Report (TERI) - Siddarth Iyer

Exploring the Buildings sector in India for climate change mitigation
(Report submitted in partial fulfillment of the Post Graduate Diploma in Forestry Management)
By
Siddharth M. Iyer
(PGDFM 2007-2009)
Summer Internship
At
The Energy and Resources Institute

New Delhi
Indian Institute of Forest Management Bhopal - 462 003
June, 2008
DECLARATION
I, Siddharth M. Iyer, do hereby declare that the project entitled "Exploring the buildings sector in India for climate change mitigation is an original work. The contents of this report have not been published before and reflect work done by me during Summer Internship component of the Post Graduate Diploma in Forestry Management of the Indian Institute of Forest Management, Bhopal from 3rd April, 2008 to 7th June, 2008 with The Energy and Resources Institute.
Place: New Delhi Date: 7th June, 2008
(Siddharth M. Iyer) PGDFM 2007-09
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EXECUTIVE SUMMARY
Buildings are known to consume about a third to two-fifth of the global energy, contributing about a third to the global greenhouse gas (GHG) emissions. This is true not only for the world in general but also to individual nations with minor aberrations. In spite of the huge potentials of energy efficiency gains in buildings by way of efficient lights and appliances in residential buildings and efficient HVAC systems in commercial buildings, little efforts are directed to channelize these gains in the buildings being built today in India. Also, as green buildings per se even lead to lower emissions, there is scope for earning through the carbon markets too, the credits being shared among the various entities related to buildings in an agreeable way. Carbon markets too are hardly tapped through buildings energy efficiency. The study aims to understand the dynamics of GHG mitigation through buildings, the perception of various parties with respect to conscious efforts to contribute to climate change mitigation through buildings and the reasons there are not many projects either for the carbon markets or even for plain energy conservation all with a special emphasis on the Indian scenario. Emissions from buildings can be primarily reduced by three measures: Reducing energy consumption & embodied energy in buildings Controlling emissions of non-CO2 GHGs Switching to low-carbon fuels and renewables
The share of green buildings in the total built-up space in India is minuscule. So is the number of projects claiming carbon credits under the Clean Development Mechanism (CDM). This, despite the fact that emission reductions through buildings hold immense potential by way of simple and net negative lifecycle cost measures like CFL (compact fluorescent lamp) distribution. The reasons are primarily the high transaction costs in CDM projects, even under the programmatic mode, and the lack of experts proficient in the integrated requirement of architecture, electrical engineering, financial engineering and climate change.
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In India, the mitigation potential is much higher for efficient lights and cooking stoves than the building envelope. This fact is borne true by the estimated carbon credit earnings for the Fortis Hospital building in New Delhi. There seems to be an uncertainty with respect to buildings exploiting the full potential of the carbon markets among the industry experts interviewed. Though most of the interviewees seemed positive about single-project CDM gaining prominence for buildings in the coming years, there was a palpable doubt regarding the scope of aspects of mitigation covered within a project due to absence of a comprehensive methodology to determine baseline emissions. Bundled and Programme of Activities (PoA) modes in CDM met with reduced enthusiasm, majorly due to the lack of clear cut guidance on their modalities on the part of the CDM executive board. Voluntary markets as a source of utilizing the potentials in Indian buildings, found more takers among the consultants than among the builders and architects community. This was partly due to the better understanding of the consultants with respect to the functioning and credibility of voluntary markets. The various lacunae keeping the supply of energy efficient buildings (and also buildings in the carbon markets) running can be enumerated as under: High upfront costs in technology improvements and higher transaction costs with respect to CDM Few incidences of builders incorporating Building Energy Management Systems Lack of experts in the field Cost-benefit accrual divergence among the end-users and builders
The most cutting drawback observed is with respect to a lethargy on the part of entities to buildings a lethargy wise enough to know the solution, but too slow to make it possible by initiating work on developing methodologies suitable for integrating all aspects of buildings mitigation potential.
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ACKNOWLEDGMENT
I express my deepest sense of gratitude to Dr. Vivek Kumar (Associate Fellow, TERI) and Mr. Prabhat Upadhyaya (Research Associate, TERI) for providing me an opportunity to work on this project. Without their constant guidance and effusion of ease, the successful completion of this work would not have been possible. Thanks are also due to Ms. Hina Zia (Research Associate, TERI), Mr. Gaurav Shorey (Area Convenor TERI GRIHA), Ms. Mili Majumdar (Associate Director Sustainable Building Sciences, TERI) and Ms. Nitu Goel (Research Associate, TERI) for helping me set the groundwork in a field relatively unknown to me and also assisting the development of my project through the complex network that contacts is. Not to forget, the much required warmth that all the members of the CGER and the SBS areas in TERI provided in making my work an enjoyable learning experience. I am greatly obliged to Mr. Marc Medrano (Departament dInforma`tica i Eng. Industrial, Spain), Ms. Aditi Narain (Head of Production and Green, Neeraj Manchanda Architects), Ms. Manjri Narain (Architect and Industrial Designer, SPA), Mr. Vinay Thomas (Landscape Architect, SPA), Mr. Ramesh Ramachandran (Team Leader, DNV-Chennai), Mr. D. K. Sharma (Environmental Consultant, Surmount Energy Solutions), Ms. Swapnashri Menon (Sr. Executive-CDM, RRB Energy), Dr. Sanjay Vashishtha (DGM-Business Development, DLF Utilities), Dr. G. C. Dutta Roy (CEO-Energy Business, DSCL ESCO), Dr. Subodh Sharma (Advisor-NATCOM, MoEF), Mr. Saurabh Kumar (Secretary, BEE), Mr. Sanjay Seth (Energy Economist, BEE), Ms. Shabnam Bassi (Project Engineer, BEE), Mr. Paul de Ruijter (Scenario expert, WBCSD) and Prof. B. Sudhakara Reddy (Indira Gandhi Institute of Development Research, Mumbai) for taking time from their busy schedules and providing extremely valuable inputs for the project. Of course, all the learning would have been impossible without the support provided by Dr. D. K. Bandyopadhyaya (Director, IIFM) and Prof. H. S. Gupta (Fieldwork and Summer Internship Coordinator, IIFM) in making the internship possible under the Course. Special
thanks to Dr. Suprava Patnaik (Associate Professor, IIFM) for awakening the necessary confidence in me at a critical juncture of the project. Lastly, I express a heartfelt gratitude to my mother and sister for their unconscious encouragement, and my dear batchmates for their enthusiastic trust in me and my abilities.
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TABLE OF CONTENTS
DECLARATION.................................................................................................................................................................................................. ii EXECUTIVE SUMMARY ................................................................................................................................................................................ iii ACKNOWLEDGMENT......................................................................................................................................................................................v LIST OF TABLES .............................................................................................................................................................................................. ix LIST OF FIGURES ..............................................................................................................................................................................................x Chapter 1: Introduction ................................................................................................................................................................................ 1 1.1. 1.2. 1.3. 1.4. 1.5. Preamble ............................................................................................................................................................................................. 1 About TERI ......................................................................................................................................................................................... 2 Need for the Study .......................................................................................................................................................................... 4 Objectives of the Study ................................................................................................................................................................. 4 Scope of the Study ........................................................................................................................................................................... 5
Chapter 2: Literature Review ..................................................................................................................................................................... 6 2.1. 2.2. The Global Outlook ......................................................................................................................................................................... 6 Indian Perspectives ........................................................................................................................................................................ 8
Chapter 3: Methodology .............................................................................................................................................................................10 3.1. 3.2. 3.3. Sampling Method ..........................................................................................................................................................................10 Data collection tools.....................................................................................................................................................................10 Limitations of the Study .............................................................................................................................................................11
Chapter 4: Results and Discussion.........................................................................................................................................................12 4.1. 4.1.1. 4.2. 4.2.1. 4.2.2. 4.2.3. 4.3. 4.4. 4.5. 4.5.1. 4.5.2. 4.5.3. 4.5.4. 4.5.5. Current Status of Green and Certified Buildings in India ............................................................................................12 Resource Efficient TERI Retreat for Environmental Awareness and Training (RETREAT)...................14 GHG mitigation options in Buildings ....................................................................................................................................20 Innovative building design and materials use ............................................................................................................21 Lighting and Appliances .......................................................................................................................................................22 Fossil fuel alternatives...........................................................................................................................................................22 Buildings and the Carbon Markets in India .......................................................................................................................23 Estimating probable carbon credits from Fortis Hospital Shalimarbagh, New Delhi .................................26 Response Analysis of Interviews............................................................................................................................................29 Builders ........................................................................................................................................................................................32 Architects ....................................................................................................................................................................................33 Energy Service Companies ..................................................................................................................................................34 Environmental Consultants, State and Corporate governing and aiding agencies ....................................36 Lateral comparison of various options of Buildings and the Carbon Markets .............................................37 vii
4.6.
Barriers to buildings fully utilizing the carbon markets in India ............................................................................38
Chapter 5: Recommendations and Conclusion ................................................................................................................................41 5.1. 5.2. Recommendations ........................................................................................................................................................................41 Conclusion ........................................................................................................................................................................................42
Bibliography ....................................................................................................................................................................................................44 Annexures ............................................................................................................................................................................................................ I 1. 2. 3. 4. Note on Policies, Programs and Bundles in the CDM ............................................................................................................ I Indicative List of Questions to Architects .................................................................................................................................. V Indicative List of Questions to Builders .................................................................................................................................... VI Indicative List of Questions to ESCOs ....................................................................................................................................... VII
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LIST OF TABLES
TABLE 1: GHG EMISSIONS REDUCTION POTENTIAL FOR BUILDINGS STOCK IN 2020................................................. 7 TABLE 2: WEATHER DIFFERENTIALS IN RETREAT BUILDING BROUGHT ABOUT BY GREEN CONCEPTS ........19 TABLE 3: COSTS OF ADVANCED TECHNOLOGIES EMPLOYED AT RETREAT ...................................................................20 TABLE 4: CDM PROJECTS IN THE BUILDINGS SECTOR IN INDIA ...........................................................................................24 TABLE 5: ENERGY PERFORMANCE INDICES (EPI) OF BASE BUILDING AND FORTIS HOSPITAL BUILDING ....27 TABLE 6: RESPONSES REGARDING CARBON MARKETS AND THE BUILDINGS SECTOR IN INDIA ........................31
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LIST OF FIGURES
FIGURE 1: CARBON MARKETS AND PROJECT TYPES COVERED DURING INTERVIEWS .............................................30
CHAPTER 1: INTRODUCTION
1.1. PREAMBLE
Energy consumed in buildings already represents more than a third of global consumption, and this share is increasing (IPCC 2007). The bulk of it is used in heating, air conditioning, lighting and appliances, depending on the surrounding climate. Energy sources vary depending on development needs. Households in developing countries like India still rely largely on biomass. In developed countries, energy for heating largely comes from oil and gas; in commercial buildings in India, lighting and air-conditioning consume electricity from the local grid, which is primarily generated from coal all causing most of todays carbon emissions from buildings. The use of electricity sharply rises with income. Energy consumption in Indian buildings is expected to increase substantially due to economic growth and human development. The demand for energy to run appliances such as TVs, air conditioning and heating units, refrigerators and mobile phone chargers increases substantially as living standards rise in India. Significant increases in energy consumption and resultant emissions in the buildings sector in India are caused by (WBCSD 2007): A switch to electricity along with changing development profiles Powering the higher number of appliances A growing service sector requiring commercial buildings The continued rise of the IT economy A further shift from rural to urban living due to rise in income levels
Energy consumption in buildings is thus, a serious threat to the sustenance of a clean environment, also contributing in its wake significant greenhouse gas (GHG) emissions. It has, however, been silently continuing with this catastrophic deed given the demand-side negative motivation to sustain unsustainable practices in the name of economics, and lack of mandatory energy ratings of appliances and building codes in India.
1.2.
ABOUT TERI
TERI was formally established in 1974 with the purpose of tackling and dealing with the immense and acute problems that mankind is likely to be faced with in the years ahead on account of the gradual depletion of the earths finite energy resources which are largely non-renewable, and on account of the existing methods of their use which are polluting.
Over the years the Institute has developed a wider interpretation of this core purpose and its application. Consequently, TERI has created an environment that is enabling, dynamic and inspiring for the development of solutions to global problems in the fields of energy, environment and current patterns of development, which are largely unsustainable. The Institute has grown substantially over the years, particularly, since it launched its own research activities and established a base in New Delhi, its registered headquarters. The central element of TERIs philosophy has been its reliance on entrepreneurial skills to create benefits for society through the development and dissemination of intellectual property. The strength of the Institute lies in not only identifying and articulating intellectual challenges straddling a number of disciplines of knowledge but also in mounting research, training and demonstration projects leading to development of specific problem-based advanced technologies that help carry benefits to society at large.
The global presence and reach attained by TERI are not only substantiated by its presence in different parts of the world, but also in terms of the wide geographical relevance of its activities. Symbolic of this fact is the annual Delhi Sustainable Development Summit (DSDS), a major event focusing on sustainable development, the pursuit of the Millennium Development Goals (MDGs) and assessment of worldwide progress in these critical areas. DSDS attracts the most prominent thinkers and practitioners in a range of fields that impinge on development. Since development worldwide is moving towards an architecture based on partnerships, the leaders who participate in DSDS come from government, business and industry, multilateral and bilateral organizations, research and academia and civil society. Encouraged by the success of DSDS, TERI has now established the World Sustainable Development Forum (WSDF), which is guided by the patronage of a group of select world leaders. WSDF would extend the experience of each DSDS to other parts of the world and carry out careful evaluation and monitoring of developments worldwide, particularly in meeting the MDGs. TERI now has staff strength of over 700 dedicated employees, drawn from a range of disciplines and experience, supported by infrastructure and facilities, which are world class and distinctively state-of-the-art. Grouping of the staff into Areas and broad-based divisions is TERI's way of encouraging exchange of ideas and information across subject boundaries and forming interdisciplinary linkages. Each Areas activities are coordinated by an Area Convenor, areas with similar focus and activities are grouped into divisions and each Division is headed by a Director/Associate Director. The author worked under the area Centre for Global Environment Research in the Energy Environment Policy Division, but also had close interactions with areas Sustainable Building Science and GRIHA of the Energy Environment Technology Division. In this world of increasing globalization and buoyed by optimism generated by the success of the Indian economy TERI moves forward to meet the challenges of the future through the pursuit of excellence embedded in its visionary charter. The current study is a step in this direction by trying to focus attention on emissions from a sector so far ignored greatly.
1.3.
NEED FOR THE STUDY
It is widely accepted that the buildings account for significant portions of the global and national energy use and GHG emissions. However, few researches have been conducted on buildings as an entity and the emission reduction potential in buildings specific to India. Also, the opportunities that the various carbon markets throw open to energy efficient buildings is considerable given that they are accountable for a third of the global emissions. Though the opportunities exist, there is neither a rush for green buildings on the part of builders, architects, energy consultants or even the end-users, nor considerable projects tapping the carbon markets through buildings. TERI has been approached by Fortis Healthcare Ltd. to generate carbon credits in the CDM market for its hospital building at Shalimarbagh, New Delhi. In addition to efficient lighting and HVAC (Heating, Ventilation and Air Conditioning) systems, Fortis Hospitals would also be incorporating waste management techniques and cogeneration system. It is more than five years since projects started registering under the CDM, but there still is no comprehensive methodology including significant parts of emission reduction options in buildings to determine the baseline emissions and monitoring mechanism for energyefficient building projects in CDM. Nor is any precedence seen in the voluntary markets. The study would try to fill in this gap in the Indian buildings sector, to understand the perception of the various entities involved in the making of buildings both regular and energy-efficient with respect to climate change mitigation through buildings and their role in the carbon markets.
1.4.
OBJECTIVES OF THE STUDY
The study aims at: 1. Gauging the preparedness of the Indian buildings sector (with its various stakeholders) in reducing emissions 2. Exploring the carbon markets (regulated and voluntary) in India for GHG mitigation potential through buildings
The Energy and Resources Institute 4
3. Estimating the probable carbon credit earnings from Fortis Hospital building 4. Identifying the barriers to buildings exploiting the full potential of carbon markets in India 5. Serving as a basis for making the industry and the government better prepared with respect to key loopholes to be improved upon, in order to unplug the latent potential of energy efficiency in buildings
1.5. SCOPE OF THE STUDY

