Green Buildings Market to 2015 - Incentives for Green Initiatives and Minimum Level of Standards to Boost Growth Opportunities11 Jan 2011 • by Natalie Aster
London – “The global green building market was worth $26.2 billion in 2005 and the market grew at a CAGR of 53.8% over 2005–2009, to reach $146.5 billion in 2009. The global green building market is estimated to be $194.6 billion in 2010. The global green building market is expected to grow at a CAGR of 25.5% to reach $606.8 bn by 2015.”
The report “Green Buildings Market to 2015 - Incentives for Green Initiatives and Minimum Level of Standards to Boost Growth Opportunities ” by GBI Research provides the key analysis and forecast market of the global green buildings market. The report covers the key market trends and growth forecasts for a global construction industry. It contains a detailed technical overview of these buildings and their specifications. The report includes a fair deal of discussion regarding the key restraints, key drivers, policy framework, global programs, and industry trends.
Despite the slump in the US construction market in 2007-2008, the green building market in North America is growing dramatically. By 2013, it is estimated that the market could grow to as much as $140.3 billion. Homeowners and developers are increasingly embracing more environmentally friendly designs for their buildings. A large cross-section of owners are also aggressively retrofitting and remodeling buildings in their existing portfolio to meet green building requirements. The green building market in Canada is also gaining traction as the provincial governments are establishing green building standards for government buildings. For instance, the British Columbia government’s Energy Efficient Buildings Strategy subscribes to the government’s goal to reduce Green House Gases (GHG) emissions by 33% from 2007 levels by 2020, as well as electricity self-sufficiency by 2016. The Energy Efficient Buildings Strategy has set targets for commercial, industrial and government buildings.
Published: December 2010 Pages: 96 Price: USD 3,500
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The European green building market is driven by stringent policies aimed to achieve the European Union (EUs) climate goals — the Energy Performance of Buildings Directive (Recast), 2010/31/EU, requires that all new buildings must be nearly zero energy buildings by 2020 and member states shall set intermediate targets for 2015. Also, the member states shall draw up national action plans for increasing the number of nearly zero energy buildings. These national action plans shall include policies and measures to stimulate the transformation of buildings which are refurbished into nearly zero energy buildings. The green building movement is gaining ground among Asian countries and the green building market is expected to grow at a rapid rate.
Green Buildings are Increasingly seen as a Silver Bullet to Counter the Threats of Climate Change, Resource Scarcity, and the Widening Energy Supply-Demand Gap
Climate change, resource scarcity, and widening energy supply-demand gap – world faces a wide range of challenges today. Urgent action is essential because any delay will worsen the climate change and increase associated costs needed for climate stability and a sustainable future. A multitude of actions are needed in order to gearing the earth towards sustainable and greener future, which include transformation of the building sector into a major part of the response to climate change.
Buildings are responsible for approximately 30% of raw material use, account for 40 % of world’s energy consumption and contribute more carbon emissions than transportation sector. Given the inefficiencies of existing building stock worldwide coupled with the impact of the massively growing construction activities, GHG emissions from building will more than double in the next 20 years, if not checked. Policy makers thus understand that if targets for greenhouse gas emissions reductions are to be met, rapid achievement of low-emission buildings should be a linchpin of national climate change strategy. Therefore, one of the important policies is the achievement of zero- or low-emission buildings, i.e. green buildings. Sustainable buildings or typically called ‘Green Buildings” aim to radically reduce the energy consumption, carbon emissions and manage climate change.
In response to the constantly rising energy cost, homeowners and developers are embracing green building practices. According to a study from the World Bank, every 1% increase in per capita GNP leads to an almost equal factor increase in energy consumption. However, this ratio can be even greater than 1% in the urban population, which can increase energy consumption by 2.2%. Building energy use in the US is substantially higher and it is likely to continue. Energy consumption in the building sector (residential and non-residential) in high growth economies such as China, India and Brazil will rapidly grow. Under the business as usual scenario, commercial building energy use in China will more than double by 2030.
In response to environmental concerns and rising energy costs, government leaders, architects and developers are increasingly adopting green building policies to help reduce energy, water, electricity and other resource usage in building construction, operation and rehabilitation. Energy prices in Europe’s biggest economies are high as compared to other regions, due to heavy government taxes. Higher electricity prices make investments in green building more attractive. The green building sector is increasingly becoming mainstream as rising energy cost has sparked greater acceptance and adoption.
