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Airplanes. Power plants. Cars and trucks. Their images might be the first to spring to mind when thinking about the challenge posed by the energy transition.
But what about plain old buildings?
From their structural bones to the energy they constantly consume, buildings account for a staggering one-third of global carbon pollution: 12.3 gigatons of CO2 in 2022.
Most of these emissions come from their operations — the fuel burned on-site for heating and cooking and off-site to produce their electricity. But 2.6 gigatons of CO2 annually, or 7% of global emissions, stems from the carbon baked into the physical structures themselves, including the methods and materials to build them, otherwise known as embodied carbon.
A February report lays out a blueprint for tackling each of these sources of CO2 and cleaning up buildings globally by 2050. The challenge is massive: It depends on the actions of millions of building owners. But the policy and technology tools already exist to meet it, according to report publisher Energy Transitions Commission, an international think tank encompassing dozens of companies and nonprofits, including energy producers, energy-intensive industries, technology providers, finance firms, and environmental organizations.
The report identifies several key levers that must all be pulled in order to deal with the climate problems from buildings: energy efficiency, electrification, flexible power use, and design that minimizes materials and uses cleaner ones. Each is showing varying degrees of progress around the world.
“We already have so many of the solutions that we need,” said Adair Turner, chair of the Energy Transitions Commission, at a panel discussion last month. But to implement them, “we need to change minds and practices.”
Building developers and owners can pursue a variety of strategies to make their buildings less energy-intensive and cheaper to operate without sacrificing the comfort of their residents, according to the report.
They can seal air leaks; insulate attics, walls, and floors; and install double- or triple-pane windows to make buildings snug like beer cozies. Weatherization strategies that take a medium level of effort would cut 10% to 30% of energy use, according to the report; deeper changes could slash up to 60%.
For retrofits, online tools and in-person energy audits can help owners decide which changes make the biggest difference for the climate, their comfort, and their energy bills.
Other simple techniques can combat growing demand for cooling, which globally is set to more than double by 2050 due to rising temperatures and incomes, the report notes. Passive approaches that deflect the sun’s rays, from painting roofs white to planting shade-giving trees, can slash cooling needs by 25% to 40% on average.
Efficiency measures “deliver a clear return to households over time,” said Hannah Audino, building decarbonization lead at the commission.
But because the payoffs can be slow to materialize, governments should provide targeted financing to lower-income households that might not otherwise be able to afford these upgrades, she added.
There’s also the challenge of convincing landlords to invest in efficiency measures even though tenants often pay for utility bills themselves. To ensure broad uptake, the authors recommend policymakers implement building performance standards, an approach adopted by U.S. cities like New York and St. Louis to penalize building owners who fail to meet certain emissions or energy-use benchmarks.
For new builds, energy codes and other regulated standards can set a performance floor. They differ widely worldwide, but the Passive House approach is “the gold standard,” per the report. Buildings that meet its benchmarks typically slash energy use by a whopping 50% to 70% compared to conventional constructions.
What’s more, new buildings that use 20% less energy than those built merely to code usually have a “very manageable” premium of 1% to 5%, the authors write, which can be recouped in a higher sale price for developers or lower bills for owners.
Connecting buildings via underground thermal energy networks in which they share heat can also unlock big efficiency gains — and do it faster and at bigger scales than individual action might. The report notes that they “should be deployed where possible.”
Buildings will need to be fully electrified to become climate friendly. That means swapping fossil-fuel–fired equipment for über-efficient heat pumps (including the geothermal kind), heat-pump water heaters, heat-pump clothes dryers, and induction stoves.
Heat pumps are essential to decarbonize heating, which is the biggest source of operational emissions and currently only 15% electrified worldwide, according to the report. The appliances are routinely two to three times as efficient as gas equipment, and they lower emissions even when powered by grids not yet 100% clean.
Heat pumps can come at a premium, though the authors expect prices to fall as sales grow and installers gain experience. In countries with mature markets, heat pumps can even be cheaper than gas heating systems, according to the report: Take Denmark, Japan, Poland, and Sweden.
For most homes in the U.S. and many in Europe, per the report, heat pumps are cheaper to run than gas equipment and have lower total lifetime costs. Heat pumps make even more economic sense when consumers are considering installing an AC and a gas furnace; heat pumps are both in one.
These appliances also keep getting better. Manufacturers learn how to improve technologies with experience, as they have done with solar panels and wind turbines. The result is that heat pumps are becoming more efficient; getting smaller; and reaching higher temperatures as they transition to natural refrigerants (which also have lower global warming potentials), the authors write.