The study covers stakeholders from the supply side of the buildings sector in India, primarily the builders, architects and energy consultants having a national presence; ministries and government bodies aiding the CDM and energy efficiency in buildings, environmental consultants with national and international presence; and corporate agencies aimed at promoting energy efficiency in world buildings. The end-users of buildings are purposely excluded from the scope as there is enough evidence for now, that behavioural changes and education are key inputs required to ensure energy-efficiency on that front (Paul and Bhattacharya 2004). CDM in the regulated carbon markets and the over-the-counter (OTC) markets in the voluntary carbon markets were selected as the carbon markets for which responses were to be elicited.
CHAPTER 2: LITERATURE REVIEW

2.1. THE GLOBAL OUTLOOK
The construction, use and demolition of buildings contribute significantly to the social and economic prosperity of a nation, but may also have serious negative impacts, especially on the environment. Areas of key concern with respect to the concomitant greenhouse gas (GHG) emissions are energy use in buildings (primary, secondary and embodied) and the construction materials used. Though still ignored by many, a significant number of studies have been conducted globally in the recent years associating energy wastage and emissions to the buildings sector. Various estimates have shown that buildings residential and commercial guzzle almost two-fifth of the global energy, and are responsible for about a third of global GHG emissions. The Intergovernmental Panel on Climate Change (IPCC) puts this emissions figure at 33% (IPCC 2007), while the United Nations Development Programme (UNDP) ascribes 35-40% of average national CO2 emissions to the residential sector alone (UNDP 2007). The United Nations Environment Programme (UNEP) on its front associates the buildings with consuming about 30-40% of global primary energy (UNEP 2007) a statement with serious implications considering that the figure excludes secondary energy. Perez-Lombard, et al. (2008), Hacker, et al. (2008), Medrano, et al. (2008), Pinkse and Dommisse (2008), Urge-Vorsatz and Novikova (2008), Holmes (2007), Hinostroza, et al. (2007), all in their individual capacities in various researches, echo similar views as made by the global institutional set-up. It can be safely taken as a fact that buildings contribute significantly to the global GHG emissions. These emissions can be reduced in primarily three ways, with various sub-categories of actual measures (IPCC 2007): reducing energy consumption and embodied energy in buildings switching to low-carbon fuels and renewables
controlling emissions of non-CO2 GHGs
In its Fourth Assessment Report, the IPCC even lists the most cost-effective and realistic emission reduction measures in the world buildings, categorizing countries under various heads:
TABLE 1: GHG EMISSIONS REDUCTION POTENTIAL FOR BUILDINGS STOCK IN 2020
(Source: Climate Change 2007: Mitigation. Contribution of Working Group III to the Fourth Assessment Report of the IPCC, 2007)
As is very clear from the table above, in developed as well as developing nations, efficient lighting systems play a key role in reducing building-related emissions, though building envelope insulation and efficient heating are higher up in the hierarchy in developed nations. It is also predicted that without any net cost, emissions from buildings can be reduced by up to a fourth in developed countries and by up to more than half (52%) in developing nations by employing just these measures. Of course, for developing countries like India, the most immediate and cost-effective mitigation options, considering a business-as-usual (BAU) case, would be efficient lights and improved cooking stoves, a fact seconded by the Human Development Report published by UNDP (2007). There is also increasing agreement (UNDP 2007; WBCSD 2007; Georgopoulou, et al. 2005; Michaelowa 2004; Chedid and Ghajar 2002; others) that existing options are insufficient,
and in many cases impractical, in reducing the emissions effectively. What also play very crucial roles in making current options effective and making way for innovation are: behavioural changes, not only on the part of end-users of buildings, but also all other parties to the building the builders, contractors, architects, consultants, etc. more effective implementation of regulations (could be in the form of government policies or even private/voluntary standards) These necessities if fulfilled have the potential of reducing by 30% the expected GHG emissions of 2020 at no additional cost (IPCC 2007).
2.2.
INDIAN PERSPECTIVES
Studies on the Indian front have definitely not kept pace with worldwide evidences on buildings and emissions. There is a good deal of research done on energy consumption in buildings, but few on energy consumption of them. Studies conducted by Reddy (2003), Alam, et al. (1998) and others focus on fuel use within urban and rural households. One interesting study, conducted by Bhattacharya and Paul (2003), uses a decomposition analysis to determine the carbon emissions from energy use in the agriculture, industry, transport and other sectors in India. Though the methodology used is effective in attributing emissions to specific economy structures and sources, the exclusion of buildings in the face of the inclusion of transport (transport emissions being less reliable when estimated, given that fuel use is not the only significant source of emissions) seems an anomaly. Debnath, et al. (1995), in a report listing the energy requirements for different types of residential buildings in India, had concluded that the embodied energy for a residential building in India is 3-5 GJ/m2 as opposed to the figure of 8-10 GJ/m2 for office buildings in Japan. Though the comparison looks impressive and seems to bode well for emissions from Indian buildings on a global perspective, the dated figures and absence of a comparison with commercial buildings in India limit the validity of the implications. If literature on emissions of buildings in India is dear, that on carbon markets potential from buildings is dearer still. Buildings, energy use, emissions and carbon markets all
have rarely managed to excite researchers simultaneously. Reddy and Balachandra (2004) focused their attention on fuel use within households for cooking and lighting. In their opinion, shifting from inefficient to efficient technology at this level provides more effective GHG mitigation than does switch from non-renewable to renewable fuels. This technology shift is not only economically viable, but also socially required because of significant health improvements. They hint at the government using this potential to tap the carbon securitization market, where though carbon credits might have to be shared by the government, it would still prove to be attractive given the various local benefits such projects would garner in their wake, and the resultant goodwill for the government. In the same year (2004), Singh and Michaelowa came out with a discussion paper on CDM potential through electricity efficiency in urban buildings of India. Though limited to CDM (and not the other carbon markets) and electricity efficiency (against other options of design and building material), the paper is quite comprehensive as far as general comparisons of Indian buildings with the world status goes. They declare that electricity use within Indian buildings residential and commercial is three to four times the German average per square metre. Studying cases of a few energy efficient buildings in India, they show the potential of emission reductions in individual projects in the range of 500 to 10,000 tCO2e a figure too low to jump the CDM transaction cost barrier. However, programmatic CDM is hinted as an alternative to avoid this pitfall, though implementation issues are untouched.
CHAPTER 3: METHODOLOGY
Primary and secondary sources were used to garner information with respect to the study, keeping the objectives and scope of the study in mind, as also the time in hand. The sampling method, data collection tools and limitations of the study are presented below:
3.1. SAMPLING METHOD

