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Quezon is home to over 2.9 million people—the most populated and highly urbanized city in the Philippines. But Quezon’s residents aren’t the only Filipinos wrestling with the challenges of urban living: nearly half of the country’s 107 million people reside in densely populated areas. As in other cities around the world, the concentration of people, industries, and infrastructure makes these areas especially vulnerable to climate change, with disastrous outcomes for citizens.

To address the link between urbanization and the impacts of climate change, the government of the Philippines has committed to a 70-percent reduction in greenhouse gas emissions by 2030, as part of its commitment to the Paris Agreement. To achieve this, the nation has to focus on building resilient infrastructure, adapting techniques and materials through “green” construction, and tapping into the sustainable cooling and renewables sector.

Green construction focuses on climate resilience, sustainability, and energy efficiency—reducing emissions from the lifecycle of constructed assets and from the industry’s value chain at large.

In the case of the Philippines, geographical location and lack of natural barriers expose large infrastructure and buildings to repeated battering from extreme weather events like typhoons and flooding. Between 1996 and 2015, more than 280 typhoons hit the country, and these will only get more severe and frequent with continued climate change.

The Philippines has committed to a 70-percent reduction in greenhouse emissions by 2030. © walterericsy/Shutterstock

A $25 Trillion Business Opportunity

It is important for governments to focus on green construction now because 70 percent of people around the world will reside and work in cities by 2050. However, 60 percent of the area expected to be urban by that time remains to be built. That means that large-scale construction needs to take place in the next three decades. Much of it will be in emerging markets.  

According to IFC’s analysis, there is a business opportunity of almost $25 trillion associated with green buildings in emerging-market cities between now and 2030. Going green during the construction process can help rapidly urbanizing cities like Quezon become more resilient to climate-related disasters—while saving money and contributing to lower emissions

More than 280 typhoons hit the Philippines from 1996 to 2015, and these will only get more severe with climate change. © junpinzon/Shutterstock

Greening Construction: the Role of Carbon Pricing, a new report from IFC, examines how to design effective carbon-pricing mechanisms that can help the construction industry become more sustainable. This is necessary because the sector is highly energy- and carbon-intensive, currently producing between 25 and 40 percent of global carbon emissions. Given the expected increase in demand for construction due to rapid urbanization, it is essential to reduce the industry’s carbon intensity if the world is to meet the goals of the Paris Agreement and restrict the rise in temperatures to less than 1.5˚ Celsius.

In the Philippines, carbon pricing could help construction companies choose lower-emission alternatives, manage carbon risks, and reduce emissions. The potential impact of “greening” construction in this way is staggering: across the country, the industry is expected to grow more than 50 percent between 2018 and 2023.

For the construction industry to think green, however, a commitment to reducing emissions must be made across the value chain—from raw material suppliers to building developers to those who live and work in those buildings. IFC will bring together all of these stakeholders to share best practices and lessons learned in efforts to move closer to “green” goals at Innovate4Climate (I4C), a conference hosted by the World Bank Group, from June 4-7. The meeting, focused on transformative action on climate change, convenes leaders from business, banking, finance, policy, and technology to think about how to leverage and direct investment toward low-carbon economies.

Quezon is home to over 2.9 million people—the most populated city in the Philippines. © walterericsy/Shutterstock

Keeping the Planet—and People—Cool

The expected increase in construction to meet urbanization demands also has consequences associated with the rising temperatures linked to climate change. In all of these new buildings, more cooling will be required to keep people comfortable, food safe, and medicines secure. However, conventional cooling technologies—such as refrigeration, air conditioning, and fans—account for as much as 10 percent of all global emissions, more than twice the carbon emissions generated from aviation and maritime activity combined. In other words, the necessity to keep things cool could make the planet hotter.

This underscores the important role that sustainable cooling plays in the design of buildings, appliances, and other equipment. Innovation in this sphere is crucial to ensure that the world’s increasing energy demands are met without further endangering people through the threat of rising emissions.

The private sector’s role in helping the construction industry become more sustainable is clear—as is the business opportunities associated with green construction.

Join in the online conversations: #Innovate4Climate

Published in June 2019