Climate change is the defining issue of our future, and already the greening of agriculture, energy and transportation -- transforming the sectors so they become more sustainable in the face of environmental challenges -- is at the forefront of new policies and investments.
But we also need to look at how and where we live. The building, construction and renovation sectors, which make up the backbone of residential and commercial housing, contribute almost 40% of global greenhouse gas emissions.
In every crisis, however, there are opportunities. Efficient and environmentally friendly green buildings are one such opportunity -- and a massive one at that.
In emerging markets alone, by 2030 green buildings will offer up to $24.7 trillion in investment opportunities. Much of this growth will occur in east Asia Pacific and South Asia, where more than half of the world's urban population will live within a decade. In a recent report, the International Finance Corporation, a member of the World Bank Group, estimated that by 2030, residential and commercial green buildings will represent a $17.8 trillion investment opportunity in Asia alone.
It will be an engine of job growth, generating upward of nine million new skilled jobs in the next 10 years alone, focused on emerging markets like Vietnam, Indonesia, the Philippines and elsewhere in the region. We estimate that new home construction alone will require more than $10 trillion in new investments.
Today, green buildings represent just 8% of the building and renovation market. By 2060, the global building stock will need to double in area -- much of it centered in east Asia Pacific and South Asia. Not only are green buildings an environmental necessity for a changing planet, they also offer a host of attractive returns for investors.
IFC's report -- Green Buildings: A Finance and Policy Blueprint for Emerging Markets -- highlights the substantial benefits for building green.
Take costs. Green buildings have far lower operational costs than traditional buildings -- up to 37% lower. They consume less water and energy than traditional buildings. Green buildings maintain higher occupancy rates -- up to 23% higher -- and command larger sale premiums -- up to 31% higher. Tenants and homeowners enjoy far lower utility costs -- 20%-40% lower -- than their counterparts in standard buildings.
As the world moves to a carbon-neutral future, traditional buildings risk becoming stranded assets. The future in building is clearly green, and Asia, the region with the most new construction, is pivotal. What it chooses to build today will have an enormous impact on what our world will look like tomorrow.
IFC is working to promote green buildings through our investments. Indeed, by 2020, we anticipate that climate-related investments will account for 28% of our total financing portfolio. We are working diligently with clients around the region to create new green bond markets, which help catalyze the private sector into investing in climate-smart projects, including green buildings.
Additionally, IFC developed the Excellence in Design for Greater Efficiencies, or EDGE, program, which is both a software application to help builders reach green standards and provides a certification system.
The software allows developers and investors to know what the costs are before a project is implemented. Most users report that the upfront costs of developing a green building are comparable to a standard building while operating costs are substantially lower. To achieve EDGE certification, a building must have a 20% reduction in energy use, water consumption and embodied energy in building materials compared to standard buildings.
EDGE is gaining a foothold in Asia. Already 5% of all new construction in Vietnam is using EDGE. In Indonesia, where the urban growth rate is the fastest in Asia, the government has passed green building codes with the use of incentives to encourage private sector participation.
For example, the Ciputra Group, one of the largest developers in Indonesia with a focus on city-scale development, became an early adopter of EDGE and today is building entire communities, such as Citra Maja Raya, a 2,000-hectare development of commercial and residential properties near Jakarta, using green design and construction.
Similar efforts have been undertaken in Vietnam and the Philippines, where governments have updated their building codes to reflect environmental best practices. So far, a total of 7 million sq. meters of real estate in 32 emerging markets has been certified with EDGE, with an estimated annual CO2 emissions reduction of more than 127,000 tons.
Green buildings succeed for everyone. They're good for the environment. They're good for business. They're good for tenants. And they may provide the single largest investment opportunity in the decade to come. The time to build green is now.
Rana Karadsheh is the Regional Industry Director -- Manufacturing, Agribusiness & Services for Asia and the Pacific at the International Finance Corporation (IFC), a member of the World Bank Group.