Data Story — Low-Carbon Buildings: Emerging Market Pilots and Fastest-Moving Subsegments

Emerging markets are experiencing the fastest building sector growth globally, with construction rates 3-5x those of developed economies. This creates both enormous emissions risk and opportunity: buildings constructed today will operate for 50+ years, locking in energy demand. Cities from Bogotá to Jakarta are piloting approaches that leapfrog developed-nation technologies, deploying district cooling, passive design, and innovative retrofit programs suited to tropical climates and developing-country contexts.

Why It Matters

By 2060, global building floor area will double—with 80% of this growth in emerging markets. The buildings constructed in the next decade will determine whether the world can meet climate targets. If emerging markets replicate developed-nation building practices (high HVAC loads, energy-intensive materials, limited efficiency standards), global building emissions will triple.

But emerging markets aren't simply following. Tropical climates require different solutions than temperate ones—cooling dominates over heating, passive design has more potential, and different material and labor economics favor alternative approaches. The fastest-moving subsegments demonstrate solutions that may ultimately influence developed markets as climate change shifts their needs toward cooling.

Key Concepts

Emerging Market Building Challenges

• Cooling dominance: Unlike developed nations where heating often dominates, emerging markets focus primarily on cooling—which is harder to electrify cleanly
• Rapid urbanization: Construction speed pressures override quality and efficiency considerations
• Informal construction: Significant building stock outside formal codes and financing
• Grid constraints: Unreliable electricity supply affects HVAC and refrigeration options
• Material availability: Global supply chains for high-performance materials may not reach all markets

Fastest-Moving Subsegments

Several building subsegments show accelerating decarbonization:

• District cooling: Centralized cooling serving multiple buildings; 50% more efficient than individual systems
• Passive design revival: Traditional tropical architecture principles (shading, ventilation, thermal mass) applied to modern buildings
• Prefabricated construction: Factory-built components enabling quality control and faster construction
• Adaptive retrofit: Upgrading existing buildings with appropriate technology for local conditions

Key Benchmarks

• Energy Use Intensity (EUI): kWh/m²/year; best-practice tropical commercial buildings achieve 80-120 kWh/m² versus 200-350 kWh/m² typical
• Cooling coefficient of performance (COP): Ratio of cooling delivered to electricity consumed; district cooling achieves 5-6 COP versus 2-3 for individual systems
• Green building certification rates: Percentage of new construction meeting EDGE, LEED, or local green building standards

What's Working and What Isn't

What's Working

District cooling expansion: Singapore, Dubai, and increasingly Southeast Asian cities are deploying district cooling at scale. Marina Bay district cooling in Singapore serves 30+ buildings at 40% lower energy than individual systems. Jakarta is piloting district cooling in its new capital Nusantara. The centralized approach enables more efficient equipment, thermal storage, and load balancing impossible with individual building systems.

Climate-responsive design mandates: India's ECBC (Energy Conservation Building Code) requires climate-zone-specific design, with different standards for hot-dry, warm-humid, and composite climates. Compliance achieves 25-50% energy reduction versus baseline. Vietnam, Indonesia, and the Philippines are developing similar zone-based approaches.

EDGE certification scaling: The IFC's EDGE certification (Excellence in Design for Greater Efficiencies) has certified 100+ million square meters in 170+ countries, focusing specifically on emerging market applicability. Certification requires 20% improvement in energy, water, and embodied carbon—achievable with local materials and technology.

Vernacular architecture revival: Architects in India, Vietnam, and Colombia are reviving traditional passive design principles—shaded courtyards, natural ventilation, thermal mass—for modern buildings. Offices and residences achieving comfort without air conditioning in hot climates demonstrate that high-performance buildings don't require high-tech solutions.

What Isn't Working

Imported developed-nation solutions: Glass curtain walls designed for European climates perform poorly in tropical sun. HVAC systems sized for heating-dominated climates are misapplied. Technology transfer without climate adaptation creates inefficient buildings and frustrated users.