The population covered the entire supply-side of energy efficient buildings and carbon markets in India the architects, builders, energy consultants, environmental consultants, government and corporate agencies and ministries related to CDM and energy efficiency in buildings. Purposive sampling was used to demarcate the population into groups the author wanted to survey. Therein, snowball sampling through development of contacts within TERI and through further contacts from the sample itself helped develop a fairly representative sample.
3.2. DATA COLLECTION TOOLS

Secondary published and unpublished literatures, information from websites as well as primary data through unstructured interviews were used to gather inputs for the study. Unstructured interviews were ideal in this case as the author could not expect the interviewees at their level in the organizational hierarchy to take out time to fill questionnaires. However, indicative lists of questions to be addressed to various entities were prepared by the author, which ensured that the time of the industry expert is not wasted. These questions were, however, strictly indicative, with the interview taking its own course if the author felt the need based on the response from the interviewee. Some of the questions earmarked for specific groups can be accessed in Annexures 2-4.
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3.3. LIMITATIONS OF THE STUDY

Though utmost care was taken to ensure that the study would be free from shortcomings, a few inevitably crop up. These limitations, if removed, could have aided in providing more helpful information to the national energy-efficient building and CDM markets. 1. The sample does not cover a statistically significant number of market participants in the groups demarcated, in many cases. This limitation is, however, partially attenuated by the fact that carbon credits through buildings is a relatively new concept in buildings worldwide, and opinions tend to replicate. 2. TERI-bias was observed by the author in few of the interviews where the interviewees knowledge about the background of the author and his relation to TERI made the response tilted in favour of TERI. 3. The calculations of probable carbon credit earnings from the Fortis Hospitals does not account for all the design, energy efficient and resource saving measures therein the actual credits could be higher. 4. The baseline building is as indicated by the Bureau of Energy Efficiency (BEE) for any hospital in India. The baseline for Fortis would be better represented by similar-sized hospitals in the same climatic zone of India. This might lead to the actual credits being lower, as recent trends show more energy efficient hospitals being built, thus reducing the baseline.
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CHAPTER 4: RESULTS AND DISCUSSION

4.1. CURRENT STATUS OF GREEN AND CERTIFIED BUILDINGS IN INDIA
The most impressive progress in residential green building development and construction is the result of individuals, architects and developers wanting to distinguish themselves as leaders in efficient use of resources and reducing waste in response to local issues of landuse planning, energy supply, air quality, landfill constraints, and water resources. Developers who have a business purpose in considering the life-cycle cost and resource aspects of their new projects are providing the green building leadership in the commercial sector. State and local governments are also demonstrating and requiring green building practices in their new buildings. Several whole-building standards have been developed or adopted to promote green buildings in India. These include international standards like Leadership in Energy and Environmental Design (LEED), modified versions of the same (LEED India), and the indigenous Green Rating for Integrated Habitat Assessment (GRIHA) developed by TERI. While there is disagreement about some of the specifics of these rating systems, they have proven to be effective in declaring the user as a cut above the rest, in the absence of the Energy Conservation Building Code (ECBC) of the Bureau of Energy Efficiency (BEE) being mandatory. Real market transformation, however, will require buyin also from the supply side of the industry due to the complex supply chain structure of the industry, and from the end-users who create a viable market. As far as numbers go, green and certified buildings are still a minuscule part of the built-up scene in India. As one of the responders cited, there are hardly 500 green buildings in India today, of which only 30-35 are certified. This certification is limited to the commercial buildings due to reasons like:
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Absence of certification suitable for residential buildings in India, until very recently (the Indian Green Building Council announced LEED-India certification for the residential sector on 2nd May, 2008).
The higher cost of energy-efficient materials and eco-friendly practices (requirements mandated by the ratings), in the price-conscious residential sector, cannot be passed on to customers.
Green buildings are not just about design and building, the green features have to be maintained. Ensuring this in apartment complexes with multiple users is not a simple task.
Commercial buildings, if certified, earn brownie points for the developers, architects and consultants alike, by way of brand equity. No such incentive is presented to an individual.
The certification costs themselves are approximately Rs. 15 lakh. In the absence of mandatory regulation, there is no incentive to invest heavily as far as the individual housings go.
Even for commercial spaces, builders apart from a few in the metros are not very keen in certifying their spaces. This lack of enthusiasm is more attributable to lack of knowledge about certification and the concomitant benefits in the living environment and operating cost savings, than to indifference. In spite of this historical lethargy, activity in the green buildings scene is accelerating now. The immense opportunities that are presented by green and certified buildings can be gauged by studying the case of RETREAT (Resource Efficient TERI Retreat for Environmental Awareness and Training), the research and convention centre of TERI at Gurgaon, India.
4.1.1. RESOURCE EFFICIENT TERI RETREAT FOR ENVIRONMENTAL AWARENESS

