Promoting Green Building
Material Enterprises
India's Waste Problem
The
Indian economy has been one of the fastest growing economies of the
world for the past few years. Recent government estimates indicate that
the real Gross Domestic Product (GDP) for India grew at a rate of 7.1%
in 2016-17. Much of this growth is attributed to the progress by
industrial sectors such as manufacturing, construction, transportation,
communication, utility services etc. growing at a steady rate. Although,
rapid economic growth has brought huge benefits to India, such fast
paced progress has had a detrimental effect on the country's environment
and has exposed urban centres to serious pollution. For instance,
India's CO2 emissions increased to 2.47 billion tonnes in 2015, 5.1 per
cent higher than CO2 emissions in 2014. In addition to burdening India's
natural resources this has also lead to generation of vast amount of
waste. What compounds this problem is the increasing per capita income
of individuals. Consumers are trending towards newer lifestyles, which
have resulted in rapid commercialisation, which in turn has led to waste
generated from consumer based packaged products. While this is fast
becoming a problem for India with major urban centres lacking space for
landfills to dispose of this waste, India with a high rate of
urbanisation at least in the near future faces severe waste management
concerns. Currently just over 33% of the Indian population is urbanised,
rising at an annual rate of 2.3%. It is estimated that 50% of Indians
will be living in cities by 2030.The situation thus warrants a need for
adopting greener practices for growth and to invest in new technologies
and business models, which will help, solve the puzzle of balancing
resources and reducing pollution while still supporting growth.
Improving resource productivity and
implementing the principles of reduce, reuse and recycle (the 3Rs) are
crucial in order to ensure sustainable development. However,
incorporating such practices would come at an increased cost of adopting
new technologies, creating adequate infrastructure and building
capacities of people. To do this specifically in large industries will
be particularly challenging. However, MSMEs - significant providers for
employment and also major contributors to waste generation can help
solve the problems of waste management.
Waste Recycling through Green Building
Materials
There is a massive demand for housing in
urban areas across India. However, in terms of choice of construction
materials and technologies, the sector is still using traditional
materials such as red bricks, stone aggregates etc. which have severe
environmental implications such as carbon emissions, water requirement,
land degradation, etc. A bulk of these materials is provided by the MSME
sector. This scenario presents a unique opportunity to make specific
interventions to green the building material sector and develop and
promote the uptake of green building materials. Technology options that utilise waste to make building materials such as fly ash bricks,
construction and demolition waste recycling and bricks made from the use
of waste materials such as marble sludge, pond ash, foundry slag,
plastic waste etc. can contribute significantly to managing the waste
problem in India while also reducing the environmental implications of
urban housing.
The Development Alternatives Group has been
working in the sphere of waste recycling for 25 years and has innovated
multiple technologies in the green building materials sector, while also
building replicable and viable business models around them. One business
model is to create decentralised production systems for the
under-developed communities and then aggregating the products to be sold
in the extended markets for them to be part of the mainstream economy.
Keeping in mind, India's lack of basic infrastructure and systems
required to collect waste, logistic challenges and ensuring a steady and
active market demand to fill the supply; decentralised enterprises and
clusters present a very strong case for success. Such waste to
wealth-recycling enterprises, beyond solving the massive waste problem,
also lead to extended impacts such as job creation and income
generation.
Lessons from the ground in Bihar
The Bihar brick industry is based on
decentralised production activity using energy intensive, resource
depleting and highly polluting technologies and production methods.
Fired clay bricks consume around 2-4 million tonnes of coal per year
leading to emissions of 4-6 million tonnes of carbon dioxide (CO2) per
year. In order to ensure that the state's economic growth is not at the
cost of the environment and public health, the Bihar government took
initiatives such as banning red brick production in districts near Patna
and promoting preferential procurement of fly ash bricks for promoting
cleaner brick production technology and waste management. This
encouraged setting up of many fly ash bricks enterprises in and around
the city of Patna.
Policy Priorities
Policy will play a crucial role in promoting
green building materials through MSME enterprises. The MSME sector lacks
both the knowledge and incentives to switch to clean building material
technologies and products. Thus designing and adopting adequate policies
that incentivise entrepreneurs to establish green building material
enterprises is the need of the hour. Of utmost importance is to develop
policies not just to promote formation of more enterprises for
production of these products, but also uptake of the new products by the
market. Some policy requirements to promote green building materials are
mentioned below:
1. Policies for preferential procurement of
green building materials: A strong focus is required on developing
preferential procurement policies to support the application and use of
resource efficient construction techniques and materials in the Indian
construction sector. For example the Delhi government has implemented a
policy that 5% of materials used in all government construction projects
need to be secondary raw materials. Preferential procurement of green
building materials will allow enterprises that produce such products to
ensure their sustainability. This also needs to be supplemented with
stakeholder engagement across the value chain to increase knowledge and
awareness of the benefits (both short-term and long-term) of using such
green products. Promoting clusters of MSMEs producing green building
materials in large quantities and promoting supply from these clusters
to large builders and contractors will also promote the sustainable
production and consumption of these products.
2. Policies promoting products which have a
strong potential to contribute in ensuring sustainable development:
Construction and demolition activities spurring out as a result of the
growing economic activities generates huge amount of waste each year
which is seen to be often disposed in landfills. In 2015, the Urban
Construction and Demolition (C&D) Waste generation in India was
estimated to be 716 million tonnes and is projected to increase to 2.7
billion tonnes per annum in 2041 (GIZ, 2016). While still a relatively
less developed area, C&D waste recycling has a huge potential to be
scaled up and have large-scale impact on waste disposed of in landfills.
Priorities at this stage (both national and state) need to be focused on
the development of policies for proper C&D waste management systems that
minimise dumping and maximise reuse. There needs to also be clarity
brought about on who should handle waste, how should it be handled, how
should it be processed and disposed. As mentioned earlier policies for
preferential procurement would be crucial for sustainability of C&D
waste recycling enterprises. Additionally, capacity building activities
for the important stakeholders in the value chain will help in raising
awareness and result in an increased understanding on the utilisation of
C&D waste and thus help make this into a mainstream product.
3. Taxation under Goods and Services Tax (GST):
Under the new GST regime, green building products need to be taxed at a
rate comparable to traditional products such as red bricks to motivate
potential entrepreneurs to set up green building material enterprises.
For example, environmentally sustainable fly ash bricks, which have been
taxed at 12% compared to 5% for the polluting red bricks need to be
taxed at the same rate as red bricks.
4. Policy tools to build a proper ecosystem:
Green financing schemes to subsidise the cost of technology for
enterprises and loan programmes allowing easy access to finance and
developing decision making support tools to enable assessment and
adoption of green technologies and products specifically targeted at
bulk consumers and industries are priorities for promoting growth of
such enterprises.
5. Other priorities: Re-envisioning how we
promote traditional building materials such as red clay bricks, which
have huge environmental implications is important, as these are a major
source of livelihoods. Here policy to promote switching over to clean
production technologies such as Vertical Shaft Brick Kilns (Eco-Kiln)
and incorporating elements of resource efficiency such as a move towards
Hollow Red Bricks can help reduce the environmental impacts of these
products.
For a developing economy like India, moving
towards green growth and setting-up a resource efficient economy while
still growing at a steady rate is going to be a challenging task.
Nevertheless, improving resource productivity and putting in place
policies that implement the principles of reduce, reuse and recycle (the
3Rs) is crucial in order to ensure sustainable development.
■
Samarth Gupta
sgupta@devalt.org
Back to Contents |