Green buildings: market potential in Southeast Asia

According to data from the United Nations (UN), in 2050 around 68% of humanity will live in cities. These represent only 3% of the planet's surface, but consume 78% of energy and produce 60% of greenhouse gas emissions. For this reason, in 2016 the UN itself improved the New Urban Agenda to advise countries on their urbanization processes and make cities more habitable, inclusive, healthy, resilient and sustainable.

Sustainable buildings minimize energy and water consumption and are a key part of sustainable urban development that seeks to combat climate change.

1. What is green buildings?

Green building is the practice of creating structures and using processes that are environmentally responsible and resource-efficient throughout a building's life-cycle from siting to design, construction, operation, maintenance, renovation and deconstruction. This practice expands and complements the classical building design concerns of economy, utility, durability, and comfort. Green building is also known as a sustainable or high performance building.

Impacts of the built environment:

Green buildings are designed to reduce the overall impact of the built environment on human health and the natural environment by:

- Efficiently using energy, water, and other resources

- Protecting occupant health and improving employee productivity

- Reducing waste, pollution and environmental degradation

For example, green buildings may incorporate sustainable materials in their construction (e.g., reused, recycled-content, or made from renewable resources); create healthy indoor environments with minimal pollutants (e.g., reduced product emissions); and/or feature landscaping that reduces water usage (e.g., by using native plants that survive without extra watering).

2. Why Build Green?

The built environment has a vast impact on the natural environment, human health, and the economy. By adopting green building strategies, we can maximize both economic and environmental performance. Green construction methods can be integrated into buildings at any stage, from design and construction, to renovation and deconstruction. However, the most significant benefits can be obtained if the design and construction team takes an integrated approach from the earliest stages of a building project. Potential benefits of green building can include: Environmental benefits - Enhance and protect biodiversity and ecosystems - Improve air and water quality - Reduce waste streams - Conserve and restore natural resources

Economic benefits - Reduce operating costs - Create, expand, and shape markets for green product and services - Improve occupant productivity - Optimize life-cycle economic performance

Social benefits - Enhance occupant comfort and health - Heighten aesthetic qualities - Minimize strain on local infrastructure - Improve overall quality of life

3. Southeast Asia: Expanding Market for Green Buildings

Southeast Asia is undergoing rapid industrialization and growth. With the increase in growth has been an increase in energy use and environmental impact. As the infrastructure and cities develop, there is a growing need for energy reduction strategies and environmental protection. Asia is estimated to be the fastest growing region of the world at 7% a year through 2020.

The top 6 construction markets in Southeast Asia in 2012 combined for $285 Billion in construction spending. This is nearly 40% of the US market ($750 Billion), and dwarfed by the Chinese market ($1.25 Trillion). The top countries include Indonesia ($184B), Thailand ($30B), Singapore ($20B), Vietnam ($19B), Malaysia ($18B), and the Philippines ($13B). With projected growth rates exceeding the US, the growing building markets in Asia are an opportunity for wide green building adoption.

Green Building Program Adoption

The green building industry and energy efficiency codes have lagged in Southeast Asia. Building energy codes have only recently been adopted or enforced, for example in Singapore 1999, Malaysia 2001, Thailand 2001-2005, and the Philippines 2005 (Asia Business Council 2006).

Custom green building programs are being deployed, and are in their infancy. Singapore developed GreenMark in 2005, Malaysia has developed the Green Building Index in 2009, and Indonesia has developed the Greenship program in 2009. The rating systems in Singapore, Malaysia, and Indonesia are based on other rating systems such as the LEED Rating System in the US.

Building requirements are consistent throughout the world to provide clean indoor air environments, lighting, heating, cooling, ventilation, water, and waste removal. With so many similar building requirements, solutions have shown to be transferable and scalable. It is no surprise the categories of each program promote site selection, energy efficiency, water efficiency, material use, and indoor environmental quality.

Green Building Market Accelerators

There are many drivers making the Southeast Asia market prime for green building development. The following are some reasons the markets are moving toward sustainable construction practices. - Energy Security - Potential energy shortages and price spikes in energy costs have heightened the need for energy efficiency as a viable focus in the building sector. - Air Pollution/Environmental Damage – Pollution of developing cities is driven by increased energy use and transportation infrastructure. Green building programs develop ways to measure reductions in pollution contribution. - Climate Change/Carbon Reductions - With carbon emissions reduction targets being set on federal levels across the world, energy efficiency is a proven strategy to reduce dependence on fossil fuels. Any carbon reduction goals have financial support for building efficiency upgrades. - Water Shortages - Just recently, parts of Malaysia have been undergoing mandatory water rationing for months due to water shortages. There are major inefficiencies in water use systems in agriculture, industry, and building consumption. Building water use efficiencies reduce the impact on local water infrastructure.

Southeast Asia is a rapidly growing construction market with a green building industry less than 10 years old. Governments and developers are rapidly recognizing the benefits of green building construction. With proven strategies from across the world, the opportunity exists to transform the building industry rapidly.

As more markets focus on energy efficiency and green building, there is incentive in the green building industry for continued innovation and exploration. There is a shortage of qualified professionals due to the rapid introduction of green building and energy efficiency programs in the region. Investments are being made in professional development, training, and awareness. Expect innovative building techniques to develop in this area of the world over the next decade.