AND TRAINING (RETREAT)
RETREAT, TERIs vision of building a sustainable habitat, is not just the first of its kind in this part of the world, but also one that inspires many such habitats to be created in the future. What was once a swampy, degraded wasteland, the 36-hectare TERI campus at Gual Pahari, Gurgaon, today is a lush green habitat. Built as a model training complex, RETREAT demonstrates efficient utilization of energy, sustainable, and integrated use of both natural resources and clean and renewable energy technologies, and efficient waste management.
With a built-up area of 3000 square metres, this 30-room training hostel includes conference facilities for 100 people, dining space and kitchen, recreational area, computer room, and a library. What makes RETREAT unique is its total independence of the citys grid system and the near-complete freedom from city services and infrastructure. Interestingly, energy planning in the building has led to a reduced load of 96 kW (peak) from a conventional 280 kW (peak), showing a saving of 184 kW (peak).
Basically, three important things were considered in the creation of the complex. Firstly, the functionality of the building was assessed, trying to see how energy is used in it. Secondly, the design of the complex minimized demands of energy in the building by architectural intervention through passive concepts like solar orientation, lattice work for shading, insulation, and landscaping. Thirdly, the space-conditioning and lighting demands were met through energyefficient systems whereas the electric energy demands were fulfilled by renewable energy sources.
Passive designing for load reduction Various passive design concepts have resulted in reduction of space conditioning loads by 10% 15%. Building envelope efficiency, which result in lowering of space-conditioning loads, was achieved by adoption of various passive techniques as listed below: The roof is insulated by using vermiculite concrete and China mosaic white finish. Walls are insulated by using Styrofoam insulation.
Part of the building is partially sunken into ground in order to take advantage of ground storage and thus stabilize internal temperature.
Shading devices and fenestration have been adequately designed to cut off summer sun and to let in winter sun.
Glare-free daylight has been adequately provided in the conference hall, library, and recreation hall through use of specially designed skylights.
Landscaping has been adequately designed so that wind directions are favourably altered. Deciduous trees are used in the southern side of the building to shade the building during summer. During winter, the trees would shed their leaves thus letting in winter sun.
The building is oriented along the eastwest axis so as to have maximum exposure along north and south. Architecturally, the building is consciously freed from the confines of a strict orientation in order to demonstrate that though energy-conscious architecture needs to be somewhat oriented, the orientation need not be rigid and interesting patterns can be formulated for architectural purposes. In RETREAT, the north block is made slightly concave towards the front, while the south block forms a hybrid convex surface facing the winter sun. The points of the south block broadly fall on the surface of large imaginary cones that generated the slightly free geometry and this allows the architecture to break away from the grid iron approach that is associated with solar architecture normally.
Ensuring a sustainable supply of energy RETREAT makes full use of the most abundant source of energy, namely the sun, by tapping the suns energy in different ways, both directly and indirectly. Some of the innovative ways of tapping solar energy and using energy more efficiently at RETREAT are (1) solar water heater, (2) PV (photovoltaic) panels, (3) gasifier, (4) underground earth tunnels, and (5) waste water recycling.
1) Solar water heater An array of 24 solar water heaters forms a part of the parapet wall of the living quarters. The system can deliver up to 2000 litres of hot water (at 65 C) every day. In winter, when the days are short and the sun less intense, gas derived from burning twigs, dry leaves, etc. serves as a back-up source to heat the water. The heat given off when the standby generator is running is also collected and utilized in the solar water heater, as a back-up source. 2) Photovoltaic-gasifier hybrid power plant The building is powered by a PV-gasifier hybrid system. Firewood, dried leaves, twigs, crop residues after the harvest and such other forms of biomass, fuel the 50 kW gasifier. The 10.7-kW (peak) roof-integrated PV system generates power from solar energy. The power available from both the gasifier and the systems is managed and controlled with the help of a building management system. The gasifier meets the daytime loads, when the solar PV plant charges the batteries. The excess power generated from the gasifier also goes to charge the battery bank. During the night, the gasifier is switched off and loads are met by the 240 V battery bank. The external lights and water pumps are powered by independent stand-alone PV systems. Most of the external lights located outside the building are powered by independent panels. 3) Earth Air Tunnels (EATs) The living quarters (the south block) are maintained at comfortable temperatures (approximately between 20 C and 30 C) round the year not by conventional airconditioners but by circulating naturally cooled air, supplemented, whenever required, with a system of absorption chillers powered by LPG (liquefied petroleum gas). The concept is based on the observation that underground cellars are usually cooler in summer and warmer in winter. Underground structures are not exposed to the sun and thus do not heat up as much. Secondly, the surrounding earth insulates them, which helps in maintaining a more or less constant temperature. Temperatures recorded at roughly 4 metres below the surface show that they are stable and reflect the average annual temperature of a place. However, the cooler air underground needs to be circulated in the
living space. Each room in the south block has a solar chimney; warm air rises and escapes through the chimney, which creates an air current: the cooler air from the underground tunnels rushes in to replace the warm air. Two blowers installed in the tunnels speed up the process. The same mechanism supplies warm air from the tunnel, during winter. So efficient is the system that in winter, when outside temperature at night is 10 C, it is a comfortable 22 C inside. 4) Absorption chillers A set of eco-friendly chillers, which run on LPG and require minimum electricity, provide extra cooling when needed. LPG being a non-renewable source of energy, efforts are under way to run the chillers on producer gas generated by the wood-based gasifiers. The conference centre, which accommodates up to 100 participants, is conditioned by means of the ammonia-based absorption chilling. 5) Energy-efficient lighting Sustainable systems do not stop at using such renewable sources of energy as the sun and firewood the energy so produced must be used efficiently. RETREAT uses the energyefficient compact fluorescent lamps (CFLs), which give the same quality and amount of light as normal incandescent bulbs but require only one-fourth as much energy. Energyefficient tubelights with electronic chokes are used for conference halls, recreation room, computer room, dining hall and in administration areas. The conference rooms enjoy glarefree daylight through strategically placed skylights. In the living rooms, strategically placed light points and specially designed swivels make it possible to use the light at a study table as well as for bedside reading. Time based controls switch off lights at pre-set time. Key tag system is installed in the rooms for energy conservation. 6) Waste water recycling by root zone system Recycling is essential for sustainability. Waste water is recycled using the root zone technique. It is a natural waste water treatment process based on aerobic and anaerobic decomposition of the contents in the roots of the reeds (phragmytes) and microbial
17
organisms. The process is natural, economical, and efficient and gives quality treated water. This water is used for irrigation. Monitoring the system The elaborate, extensive, and sensitive network of sensors, linked to a central station, monitors every heartbeat of the system 24 hours a day, 365 days a year. The data-loggers keep tabs on virtually every relevant part of the entire system. At any given instant, one can find out what it is like outside how warm, how sunny, how humid and how these conditions have affected the same parameters inside; one can know how much power is being consumed in different parts of the building and how much is being generated; one can check the temperature of the water being delivered through the hot water system. Thus, the facility is also a first-rate source of immense quantities of scientific data that can power many more experiments and indeed influence the design of other such facilities the world over.
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Performance Superior performance has been recorded by the RETREAT system in the past, in part attested by the author during his visit to the centre. A table summarizing the various climatic performances is given below:
TABLE 2: WEATHER DIFFERENTIALS IN RETREAT BUILDING BROUGHT ABOUT BY GREEN CONCEPTS
HEAD
Average recorded temperature
Ambient temperature 10 C
Recorded relative humidity -
Ambient relative humidity -
Rooms
conditioned
22 C
by solar gains and EAT (winter, night) Rooms by conditioned evaporative 28 C 40 C 45-50% 30%
cooling and EAT (dry summer, day) Rooms by cooling (humid day) Conference conditioned rooms by
(Source: Internal secondary data, TERI)
conditioned evaporative and EAT summer,
30 C
38 C
65%
70%
25 C
55%
absorption chillers
As can be seen above, the temperature differentials recorded above are significantly within the comfort levels of most people, and the system thus proves its point in not only saving on energy and resources, but also on the emissions which would otherwise have been
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generated by excessive reliance on the regional grid with insignificant renewable contribution. Of course, the advanced technology comes with a cost a barrier many small-scale entities might be hard-pressed to overcome. The cost break-up can be seen in the table below:
TABLE 3: COSTS OF ADVANCED TECHNOLOGIES EMPLOYED AT RETREAT
TECHNOLOGY EAT Solar chimney 10.7 kW solar photovoltaic system Stand-alone PV streelighting system Root zone system Solar water heating system Building management system Ammonia absorption cooling system along with gas bank HVAC TOTAL COST OF TECHNOLOGY
COST (Rs. Million) 1.68 0.28 7.40 0.28 0.85 0.25 2.30 3.10 2.40 18.54
(Source: Internal secondary data, TERI)
The building being only partially loaded as yet now consumes a maximum of 40 units of electricity per hour. The PV system generates on an average 55 units per day on a sunny day. The total cost of technology, Rs. 1.85 crore, was recovered by RETREAT in the very first year of operation by way of cost savings in the local grid and resource savings.
4.2.
GHG MITIGATION OPTIONS IN BUILDINGS
Energy consumption in buildings is expected to increase substantially due to economic growth and human development. The demand for energy to run appliances such as TVs, air-conditioning and heating units, refrigerators and mobile phone chargers increases substantially as living standards rise in India. This puts additional pressure on the
emissions balance, which needs to be countered by achieving energy efficiency improvements. The three basic mitigation options mentioned earlier can be actually implemented in a number of ways, many of which were effectively deployed in RETREAT: Thermal envelope building shell as insulation Heating & cooling load reduction HVAC system efficiency Building Energy Management System Active collection & transformation of solar energy Solar hot water Efficient lighting systems & daylighting Efficient appliances & equipments Retrofits
Specifics of some of the various measures are detailed below:
4.2.1. INNOVATIVE BUILDING DESIGN AND MATERIALS USE

Innovation in new building design, building form and alignment, heating, cooling and ventilation systems, lighting, and choice of materials have a substantial impact on a buildings energy demand and carbon footprint over its lifetime. Significant energyefficiency gains and GHG emissions reductions can be achieved in buildings by addressing the basic requirements of cooling and heating at the design stage itself: The shape, form and orientation of a building and shading devices affect heating and cooling requirements. Improved insulation coupled with adequate ventilation using a heat recovery system reduces the demand for heating. Cooling and heating needs can be supported by heat pumps (similar to the earth tunnels at RETREAT), which use stable temperatures in the ground, air and water to support cooling requirements in the summer and heating in the winter.
Low-E glass coating reduces the amount of solar radiation that is absorbed without significantly affecting the light allowed, which helps keep buildings cool and naturally lit. Glass with the reverse effect and double-glazing reduces heating requirements.
Combined Heat and Power (CHP) or cogeneration technology increases energy efficiency by using waste heat.
Energy-efficient boilers and solar thermal panels reduce water heating requirements.
4.2.2. LIGHTING AND APPLIANCES

Lighting is one of the major energy consuming factors in commercial and residential buildings. Energy consumption can be reduced cost-effectively by introducing intelligent lighting systems (motion detectors) in buildings and by switching to energy-efficient fluorescent light bulbs, which consume up to 80% less energy (WBCSD 2007). Although initial costs are higher, life-cycle savings in energy bills can far outweigh the initial investment. Another significant contributor to energy demand and emissions in the buildings sector in India are appliances. In many countries, appliances have to display an energy efficiency label and are grouped into different categories, providing the consumer with an indication of the energy consumption of the appliance. This is, however, not mandatory in India.
4.2.3. FOSSIL FUEL ALTERNATIVES

By encouraging alternative sources of power with low- or zero-GHG technologies installed locally, total energy demand can be supplemented. The use of renewable energy sources lowers GHG emissions by reducing demand for fossil-based grid electricity.
4.3.
BUILDINGS AND THE CARBON MARKETS IN INDIA
In spite of substantial emission reduction potential from buildings, the carbon markets have rarely been tapped as a source of earnings; what little projects exist (either registered or in the pipeline), are through the CDM market, in the form of small-scale individual projects. Though the voluntary markets are gaining importance in India through the efficiency of organizations like GTZ, SKG Sangha and EnerGHG India, little attention is paid to the buildings as a viable investment. This, despite the fact that energy efficiency in buildings accounts for nearly two-third of the potential emission reductions through energy efficiency (Cherail 2007). Credence to this condition of carbon markets in India with respect to buildings is borne by the fact that of the 333 registered Indian CDM projects till date, only one (0.3%) relates to a building claiming carbon credits, and of the 528 Indian projects at the validation stage of CDM only seven (1.33%) pertain to buildings (UNEP Riso Centre 2008). Though the figures depict an impressive growth rate of 343% over two-and-a-half years (the first CDM project through buildings was registered in 2005, with a crediting period starting 2006), it is still small considering the immense technical potential and the fact that four of the projects in the pipeline deal with CFL distribution in households alone, not the entire gamut of emission reductions from buildings. The projects registered and in the validation stage are tabulated below:
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TABLE 4: CDM PROJECTS IN THE BUILDINGS SECTOR IN INDIA
No.
Name of the Project
Place
Approximate emission reductions (tCO2/yr.)
CDM status
1.
Improvement Sonar Bangla)
in
energy
Kolkata
3,000
Registered
consumption of a hotel (ITC 2. 3. Energy efficiency measures in Technopolis Installation group hotels 4. 5. Energy efficient design Olympia Chattisgarh Improvement (CLIP) 6. 7. Visakhapatnam OSRAM CFL distribution CDM project Yamunanagar and Sonipat OSRAM CFL distribution CDM project 8. Replacement incandescent CFLs in households of bulbs with Kadapa Circle, Andhra Pradesh
(Source: Extracts from CDM pipeline at http://cd4cdm.org/, as in May 2008)
Kolkata Agra, Bengaluru, Chennai and Mumbai Chennai Rajnandgaon Circle, Chhattisgarh Andhra Pradesh NCR and Haryana
8,700 10,000
At validation At validation
of
high
efficiency chillers in EIH
15,000 48,000
Lighting Project
49,000 49,000
51,000
At validation
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The table clearly shows the trend of things, as far as potential for carbon credits from buildings in India goes. Though all but one of the projects listed above are still under the validation stage, the ground is set for the emission reduction potential the table corroborates the findings of the IPCC in its Fourth Assessment Report, as described in Table 1. Diffusion of efficient lighting systems has a greater potential in India for reducing the GHG emissions as compared with other measures in buildings. These other measures, though consequential enough and necessary given the current upsurge in realty development, do not offer as drastic a difference as offered by efficient lights. As seen in the table, the difference between the highest emission savings in non-CFL buildings CDM projects (15,000 tCO2/yr.) and the lowest emission savings in CFL buildings CDM projects (48,000 tCO2/yr.) is more than double (33,000 tCO2/yr.) of the former. While drawing these conclusions, it is to be noted that the projects are still in the validation stage, the latter category includes only a few households in the residential buildings sector of India and all the projects are in the form of single-projects. Actual emission reduction potential will increase with more aspects of the building being covered in future projects, and proper methodologies emerging to integrate the same. The above discussion forms the basis for the next sections of the chapter, which deal with: Probable emission reductions from Fortis Hospital building in New Delhi The responses from various stakeholders in the supply side of buildings the builders, architects, energy and environmental consultants, and state and corporate governing bodies and aiding agencies during interviews and interactions aimed at eliciting the perception, hopes and difficulties faced by their respective sectors in exploiting the full potential of GHG mitigation in buildings and earnings from the carbon markets in India
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4.4.
ESTIMATING PROBABLE CARBON CREDITS FROM FORTIS
HOSPITAL SHALIMARBAGH, NEW DELHI

