Isramart : Carbon trading for buildings to be the next step for CDM

Isramart news:
Founded in 2006, the Sustainable Buildings and Climate Initiative (SBCI) became part of the United Nations Environment Program (UNEP) to ensure recognition of the significant role of buildings in environmental policies such as the Kyoto Protocol.

Part of its priorities is to establish financial mechanisms to encourage a life-cycle approach to building construction and operation.

Currently, the SBCI is developing a Sustainable Buildings and Climate Index, including a common carbon metric for building types in different climatic regions. The Jakarta Post discusses the issue with SBCI’s Chief of Sustainable Consumption and Production Branch, Arab Hoballah. Here are excerpts of the interview:

Question:What is the carbon metric and how far has it been developed?

Answer: Countries are now looking for ways to standardize how they measure the energy efficiency of buildings, what needs to be included, counted and so on. The techniques exist but somehow they haven’t been put together in a step-by-step manual.

This is what we are developing right now. Technically speaking, it (the carbon metric) has been tested. It is already available and various buildings in the world have been using it. But, it is more of a pilot program used on a voluntary basis. Some people just thought it would be interesting to measure their energy consumption in order to be able to reduce it. We are looking for best practices around the world.

We are trying to put together something simple that can deliver good results and be used in any country and for any type of building. This metric will be available in a matter of months. We already have outlines that will be distributed in Copenhagen in order to show negotiators that the tool is there.

We just need a little more time to develop it further. And we’ll be focusing on energy and carbon first. Later, we will be adding other parameters like water, air and so on.

Measuring energy consumption makes sense from an economic point of view, as it shows users where they can make savings and how much they can save on energy bills. Governments will be able to quantify how much less fuel they need to buy, how much they will be saving. No doubt there will be an impact on the global economy if individuals can save between 20 and 30 percent on their energy bill.

When used in different countries and different types of buildings, people will need to add more detail to the metric depending on their level of awareness and funding. This tool will be made available through our website in no more than six months. Hopefully in two years time we will have completed the SBC Index.

But, keep in mind that it is voluntary and up to each country to insert the carbon metric in their national legislation and make it mandatory.

How have countries responded to this so far?

We have been working closely with France, India and Thailand. But many countries are still not aware of the carbon metric. The big issue for us is that governments are often not aware of the importance of the building sector. They don’t realize they can significantly improve buildings by making simple changes.

The problem with the building sector is that it is hard to see what is wrong with a building. When you have a car, you can see the smoke coming out of the exhaust pipe. But buildings don’t create visible pollution. However, the pollution is embedded in the building.

How far has this future carbon metric system been developed into a supporting financial scheme?

In order to retrofit buildings, you need additional resources. It makes it difficult if you don’t have a banking system that can provide additional incentives and adequate loans with five- to six-year terms.

With this clear metric system, governments will have to create a framework that encourages the banking system to provide such loans and inform everybody. Around three months ago in Paris, radio programs informed their listeners about three banks that understood the loan needs for buildings. You don’t have this in many places. You have to have the facts and figures to show how important this is.

In addition, governments can put in place a good fiscal system like in Germany where any efforts to retrofit buildings and houses will receive incentives and be subject to less tax. These measures show that you won’t be the only one bearing the cost.

They can also create incentives for the companies to promote the needed technology. At the end of the day, it will appear like a cost to the government for a short period. But, in the long term, those measures will benefit governments because they will be saving energy.

Can it be developed into a carbon trading system for buildings, just like the general carbon-trading scheme (or known as Carbon Development Mechanism or CDM)?

We are working on that. This is a sensitive issue because it will be the major additional financial resources. And this will be the next step after the clean development mechanism, which has not really included buildings.

Out of the 5,000 measures, we only have seventeen pertaining to the building sector. Getting in the carbon market might be an excellent opportunity for buildings. There will be a lot of resistance though. With regards to how the companies or the governments will profit for instance. But, it will be happen sooner or later. We will be pushing for that. Success will depend on negotiations in Copenhagen.

What are your thoughts about the Copenhagen conference?

I think it will end up being a “let’s keep on walking” event. We are not stopping, but let’s keep on walking because the US, China and India don’t want to make major progress now. The US administration doesn’t have much time to work with its business sector before the negotiations. We’ll need a little bit more time for that. Unless the US comes up with something we are not aware of.

While China and India are saying they won’t do anything because the Americans are not doing anything either. And the Europeans are saying they are only ready to go so far, until the others make a move too.

We have to keep in mind that China is ready for a change. China is just waiting for the others to move, because it understands very well that if it wants to be the power of tomorrow, it will have to work on environmental issues. The technology is there, the knowledge is there, the willingness is there. The problem is the global agenda and the market.