But policymakers need to address energy costs to encourage widespread electrification, according to the report. Countries with high electricity prices relative to those of gas lag in heat pump adoption.
Fixes include shifting environmental levies that are currently disproportionately piled onto electricity bills to gas costs, offering lower electricity rates for customers with electric heating, and putting a price on carbon, the report says. Banning gas equipment would be the most direct move, but “only a handful of countries, such as the Netherlands, have successfully outlined plans” to do so.
Buildings will need more power when they’re all-electric, potentially straining grids. Unchecked, global electricity demand for buildings by 2050 could grow 2.5 times what it is today, per the report. But with efficiency improvements, the commission expects electricity requirements to grow a more modest 45%.
That’s still massive. So, to decarbonize buildings without breaking the grid, we’ll need to make them flexible in their electricity demand, the authors note. By using power when it’s cheap, clean, and abundant, these edifices will also be more affordable than they’d be otherwise.
Low-cost smart thermostats and sensors can reduce demand by 15% to 30% and shift energy use automatically when prices drop. In some places, commercial building owners can already reap tens of thousands of dollars in annual savings by dialing down energy use when grid demand is highest.
The report recommends that all buildings aim to have the ability to shift when they actively heat or cool by two to four hours without compromising comfort. That’s doable with existing solutions that provide thermal inertia, including insulation and tank water heaters that can store hot water for when it’s needed.
Utilities and regulators can spur more flexible demand by implementing electricity rates or utility tariffs that reward customers for using power outside of peak periods.
“When the wind is blowing and the sun is shining, and we’ve arguably got an abundance of clean power on the grid, prices often go negative,” Audino said. Tariffs can reflect that reality, creating a clear financial incentive for households and others to shift their power usage. Without these more dynamic tariffs, “it’s really hard to see how we can drive this [shift] at scale.”
Building floor area globally is expected to grow by over 50% by 2050, according to the report. If structures are built with the same techniques as today, cumulative embodied carbon emissions could soar an additional 75 gigatons of CO2 between now and midcentury.
But that amount could be reduced to about 30 gigatons of CO2 by maximizing the utility of buildings that already exist, decarbonizing building materials, and designing new ones differently.
Using existing structures is “the biggest opportunity” for reducing embodied carbon, per the report: The strategy avoids adding any new embodied emissions at all. But it’s harder to implement this tactic than it is to change building techniques, the authors add.
Producing materials drives up-front emissions, and the biggest contributors are cement, concrete, and steel, the report notes: They account for 95% of the embodied carbon from materials in buildings.
Low- and zero-carbon cement, concrete, and steel can be made using electricity, alternative fuels, exotic chemistries (including ones inspired by corals), and carbon capture with storage. But developers need incentives to buy these clean materials, which aren’t yet widely available or competitive on cost alone.
A complementary approach is to design buildings with less of the emitting stuff. For the same floor space, a mid-rise structure uses less material than a high-rise, which needs a larger foundation and bigger columns. A boxy building is more efficient than an irregular one.
Developers can moreover supplement construction with alternative, lower-carbon materials, per the report. These include recycled materials, sustainably sourced timber, bamboo, rammed earth, and “hempcrete” — a low-strength, lightweight mixture of hemp, lime, and water that actually absorbs carbon.
Embodied carbon has been particularly challenging to curb because it’s largely invisible. In 2021, London regulators decided to change that, requiring major developers to tally all the carbon emissions, operational and embodied, over the building’s lifetime while still in the planning stage, the authors write.
Developers weren’t required to stay below any carbon-intensity threshold; they just had to report expected emissions, said Stephen Hill, associate director in the buildings sustainability team at firm Arup, a member of the Energy Transitions Commission.
“But it triggered a kind of race downwards in terms of embodied-carbon intensity for developers, all of whom wanted to have the lowest-carbon developments,” he added. “It’s a fascinating example of what transparency will do and how the market behaves.”
Stephen Richardson, senior impact director at the nonprofit World Green Building Council, emphasized at the commission’s panel event that to decarbonize buildings, governments need to do two things at once. “We need to incentivize, on the one hand, make it financially more appealing,” he said. And “we need to mandate.”
Large parts of Asia, most of Africa and South America, and even some U.S. states lack mandatory building codes, the report notes. And that’s the “absolute, No. 1” policy that needs to be in place, Richardson said. “Without policy, nothing happens — or very little.”
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