Building Back Better: The Future of Construction

Zero carbon buildings and construction are essential to meet the Paris Agreement goals, improve climate resilience and create jobs as part of COVID-19 recovery. However, the buildings and construction sector is not living up to its potential. What can be done? By Martina Otto

With its almost 40 per cent share of energy-related CO2 emissions globally, the buildings and construction sector is among the high impact areas for climate action. Sustainable technologies are known and proven, and a good number of them are among the most cost-effective climate solutions. Yet, the sector is not on track.

The Global Alliance for Buildings and Construction (GlobalABC) has just released its fifth annual Global Status Report for Buildings and Construction, which tracks progress in the sector. The report found that CO2 emissions from the operation of buildings have increased to their highest level ever at around 10 billion giga tons of carbon dioxide (GtCO2), or 28 per cent of total global energy-related CO2 emissions, and building construction adds a further 3.5 CtCO2 or 10 per cent.

Worse even, the new Buildings Climate Tracker shows that decarbonisation progress is losing momentum and has, in fact, almost halved from 2016 to 2019. Consequently, we now need to accelerate the annual decarbonisation of buildings by a factor of 5.

Triple Strategy to Reduce Energy Demand and CO2 Emissions.

The GlobalABC is calling for a triple strategy: drastically reduce energy demand in buildings, implement material solutions that reduce lifecycle carbon emissions and decarbonise the power sector to effectively cut both energy demand and CO2 emissions. Furthermore, we must ask ourselves what we build, how we build and how much we build. What we build calls for sustainable urban planning and design, to address buildings not in isolation but in their ‘ecosystem’, the neighbourhood. How we build asks the question about technical solutions; and how much we build refers to strategies to increase the use of buildings and extending building lifetime – with impressive saving potential as pointed out by the International Resource Panel.

Pathways Towards Zero Carbon Buildings

To help countries’ set their policies and strategies, the GlobalABC developed the Global and Regional Roadmaps. Developed in collaboration with GlobalABC members, and through consultation with over 700 stakeholders globally, they provide a framework and a process to set short-, medium- and long-term targets and milestones in a manner that engages actors along the building and construction value chain. Organised around eight priority areas (urban planning, new and existing buildings, building operations, appliances and systems, building materials, resilience and clean energy), they illustrate a comprehensive set of aspirational targets and key actions, adapted to regional contexts.

For example, for new buildings, the Roadmaps point to prioritising high efficiency standards and implementing mandatory building codes. Building codes are indeed among the most effective policy measures as a recent cost-benefit study on different decarbonisation policies shows. However, in 2020, only 73 countries were found to have a mandatory or voluntary code for minimum energy performance requirements of new buildings. This means that every year, billions of square metres are built without meeting performance requirements. The Roadmaps recommend for new buildings to become net-zero operational ready by 2030 and to increase the enforcement of building codes to reach whole-life net zero carbon emissions by 2050.
The Roadmaps also list options for financial instruments. Over the past years, we have indeed seen a surge in instruments, from green bonds to green mortgages. Finance institutions and property companies have also seized many investment opportunities related to sustainable building. However, at just 152 billion US dollars in 2019, spending on energy efficiency in buildings remains a small fraction of the 5.8 trillion spent in the buildings and construction sector.

Going forward, a key ingredient for unlocking investment flows is green building certification, which serves as a quality assurance and verification instrument to facilitate the issuance of green bonds and other forms of sustainable finance. As the Buildings-Global Status Report has shown, certification is being rolled out across the globe and can act as a de facto code in places where they are absent.

Building Back Better

Finally, what does the future hold for the global buildings and construction industry in light of the current pandemic? The UNEP Emissions Gap Report states that if governments invest in climate action as part of pandemic recovery and solidify emerging net-zero commitments with strengthened pledges at the next climate meeting – taking place in Glasgow in November 2021 – they can bring emissions to levels broadly consistent with the two degree Celsius goal.

COVID-19 recovery packages provide an opportunity to build back better – literally. The impact of COVID-19 on the global construction industry, which employs 7 per cent of the global workforce and accounts for approximately 13 per cent of global GDP, has been severe. Construction activities have dropped by 10 – 25 per cent compared to 2019. At the same time, including building renovation in recovery packages presents a high potential for job creation – with 9 – 30 jobs created per 1 million US dollars invested, which is higher than in most other sectors.

As we have witnessed, the global health crisis came on top of a housing crisis and has placed greater attention on healthy, adequate and affordable buildings. While the final call is still out on how deeply the pandemic will influence our preferences and thus building design, it is clear that ventilation, passive design and nature-based solutions will play a more important role, as they come with multiple benefits in terms of occupant health, well-being and climate resilience.

The pandemic has illustrated how hard a crisis can hit when we are not prepared – climate change, with its severe storms, floods and the increasing number of heatwaves, requires heightened attention to adaptation and resilience, including in the buildings sector.

In summary, existing technologies can take us where we need to go: a decarbonised buildings and construction sector. National Roadmaps can help forge a common vision and co-create policies and decarbonisation strategies, spurring radical collaboration across all actors in the sector. COVID-19 recovery packages with green strings attached can help accelerate building decarbonisation by future-proofing our built environment. Yet, we need to roll out solutions faster and at a greater scale to bend the curve.