Knesset Promoting Incentives, Tax Breaks for 'Green' Building

The Knesset Economic Affairs Committee Chairman Gilad Erdan said yesterday that the committee intends to promote incentives for 'green construction' through tax benefits or additional construction rights, as is customary in other countries. He plans to ask the finance minister to have the treasury committee on green taxation (the Sofer Committee) consider ways to encourage environmentally sound construction.

In a debate yesterday, Erdan said that the impending shortage of energy and electricity means that the state must take steps that will curtail power consumption by buildings.

A document submitted by the Knesset's Research and Information Center reports that energy expended for heating, air conditioning, water heating, lighting, cooking and operation of electrical appliances constitutes 25 percent to 40 percent of all energy typically used in member countries of the Organization for Economic Cooperation and Development (OECD). According to the report, many countries have succeeded in increasing energy efficiency by implementing subsidies and tax benefits.

Dr. Nitzan Eyal, who coordinates environmental issues at the Standards Institute, said that the Israeli standard on green construction, which aims to increase environmental awareness of entrepreneurs, contractors and residents, by promoting use of a combination of technologies and construction and environmental planning instruments, is a voluntary standard.

"Five office buildings, a Kfar Saba neighborhood and additional residential units are currently being constructed in compliance with the standard," Dr. Eyal said. "It is imperative that the state and the IDF ensure that construction is in compliance with this standard."

Architect and environmental activist Rafi Rich criticizes the Israeli standard, which he says is far less demanding than those prevailing worldwide.

"I'm concerned about providing economic incentives for anyone who simply meets this standard," he said, adding that Israel must set clear regulation and a high standard in keeping with international levels.

Representatives of the Association of Contractors and Builders in Israel have proposed that increased construction rights be granted in high-rise construction. "There is no administration in Israel to lead green construction, and no leadership with overall responsibility for this field," complains Shlomo Oren, director of the National Association of Constructors and Developers in Israel.

Architect Michal Naor-Vernick, director of urban planning at the Ministry of Building and Housing, confirms that to date no government office has been created to be responsible for this issue. "Battles between government ministries have prevented the handling of this issue in an efficient manner" she said.

A spokeswoman from the treasury said that the finance ministry is not a policymaker on the issue of green construction, and that only after a clear policy has been consolidated will the ministry be able to consider the viability of providing financial incentives.

A senior source in the environment ministry believes that because construction in accordance with the regulation does not necessarily increase the cost of construction, and results in long-term savings, the state should focus on developing awareness and not provide incentives.