Building Green About IFC IFC—a member of the World Bank Group—is the largestglobal development institution focused on the privatesector in emerging markets. We work in more than 100countries, using our capital, expertise, and influence tocreate markets and opportunities in developing countries.In fiscal year 2023, IFC committed a record $43.7 billion toprivate companies and financial institutions in developingcountries, leveraging the power of the private sector to endextreme poverty and boost shared prosperity as economiesgrapple with the impacts of global compounding crises. Formore information, visit www.ifc.org. Building Green Sustainable Constructionin Emerging Markets ACKNOWLEDGEMENTS This report was prepared under the guidance of SusanLund, Vice President of Economics at IFC. Denis Medvedev(Director, CERDR, IFC), Roumeen Islam (Senior EconomicAdvisor to the CEO, IFCMD, IFC), Vivek Pathak (Director,CBDDR, IFC), and Jamie Fergusson (Director, CBDDR,IFC) provided research leadership. Lucio Castro (SeniorEconomist, CERER, IFC) was the lead author managingthe team. Working team members include Imtiaz Ul Haq(Economist, CERER, IFC), Juliana Somerville (Consultant,CERER, IFC), Gabriel Michelena (Consultant, CERER, IFC),Samuel Asuquo Edet (Economist, CERER, IFC), EdgarSalgado (Economist, CERER, IFC), Maty Konte (SeniorEconomist, CERER, IFC), and Ariana Tamara Volk (AssociateEconomist, CERER, IFC). Li Tu (Senior Investment Officer,CMGMF, IFC), John Anagnostou (Senior Industry Specialist,CMGMF, IFC) and Marek Stec (Senior Industry Specialist,CMGMF, IFC) co-authored Chapter 3, while Imtiaz Ul Haqand Juliana Somerville co-authored Chapter 4. Dominiquevan der Mensbrugghe (Director and Research Professor,Purdue University) and Maksym Chepeliev (Senior ResearchEconomist, Purdue University) developed the model andproduced the projections presented in this report, jointlywith Lucio Castro and Gabriel Michelena. R. Balaji (ChiefIndustry Specialist, CMGMF, IFC), John Anagnostou andMarek Stec provided invaluable expertise and supporton construction materials, and Hania Dawood (PracticeManager, SCCFE, World Bank), Corinne Figueredo (SeniorOperations Officer, CBDSB, IFC), Prashant Kapoor (ChiefIndustry Specialist, CBDSB, IFC), Ommid Saberi (SeniorOperations Officer, CBDSB, IFC) andSandeep Singh(Operations Officer, CBDSB, IFC)on green buildings. JeanPierre Lacombe (Director, CGRDR, IFC), Veronica Navas(Senior Economist, CGRDR, IFC), and Julio Flores Salvatierra(Senior Economist, CGRDR, IFC) provided detailedcomments on the prospects for steel decarbonization inemerging markets. We also thank Kruskaia Sierra-Escalante(Senior Manager, CBFNP, IFC) and Elizabeth T. Burden(Operations Officer, CBFNP, IFC) for their invaluable help with the concessional and blended finance data, and DiepNguyen-Van Houtte (Senior Manager, CBDSB) for hercomments on the report. Peter Gumbel and William Shawwere the editors and Irina Sarchenko (CommunicationsOfficer, CCOCO, IFC) served as the graphics editor. BrianBeary (Communications Officer, CCOCO, IFC) and ChrisVellacott (Senior Communications Officer, CCOCO, IFC)played an invaluable role in editorial production. NadyaSaber (Senior Communications Officer, CCOIC, IFC), Monicade Leon (Communications Officer, CCOIC, IFC), and NicolasDouillet (Senior Communications Officer, CCOIC, IFC) ledthe dissemination efforts. Adama Badji (Executive Assistant,CERDR, IFC), Irina Tolstaia (Program Assistant, CERDR,IFC), and Gleice Zanettin (Program Assistant, CERDR, IFC)provided administrative support. We thank the peer reviewers Tom Farole (Lead Economist,SCADR, IBRD), Stephan Hallegatte (Senior Climate ChangeAdviser, GGSVP, IBRD), Seema Jayachandran (Professor ofEconomics and Public Affairs, Princeton University) andJuan Pablo Rud (Professor of Economics, Royal Holloway,University of London) for their insightful comments.We especially thank the Facility for Investment ClimateAdvisory Services (FIAS) for the financial support providedfor the report. FIAS supports World Bank Group projectsthat foster open, productive, and competitive marketsand unlock sustainable private investment in businesssectors that contribute to growth and poverty reduction.Supported by nearly 20 development partner countries anddonor institutions, co-financed by the World Bank Group,and managed and implemented by IFC, FIAS is one of theoldest and largest multi-donor trust funds in the WorldBank Group. For more information, see the FIAS website atwww.thefias.info. CONTENTS Executive Summary10 1.2. Construction value chains are a major contributor to global CO2emissions, particularly from emerging markets................................................281.3. Emissions from construction are set to rise and are off track to meet construction climate commitments