Overview

Over half the world's population lives in cities; a figure that is expected to rise to just below 70% by 2050^[1]. At the same time, climate change and its environmental impact on the world is one of the few truly global issues. With urban areas the main source of the world's energy emissions, a concerted effort is needed to provide solutions to what is an ever-growing urban carbon footprint.

According to a 2008 report on energy efficiency in buildings by the World Business Council for Sustainable Development, buildings are responsible for at least 40% of energy use in most countries. For many, the solution lies in 'green buildings' - buildings that minimise harmful emissions into the atmosphere while maximising energy efficiency.

In Asia, the world's most populous continent and home to some of most densely populated urban areas anywhere, the issue is particularly pressing. Creating solutions to this challenge requires a technological and material response, but the greater test will lie in making the product accessible and understandable to users. Crucially, industry actors, both private and public, need to be convinced that green solutions are affordable and economically efficient.

^[1] http://esa.un.org/unup/p2k0data.asp

Facts on the ground

Competing with Emerging Markets

The necessity and relevance of green buildings needs to be coupled with solutions that make economic sense. Increasingly, competition from industry players in emerging markets has convinced established companies in the building and infrastructure industries that their key to market dominance is innovation and capability development. Globally, major corporate players face a situation where the costs and prices of their products and services are higher compared to their counterparts in emerging markets.

What is needed to sustain established brands is the perception of innovation and reliability that accompanies the recognised brand's name and helps to ensure customer loyalty. In Singapore, one of Asia's most developed countries, real estate developer City Developments Limited's spokesperson believes that "greater efficiency in the use of resources such as energy, water and land will contribute to enhancing Singapore's competitiveness in the long run."

Savings: The Bottom Line

With expenditure on energy the single largest outlay in commercial real estate, making buildings more energy efficient can result in greater savings for both developers and tenants. In the past, there would have been a higher initial outlay (from 5 to 10%) to construct a building that incorporates green features. Now, the Asia Business Council's executive director, Mark Clifford, argues that "green buildings now cost only slightly more than conventional buildings (typically 0-4%), and are the cheapest, quickest way that Asian countries can improve energy efficiency."^[2]

Energy efficiency is particularly pressing in the tropical and sub-tropical climate - where high temperatures are the norm for the majority of the year. In these environments, the main concern facing urban real estate is space cooling. The cost of keeping a building's interior cool is estimated by UNESCAP - the UN's Economic and Social Commission for Asia and the Pacific - as taking up 'as much as 60 per cent of the energy demand of modern high-rise buildings in the tropical climate.'^[3]

Jeremy Choy, Project Director of grade-A commercial development Asia Square believes that efficient use of energy in green buildings means savings in utilities and results in lower operating costs for tenants. Adopting green-building architecture in commercial real estate has other benefits too, since it provides "healthier indoor environments that are more conducive for occupants, thus helping tenants boost overall employee wellbeing, satisfaction and productivity levels."

For companies based in developed economies, adopting green solutions can result in a long-term diminished financial outlay. Moreover, in a global market where social responsibility is more prevalent, being perceived as an environmentally conscious actor has an intangible, but equally important, effect. Countries like Singapore, which is conducive for R&D and regulatory structures, are an attractive proposition for private enterprise involved with urban solutions.

^[2] http://www.google.com.sg/url?sa=t&source=web&cd=4&ved=0CDEQFjAD&url=http%3A%2F%2Fevents.cleantech.com%2Ftianjin%2Fsites%2Fdefault%2Ffiles%2F2-MarkClifford-SSTEC_Cleantech_Focus_2010.pdf&rct=j&q=Mark%20Clifford%2C%20green%20buildings%2C%20cost&ei=lcKRTcfGOoTCvQOO0tzxBw&usg=AFQjCNE4I6jw7R8KirB-mQVKtEq6AlbQwQ&sig2=iGDcxz3Dp033jjCA244Bhw
^[3] www.unescap.org/esd/energy/publications/Co-gen/part1ch1.pdf

The Singapore difference

Going Green?

A developed R&D infrastructure, combined with a strong regulatory regime in which to vigorously test new technology and services, is invaluable to companies providing urban solutions. Real estate developers seek leverage from a country's academic and research institutes, custom-built business parks and test-bed areas, and internationally recognised certification in order to achieve energy-efficient, commercially viable constructs.

In Asia, the Singaporean model has two main drivers. One aspect is the regulatory framework driven by the Building and Construction Agency (BCA) - the national regulatory body for the building and construction industry - to test, classify and certify green buildings and urban solutions technology. The other is the concept of 'living labs', which are areas dedicated to the testing, development and demonstration of new technologies. Here, corporations can work with a large pool of specialists, collaborate on R&D projects with research institutes, partner government agencies on prototype projects, or form design teams to tackle urban issues.

Strong Regulatory Framework

Launched in 2005, the BCA Green Mark is a rating tool for green buildings that benchmarks best practices in buildings' environmental design and performance. Depending on the level of environmental performance, buildings are graded according to four categories - rising from the basic 'Certified' to the highest-attainable standard: 'Platinum'. The BCA Green Mark scheme uses much the same criteria as other green building schemes, including the USA-based LEED and the Australia-based Green Star. One notable difference about the BCA Green Mark is its greater emphasis on the building's energy efficiency, which is essential in tropical conditions.

