The Signal is Green!

World Environment Day 2008 is here! Oil prices are going through the roof and that could be terrible news for you as a consumer. But, for an environmentally concerned citizen, it could perhaps be good news as well, especially since more and more cleaner energy alternatives may now become economically viable.

But, as another summer season gets over, what needs to worry you more as a producer or a consumer is something else! It is becoming increasingly clear that power shortage in India is not likely to disappear any soon. While the demand for electricity has kept on growing, the capacity expansion has fallen short of targets both in the Ninth and Tenth plans by about half. According to the government, India will miss the target of adding 78,577MW of power generation capacity by 2012 and the best case scenario will see only an addition of around 35,000MW.

The expected loss in Industrial Production during April-July 2008 only due to power shortages is 35%, according to ASSOCHAM. The all-India deficit in power supply in terms of peak availability and of total energy availability during 2007-08 was 14.8 per cent and 8.4 per cent, respectively, implying that the GDP was less by around 3,50,000 crores only due to power shortage. Given the related job loss and lost income opportunities, one can clearly identify the shortfall in power generation as an important constraint that prevents faster poverty reduction and our meeting the Millennium Development Goals (MDGs).

While initiatives for addition to capacity to meet the growing demand for power need to be accelerated, considerations of sustainable development and the need for efficient resource usage make it imperative also to focus on demand-side management. The Energy Conservation Act, 2001, empowers the Government to take concerted steps to improve energy efficiency and conservation in the Indian economy. Among other things, the Act provides for notifying energy intensive industries, establishments and commercial buildings as ‘designated consumers’ and to prescribe energy consumption standards for them. The Act also provides for Energy Conservation Building Codes (ECBC) for efficient use of energy and its conservation in commercial buildings.

In this context, the setting up of the CII Green Business Centre at Hyderabad in 2000 was a major pioneering step in India. CII-GBC formed the Indian Green Building Council (IGBC) to promote the concept of Green Buildings in India. Of course, the concept of green building is not just about improving energy efficiency. It is also about improving the efficiency of use of material and water resources as well. It is ultimately an attempt to reduce the environmental impacts of both the construction and use of buildings, which also reduces the cost of operations and improves public health, by reducing conflict with nature.

The Leadership in Energy and Environmental Design (LEED-INDIA) Green Building Rating System promoted by the IGBC is slowly catching the attention of corporate clients. IGBC’s vision is to usher in a green building revolution in the country and to facilitate the emergence of India as one of the world leaders in green buildings by 2010.

One company which has taken the vision of a green building revolution to non-corporate customers is Biodiversity Conservation (India) Limited (BCIL). BCIL has built nearly two million square feet of residential homes in gated communities, offering green solutions to individuals and families without compromising on urban comfort and convenience. BCIL eco-homes use half the energy of regular residences of comparable size. Given that energy costs can only rise in the years ahead, the potential savings for the consumer is clear and tangible.

Naturally, the business is growing, and how! Whether in Madison Square or down town Bangalore, the best advertisement for any product is in the form of a proud customer. Word of mouth publicity has accelerated the demand for this customer driven business and BCIL has grown to an 80 crore company in a decade or so. Of course, awards and recognitions for BCIL and its Managing Director, Mr Chandrashekar Hariharan, from national and international bodies like TERI and ADB have also helped.

World Business Council for Sustainable Development (WBCSD) says that buildings are responsible for at least 40% of energy use in most countries. With construction booming, especially in countries such as China and India, these figures are only likely to rise. The report of the companies involved in WBSCD’s Energy Efficiency in Buildings (EEB) project calls on governments to provide better urban planning, more effective building codes to enforce minimum required technical standards, and information and communication framework to overcome the lack of know-how. Additionally, policy improvements including tax and market incentives could encourage the use of energy efficient building equipment and materials and occupant consumption.

Of course, buying efficient equipment or building green homes is only one aspect of consumer behavior related to energy. The other significant aspect is using energy efficiently. In most Western countries, despite the price premium for energy-efficient equipment, during the 1990s most consumers switched over to more energy-efficient appliances. This eventually made the consumers wealthier. Yet, when the monetary savings from efficient use of energy is spent on more gadgets and equipment, this may not lead to much of a reduction in overall energy demand.

The growth of green business houses in India needn’t surprise us. Globally, green business has already become big business. The reasons are plenty: For one, it is now widely accepted that environmental problems, especially the ones related to energy, are not going to get any better. Then, of course, the consumers are increasingly aware and want economic costs and environmental risks to be minimized. The technology factor cannot be ignored either. Clean technology has emerged to meet the demand for greener products without compromising on quality or value for money. And all these mean that there is money, and fame, to be made for companies like BCIL that go the green way.