Cities globally have witnessed rapid urbanization and rural migration leading to increase in population density. Infrastructure emissions are not aligned with the Intergovernmental Panel on Climate Change ambitions, and countries need to implement significant measures to curb carbon emissions to comply with the net-zero goal. Indonesia is on the verge of an infrastructure boom, due to the development of its new capital in East Kalimantan at a cost of c.USD33bn, which is expected to fuel employment and host 1.5m residents, apart from commercial and office buildings. The Government of Indonesia intends to build a smart and sustainable capital.
The blueprint, development, and functioning of green buildings reduce unfavourable urbanization impacts and lead to a positive impact on climate and the environment. Green buildings protect and preserve natural resources while improving the quality of life. Additionally, they offer a multitude of economic and financial benefits to consumers.
The global green building market is estimated witness robust growth, growing at a 14.3% CAGR in the period 2020-2027. The green buildings market is projected to be worth USD 991.19 billion by 2030. The following factors are expected to propel the growth of the green building market:
- Responsive administrative mandate that encourage construction of green buildings
- Regulations that promote the use of green materials in construction
- Emergence of certifications such as LEED (Leadership in Energy and Environmental Design)
- Premium received on resale of green properties
- Increasing consumer recognition of the benefits of green buildings such as minimum operating and maintenance expenditure
- Green clusters and space allocation in cities
- Increasing concerns about escalating environmental pollution
The global green building market has had to endure the negative repercussions of the COVID-19 pandemic. Interruption of the construction of commercial and residential buildings, disruptions in supply chains, and suspension of production have deteriorated the outlook for the production of green building materials in the short term. However, the green infrastructure market looks very promising as an increasing number of countries continue their progress towards net-zero emissions.
The green building market spans mainly Europe, Asia Pacific (APAC), and North America. North America (c.29.1% share in 2019) dominates the overall market, followed by Europe and APAC. Technological advancements, increased awareness of environmental degradation, high disposable income, and pro-green regulations have influenced market growth in North America. Canada and United States hold the majority market portion, due to soaring green construction in these countries as part of measures taken by respective Governments for reaching the net-zero goal by 2050. . Apart from the factors mentioned above, growing demand for low-energy-consumption systems, the 2030 target for zero energy building emission and improved construction material are bolstering growth in Europe. The green building market in APAC is forecast to grow at a fast pace in the next few years. Rapid urbanisation in emerging economies, rigorous environmental directives, rising government concerns and steps towards clean energy promotion, increasing research & development, endorsement of sustainable building practices, increasing concerns over national energy security and environmental degradation in several countries (such as Singapore, Indonesia, Hong Kong, Malaysia, and Thailand) are also advancing the growth of the green building market in APAC.
Statistics from major economies, including China, India, and the US, reinforce the growing focus and strategies in developing the green building market.
The World Green Building Council inaugurated the Net Zero Carbon Buildings Commitment in 2018, which encourages governments and organisations to operate net-zero-emissions new buildings by 2030. The commitment further advocates for all buildings globally to become net-zero-emissions buildings by 2050. By 2019, 31 businesses, 26 cities, and 6 states and regions worldwide had signed the commitment. Major organizations, including Deloitte, Goldman Sachs, JLL, and Mott MacDonald, have pledged to transform their existing and upcoming buildings into more energy-efficient ones and play a major role in limiting global warming.
The adoption of green infrastructure leads to environmental benefits and subsequent financial benefits, which are passed on to consumers. LEED Gold buildings have 19% lower maintenance costs than traditional buildings.
The global green building market will likely continue to grow as more countries and organizations continue to take measures to limit carbon emissions. Strict regulations and awareness of energy conservation, with a focus on research and development, create a favorable environment for the growth of green infrastructure.