Fortis Healthcare Ltd. has approached TERI to generate Certified Emission Reductions (CERs) for its 500-bed hospital building at Shalimarbagh, New Delhi. The building is being designed with a vision to provide an environment-friendly health care facility. Energy efficiency and resource conservation measures will be incorporated in various aspects of the design, construction and operation of the proposed green building. The hospital is being designed as an energy-efficient building that complies with the Energy Conservation Building Code (ECBC) and is undergoing TERI-GRIHA rating certification, poising to become the first hospital building in India to be registered for the building rating system. Energy efficiency and green features in the building include: Sustainable site planning is practised on site to conserve resources, minimize disruption of the natural ecosystem, and maintain the microclimate of the site. The building design has been optimized to reduce the external solar gains and avoid over design of lighting and air-conditioning systems. Low embodied energy material options are being explored by the management. CFC- and HCFC-free equipment will be installed for the refrigeration and airconditioning systems. Specific measures taken in this regard include: 1. External wall with lower U-value 2. Roof with better insulation 3. Low emissivity glass 4. Efficient lighting 5. Efficient HVAC (Heating, Ventilation and Air Conditioning) equipments and controls 6. Cogeneration (CHP)
7. Waste management With an aim to gauging the potential CERs for Fortis Shalimarbagh hospital building and thus conclude or gainsay the findings in the previous section of this chapter, the author used the baseline data for buildings as indicated by the Bureau of Energy Efficiency (BEE). The data for the base building and the savings at Fortis are tabulated below:
TABLE 5: ENERGY PERFORMANCE INDICES (EPI) OF BASE BUILDING AND FORTIS HOSPITAL BUILDING
Base building 1. Building envelope External wall: 230 mm brick work plastered on both sides (U-value = 1.98 W/m2K) Roof: 150 mm concrete root slab + 100 mm brick coba + roof tile finish (U-value = 2.43 W/m2K) Glass: Single clear 6 mm glass (U-value = 5.7 W/m2K) EPI = 605 kWh/m2 p.a.
Fortis Hospital, New Delhi External wall: Cement plaster + 200 mm AAC blocks (U-value = 0.69 W/m2K) Roof: 150 mm RCC + 65 mm vermiculite + 100 mm brick coba + 25 mm tiles (U-value = 0.98 W/m2K) Glass: Double glazed low-E glass (U-value = 2.8 W/m2K) EPI = 593 kWh/m2 p.a. (2% reduction after building envelope optimization) 2. Lighting
Lighting Power Density (LPD) = 20 EPI = 605 kWh/m2 p.a.
W/m2
LPD achieved is less than 10 W/m2 (Energy efficient fixtures and lamps will be used) EPI = 476 kWh/m2p.a. (21% reduction after building envelope + lighting optimization) 3. HVAC
Chiller efficiency = 1.15 KW/TR (Air cooled chiller EPI = 605 kWh/m2 p.a.
Chiller efficiency = 0.61 KW/TR (water cooled screw chiller) EPI = 346 kWh/m2 p.a. (43% reduction after building envelope + lighting + HVAC optimization
4. Controls for HVAC system None EPI = 605 kWh/m2 p.a. Variable frequency drive (VFD) on chilled water pumps, Air handling units (AHUs) EPI = 312 kWh/m2 p.a. (48% reduction after building envelope + lighting + HVAC optimization + controls (Source: BEE, 2007)
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Only the conditioned floor area of approximately 14,633 m2 (1,57,510 ft2) as indicated by sources at TERI has been considered to calculate annual energy consumption instead of the total built-up area of 64,400 m2 declared by BEE. This is because what needs to be measured is the savings in energy consumption brought about by HVAC efficiencies. The following figure shows the calculations of probable CERs from the Fortis building:
Base Case Fortis Reductions Reductions

Head Building envelope, Lighting, HVAC and Controls for HVAC 8852965 4565496 4287469 4287.469 kWh kWh kWh MWh
annually
Emission factors for Northern grid (calculated as prescribed in approved methodology ACM0002/Ver.7)
Simple Operating Margin Emission Factors from 2004-05 to 2006-07 (incl. imports) 2004-05 2005-06 2006-07 North 0.98 1 1 Simple avg. 0.993333 tCO2/MWh Build Margin Emission Factor for 2006-07 (unadjusted for imports) 2006-07 North 0.63
Emission factor for electricity drawn from Northern Electricity grid
0.81167 tCO2/MWh Emission reductions in Fortis (tCO2 p.a.) 3479.995672
Reduction in electricity consumption compared with base case
4287.47 MWh p.a.
In the table above, the energy consumption (in kWh) for the base case and the Fortis buildings have been calculated by multiplying the EPIs of the respective buildings with the conditioned floor area, and energy use reductions are depicted in megawatt-hours. Using the approved methodology ACM0002/Ver.7 for CDM projects the consolidated method
for grid-connected electricity generation from renewable sources the average operating margin (OM) emission factor is calculated as 0.9933 tCO2/MWh, the build margin (BM) emission factor as 0.63 tCO2/MWh and the combined margin (CM) emission factor as 0.8117 tCO2/MWh assuming 50% new capacity additions in the grid, and thus an equal weight for OM and BM, a conservative estimate. This CM emission factor when multiplied with the energy use reductions gives the probable reductions in carbon emissions from the project as approximately 3,480 tCO2 p.a. or 3,480 CERs. The figure is not a very impressive one when compared with other projects in the CDM pipeline in Table 4. Individual projects in buildings thus fail to garner high CERs unless major expenditure to import improved technology is incurred. This was not the case with Fortis Hospital, which makes use of indigenously available materials and technology. Of course, the calculations suffer from limitations as described earlier but with simultaneous increase and decrease of emission reductions as a consequence of the respective limitations, the final figure could more or less be as estimated here. The ground is set to further delve into what the supply side of buildings views as the most viable forms of building projects in the carbon markets.
4.5.
RESPONSE ANALYSIS OF INTERVIEWS
During the course of the project, the author conducted unstructured interviews and interacted with officials at the decision-making levels of organizations directly or indirectly related with the supply of buildings in the Indian market. The aim was not only to gauge the awareness level with respect to carbon credit earnings potential through buildings among them, but also go a step further in assessing from discussions their views on the most suitable form of earning through buildings in the carbon markets and the lacunae they see in effective implementation of such projects in the near future. It would not be off course looking into the various means of carbon credit earnings from buildings, at this stage. The global carbon markets can very simply be divided into two categories, based on the regulatory necessity of such a project:
1. Regulated markets where carbon markets arise based on some global, state or regional interventions to reduce GHG emissions. For e.g., the CDM, the European Union Emissions Trading Scheme (EU ETS), the New South Wales Greenhouse Gas Abatement Scheme, etc. 2. Voluntary markets representing consumer demand for action on climate change, with projects arising primarily on the basis of individual efforts to mitigate emissions not necessarily mandated by a global, state-level or regional agreement. This can be in the form of the structured exchange-driven market of Chicago Climate Exchange (CCX) or the more disaggregated over-the-counter (OTC) markets with standards like the Voluntary Carbon Standard (VCS), the Gold Standard, VER+, etc.
As stated earlier, the author elicited responses from the industry experts for the following forms of the carbon markets:
Carbon Markets
CDM
Voluntary
Singleproject
Bundle
Programme of Activities (PoA)
VCS, Gold Standard, VER+, etc.
FIGURE 1: CARBON MARKETS AND PROJECT TYPES COVERED DURING INTERVIEWS
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Bundling and PoAs offer great scope for exploiting the mitigation potential in buildings in principle. In a PoA, emission reductions are achieved by multiple verifiable activities executed over time as a result of a government measure or private sector initiative. Bundling, on the other hand, involves several individual and independent projects bundled together to reduce CDM-related transaction costs. In both cases, the winning entity is the small-scale project participant who finds the costs of going through the CDM process too prohibitive in small projects yielding low credits, or even a big-scale participant with similar projects in the pipeline at varying locations and varying points of time in the future. The buildings sector in India can definitely benefit from such arrangements and hence, the response-seeking in this regard. More details about programmes and bundles can be looked up in Annexure 1 Based on the interviews and interactions with industry experts, the table of responses is presented below :
TABLE 6: RESPONSES REGARDING CARBON MARKETS AND THE BUILDINGS SECTOR IN INDIA
(Source: Interviews with industry experts, May 2008)
The responses seem to be a mixed bag of sorts. Though most (93%) of the parties interviewed seemed positive about single-project CDM gaining prominence for buildings in the coming years, there was a palpable doubt regarding the scope of aspects of mitigation covered within a project due to absence of a comprehensive methodology. Bundled and
PoA modes in CDM met with reduced enthusiasm, majorly due to the lack of clear cut guidance on their modalities on the part of the CDM executive board. Voluntary markets as a source of utilizing the potentials in Indian buildings, found more takers among the consultants than among the builders and architects community. This was partly due to the better understanding of the consultants with respect to the functioning and credibility of voluntary markets.
4.5.1. BUILDERS
The builders have mammoth plans in mind the implications of DLF investing Rs. 1250 crore for developing multiplexes or Omaxe lining up $20 bn to build low-cost homes are grave in a growing realty market where sustainable design and use of resources in buildings is secondary to profits. However, one interviewed had already started contemplating the programmatic CDM (pCDM) mode to earn carbon credits from their products. It was stated that a greater deal of transparency needed to exist between the builder community and research and aiding organizations like TERI and BEE so that proper methodologies to integrate all aspects of emission mitigation in buildings could be developed. A willingness on the part of the builder to provide data of use in this regard was well accepted by TERI on being apprised by the author. However, there was felt an opportunity loss by way of carbon credits forgone for want of enough experts in the field, proficient in engineering, design and climate change, as their absence meant that builders like themselves could not exploit the carbon markets fully though having reached a scale of operations where energy-efficient technologies are easier to employ. Bundling projects did not seem to have the same shine as PoAs did, in the builders perception. In addition to vague specifications and non-existent clarifications regarding the same, there was no real incentive to go for bundling given the uncertainty regarding presence of other builders willing to go the same way. Of course, had smaller developers been a part of the interviews, perceptions could have been different as they are the ones more susceptible to high transaction costs of CDM.
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Voluntary markets met with a marked indifference among the builders interviewed, as in their opinion CDM was the way forward as of now, with voluntary markets in India yet to show the robustness demanded to garner credibility. As far as the large-scale builders community goes, earnings from buildings in carbon markets (CDM specifically) is a believable possibility. Experts paucity and vague specifications for the non-conventional modes of CDM could however, spill water on this positivity, more so given that projects today take a much longer time to get registered in CDM, and thus any methodology developed to address the issues could have to wait longer than the Kyoto period of 2012 to find credibility. Uncertainty rules the way forward.
4.5.2. ARCHITECTS
The architect community holds an interesting position in the entire spectrum of earning carbon credits from buildings. They are the entities that hold the key in designing the whole building in a manner that ensures emission reductions eventually, and they are also the entities that are least informed about the potential of earnings from buildings in the carbon markets. Architects the author interviewed were, as they admitted, among the few in their community who were aware of the carbon markets firstly, and that too the role of buildings in them. The fault lay in the education system itself, where the section related to green buildings is taught as part of the 10% theoretical learning as against the 90% studio learning that forms the crux of architectural studies. Consequently, very less is actually implemented in real life at the initiative of the architect. Secondly, with a lack of expert knowledge to validate the energy and resource savings, the architects are faced with the doubt whether the building designed would indeed attain the savings as envisaged. Though the architect community interviewed was positive about buildings earning carbon credits in the future, they neither had any idea about various modes of CDM registration, nor about the voluntary markets. Some of the recommendations that came up to improve the condition in the architect community with regard to them voluntarily lobbying for green buildings and carbon credit earnings from them are:
Governments should have a proactive marketing cell for information dissemination. Advertising in a big way would help the cause, and India has a lot to gain in the process.
Advertisements need to be pushed by carbon credit trading companies too, to generate curiosity.
The Council of Architects too could contribute by tying-up with builders & carbon credit companies and aid the information dissemination process.
What the architects suggest could truly help the process of making all entities related to buildings the supply side as well as the end users more aware with respect to the need of having resource efficient buildings which could also earn carbon credits for the project participants, but the suggestions presume one certainty: that the systems (legal, regulatory, resource-based and norm-based) necessary to corroborate the surge in such projects following greater awareness in the community, exist and are functional.
4.5.3. ENERGY SERVICE COMPANIES

