Governments should not give fiscal sops or extra built up area to developers without stringent monitoring of actual energy savings and environmental performance of green-rated buildings
- CSE review has exposed the shocking fact that several state governments across the country are giving sops of extra free built up area to developers to get their buildings green rated without independent official oversight on their operations
- This is dangerous as CSE review has exposed several green rated buildings across the country are underperforming and guzzling more energy
- Cities of Maharasthra are however doing this differently and better. Instead of giving or extra built up area to developers as an incentive it is giving tax concession that can be withdrawn if needed. But this needs to be linked with the actual performance of buildings and penalty for underperforming
- CSE asks: Why should only a few green rated buildings enjoy official incentives for meeting the minimum green measures that all buildings must implement? Why should sops continue if buildings do not perform
- Take steps to link incentives only to drive top line of performance and not incremental improvement. Monitor and disclose actual performance of buildings for proper scrutiny
Pune,November 20, 2015:Centre for Science Environment (CSE) has expressed deep concern over the growing obsession among the state and city governments across the country to offer sops of extra and free built up area and fiscal incentives to push the developers to opt for green rating of buildings. State governments are doing this without setting up independent, transparent and accountable oversight system for monitoring of the actual energy savings and environmental performance of the green rated buildings. “CSE review of green rated buildings had earlier exposed how several buildings in India are grossly underperforming after being rated green,” said Anumita Roy Chowdhury, Executive Director, CSE.
CSE review of the green rating systems and the incentives has further shown that the cities of Maharashtra like Pune and Pimpri Chinchwad are doing this differently. Instead of giving incentive in the form of extra built up area it has rightly opted only for fiscal incentives that can be withdrawn if needed. This is a better practice than giving the extra built up area as once constructed it cannot be undone if found underperforming. But fiscal incentives can be withdrawn if buildings are not performing on energy and resource savings after becoming operational. “In fact Mumbai is taking an even better approach. Instead of incentives it is working on green code for all buildings. While the Maharashtra system can be further improved to be more explicitly linked with the actual performance, other state governments need to take cue from this system,” said Roy Chowdhury.
The reason for this concern over official incentive for green rating is the earlier assessment of CSE that had brought out that several buildings after obtaining the star ratings under the LEED rating were grossly underperforming and there is no transparency in data sharing by other agencies to assert performance of buildings rated by them. The government also has no oversight over these systems. This concern was discussed in the gathering of leading architects, experts and media in the Regional Dialogue that was organized by the Centre for Science and Environment on Building Sense in Pune today.
The key highlights of concern from CSE assessment are as follow:
State governments are giving extra free built up area without independent official monitoring and oversight of actual energy and resource savings in green rated buildings. Several state governments including West Bengal, NOIDA in Uttar Pradesh, Rajasthan, Punjab among others have promised extra built up area to the developers and put the entire onus of monitoring and certification on rating agencies. In fact, in NOIDA, UP, even if building projects merely sign up to get rated under GRIHA and LEED can get extra floor area ratio (FAR). In response to a RTI from CSE the NOIDA authority responded saying that they have no official record of how many buildings have availed of green buildings incentives. Yet NOIDA gives one of the highest sops of 5 per cent FAR. Thus governments are giving incentive for green building without keeping any record on their actual performance. West Bengal government has gone ahead to notify a staggering 10 per cent extra FAR incentive for GRIHA and IGBC rating. The penalty for non-compliance is weak. There is no official oversight. State governments that have given incentives do not maintain record of green credentials and resources and energy savings of these buildings enjoying the official incentives.
The compliance is based entirely on self reporting by builders and rating agencies without independent official oversight. Even penalty for underperformance is linked to self reporting. Thus, green rating is becoming a proxy for green building regulations without any official system of monitoring of the green credential and actual resource savings. This can lock in enormous inefficiencies and resource guzzling and negate the benefits of green rating at an enormous cost to the government. The incentive of 5 per cent extra free FAR in NOIDA is already costing the civic body anywhere between Rs 16 crore to Rs 60 crore based on the current circle rates and the area that qualifies for incentives. The incentives should be used to push only the top line of performance and not to promote minimum green measures that should be obligatory for all buildings to meet.
Cities of Maharashtra are doing this differently but needs further improvement: Currently both Pune and Pimpro Chinchwad offer discount on premium paid by the builders to municipality and rebate on property tax paid by the owner of the green rated buildings. The quantum of incentive is variable according to the number of stars under GRIHA rating. Even one and two star rating gets some incentive. The limitation of this approach is that there is no provision for penalty for underperforming. After the final rating is awarded based on the one year audit there is no further requirement of periodic audit after the building becomes operational. Technically, GRIHA requires renewal of rating every five years. Though 50 odd builders have applied for incentives, only 2-3 builders have got the incentives. Therefore, Pune, Pimpri Chinchwad and other cities of Maharashtra who are designing fiscal incentives should further improve this system by linking it more explicitly with the actual performance of buildings in terms of energy and resource savings. It should provide for penalty for under performance and withdraw the fiscal incentive if found non-performing.
