A CONTEXTUAL APPROACH TO GREEN BUILDING REGULATION IN DEVELOPING COUNTRIES Autif Mohammed Sayyed International Finance Corporation, Indonesia

ABSTRACT Construction policy makers in developing countries have to strike a delicate balance between promoting continuous, unhindered economic growth and regulating the growth to sustainable levels that doesnt accelerate climate change, environmental pollution and energy shortage A local !home"grown# regulation, informed by global best practices, with limited mandatory re$uirements that are cost efficient and simple to design and enforce, has very good potential for bringing about the e%pected impact INTRODUCTION &ith rapidly growing economies and a bustling population that has high e%pectations, urbani'ation in most developing countries presents a conundrum to building construction policy makers (he difficult choice they often face is between promoting continuous, unhindered economic growth and regulating the growth to sustainable levels that doesnt accelerate climate change, environmental pollution and energy shortage )aving seen the adverse impacts of unregulated growth, most countries are prudently introducing codes and standards that balance economic growth with environmental sustainance in the long run *egulations related to construction of buildings have e%isted since )ammurabis laws from the + nd century For centuries these regulations were focused mainly on fire protection, plumbing, structural integrity and such issues, but not much on energy and water conservation or environmental protection Its only in the last few decades that the governments have reali'ed the huge potential of building regulation in reducing the high environmental footprint caused by construction and operation of buildings (he first generation of modern building regulations in ,S and -urope in the second half of +. th century regulated energy consumption through a few select measures such as air"conditoner efficiency, boiler efficiency and envelope insulation /argely due to the influence of environmental impact assessment rating systems such 0*--AM 1234.s5 and /--6 1233.s5 the scope of these regulations is now increasing to cover water, material, indoor environmental $uality and site issues as well &ith the e%ception of China, most developing countries were not actively regulating resource efficiency in buildings till about 27 years ago -ven now, many countries have either not developed their own green building codes, or have not been able to implement them sufficiently (his is noteworthy because ma8ority of new construction globally is now happening in the developing countries ,nlike the gradual development of green building regulations that has happened in the developed countries, developing countrires need to act rapidly to avoid disastrous economic and environmental conse$uences (he ne%t section of this document discusses some reasons behind the slow uptake of green building regulations in the developing world, and discusses some possible solutions CHALLENGES IN DEVELOPING COUNTRIES /ack of political will and support *elevant government and administration support is absolutely crucial for any regulation to be successfully implemented (ypically, code implementation involves several ministraies and departments Senior government commitment and support helps in eliciting the coordination and cooperation of relevant staff )owever, this support should be issue"based rather than personality"based so that senior administration reshuffles or retirements do not affect the code implementation In order to gain issue"based support a strong business case has to be presented, discussed and reiterated so that all team members are convinced about the impact of succesfully implementing the regulations Among the benefits that can be included in the business case are economic improvement through preservation of the valuable and limited natural resources, increase in productivity and reduction in national health costs 9overnments should be shown long term impacts of inaction and shown the better alternative 9reen buildings should be incorporated as an important tool in the countrys climate change mitigation and economic development plan /ack of market readiness

&hile local vernacular architecture has a very strong climatic and environmental basis, most new construction in developing countries has been following the template of modern design from western countries, which is often very inappropriate for the local climate and conte%t :ery few countries have a strong green building movement that is well accepted and understood by the building industry As a result, the level of awareness and capacity in these countries is low In such underprepared markets, rushing in with a code that is very restrictive or complicated may be counterproductive &hile these countries do not have the lu%ury to wait for the industry to raise their collective green building awareness level, they can start rolling out simple regulations that are in proportion to the maturity of the industry, while working on improvement of market readiness simultaneously ;nce the culture of green building regulation is established in the first few years, more mature regulations could be introduced Cost of building green <robably the biggest hurdle to successful green building regulation is the real or perceived increase in construction cost In order to dispel this concern, clear cost"benefit analysis should be provided to the building owners As shown in many countries, a well planned green building may have a cost premium between .= to >=, with paybacks usually between + to 7 years2 Incentives from government and preferential financing options from the private sector could further reduce the cost barrier for green buildings