As far as commercial and residential buildings are concerned, a builder can enter into longterm installment payment contracts or lease purchase agreements of up to 10 years for the evaluation, recommendation, purchase and installation of energy conservation measures. An ESCO provides a package of these services and guarantees the savings. With proper coordination between a builder and the ESCO, such projects could also be developed as carbon projects with the credits being shared between the two entities. An ESCO could, in a way, ensure that energy savings indeed materialize, with the concomitant reductions in emissions, which would also lead to greater probability of the building project being accepted as a carbon project, given the current rate of registrations in the CDM market slowing significantly (Capoor and Ambrosi 2008).
34
The ESCO the author interviewed is the biggest in the Indian energy service industry. The feedback was quite contrary to what the entities directly related with buildings (builders and architects) presented. According to them, the Indian scenario for energy efficiency in buildings is not very strong with builders not very forthcoming in dealing with ESCOs as yet, due to the nascent stage of the industry in India today. Experts in energy reduction avenues having proficiency in financial engineering are hard to come by, and in spite of regular trainings imparted by the said ESCO to its employees, it has lost many of the leading experts to ESCOs in Singapore. Policy initiatives like the Three-Country Energy Efficiency Project (3CEE) initiated by UNEP and World Bank do serve a purpose in developing financial intermediation mechanisms within India, but they are also stunted by opposing policies at the national level. Neither in their earlier projects, nor in their future ones (Batra Hospitals and AIIMS in Delhi) have they thought to explore the carbon markets for earnings. Completely against buildings using the carbon markets in the near future, both in the individual project and the PoA modes, there was a hint of uncertainty with respect to rejecting the bundling mode outright. This was attributed to high transaction costs associated even with PoAs (Rs. 10 lakh, as mentioned), a barrier which could not be easily overcome unless the parties involved are large enough to bear the costs. Bundling could be a solution here, but lack of clear guidelines with respect to such projects and also a precedent being absent leave room for doubts. But the voluntary markets could be effectively tapped by the buildings sector in connivance with the ESCOs due to the more globally accepted standards increasingly reliable now. Here too, there is no precedence with respect to buildings, but the outlook is bright given that with the share of Asia in the global supply of Verified Emission Reductions (VERs) topped in 2007, with an increased percentage of energy efficiency projects. Though the points leveled against the buildings in the CDM markets are compelling, the positive attitude attached to the voluntary markets just on the basis of a report when similar cases can be built for buildings in the CDM market too seems to be more a biased judgment than one built on strong objective foundations.
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4.5.4. ENVIRONMENTAL CONSULTANTS, STATE AND CORPORATE GOVERNING AND

AIDING AGENCIES
The experts interviewed under these heads offered views similar to the ones seen in the previous sections, though more at the positive end of the spectrum. There was general agreement among the interviewees regarding the prospects of buildings in the singleproject mode, with recent cases being quoted. Bundled mode and the voluntary markets too found favour with the environmental consultants given the opportunities they offered. Specially with respect to the voluntary markets, there was increased hope on the part of the environmental consultants with mainstream CDM projects taking longer to be registered, with proportional increase in associated costs. With the voluntary markets looking up in India with the increased participation of organizations like the German Development Corporation (GTZ), SKG Sangha and EnerGHG in India by supplying VERs through primary projects, there is a widespread belief among the environmental consultants in India that voluntary markets have only further up to go. This was taken a step further with one of the consultants acknowledging that energy efficiency in buildings particularly commercial could be tapped easily in this regard, and efforts were on to develop projects for particular clients. However, the PoA mode of CDM projects seemed to find less favour with them on account of lack of experts who could integrate the various energy efficient design, material and equipments into one binding baseline methodology, and develop a first in the buildings sector. State and corporate governing/aiding agencies were, expectedly in the case of the former and unexpectedly in the case of the latter, against the voluntary markets being ripe for carbon projects in buildings. As the corporate-led agency put it, small-scale players who form the bulk of the voluntary markets would not have the wherewithal to incorporate the upfront costs associated with energy-efficient buildings without the support of entities like ESCOs, an industry still undeveloped and little-known in India. Though the state-led governing bodies remained uncertain about bundling of building projects in CDM (a
misgiving not substantiated by them), PoA found relative favour with a mention of a Design Document being under development by South Pole Carbon Asset Management Ltd. Barring the biased judgment meted out to the voluntary markets by the state-run governing body, the responses seem to be free of subjective influences and show the prospects of buildings and carbon markets in relatively good light.
4.5.5. LATERAL COMPARISON OF VARIOUS OPTIONS OF BUILDINGS AND THE CARBON MARKETS
Single-project CDM did find its share of takers, though largely in principle. Bundled projects failed to attract the attention of a majority (87%) of the responders. PoA and the voluntary markets found a few supporters and other dubious remarks. PoA in particular, though offering significant opportunities to the buildings sector in India by way of claiming credits from multiple activities in the future, spread geographically, largely stayed in the grey line. The reasons were: Demanding monitoring requirements of decentralized CDM Programme Activities (CPAs) Methodology limited to one in a PoA (as against single-projects which can use several methodologies in the same project) The liability for adding a CPA to the PoA being with the Designated Operational Entity (DOE), small private players might struggle to cope with the probable attempt on the part of the DOE to transfer the risk back to the PoA manager or to recover risk premium.
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4.6.
BARRIERS TO BUILDINGS FULLY UTILIZING THE CARBON
MARKETS IN INDIA
Despite the relatively favorable general policy framework to support energy efficiency, there are several barriers to the actual implementation of these measures in buildings in India. The identified barriers range from the still inadequate legal and regulatory framework that limits the role of ESCOs to different information, capacity and financial barriers, as enunciated by the various industry experts: 1. Higher upfront costs All energy efficiency technologies have a higher cost of investment than the standard technology. Builders are either too short-sighted to value the lower operational costs during the lifetime of the equipment and material, or too cash-stripped to be able to afford them. ESCOs can bail out the builder by providing energy savings guarantee as well as financing schemes, but if taken up as a carbon project, they would also demand a share in the credits. The end-users of buildings, who in most cases are not even aware of the specific energy efficiency technologies and their costs vis--vis their cost saving potential are often not ready to invest more for parts of such buildings. 2. Non-existing BEMS Most building managers are overloaded with daily routines and therefore do not have the time to think about an integrated energy management system. They are hesitant to employ a new, unknown technology that may require skills beyond their qualification. Thus, with no proper system to ensure that the energy savings forecasted would actually take place, carbon credits would be all the more difficult to earn. 3. Transaction cost barriers A trivial, but often overlooked barrier is the transaction cost accruing if one has to address many different owners/operators of buildings. This essentially limits CDM projects to large scale commercial buildings. But even here, the annual emission reduction lies between 500 and 10,000 tonne, which may not be enough to cover the
CDM-related transaction costs (Singh and Michaelowa 2004). Programs for appliance dissemination such as air-conditioners, windows and CFLs may overcome this barrier if they are large enough; monitoring of the equipment use may however be challenging. So far, no large-scale project of this type has an approved baseline and monitoring methodology. 4. Lack of experts Buildings as CDM projects not only require one to be conversant with the nitty-gritty of design, engineering and finance, but also the carbon markets. All-round experts in such fields are hard to come by. Even in the ESCO community, experts who could conceptualize innovative financial structures to ensure smooth implementation of energy-efficiency measures in the buildings are in short supply. Rather than stifle in the stagnant Indian market, these experts prefer to go to the South-east Asian shores. 5. Cost-benefit accrual divergence Misplaced incentives occur when intermediaries are involved in decisions to purchase energy-saving technologies, or agents responsible for investment decisions are different from those benefiting from the energy savings, for instance due to fragmented institutional organizational structures. This limits the consumers role and often leads to an under-emphasis on investments in energy efficiency. For example, in residential buildings, landlords often provide the AC equipment and major appliances and decide on building renovation, while the tenant pays the energy bill. As a result, the landlord is not likely to invest in energy efficiency, since he or she is not the one rewarded for the investment. 6. Lack of initiative A strange barrier to buildings in India utilizing the carbon markets, as observed by the author during the interview process, is the lethargic pace at which ideas and action move in the buildings industry. Every industry expert interviewed mentioned that with experts in the field lacking, there needs to be greater integration between the workings of the various stakeholders the builders, architects, energy consultants but everyone
expected the other person to take the first step in initiating the process. Admittedly, the levels of market flows existing in the Indian economy are still not completely free, but just expecting others to do the dirty job of methodology development while waiting to free ride on the results will mean opportunities wasted.
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CHAPTER 5: RECOMMENDATIONS AND CONCLUSION