Why should only a few buildings enjoy incentives for meeting green norms when law must require all buildings to comply with green norms? CSE has assessed the requirements of the green rating system and found that several requirements are part of the legal requirement for all buildings. For example, under GRIHA version 3 rating buildings get points for meeting rules under the eco-sensitive zone regulations, coastal zone regulations, heritage areas, water body zones rules, various hazard prone area regulations, among others. But these rules are legal requirements and should be met by all buildings in the affected areas irrespective of whether they are rated or not. In fact, any standard building that meets the legal requirement under various provisions of existing laws can qualify for 2 star of GRIHA rating. It is also strange that governments own energy rating system developed under star labeling of BEE has not been considered for incentive by any state government. In fact, such a practice was initially considered in Punjab, Delhi, Noida but it was eventually dropped.
What goes as green is not green. CSE review found green rated building underperforming: CSE has reviewed the data put out by the Indian Green Building Council (IGBC) on energy consumption of large commercial buildings that were rated and awarded silver, gold and platinum rating, under the LEED green rating programme. It found several of these buildings grossly underperforming. Several of them cannot qualify even for the one star label under the energy star labelling programme of the Bureau of Energy Efficiency (BEE) that ranks buildings based on their energy efficiency when operational
This had come to light only after Indian Green Building Council (IGBC) started sharing the energy and audit data of the buildings rated by them under the LEED rating programme couple of years ago. CSE had assessed the annual energy consumption data of 50 buildings rated under LEED and found them half of them underperforming. One-third did not even qualify for even one star label of star labeling system of Bureau of Energy Efficiency. The objective of CSE analysis was to find out if the rated buildings, once they are operational, can meet the requirement of the star labelling programme of BEE. This trend is quite consistent with the global trend. Even in the US LEED rated buildings were found to be underperforming. But this has led US LEED to reform its system and demand annual audits of all rated buildings. But these reforms have not been introduced in India.
Disclosure of data on annual energy and resource use of buildings should be made obligatory by all state governments. The rating agencies are reluctant to share performance data. The IGBC put out performance data of 50 out of 713 certified buildings on their website that has not been updated since January 2014. GRIHA shares limited data on request but not publicly on the grounds that that they are contractually bound not to share the audit reports of projects. But any project enjoying support from the government – fiscal or otherwise – should have the obligation to be under scrutiny for performance and be transparent and accountable. Without stringent measure for performance private green rating systems are becoming proxy for environmental regulations and the incentives are becoming a privilege for the few whereas these requirements should be an obligation for all.
Instead of incentivizing a few without official oversight and monitoring adopt legally binding green building code for all buildings: India is locked in a frenzy of construction to meet the demand for homes, offices, and shops. A staggering two-third of buildings that will stand in India in 2030 are yet to be built. Unless policies minimize resource guzzling and wastes with appropriate architectural design, building material, and operational management for the entire building stock, there can be massive environmental debacle in the building sector. Unlike the developed world, the challenge is not to retrofit the already built to make it green; but to build new, which is efficient, sustainable, affordable and comfortable for all. This will have enormous impact on the quality of urban space; water and energy resources in cities; and waste generation.
Need holistic green norms to avoid unintended consequences. The CSE review shows that if green building norms are not designed right and holistically they can lead to unintended consequences. The Indian building sectorhas become an energy guzzler even when the current penetration of air conditioning is only 3 per cent of the built up area. If the share of mechanical cooling continues to increase uncontrolled the energy budget will be unbearable posing serious threat to energy security and associated climate impacts. Building sector causes 40 per cent of carbon emissions, 30 per cent of solid wastes, and 20 per cent of water effluents. Waste from their demolition and repair destroy our water bodies, open spaces and vegetation.
Need strong focus on greening of the affordable housing sector: Green building is also about improving comfort and livability of poor people’s home. Recently published KPMG report found that, in urban areas alone, Maharashtra would need 5 million new homes by 2022, adding about 50 percent to its current housing stock. Most of that – about 70 percent – would need to be affordable. This will have to be addressed with robust policies.
The way forward
India needs appropriate green norms to benchmark energy and water use, minimize waste, and develop monitoring and compliance strategies. But only designing a green building is not good enough. Even bigger effort will have to be met to ensure that buildings remain resource and energy efficient when in operation. All cities must have regulations and oversight system form monitoring of actual performance of buildings; link incentives and penalties not only with the design of buildings but also with performance. Incentives should push the top line of performance and not minimum green measures that all buildings must implement.
- Set quantifiable energy performance targets for different building typologies to reduce overall energy intensity and consumption over time.
- Improve and make BEE star rating mandatory to improve operational performance.
- Make appliance rating more stringent for quicker uptake of super efficient technologies.
- Introduce mandatory energy and water audit and consumption based energy and water billing to improve operational efficiency of all buildings.
- Need legal framework for post-construction performance, accountability and transparency to ensure that the buildings remain high performing.
- Need policies for improvement in thermal comfort of the houses being made for the poor.
- Make it obligatory for all buildings to disclose publicly the data on annual energy and water usage along with the built up area.