The first office development to receive the BCA Green Mark Platinum Award: the Ocean Financial Centre^[4] optimises energy use and reduces emissions. The building's triple-glazed windows (which maximise natural light and minimise heat gain), and a roof photovoltaic system (which converts solar radiation into electricity) help to achieve overall energy savings of about 35%. Another recipient of the BCA Green Mark Platinum Award certification is the United World College of Southeast Asia's Singapore campus. The building consumes over 40% less energy than conventional buildings of similar size and function, and includes Singapore's first ever solar-powered air conditioning and hot water system, which reduces CO2 emissions, saves natural resources, and reduces energy bills.

To drive the industry towards developing more environmentally friendly buildings, in 2008 Singapore required that all new buildings, and those undergoing major retrofitting (which are above 2,000m² of floor area), comply with minimum green building standards. Singapore is one of the first countries in the world to mandate green building regulation. New public sector developments of more than 5,000m² air-conditioned floor area must attain the 'Platinum' standard, while existing public sector buildings with more than 10,000m² air-conditioned floor area must be retrofitted to the 'Gold Plus' standard by 2020.

BCA has also introduced a series of environmental performance-related incentive schemes for developers and building owners. The S$100 million Green Mark Incentive Scheme for Existing Buildings encourages energy-saving modifications for older developments. These initiatives are aimed at making 80% of Singapore's building stock 'green' by 2030.

Thought Leadership in Asia

Making a building 'green' and energy-efficient is important because it cuts down on long-term operational costs. However, the implementation of green building solutions to improve the efficiency of a building's passive design has yet to gain mainstream following, largely due to a lack of market drivers.

"While developers recognise the benefits in going green, many are also concerned with the capital outlays that come with constructing environmentally friendly and sustainable buildings," reveals Kwok Yan Hoe, Deputy General Manager, Corporate Development, Keppel Land. He believes that many developers are wary of adopting wholesale the materials, design and constructions used in green buildings, perceiving them to be as yet unproven.

In the USA, green buildings are a US$10 billion, 25-year-old industry. In Asia, however, it is still at a nebulous stage where the absence of industry thought leadership in the region compounds developers' wariness to be early adopters. Developers also "face the challenge of engaging and educating tenants on how they too can green their operations and adopt a change in mindset," believes Kwok. Rapid advances in technology, concepts and materials, that often outstrip existing industry standards and regulations, make this even more challenging.

On a macro-level, companies aiming to innovate with technology, talent or services require not just adequate R&D support; they also need to showcase their products and demonstrate commercial proof of concept. The Singapore answer is to provide test beds: integrated living labs that provide a platform for private enterprise to test innovation in the industry by working with each other and with public institutions.

Singapore's Clean Tech Park (CTP), developed by industrial infrastructure innovator JTC Corporation (JTC) and the Singapore Economic Development Board, is a 50-hectare eco-business park next to Nanyang Technological University. It acts a test bed for organisations to demonstrate system-level, clean technology solutions. For example, JTC is working with Singapore's universities to develop a thermal facade that removes heat from the outer skin of CleanTech One, CTP's first building. Using data from this, the team will build thermal modelling software capable of accurately predicting the heat-island effect of a given master plan. Similarly, JTC works closely with companies interested to test-bed and commercialise green urban solutions at the CTP. Using Singapore as a reference site, these solutions can then be scaled up for markets in the Asia Pacific region and beyond.

Integrated Design

One area where the lack of market drivers is most visible is in the adoption of integrated design and solutions. The building industry, especially in Asia, is conservative, argues Owen Wee, Assistant Vice President (Architectural) at developers Surbana International Consultants: "It is always easy to just do the same thing and... fall back to the usual way of design." Commonly, buildings are built using the same procedures, processes and people, all employed separately and very much on a siloed basis. This methodology lacks coordination. Integrated design, in contrast, attempts to integrate the different aspects at a systems level to achieve optimal energy efficiency.

Recognising the need for integrated design, Singapore has taken steps to become a thought leader in the area. On one hand, public sector living labs drive the market demand for integrated solutions. In the case of CleanTech One, JTC Corporation worked with Surbana International to ensure that energy efficiency was kept top of mind even at the initial stage of architecture design. The building design takes into account the direction of wind and sun so as to reduce energy consumption. In the commercial sector, Singapore shopping mall, Harbour Front partnered with Johnson Controls' Building Efficiency Group - an integrated technology solutions provider - to install a chilled water plant system within the mall. To achieve optimal performance, the water chilling system was specifically matched to the building's cooling load profile and own automation and was able to achieve more than 30% reduction in energy costs for Harbour Front.

Urban Solutions

Developers - be they public or private - adopt a bottom-line approach to decision making. Although the cleantech industry is expected to contribute some $3.4 billion to Singapore's GDP, green features - technological, systems or materials - will only achieve wholesale take-up if they make both environmental and economic sense. Singapore provides an enabling environment, providing companies with access to R&D research institutes, governmental assistance and an internationally recognised regulatory regime. Its unique competitive advantage comes in allowing companies to innovate, integrate and, crucially, to showcase the commercial viability of their urban solutions to the people who matter.

^[4] http://www.channelnewsasia.com/stories/singaporelocalnews/view/1112160/1/.html