Buildings

Green building investment opportunities Scaled by value of new construction

10 8 6 4 2 0

China Russia Indonesia

Turkey Poland

Mexico 0 2 Low green share 4 India S. Korea

Netherlands Spain

Italy 6 Moderate green share

Brazil Canada

USA Japan 8 Australia Sweden

Germany UK

France 10

High green share Sustainability level*

* Excluding economic factors

level of building construction in representative countries Source: Nelson (2008)

dependency on air-conditioning through technical improvements.6

In India, for example, potential energy

savings of 25 per cent have been estimated through cost-effec tive retrofitting of existing commercial buildings (UNEP SBCI 2010a).

The pros and cons of constructing a new building or retrofitting an existing structure have to be individually examined and compared. In some cases, retrofitting allows a further reduction of the energy load by preserving building materials, which can contain high levels of embodied energy7

, expended in the extraction

of resources, the manufacture of materials and their transportation. Both new building construction and

6. In Brazil, for example, refrigerators are responsible for 33 per cent of all electricity use in residential buildings over the year, with electric showers, lighting and air conditioning accounting for 20, 11 and 10 per cent respectively (Ghisi, Gosch and Lamberts 2007).

7. Embodied energy is energy needed for the production and processing of materials, transport and demolition as well as for manufacturing of furniture, appliances and the provision of infrastructure services such as water and sanitation. Embodied energy is highly dependent on the design and construction technique of buildings.

Building retrofits Developed Countries

(Key focus) • Single homes that lack efficiency norms (e.g. EU) • Homes to increase lifespan (e.g. Japan) • Appliances in large, relatively new homes (e.g. USA) • Older multi-family buildings (e.g. Europe)

(Secondary focus) • Single homes built by the informal sector to meet basic efficiency standards (e.g. Brazil)

Emerging Economies

• Multi-family homes (e.g. China, Brazil and Russia) • Predominance of single homes in countries such as India – needs retrofits to sustenance levels (basic electricity, better cooking fuels, durable)

retrofitting are fundamental for catalysing a green building transformation. Retrofitting in developed countries can yield significant energy savings as the design, construction and technology of older buildings is often significantly less efficient than current best practices. In addition, retrofits that address daylight or on-demand ventilation to improve air quality can bring benefits through lower health care costs and higher productivity levels.

While less significant in terms of volume compared with new construction, retrofits can play an important role in addressing energy poverty in developing countries. At least 20 per cent of the world’s population lack access to electricity and it is expected that 1.2 billion people will still be without electricity in 2030; 87 per cent of them living in rural areas (IEA 2010a). Equipping households with electrical appliances, heating and cooling systems and either on-site renewable energy generation (such as rooftop solar panels) or a connection to the power grid may increase overall energy demand. Yet it will come in a far cleaner form than the coal, dung or wood many

New construction

(Secondary focus) • High rate of new construction expected in USA and Japan. High potential to meet green standards, e.g. zero-carbon, zero-waste and 3R (Japan).

(Key focus) • Huge housing shortage – opportunity for greening through publicly subsidized and privately financed housing (e.g. India, China, Brazil, Russia and other emerging economies)

• Huge demand for office space. Potential for greening through corporate demand.

Table 2: Summary of the major opportunities for green buildings in different sectors Source: Based on WBCSD analysis (2007a)

10 8 6 4 2 0

Green retrofit investment opportunities Scaled by value of potential retrofit stock – 2007

Mexico Poland Russia Indonesia 0 2 Low green share Turkey China 4 India 6 Moderate green share 8 High green share Sustainability level* * Excluding economic factors Figure 3: Investment potential for new construction and building retrofits relative to the current sustainability 10

Netherlands Italy

S. Korea Brazil USA Spain UK

Sweden Australia

Japan

France Germany

Canada

345

New construction potential

Retrofit potential