5.1. RECOMMENDATIONS
Given the limitations existing in the Indian policy framework as well as industry experience, following measures could be adopted at various stages in India, with each successful implementation serving as a feedstock for a tighter emissions stage from buildings: Clear and easily understandable mandatory energy performance labeling, standards, rating schemes and codes for buildings, appliances and lighting. Efforts must be doubled with respect to removing the systemic limitations which keep codes like the ECBC from becoming mandatory. Robust government incentive programs and market-based mechanisms to trigger improvements in energy efficiency in new and existing buildings and to foster innovation in the design and operation of buildings. Education programs for operators and occupants of commercial and residential buildings to promote energy efficiency and to drive changes in their behaviour. Government policies that promote building materials with lower associated GHG impacts. Greater transparency, awareness and control of energy demand in new and existing buildings, coupled with financial incentives to retrofit and renovate existing housing and commercial building stocks.
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5.2.
CONCLUSION
Buildings are one of the main consumers of energy and a significant contributor of GHG emissions, not only in India but the world over. There is significant scope in cities and residential and commercial developments to improve energy efficiency and lower carbon intensity. A mega shift towards improved energy efficiency and GHG elimination should be encouraged through firstly securing the systemic ties of the sector by making improved technology easily accessible and secondly by making building codes like ECBC mandatory and providing fiscal and/or trade incentives to builders adopting rating systems like LEED and TERI-GRIHA for their buildings. The urgency in the building sector stems from the fact that the incorporation of low-energy and low-GHG designs is more easily implemented in new construction than through retrofit. However, due to the long lives of buildings, retrofit of existing buildings must also be a priority. These actions can significantly reduce the carbon footprint of Indias cities. In the short term, energy efficiency improvements can be achieved by using energy-efficient appliances, low-energy lighting and behavioral changes driven by greater awareness. The scope for buildings claiming carbon credits for these attempts too cannot be underrated, though care must be taken in such cases to ensure that the costs borne for ensuring emission reductions warrant proportionate returns to the parties concerned. Many design practices and technologies that can make a real difference are available today but not always used. Encouraging their use, for example, through holistic design approaches could improve energy efficiency and the corresponding carbon footprint by as much as 50% for retrofit projects and upwards of 80% for new construction projects (WBCSD 2007). The use of more local materials and certified wood in buildings will also reduce CO2 impacts and depletion of natural resources. Education and awareness could create significant improvements in energy consumption by altering the behavior of the users and occupiers of buildings. Building owners provided with the right information would be able to make bottom-line decisions very rapidly on use
of lighting, appliances, or envelope adjustments such as shading through the use of blinds. Of course, these entail investments in time, money and resources, but the path is clear either Indian cities lead the global scene in low- or zero-carbon buildings by utilizing the vast swathe of local knowledge available at the grassroots, or become bigger energy guzzlers by the day. The earnings potential that carbon markets would bring in the future, whatever be the outcome post-2012, is significant and for the builder, architect, consultant and ESCO community to capture and share with the end users.
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BIBLIOGRAPHY
http://cd4cdm.org. http://unfccc.org. Alam, M, J Sathaye, and D Barnes. "Urban household energy use in India: Efficiency and Policy implications." Energy Policy, 1998: 885-891. Beerepoot, M, and N Beerepoot. "Government regulation as an incentive for innovation: Evidence from energy performance regulation in the Dutch residential building sector." Energy Policy, 2007: 4812-4825. Bonneville, E, and A Rialhe. "Demand-side management for residential and commercial end-users." Efficiency & Eco-design, 2006. Capoor, K, and P Ambrosi. State and Trends of the Carbon Markets 2008. Washington, D.C.: World Bank Institute, 2008. Chedid, R, and R Ghajar. "Assessment of energy efficiency options in the building sector of Lebanon." Energy Policy, 2004: 647-655. Cherail, K. "Energy efficiency projects, CDM and climate change mitigation opportunities." IREDA News, AprilJune 2007: 42-46. Debnath, A, S Singh, and Y Singh. "Comparative assessment of energy requirements for different types of residential buildings in India." Energy and Buildings, 1995: 141-146. Ecosystem Marketplace and New Carbon Finance. Forging a Frontier: State of the Voluntary Carbon Markets 2008. Ecosystem Marketplace/New Carbon Finance, 2008. Figueres, C. "Note on Policies, Programs and Bundles in the CDM." Carbon Finance Unit - World Bank, 2006. Georgopoulou, E, Y Sarafidis, S Mirasgedis, C Balaras, A Gaglia, and D Lalas. "Evaluating the need for economic support policies in promoting greenhouse gas emission reduction measures in the building sector: The case of Greece." Energy Policy, 2006: 2012-2031. Hacker, J, T Saulles, A Minson, and M Holmes. "Embodied and operational carbon dioxide emissions from housing: a case study on the effects of thermal mass and climate change." Energy and Buildings, 2008: 375384. Hinostroza, M, C Cheng, X Zhu, J Fenhann, C Figueres, and F Avendano. Potentials and barriers for end-use energy efficiency under programmatic CDM. Working Paper, CD4CDM, 2007. The Energy and Resources Institute 44
Holmes, M, and J Hacker. "Climate change, thermal comfort and energy: Meeting the design challenges of the 21st century." Energy and Buildings, 2007: 802-814. IEA. "Energy Statistics Manual." Luxembourg: OECD/IEA, 2005. IGBC. "LEED India - Green Building Rating System: Abridged Reference Guide." Indian Green Building Council, 2007. IPCC. Climate Change 2007: Mitigation. Contribution of Working Group III to the Fourth Assessment Report of the Intergovernmental Panel on Climate Change. Cambridge: Cambridge University Press, 2007. Medrano, M, A Castell, G Fontanals, C Castellon, and L Cabeza. "Economics and climate change emissions analysis of a bioclimatic institutional building with trigeneration and solar support." Applied Thermal Engineering, 2008. Paul, S, and R Bhattacharya. "CO2 emission from energy use in India: A decomposition analysis." Energy Policy, 2004: 585-593. Perez-Lombard, L, J Ortiz, and C Pout. "A review on buildings energy consumption information." Energy and Buildings, 2008: 394-398. Pinkse, J, and M Dommisse. "Overcoming barriers to sustainability: An explanation of residential builders' reluctance to adopt clean technologies." Business Strategy and the Environment, 2008. Reddy, S. "Overcoming the energy efficiency gap in India's household sector." Energy Policy, 2003: 1117-1127. Reddy, S, and P Balachandra. "Dynamics of technology shifts in the household sector: Implications for clean development mechanism." Energy Policy, 2006: 2586-2599. Shreshta, R, S Sharma, G Timilsina, and S Kumar. Baseline Methodologies for Clean Development Mechanism Projects: A guidebook. Roskilde: UNEP Riso Centre, 2005. Simha, R. "HVAC in Green Buildings." Independent Paper, 2004. Singh, I, and A Michaelowa. Indian urban building sector: CDM potential through energy efficiency in electricity consumption. Discussion Paper, Hamburg: Hamburg Institute of International Economics (HWWA), 2004. Taiyab, N. Exploring the market for voluntary carbon offsets. London: International Institute for Environment and Development (IIED), 2006. UNDP. Human Development Report 2007/2008. Fighting climate change: Human solidarity in a divided world. New York: Palgrave Macmillan, 2007.
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UNEP. Buildings and Climate Change: Status, challenges and opportunities. UNEP, 2007. UNEP Riso Centre. CD4CDM. May 2008. http://cd4cdm.org/ (accessed May 14, 2008). Urge-Vorsatz, D, and A Novikova. "Potentials and costs of carbon dioxide mitigation in the world's buildings." Energy Policy, 2008: 642-661. WBCSD. Energy and Climate Trilogy. Geneva: World Business Council for Sustainable Development, 2007. WBCSD. Energy Efficiency in Buildings: Business realities and opportunities. Summary Report, Geneva: World Business Council for Sustainable Development, 2007.
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ANNEXURES
1. NOTE ON POLICIES, PROGRAMS AND BUNDLES IN THE CDM
In December 2005 the COP/MOP1 held in Montreal ruled on the consideration of policies, programs and large-scale bundles in the CDM. Without prejudging detailed clarification that may be emitted by the Executive Board, this note suggests some practical definitions and examples that could be used to distinguish among the three concepts. In the COP/MOP 1 decision containing Further Guidance Relating to the CDM, paragraphs 20 and 21 state: a local/regional/national policy or standard cannot be considered as a clean development mechanism project activity project activities under a programme of activities can be registered as a single clean development mechanism project activity provided that CDM methodological requirements are met. large scale project activities under the clean development mechanism can be bundled 1. Policies and Standards Accordingly, policies and standards are not eligible as CDM project activities. Policies could be defined as governmental courses of action taken with the purpose of guiding or determining decisions and trends. Policies may be binding or non-binding (e.g. policy to increase share of renewable energy). Standards are government regulations to standardize some features of a product or of an activity. While policies and standards can lead to GHG reductions, the above decision renders them not eligible for the CDM possibly due to (i) the difficulty in attributing an observed GHG reduction to a particular policy or standard; and (ii) the difficulty in verifying the corresponding GHG impact (e.g. a tax on fossil fuels would likely not be eligible as a CDM project activity). While a policy cannot be considered a CDM project activity, its adoption need not make an otherwise eligible and concrete CDM project activity non-additional. At its 22nd meeting the Executive Board ruled that policies that encourage lower emissions do not need to be taken into account in the baseline if the policy was implemented since the adoption of the
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CDM Modalities and Procedures in November, 2001 (i.e. the baseline scenario can refer to a hypothetical situation without the national and/or sectoral policies or regulations being in place).
2. CDM program of activities
Paragraph 20 rules that a CDM program of activities is eligible as a CDM project activity, although it does not define a program of activities. A CDM program could be defined as one in which emission reductions are achieved by multiple verifiable activities executed over time as a result of a government measure or private sector initiative. Program characteristics could include the following: It is a deliberate program, public or private sector based, put in place in order to provide an incentive for GHG mitigating actions. The program results in a multitude of GHG reducing actions occurring in multiple sites. The sites could be located within one city, one region or one country, depending on the design of the program. The GHG reducing actions do not necessarily occur at the same time, but rather throughout the life of the program. The type and the size of the emission reducing actions induced by the program may not be known at the time of project registration. However, possible types of expected actions have to be identifiable ex-ante for the purpose of selecting the appropriate baseline and monitoring methodologies, and all emission reductions must be verified ex-post to ascertain the actual reduction achieved by the overall program. CERs are not issued based on the ex-ante estimation, but rather on the expost quantification and verification. While GHG reducing actions can be implemented by one or more entities, the responsibility for designing the program and overseeing the execution of its various activities lies with the program agent or main project participant (e.g. NGO, governmental institution, federation, energy service company (ESCO), single company, financial intermediary, etc). The program agent can have agreements with other participants for the distribution of CERs. 2a. Examples of CDM programs
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An example of a CDM program could be a soft loan program for renewable energy. A development bank, the public utility or an NGO could choose to set up a soft loan program accessible to those who purchase and install solar water heaters. A second example could be a private company that uses CDM revenues to finance a price discount on the energy efficient equipment it sells, or an energy service company (ESCO) that finances the purchase of energy efficient equipment to be paid back with the energy savings. A third example could be a labeling program for appliances. The Board of Standards, the energy efficiency agency or the public utility of a country could choose to set up a performance labeling and testing program, in order to incentivize the sale of higher efficiency appliances. In all cases, the program agent puts the program in place, and the GHG reducing actions are achieved by the end users (households/offices, etc) that purchase the more efficient appliances, solar water heaters or other energy efficient equipment, over a period of time as a result of the program. The level of GHG reductions will only be known once the equipment is installed and functioning, and CERs are not issued until verification has taken place. 2b. Reach of programs The inclusion of programs in the CDM broadens the access to the CDM. The structure of programs can allow the CDM to reach out to households, small enterprises and the transportation sector, all of which are currently underrepresented in the CDM due to their dispersed nature and high transaction costs. Programs are particularly appropriate for energy efficiency and fuel switching activities, as many of these activities do not occur as stand-alone actions but rather as the result of a deliberate program that seeks to provide and incentive for a large number of activities executed over time at many locations. Programs can be incrementally applied to whole sectors, regions or countries, thus facilitating much needed systemic transformation in the energy and transportation sectors. 3. Bundle Paragraph 21 defines that bundling of large scale project activities is allowed under the CDM. A bundle is distinct from a program. In a bundle each project could be undertaken individually as a CDM project activity (e.g. three wind power projects) and are only
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bundled together in order to reduce CDM-related transaction costs. The following table summarizes the differences that could exist between a bundle and a program. 4. Need for EB clarification The Executive Board has not emitted guidance on the modalities either for programs or for large-scale bundles in the CDM. Without making any changes in the modalities and procedures established by the Marrakech Accords, the Executive Board could ensure the environmental integrity of such CDM project activities by providing guidance on the following specific issues: For programs exclusively: Definition of a program of activities. The program agent must be a project participant. The type and sizes of expected GHG reducing actions must be identified ex-ante for purposes of choosing the appropriate methodologies, but emission reductions of all actions must be measured and verified ex-post (inter alia through accepted sampling techniques) as the basis for the issuance of CERs. For both programs and bundles: In the cases where there are different types of GHG reducing actions, each type must be quantified according to an appropriate approved baseline methodology, even if that means that several methodologies are included in the same PDD. In the cases where there are many small GHG reducing actions the project participant must propose appropriate sampling tools in the PDD. All CDM rules and clarifications, including those on national/sectoral policies, apply to programs and bundles.
IV
2. INDICATIVE LIST OF QUESTIONS TO ARCHITECTS

