Climate Action 2010-2011

Energy and Mitigation
The buildings sector is also one of the world’s largest
industries and biggest employers. Construction accounts
for about 10 per cent of the world’s gross domestic
product and is estimated to employ 180 million people
worldwide.
All the major studies investigating cost-abatement
potential conclude that there is vast potential for savings
in the built environment, with a payback. For example, the
IPCC 4th assessment report of 2007, which conducted
a synthesis of international abatement potential studies,
found that by 2020, about 4 Gigatonne (Gt) of CO 2
could
be abated annually in the global building stock at negative
cost to society – in other words, at a theoretical profit.
Worldwide carbon emissions
resulting from buildings are
significantly more than those from
the transportation sector.
Technically, it is possible today to reduce building
energy consumption by 70-80 per cent or more through
a mixture of ultra-efficient new build and deep energyefficient
retrofits of the existing building stock.
On the new build front, a significant number of
NZEBs (Nearly Zero Energy Buildings) serving diverse
functions have already been built around the world in
a variety of locations and climates – including some
50 examples in the Cancun area, financed with the
help of the Canadian government. These have helped
demonstrate the technical viability of such designs.
Though there are still issues to be resolved regarding
performance limits for some specific environments, the
technical solutions for buildings that consume virtually
no energy – or are even net energy producers – are
available today.
Retrofitting the existing building stock is the
parallel challenge. This is particularly true for developed
countries. In the US, two-thirds of existing apartment
buildings were built before 1980. In Europe, roughly half
of all buildings were constructed before the first energy
crisis in 1973 and new buildings are only added at a rate
of about one per cent of the total stock each year. This
means it will not be possible to meet the EU’s 2050 CO 2
targets unless the existing building stock is renovated to
very high efficiency levels.
The first-line retrofit measures, such as improved
insulation and better windows, are relatively simple and
each one alone can have significant impact in the short
term, which is tempting for many. However, according
to the Energy Efficiency in Buildings project of the
WBCSD, in order to attain a truly transformative
72 per cent energy reduction, a comprehensive set of
retrofit measures will be required, including everything
from improved envelope to more efficient lighting, new
heating systems, and low-energy appliances. This sort
of ‘deep renovation’ is the real key to achieving a stepchange
in retrofits.
Barriers to energy efficient buildings
are common
Energy efficient solutions in buildings clearly make sense
at the societal level, but they often run into obstacles
on the ground. Most are rooted in the fact that energy
efficiency isn’t generally visible to the end user – unless it
hits his or her own wallet.
The biggest issue is the one of split incentives, which
arise wherever the investor paying for the renovations is
not the one who will benefit from the energy savings. The
best-known of these is the landlord-tenant barrier, where
a landlord owns a property and pays for renovations,
but the tenant is the one to benefit from the lower
energy bills. This issue also extends across ‘generations’
of building owners. If someone is unsure how long they
will actually own their property, they will tend to heavily
discount the value of future savings from reduced energy
bills, making energy efficiency refurbishment a de facto
short-term investment decision.
Split incentives can apply to new buildings as well. Many
businesses split infrastructure investment management
from ongoing operation and maintenance. Developers sell
the constructed properties on to others. This means that
those responsible for the actual construction often aim to
build at the lowest absolute cost, without factoring in the
energy and maintenance costs over the life of the building.
Other barriers are rooted in a simple lack of awareness.
For example, the new building supply chain is highly
fragmented. Many key actors, starting with architects
and contractors, and moving on to the many procurers
of building materials and components as well as their
suppliers, are unaware of the potential offered by more
energy efficient solutions.
The IPCC found that by
2020, about 4Gt of CO 2
could
be abated annually in the global
building stock at negative cost
to society – in other words,
at a theoretical profit.
Most of the barriers to energy efficient buildings will
not be affected by CO 2
pricing, which will serve to send a
clear signal to polluters, to increase energy costs and exert
a downward pressure on energy demand in buildings, but it
will not promote a transformation in the buildings sector.
There are clear ways to tackle the barriers
A multi-faceted approach is now needed with robust
policy measures that together create strong incentives to
ensure new buildings are constructed to net zero energy
standards and to create incentives that spur the lowenergy
retrofit of existing buildings. Promising signs of
this are already emerging on many fronts.
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