needed for code compliance and higher levels are needed for the various green ratings <rescriptive vs <erformance based codes Most national energy efficiency and green building codes are either purely prescriptive, or offer a choice of prescriptive and performance compliance paths &hile the prescriptive path is simpler to enforce and evaluate, since it involves complying with some minimum efficiency re$uirements, such as chiller efficency or glass ,"value, they may limit some design fle%ibility <erformance path is more fle%ible, but usually re$uires more analysis and calculation, which may be costly for the building owners A hybrid option provides a pallete of measures, and an accompanied tool that could be used to achieve a specific efficiency or saving target using any combination of provided measures -nergy efficiency code vs 9reen 0uilding code In countries where industry maturity or enforcement capacity is limited, the regulation could initially adress only energy and@or water efficiency 9radually, oter green building re$uiremnts could be added in subse$uent code revisions Aational code vs /ocal code 6epending on the administrative setup of the country, some countries may set their a common national green building code, whereas others may formulate only a national guideline, which could be adopted by the individual provinces or cities for their 8urisdictions -ach of these approaches need to tackled slightly differently A national code should be fle%ible and appropriate enough to be used in any climatic and geographical location in the ocuntry &hereas a national guideline should be write in such a manner that it could be easly adapted for the local conte%t It is helpful if some adaptation support is also provided by the national government to the local government units Aew building code vs -%isting building code 6ue to the rapid construction growth in most developing countries, it is more urgent to develop new building regulations first Aew building codes are easier to implement and also have a much bigger potentaial for savings In the initial years, if the enforcement capacity is limited, only ma8or renovations in e%isting building could be re$uired to follow the code )owever, once the code becomes commonly accepted, e%isting building regulations should be rolled out as well BEST PRACTICES

ALTERNATIVES Among the options that need to be discussed during development of green building regulations are? Mandatory codes vs :oluntary standards :oluntary standards, such as /--6 and 0*--AM define the leading edge of sustainable construction, but are used only by a small fraction of the total building stock thus limiting their direct impact on environment and society Mandatory codes impact a much larger volume and have the potential for a much bigger cumulative impact A hybrid option, such as Singapores 9reenmark rating system could be used where the minimum performance level is
2

:arious sources, including IFCs analysis for 9reen 0uilding codes in 7 countries

0ased on global e%periences in code development and implementation, some important lessons can be learned Stakeholder involvement Mapping the key stakeholders and engaging them in decision making early on builds consensus and considerably improves chances of implementation success later Active and persistent engagement with these stakeholders should be maintained to prevent dilution of the code intent and content Simplicity of regulation Instead of emulating matured policies and sophisticated regulations from developed countries, simplicity should be encouraged Simplification of the code should be based on prioriti'ation of measures done through sensitivity and payback analysis Such simplicity helps owners and design teams in code compliance and the enforcement staff in evaluating Incentives Incentives are great as catalysts for green building implementation &hile many governments in the region are reluctant in providing financial incentives for complying with a mandatory law, they are more open to non"fiscal incentives such as additional floor area, speedier building permit processing, ta% rebates etc Aon"governmental financial incentives in the form of preferential construction loans for developers and green mortgages for owners, e%ceeding the code re$uirements can also be very efficient ways of increasing code compliance <ower of demonstration &ell e%ecuted demonstration or pilot pro8ects that act as e%amples of cost effective code implementation provide the marketing impetus needed to show the feasibility and cost effectiveness of a new regulation /ong term roadmap Codes that are developed as part of a long term strategy have a definite focus and are able to gradually lead the market to the high achievement targets set in the plan in a more streamlined manner Such a roadmap should consider all other avenues of market transformation including education, urban development, ta% policies etc For e%ample, ,S government has developed a multiyear savings target for building codes that increases energy efficiency savings target from B.= in +.2. to 7.= by +.2C+ It also allocates . 7= of all carbon emissions
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allowances amounting to several hundred million dollars per year for code implementation efforts Singapore green building masterplan targets covering 4.= of all the countrys buildings by +.B.B Supporting infrastructure In order for the building sector to be successfully transformed, sufficient support infrastructure needs to be provided Short term support could be in the form of user guides, training materials, checklists and tools In the long run, setting up building research and education institutes, and a building performance data disclosure system that could be used to develop a performance benchmarking system would be very effective Setting up a national eco"labelling system for building materials and e$uipment is also a crucial step in this regard A financial system to support new and retrofit green building investments can act as a huge catalyst for green building growth in the market (his was evident in Singapore, which saw a huge spurt in green buildings soon after the introduction of a cash incentive scheme CONCLUSION (here are several paths to achieving market transformation in the green building sector in developing countries -%perience from developing countries has shown that an appropriate and locally relevant solution needs careful analyses, sufficient government support and stakeholder engagement in drafting the regulation and its implementation ACKNOWLEDGMENT (his document is primarily based on the work and research done by the Indonesia, :ietnam, 0angladesh, Colombia and <hilippines 9reen 0uilding teams of International Finance Corporation

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