a) Whats the overall process of an architects job? How do things move? Do builders/customers come directly, based on the reputation of the architect? b) How much say does the architect have on the final design of the building? c) Do the architects, builders and contractors work in tandem or does the architect hand over the design to the builders? d) How much (in rough % terms) is the demand for green buildings? What parts of it are accounted for by the commercial & residential sectors? Is the demand more from individual establishments/entities or big builders/developers? e) How keen are builders in getting their products certified through ratings like LEED, TERI-GRIHA, etc.? How much do you (you, meaning, an architect) consider recommendations of these ratings while designing the blueprint? f) In your opinion, how aware is the architect community of the fact that reduction in emissions from buildings by energy-efficient design and fittings are eligible for carbon credits? Does awareness translate into consultancy in this regard? g) What are the barriers to the promulgation of green buildings in India? Retrofitting, and commissioning of new buildings, both can work out at significantly low incremental costs if only the vision is applied right at the start. Whats stopping this vision? Is it indifference? Or ignorance? Or both?
3. INDICATIVE LIST OF QUESTIONS TO BUILDERS
a) What main projects currently on? b) What considerations paramount while constructing? Details c) Demand of future-owners considered? Or product made, demand develops by brand? d) Process of construction (understand whether integrated process or separate w.r.t. themselves and architects) e) Commissioning? Performance contracting (through ESCOs like DSCL ESCO Ltd., Asian Electronics Ltd., Shri Shakti Alternative Energy Ltd., etc.) f) Ratings? (GRIHA, LEED, etc.) g) Considered producing energy-efficient buildings to earn carbon credits (either under CDM or voluntary markets)? a. Yes, what steps? If no steps, why not? b. No, why? (Ignorance, benefit of energy-efficiency to owners only, transaction costs, other) h) Barriers to buildings exploiting the carbon credits market in India (assuming the person knows about the carbon market) i) Where do you see the future going? You believe energy efficiency would be required to be seriously pursued? a. Yes, what steps u r taking? b. No, why? j) If it doesnt crop by now, aware of BEE and ECBC?
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4. INDICATIVE LIST OF QUESTIONS TO ESCOS
a) Hows the Indian scenario like? How forthcoming are builders, business establishments, etc. in dealing with ESCOs? b) How rich, in your opinion, is the talent pool in the ESCO business? Are experts in financial engineering proportionate to the requirement? c) Policy initiatives like the 3CEE project initiated by the UNEP & World Bank how effective in developing financial intermediation mechanisms? d) ESCOs generally dont have large assets to bank on. How does DSCL deal with this, in regard to convincing the clients about the certainty of energy & cost savings? Does having a brand significantly help at this stage? e) When did you do the retrofit project for Palika Kendra? (If post-enforcement of KP, did you consider going through the CDM route?) f) What are your future projects like? Do you now consider going the CDM or voluntary carbon markets way? Details g) pCDM can lead to cost reductions with regard to multiple locations, at different time periods & also many small energy-efficiency projects of yours your take? h) Owner/occupant training is a key part in the performance contracting process how effective is it, in reality, in ensuring that the energy savings predicted actually materialize? In cases of light retrofit (like in Palika), things are simpler. What about more complex EE measures like controlled conditioning & daylighting like through clerestories, lightshelves, etc. (if this is within your domain)? i) Any other barriers you see to the ESCO companies exploiting the carbon markets?
VII

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Exploring the Buildings sector in India for climate change mitigation

The Energy and Resources Institute

Indian Institute of Forest Management Bhopal - 462 003

Place: New Delhi Date: 7th June, 2008

(Siddharth M. Iyer) PGDFM 2007-09

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The Energy and Resources Institute

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Barriers to buildings fully utilizing the carbon markets in India ............................................................................38

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NEED FOR THE STUDY

OBJECTIVES OF THE STUDY

1.5. SCOPE OF THE STUDY

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CHAPTER 2: LITERATURE REVIEW

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controlling emissions of non-CO2 GHGs

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3.1. SAMPLING METHOD

3.2. DATA COLLECTION TOOLS

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3.3. LIMITATIONS OF THE STUDY

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CHAPTER 4: RESULTS AND DISCUSSION

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4.1.1. RESOURCE EFFICIENT TERI RETREAT FOR ENVIRONMENTAL AWARENESS

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Average recorded temperature

Recorded relative humidity -

Ambient relative humidity -

conditioned evaporative and EAT summer,

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GHG MITIGATION OPTIONS IN BUILDINGS

Specifics of some of the various measures are detailed below:

4.2.1. INNOVATIVE BUILDING DESIGN AND MATERIALS USE

4.2.2. LIGHTING AND APPLIANCES

4.2.3. FOSSIL FUEL ALTERNATIVES

BUILDINGS AND THE CARBON MARKETS IN INDIA

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TABLE 4: CDM PROJECTS IN THE BUILDINGS SECTOR IN INDIA

Name of the Project

Approximate emission reductions (tCO2/yr.)

Improvement Sonar Bangla)

efficiency chillers in EIH

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ESTIMATING PROBABLE CARBON CREDITS FROM FORTIS

HOSPITAL SHALIMARBAGH, NEW DELHI

Lighting Power Density (LPD) = 20 EPI = 605 kWh/m2 p.a.

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Base Case Fortis Reductions Reductions

Emission factor for electricity drawn from Northern Electricity grid

0.81167 tCO2/MWh Emission reductions in Fortis (tCO2 p.a.) 3479.995672