Catalysing India’s decarbonisation: market-based solutions to accelerate sustainable growth in built environment

By Lodha

There could be many reasons for this, ranging from awareness and marketing to costs and benefits to even personal preferences. Let's call all of these market forces. These forces must be considered while planning and enabling a country-wide transition, such as decarbonising the built environment. We must address all of them to achieve the desired results.

There is also a tendency to believe that publishing a new policy or introducing a new code can be a game-changer, but history shows this is not the case. Let's evaluate the reasons for this:

In an insightful article at the start of the housing market upswing in India, Mr. Neelkanth Mishra, a highly respected expert on the Indian economy, highlighted that, “Today, 93 percent of India’s houses are in buildings of one or two storeys and only 0.2 percent in buildings with more than 10 storeys.”

The share of Indian real estate, which is 7-8% of the GDP can be valued at around 300 billion USD, the proportion of this built by developers is hardly 30%. Of this, only one-third of the developers, listed or unlisted, have the internal capacity to absorb and implement upcoming codes and standards. The reach of any new code therefore is this small cohort, which may be only 10% of the market size, or even less, considering the applicability of the solution in a given context.

On the other hand, the overall catchment for any solution is the larger, and ever-expanding, 300 billion USD market. Overcoming initial cost barriers can also be achieved through the scale that the Indian economy offers. While solutions can be initiated through codes and standards, they need to grow through the cycle of proof of performance to develop confidence and access much larger markets through lower costs and increased awareness.

Every solution typically goes through four stages: it gets found, it is verified and tested, it’s used initially to build confidence, and then only it achieves popularity and scale. While policies help verify and formalize a solution, it’s the markets that can build the confidence needed to achieve scale. Market mechanisms can then take that scale even further.

Figure 1: Market-based solutions can enhance, speed up, and expand the implementation of policies, codes, and standards aimed at decarbonising the economy.

Work with us to develop market-based solutions

At Lodha Net Zero Urban Accelerator, with our partners RMI India Foundation, we are working to develop market-based solutions to overcome these barriers. We support policymakers in creating new guidelines and standards and achieving the desired scale once these guidelines are published. We are addressing all areas of the built environment emissions spectrum, from materials and passive designs to equipment efficiency, clean energy, and clean mobility.

Here are a few examples of our work:

• We are increasing the penetration of 5-star air conditioners, which is below 10% nationally, enabled by bulk procurement. We have been able to install 5-star ACs in thousands of affordable homes, achieving 100% penetration in several developments.
• We have been advocating for and demonstrating the use of greener concrete mixes in our developments, using higher GGBS content in the concrete. We are also piloting and scaling the use of the newly introduced LC3 cement in partnership with IIT Delhi and leading cement manufacturers, with early trial mixes already being done at one of our projects..
• We plan to develop an all-5-star marketplace for home appliances through our flagship Bellevie app. We are working with the RMI Global Cooling Prize team to support the mainstreaming of the super-efficient air conditioning in the Indian residential sector..

These solutions help develop markets and achieve scale for the necessary solutions to decarbonize the built environment, which is responsible for almost 40% of overall emissions in the economy. We are developing solutions with various materials that bring down the embodied as well as the operational carbon of the built asset. We are engaged with partners in the renewable energy and electric vehicle charging space to develop deployment models that increase access to cleaner energy and mobility to our residents.

We invite the industry ecosystem to work with us in scaling up solutions to develop larger markets that can help India decarbonize its economy while simultaneously achieving energy security, materials security, and climate security during this once-in-a-lifetime growth opportunity, helping India leapfrog from a low-income economy to a high-value, high-income knowledge economy.