How Can Budget 2024 Align with India's COP28 Goals and Promote Green Buildings?

Union Budget 2024 marks a critical juncture for India's sustainable development, particularly in the real estate sector.

With the nation's steadfast commitment to COP28 goals and the imperative to address environmental challenges, the role of sustainable real estate development has gained paramount significance.

India's pledge to COP28 underscores the urgency to reduce carbon emissions and embrace sustainable practices. The real estate sector, a major contributor to carbon emissions, stands as a key battleground in this pursuit.

Sustainable real estate development not only aligns with environmental targets but also acts as a catalyst for economic growth and job creation.

Budget 2024 presents a unique opportunity for transformative policies that can revolutionize the real estate landscape. Leveraging the latest reports and figures from the Indian real estate industry, the budget can strategically promote green buildings.

Reports from the Confederation of Indian Industry (CII) project substantial cost savings – up to 30% in energy – by 2030 with just 10% adoption of green building practices. Furthermore, embracing green buildings can create over a million jobs, significantly contributing to economic growth.

As we stand on the edge of Budget 2024 , the call for sustainable real estate practices echoes louder than ever.

This budget can serve as the cornerstone for India's journey towards a greener, more sustainable future, solidifying our position as a global leader in environmentally conscious real estate development.

High-Impact Sectors: Rollout of Mandatory Green Building Rating Systems

Budget 2024 presents a pivotal moment for India's real estate landscape, particularly in the context of aligning with COP28 goals and fostering sustainable development.

Focused initially on high-impact sectors like commercial buildings and government infrastructure, this approach is backed by compelling data from the Confederation of Indian Industry (CII).

The CII's findings suggest that the rollout of green building rating systems has the potential to unlock substantial cost savings, with a projected 30% reduction in energy consumption compared to conventional buildings.

This translates into annual savings of ?50,000 crores by 2030 if just 10% of new buildings adhere to green standards.

Moreover, the emphasis on high-impact sectors aligns with the Ministry of Environment, Forests, and Climate Change's (MoEFCC) acknowledgment that buildings contribute to 38% of India's CO2 emissions.

The targeted rollout, coupled with gradual expansion to include residential buildings and smaller projects, positions Budget 2024 as a strategic enabler for substantial emission reductions.

The proposal for a streamlined approval process, including a single-window clearance system, further underscores the commitment to expediting green projects.

This aligns with the broader goal of establishing India as a global leader in green buildings, supported by the Indian Green Building Council's projection of the market reaching $100 billion by 2030.

Skill Development and Workforce Training

The proposed launch of a dedicated green jobs mission aligns seamlessly with the global trend, echoing the estimates by the World Green Building Council that such initiatives can create up to 3.9 million jobs globally by 2030.

In the context of India, where the construction sector is a significant contributor to economic growth, the proposed green jobs mission holds substantial promise.

With a burgeoning market anticipated to reach $100 billion by 2030, as projected by the Indian Green Building Council, the demand for skilled professionals is poised to surge.

Additionally, the emphasis on public-private partnerships to develop training programs resonates with the need for collaborative efforts. Data from the Confederation of Indian Industry (CII) emphasizes that industry collaboration is instrumental in achieving economic and environmental benefits.

The envisaged tax breaks and subsidies for companies investing in green building skills training not only stimulate workforce development but also fortify the economic ecosystem.

Public Awareness and Market Transformation

The proposal to implement a transparent green labeling system aligns seamlessly with the industry's evolution, as substantiated by the rapid increase in Indian Green Building Council (IGBC) certifications, reaching over 8,000 projects and 5 billion sq. ft. by January 2024.

In tandem with this, consumer awareness campaigns become instrumental, particularly considering the potential cost savings highlighted by the Confederation of Indian Industry (CII) – up to ?50,000 crores annually by 2030 through green buildings.

The push for prominent display of green labels on buildings not only instills consumer confidence but also serves as a catalyst for developers to pursue certifications, as evidenced by leading real estate firms across the country.

In addition, knowledge-sharing platforms and collaborative pilot projects, a key facet of Budget 2024, resonate with the need for industry-wide transformation.

With the green building market expected to reach $80 billion by 2030, the budgetary focus on market transformation initiatives underscores India's commitment to becoming a global leader in sustainable real estate.

Green Building Financing Mechanisms

The emphasis on Green Building Financing Mechanisms in Union Budget 2024 stands as a pivotal step towards sustainable real estate development.

The proposal to establish dedicated funds for low-interest loans and grants aligns seamlessly with the burgeoning Indian green building market, anticipated to reach $80 billion by 2030.

Collaborating with financial institutions for green mortgages with lower interest rates is a strategic move in sync with the COP28 goals. The Indian Green Building Council's (IGBC) LEED rating system serves as a testament to the increasing traction of green certifications, with over 1,600 projects already certified, showcasing the industry's commitment to environmental sustainability.

Besides, the implementation of risk-sharing mechanisms to attract private investors underscores Budget 2024's recognition of perceived risks associated with green building projects.

According to the Ministry of Environment, Forests and Climate Change (MoEFCC), buildings contribute to 38% of India's CO2 emissions. The budget's focus on mitigating these emissions aligns directly with India's COP28 goals and reaffirms the potential for significant environmental impact through green building initiatives.

Conclusion

The proposed strategies, spanning mandatory green building ratings, dedicated funds, and green mortgages, promise significant economic and environmental benefits. With potential annual savings of ?50,000 crores by 2030, India can lead in green building adoption and climate change mitigation.

The focus on skill development, public awareness, and market transformation reinforces Budget 2024's transformative impact.

Through technology and transparent labeling, the government is steering the nation toward a future where sustainability is integral to real estate.

These policies position India as a global leader in sustainable real estate. The question that resonates is: How can we collectively contribute to this paradigm shift towards a more sustainable and resilient built environment?