According to UNEP, in a green economy, growth in employment and income are driven by public and private investment into such economic activities, infrastructure and assets that allow reduced carbon emissions and pollution, enhanced energy and resource efficiency, and prevention of the loss of biodiversity and ecosystem services. One significant component of a green economy strategy is to promote the development and adoption of sustainable technologies.
A no-brainer
It has been reported that nearly 40% of global carbon dioxide emissions come from the real estate sector. Controlling the emissions within the building sector is therefore a key intervention in the general climate action agenda. Green buildings which are those constructed to be energy and resource efficient, offer not only environmental preservation but practical benefits for property owners compared to conventional buildings.
According to the U.S. Green building Council (USGBC), the initial cost of a green building is only 2%-3% higher than its non-green counterpart. This is equivalent to an added cost of approximately $3.00-$5.00 per square foot, which does not seem to be extremely more expensive than conventional buildings. Green buildings also offer 20% life cycle savings of total construction costs, saves on average between 30 – 40% on energy and between 20 – 30% on portable water every year compared to conventional buildings. Should one also employ a few add-ons like solar, the payback period could be as short as 3-5 years.
According to IFC EDGE Buildings, in Ghana particularly, the market is at a very nascent stage with total certified green buildings less than 1% of new builds in 2020. To boost growth within the sector, a few interventions can be made in the following areas:
Policy
At the last count there were over 50 policies and projects including the Ghana Shared Growth and Development Agenda (GSGDA II, 2014–2017) GSGDA II and National Climate Change Policy (NCCP 2013) amongst many others, meant to provide strategic direction and coordinates issues of climate change in Ghana. As with most finely worded documents, implementation is a challenge.
In the building sector specifically, there has been a few interventions to boost activity and ensure growth. The national building code has been reviewed to include green elements. With the Ghana Building Code 2018 Part 14 Energy Efficiency and Sustainability, the code sets out requirements and recommendations for energy efficiency for mechanical ventilations systems, refrigeration equipment, hot water systems and lighting systems.12. While this is a great move, the drafting of the bill to parliament and subsequent assent into law has delayed by almost 3 years since the review. When this is eventually implemented it will give the necessary fillip to green growth
Incentives
Incentives specific to the green building sector is almost non-existent though the Sekondi-Takoradi Metropolitan Assembly has one which is a 30% discount on permit fees on projects that will be certified green. There are however incentives in other jurisdictions we can pick a leaf from. According to IFC EDGE, in Columbia, there is an exclusion of VAT (19%) and income tax deduction (25%) for project design services and technical solutions such as insulation and energy-efficient air conditioning systems. In Peru, zone-based height bonus for one extra floor and reduction of parking space requirements if project is certified, with additional requirements of 40% green roofs, 50% transparent fences, waste segregation, and bicycle racks. In Kenya, there is a 100% tax exemption on interest income for bonds and securities used to raise funds for green building projects as defined under the Green Bond Standards. The bond may be issued by a corporate entity or a financial institution.
Innovation
There are many innovations in the prop-tech sector that are also contributing to the larger climate action agenda. Generally one that is particularly exciting in the building sector is that– The new age of Electronic Vehicles are evolving to become a form of cheap energy storage that feed stored energy to homes. With construction methods, there have been exciting developments on the continent. Modular construction methods have seen a few notable innovations according to IFC EDGE. In Kenya, the developer 14 Trees has built an EDGE Advanced 3-D printed sustainable home, the first of its kind in Africa. IN northern Ghana, Tamale to be specific REALL have constructed 100 two-bedroom affordable units with compressed earth blocks that was priced moderately around GHS50,000 earlier this year. There are also innovations in the student’s hostel and accommodation area and even warehousing.
Future Outlook
Up to 60 million new jobs could be created globally by 2032 in the shift to a greener economy. That alone inspires confidence in our advocacy and I see the next couple of decades looking where we have largely moved away from our linear production and consumption pattern to a more sustainable circular model so much that it wouldn’t be even financially savvy and smart to stay in the brown economy, the green economy will not be choice but the default model.
