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Cablegate: Leading the Way to Green Building in Argentina

VZCZCXYZ0018
RR RUEHWEB

DE RUEHBU #1112/01 2801748
ZNR UUUUU ZZH
R 071748Z OCT 09
FM AMEMBASSY BUENOS AIRES
TO RUEHC/SECSTATE WASHDC 4451
INFO RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RHMFIUU/DEPT OF ENERGY WASHINGTON DC
RUCNMER/MERCOSUR COLLECTIVE

UNCLAS BUENOS AIRES 001112

SIPDIS

E.O. 12958: N/A
TAGS: SENV KGHG BEXP ECON ENRG EIND AR
SUBJECT: LEADING THE WAY TO GREEN BUILDING IN ARGENTINA

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Summary
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1. With green building a major focus of reducing global energy
consumption and emissions, the U.S.-based LEED standard is gaining
regional acceptance as a standard for green buildings. Still,
reticence in some quarters about adopting U.S. standards surfaced in
an Embassy-sponsored recent conference on green building. We have
been meeting with local promoters of the LEED standard to explore
ways to further promote the standard and to explore business
opportunities for U.S. companies. LEED adoption in this important
market would help to steer local builders towards U.S. companies to
source energy-efficient building technology and materials, in
addition to contributing to global emissions reductions. End
Summary.

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Green Building: In Its Infancy in Argentina
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2. According to UNEP, buildings (construction and operation)
account for one-third of energy use and associated greenhouse gas
(GHG) emissions in both developed and developing countries and are a
major target for energy and emissions mitigation. The World
Business Council for Sustainable Development estimates that Europe
could hit more than half of its target of a 20% reduction in carbon
dioxide emissions by 2020 solely through increasing building energy
efficiency. Much greater gains are available in countries such as
Argentina, where there are few energy-efficiency building standards
and little awareness of green building techniques.

3. ESTOff met with Argentina Green Building Council (AGBC) CEO
Guillermo Simon-Padros and President Carlos Grinberg to discuss the
sustainable building industry in Argentina. AGBC was founded in
2008 to promote LEED (Leadership in Energy and Environmental Design)
certification in Argentina. LEED is a green building certification
system administered by the U.S. Green Building Council (USGBC) and
provides third-party verification that a building meets a high
standard of energy savings, water efficiency, CO2 emissions
reduction, improved indoor environmental quality, and stewardship of
resources.

4. Grinberg said that Argentina's green building market is
incipient but contains potential for significant growth, as the
country searches for ways to reduce energy emissions. Argentina has
13 LEED-certified professionals (architects and engineers) and 15
projects seeking LEED certification, totaling 300,000 square feet of
new construction. Building codes for energy consumption are rare,
and builders are not accustomed to green building techniques,
despite the potential to significantly reduce energy costs. (Note:
Argentina's heavily-subsidized electricity rates provide a
disincentive for developers to focus on energy consumption. End
note.)

5. Grinberg noted that AGBC is working with the municipal
governments of Buenos Aires and Cordoba, including planned energy
audits of four public buildings. The planning department of Buenos
Aires hopes to include environmental standards in contracts for
future renovations of public buildings. According to Grinberg,
while city planning departments are eager to offer tax incentives
for green buildings, other officials are opposed to anything that
would reduce tax revenues.

6. Officials from both the national Environment Secretariat and the
City of Buenos Aires have repeatedly mentioned in recent meetings
with ESTH officers that green building is a focus of their energy
conservation plans. The national Secretariat has a "sustainable
construction observatory" working on green building techniques and
materials. The Director General of Urban Development at the City of
Buenos Aires highlighted new energy codes for public and private
buildings as a key part of the city's plan to reduce energy use, and
noted that the city planning department hopes to include
environmental standards in contracts for future renovations of
public buildings.

7. AGBC's Simon-Padros estimated that U.S. companies are years
ahead in their focus on energy efficiency in construction, providing
them with a significant advantage in this market. He noted
interesting developments underway in Buenos Aires. A 27-story
office building, owned by major Argentine developer Raghsa S.A. and
currently under construction in the Puerto Madero district of Buenos
Aires, is one of the first major Argentine projects seeking LEED
certification. It includes an elevator system from United
Technologies, a building management system from Honeywell, and air
conditioning, lighting, and insulation also supplied by U.S.
companies. According to Simon-Padros, Hilton Hotels is also
examining the possibility of building a LEED-certified hotel in the
southern resort of Bariloche. AGBC is supported by several U.S.
corporations who market their energy-efficient products in
Argentina, including Carrier, Johnson Controls, and Trane. AGBC is
also working with Argentine companies interested in forming joint
ventures with U.S. companies to manufacture energy-efficient
building products in Argentina.

--------------------------------------------- --------
Green Building Conference Reveals Underlying Tensions
--------------------------------------------- --------

8. USGBC appears to be increasingly promoting LEED as a global
standard. As part of this global effort, AGBC hosted a conference
on August 3-4 for industry professionals, academics, and government
officials to discuss LEED standards, with USGBC CEO Rick Fedrizzi
providing the keynote address. As a high-level event sponsor, the
Embassy promoted U.S green building standards and companies at the
conference by inviting key contacts from the Renewable Energies
Chamber and the American Chamber of Commerce, as well as Latin pop
star and climate change activist Charly Alberti; coordinating
extensive national coverage in print and television media; and
speaking about President Obama's initiatives for climate change and
renewable energy.

10. Green building certification provides an interesting example of
the delicate balance the Argentines must strike between their
recognition of the value of U.S. technology and ideas and their
suspicion of being co-opted by U.S. standards. Argentina's private
sector is eager to use LEED as a marketing tool and recognizes that
a project will have a significant price markup with LEED
certification. Many conference attendees welcomed Fedrizzi's
message that adopting green standards is a smart business decision
that will lead to increased market value within five to ten years of
investment and the creation of green jobs.

11. By contrast, Argentina's public sector, while eager to use LEED
techniques for reducing energy use, "has to camouflage it,"
according to Grinberg, to avoid appearing to adopt a U.S. standard
too wholeheartedly. This tension was evident in the conference's
public policy discussion, where a number of real estate agents and
architects expressed deep concern that the adoption of LEED
standards will render Argentina's building sector vulnerable to a
U.S. decision-making body. Argentine LEED professionals countered
that while the USGBC encourages the use of local norms on par with
or stricter than LEED standards, LEED is already an internationally
accepted standard.

12. Grinberg stressed that LEED is already the undisputed standard
across Latin America, from Mexico to Argentina, because it is a
simple certification process easily applied to any project.
Competing standards, including BREEAM in the U.K./Europe, Green Star
in Australia, and CASBEE in Japan, are less well-known and not seen
as viable competing standards for Latin America. AGBC intends to
eventually develop an Argentina-specific green building
certification process derived from LEED, but currently USGBC
directly certifies projects in Argentina.

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Comment: Opportunity for U.S. Green Building Technology
--------------------------------------------- ----------

13. In addition to providing the means to significantly cut energy
consumption and GHG emissions, LEED certification is a way to
promote U.S. standards and to create business opportunities for
green U.S. companies in the Argentine building industry. The U.S.
market in green building products was $12 billion in 2007 and is
projected to increase to $60 billion in 2010. With buildings
responsible for at least one-third of all energy use, a similar
increase in green building is expected globally as part of the
effort to reduce GHG emissions. LEED adoption in the important
market of Argentina would help to steer local builders towards U.S.
companies to source energy-efficient building technology and
materials, in addition to contributing to global emissions
reductions.

MARTINEZ

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