The Two-Pronged Strategy of Incentivizing Green Initiatives and Enforcing a Minimum Level of Standards Bodes Well for the Development of Green Buildings
Governments across the globe have adopted a wide range of strategies including financial or structural incentives and policy instruments such as mandatory labeling and certification programs and building codes to encourage green buildings. Various governments are leading by example implementing a two-pronged strategy of incentivizing green initiatives and enforcing a minimum level of standards. Several state and local governments already offer financial incentives in the form of tax credits or grants in order to reward home owners and developers who practice green building techniques. Financial assistance in the form of revolving loan funds is yet another measure which helps to lower the up-front costs associated with some green building practices. Various governments have adopted policy and regulatory instruments as a cudgel for accelerated sustainable development. These policies include building codes, building certification and labelling systems. Governments in many countries have set a minimum level of standard for buildings and are increasingly addressing energy efficiency in existing buildings and new construction. The policy instrument is set to drive the green building market.
Economy Recovery is expected to have a Positive Ripple Effect on the Global Construction Market
The global economic crisis triggered by the US sub-prime crisis in 2007 led to restrictions on credit and the loss of consumer confidence globally. The global economic slowdown thus severely slowed the residential building construction industry; most affected were developed nations such as the US, the UK and Western European nations. The global construction market contracted 2.4% in 2009 from 2008 levels.
Although economic recovery is beginning to take shape across various parts of the globe, the global economic recovery will largely be led by emerging nations. The construction industry is likely to follow the global economic recovery. The recovery will further augment with growth in private investment in construction markets of emerging nations, anticipated growth of Eastern European countries due to accession to the EU. The developed nations are expected to stimulate demand through tax breaks and subsidies, federal and state tax credits. These incentives are expected to generate revenues for the construction industry in the short term so that it stays afloat, until the industry gets higher demand organically. Furthermore, the institutional building construction market is expected to witness a robust growth in the years ahead – primarily due to the continued government spending and international aid. Education and healthcare sectors are likely to attract the major portion of government spending. In addition to the government funding, healthcare and educational sectors in underdeveloped and developing nations are expected to receive international aid, which will support the growth of the construction industry in these categories. The global construction market is expected to witness a CAGR of 7.6% during the forecast period 2010–2015, from $4,759.6 billion in 2010 to $6,875.7 billion in 2015.
Policy and Regulatory Instruments could promote Accelerated Sustainable and Equitable Development in Asia-Pacific Region
Policy and regulatory instruments could become the legal framework to channelize accelerated sustainable and equitable development in Asia-Pacific Region. In Asia-Pacific, policy instruments such as mandatory labeling and certification programs and building codes to encourage green buildings are primarily used to accelerate the adoption of green technologies in building. Strict enforcement of standards of energy-efficiency design for construction industries is driving the green building market in the current scenario. The building inspection programs are instituted by the central government to ensure strict enforcement of mandatory national building energy standards. The stakeholders such as design institutions, developers and construction companies stand the risk of losing their licenses or certificates if they do not comply with the regulations. In Japan, mandatory reporting of energy conser¬vation measures is required for both non-residential buildings and residential building. In Korea, the Ministry of Land, Transport and Maritime Affairs plans to make energy reduction mandatory by 2017. The Land Ministry envisages that by 2025, conventional buildings will be replaced buildings which minimize fuel energy consumption through the use of alternative energy sources. Sustainability of the built environment is a key issue in Singapore — there is increasing pressure for the construction industry in Singapore to consider the environmental impacts of its projects. The Inter-Ministerial Committee on Sustainable Development (IMCSD) of Singapore announced its second Green Building Masterplan that aims to green 80% of all buildings in Singapore by 2030. Government has set the target of a 35% reduction in energy intensity (consumption per dollar GDP) by 2030 from 2005 levels. To jumpstart the ‘greening’ of existing buildings in the private sector, a $100m incentive for private building owners to retrofit existing buildings is earmarked. Stronger energy efficiency requirements of the commercial buildings are being proposed part of the 2010 update to the Building Code of Australia.
GBI Research expects that the cumulative green certified space in the Asia-Pacific region will grow from 507.4 million square feet in 2010 to 3,314.2 million square feet in 2015.
More information can be found in the report “Green Buildings Market to 2015 - Incentives for Green Initiatives and Minimum Level of Standards to Boost Growth Opportunities ” by GBI Research.
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