy and uses 34% less water than a similar traditional building would. Even more important, as sustainable materials and technology improve, green construction will become more cost-effective, says Charles Lockwood, an environmental and real-estate consultant in Southern California and New York.

So how do individual investors get in on this latest real-estate boom? The easiest opportunities may lie in REITs that have made a substantial commitment to new or renovated green buildings. In a sign of just how hot this phenomenon is, however, two of the biggest, greenest REITs, Arden Realty and Equity Office Properties Trust, have been swallowed up by GE Real Estate and Blackstone Group, respectively.

But there are still promising names out there. Liberty Property Trust (LRY, news, msgs) has 21 green buildings in its portfolio of about 700 properties and says that number will rise quickly as the trust renovates more of its existing properties and takes on more new green projects. Liberty has enjoyed the nice run-up that all REITs had in the past year thanks to the strong commercial-building market. But Fauzia Rashid, a co-manager of Fred Alger Management's Spectra Green Fund (SPEGX), expects Liberty's green investment will help it continue to perform well even if commercial building starts to slow down.

For investors who get a bit woozy at the thought of betting solely on the vagaries of the commercial-real-estate market, a mutual fund with green-building holdings might be the safer way to go. The Spectra Green Fund, unlike many of its socially conscious counterparts, has consistently outperformed the Russell 3000 for the past three years.

The fund, which among other things invests in clean-energy stocks, is putting a small percentage of its assets in green REITs. Rashid also likes to invest in the building segment through the back door, focusing on the supply and equipment manufacturers that green builders rely on, such as Johnson Controls (JCI, news, msgs), the maker of devices that measure and monitor energy output. At about $96 a share, Johnson Controls has jumped in the neighborhood of 40% in the past year. And that's a nice neighborhood to be in.

This article was reported and written by Walecia Konrad for Fast Company.