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Opinion

Phl greenhouse gas emissions commitment

THE CORNER ORACLE - Andrew J. Masigan - The Philippine Star

Last year, the Philippines made its commitment to the United Nations Framework Convention on Climate Change (UNFCCC) to reduce the country’s greenhouse gas emissions. Based on a business-as-usual scenario, government estimates that the country will emit 3,340.3 metric tons of carbon dioxide from 2020 to 2030. The Philippine government made a nationally determined commitment (NDC) to reduce this number by 75 percent from 2030 onwards. It is an ambitious target by world standards.

For those unaware, a country’s NDC is a detailed plan and commitment on how it will reduce emissions and mitigate the impacts of climate change. In the case of the Philippines, the 75 percent reduction will be derived from the agriculture, waste, industry, transport, energy and property sectors. Of the 75 percent target, 72.29 percent is conditional or dependent on access to climate finance and technologies from developed countries. After all, the Philippines has little to no technological capacities in carbon emission mitigation. The balance of the target, or 2.71 percent, will be implemented through domestic reforms.

The NDCs of countries are the basis of the Paris Agreement, which seeks to limit the increase of global temperatures by 1.5 degrees Celsius. As we are all aware, to exceed the 1.5 degrees Celsius threshold will trigger changes in the planet’s atmospherical balance and this could be fatal to all life forms. Time is ticking and nations are accelerating their respective programs to meet their carbon reduction commitments.

The Philippines is behind in its commitment and this is particularly evident in the property sector. As of 2021, only 200 buildings out of hundreds of thousands of edifices around the country are certified green. Most of these green buildings are prestige properties located in central business districts.

The Philippines will do well to follow progressive countries that enact laws to mandate, enable and incentivize property developers to pursue a green strategy.

How can the law be leveraged? The law can mandate a cap on the level of carbon emissions in new buildings. Some countries even withhold the issuance of construction permits if a proposed building exceeds an acceptable carbon emission level. In addition, the law must enable easy access to green technologies, renewable power sources and sustainable construction materials. The law can also incentivize the greening of buildings by way of reduced property and environment taxes or special permission to build higher according to the extent of carbon emission reduction.

The mandate to reduce carbon footprints can apply to existing buildings as well. Renewals of business permits can be made contingent on retrofitting buildings to reduce emissions.

Suffice it to say that the private sector needs to be nudged by government for them to pursue a green strategy. Now is an opportune time since buildings built during the construction boom of the late 90’s and early 2000 are due for renovation.

The International Finance Corporation (IFC) is a member of the World Bank Group. The IFC has a program called Excellence in Design for Greater Efficiencies or EDGE. EDGE is a green building certification system focused on making commercial, residential and industrial buildings more resource-efficient.

Filipino property developers can consult the IFC, through its EDGE desk, for best practices relating to the physics, mechanical equipment, water efficiency and materials – basically all ways to reduce carbon emissions. Once the edifice is built, the IFC can certify it according to three levels. EDGE Level 1 means a building has achieved a 20 percent savings in energy, water use and embodied energy in construction materials. EDGE Level 2 means savings of at least 40 percent was realized. EDGE Level 3 means net zero carbon emissions.

Going green offers many benefits outside protecting the environment. For one, it opens access to funding.    Numerous financial institutions prioritize green projects and provide incentives for property developments that adopt green strategies. Such incentives come in the form of reduced interest rates, longer payment terms and lower equity participation from the owner. Apart from this, green buildings bring prestige, which increases its desirability and allows the developer to command premium lease or selling rates.

One of the barriers in the Philippines is the idea that adopting a green strategy is both expensive and complex. While this may have been true a decade ago, new technologies have made greening new and existing buildings simpler and more affordable. In fact, EDGE has rolled-out several demonstration projects to prove this point. These demonstration projects persuaded numerous land developers, including those in the low-cost housing and industrial segment, to adopt green technologies.

The IFC claims that investments in a green strategy can be recouped in two years on the back of savings on utility bills. Savings derived thereafter translate to improved bottom line profits.

The good news is that the greening of property developments in the Philippines is gaining traction. This year, 50 projects, with a collective area of 865,000 square meters, have been EDGE certified. In the pipeline are some 1.3 million square meters more. In fact, progressive local property firms like Ayala and Phinma have already gone public with their commitments towards being carbon neutral by the year 2030.

The greening of the property sector has begun but much must be done to hasten the process. Government involvement is a must. Again, the new government of Ferdinand Marcos Junior will do well to enact laws that mandate, enable and incentivize the greening of the property sector. There is much to do to catch up with our commitment to reduce carbon emission by 75 percent.

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Email: [email protected]. Follow him on Twitter @aj_masigan

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