Enforcement gaps: Many emerging markets have adopted green building codes but lack enforcement capacity. Indonesia's green building requirements apply to buildings above 10,000 m² but compliance verification is limited. Codes without enforcement are aspirational rather than effective.

Retrofit neglect: Focus on new construction ignores existing stock that will dominate emissions for decades. Mumbai's 2 million buildings largely predate efficiency standards. Retrofit programs struggle with fragmented ownership, financing gaps, and technical complexity.

Informal sector exclusion: Green building programs typically address formal commercial and residential development, ignoring the 30-50% of construction in many emerging cities that occurs informally. This housing sector has the worst conditions and least access to efficiency improvements.

Examples

1. Bogotá District Thermal Energy, Colombia: Bogotá is developing Latin America's largest district thermal network, initially serving 50 buildings in the city center with plans for 200+ by 2030. The system uses river water for cooling and provides heating where needed from waste heat. Early buildings report 35% energy reduction versus individual systems. The municipal utility model ensures accessibility and integration with city climate planning.

2. Tata Housing Passive Design, India: Tata Housing's Primanti project in Gurgaon achieved LEED Platinum with 40% energy reduction through passive design—deep overhangs, oriented facades, high-performance glazing, and optimized natural ventilation. The approach cost 5% more than conventional construction but eliminated individual AC units in common areas. The project demonstrates that Indian developers can deliver sustainable housing at accessible price points.

3. Jakarta Green Building Standard, Indonesia: Jakarta's Governor Regulation 38/2012 mandated green building standards for large buildings, with increasingly stringent requirements. Compliance requires 15-25% energy reduction, water efficiency, and waste management. The policy has certified 150+ buildings representing 25 million m² of commercial space, demonstrating that emerging market cities can implement and enforce green building requirements.

Action Checklist

• Assess climate-specific requirements—evaluate cooling-dominated energy profiles and tropical design needs rather than applying heating-oriented developed-market solutions
• Explore district energy potential—investigate district cooling feasibility for developments of sufficient scale, particularly in urban areas with high density
• Specify EDGE or climate-appropriate certification—require emerging-market-focused certifications that ensure achievability with local materials and technology
• Incorporate passive design—integrate shading, natural ventilation, and thermal mass that reduce mechanical system loads in tropical climates
• Partner with local expertise—engage architects and engineers familiar with local conditions, materials, and construction practices
• Include retrofit in strategy—address existing building stock alongside new construction for comprehensive portfolio decarbonization

FAQ

Q: Can green buildings be cost-competitive in emerging markets? A: Yes—EDGE certification demonstrates 20% efficiency improvement with under 5% cost premium. Passive design strategies often have minimal or negative cost premium while reducing operating expenses. District cooling infrastructure requires upfront investment but delivers lower lifecycle costs.

Q: Which emerging markets have the strongest green building policies? A: Singapore leads globally in policy comprehensiveness. India's ECBC and Vietnam's VGBC provide strong frameworks in Asia. Colombia and Chile lead Latin America. South Africa has Africa's most developed green building code. Implementation and enforcement vary more than policy adoption.

Q: How do we address informal construction sustainability? A: Community-based approaches, microfinance for efficiency improvements, and government programs reaching informal settlements show promise. The IFC's EDGE affordable housing track and various NGO programs demonstrate that efficient housing can reach lower-income populations.

Sources

• International Finance Corporation, "EDGE Certification Global Impact Report 2025," IFC, 2025
• Global Alliance for Buildings and Construction, "2025 Global Status Report: Emerging Market Focus," GlobalABC, 2025
• UN-Habitat, "District Energy in Cities: Emerging Market Deployment," UN-Habitat, 2025
• Tata Housing, "Sustainable Housing Case Study: Primanti," Tata Housing Development Company, 2024
• C40 Cities, "Clean Construction in C40 Cities: Emerging Economy Solutions," C40, 2025