Decarbonizing buildings is an important part of the journey to achieving net zero greenhouse gas (GHG) emissions by mid-century.
Buildings and construction’s share of global final energy and energy-related CO2 emissions, 2020
Source: IEA 2021 via UNEP, GABC (https://globalabc.org/sites/default/files/2021-10/Buildings-GSR-2021_EXECUTIVE-SUMMARY_ENG_14-10-21%20FIN2.pdf)
Buildings make up a significant share of global GHG emissions, especially if you consider power generated for use in buildings, as well as building material and the construction industry’s footprints.
Buildings broadly made up 12 GtCO2e of GHG emissions in 2019, or 21% of global emissions. 57% of this was indirect from offsite power generation and heat, 24% direct CO2 emissions from on-site sources, and 18% from construction materials, particularly cement and steel.
For CO2 emissions only, buildings represent 31% of the global total, with residential buildings contributing 50%, non-residential buildings 32%, and embodied emissions 18%.
In the US alone, residential and commercial buildings account for some 31% of US GHG emissions including electricity sector emissions, without these, buildings account for about 8-9% of total US emissions.
Methane leakages look to be underestimated as discussed below, which could make these numbers higher.
Reducing buildings sector emissions requires major work on retrofitting, as well as on newbuilds. Some two-thirds of buildings that will be standing in 2040 already exist today, due to slow turnover of the building stock. This means that retrofitting is very important, alongside measures to bring newbuilds to net zero quickly.
The main sources of emissions reduction measures for buildings are as follows:
- Operational carbon (and other GHGs)
- Reduce energy use in terms of consumer/household/business preferences, floor space per capita, thermostat settings, multi-functionality of spaces, etc.
- Improve energy efficiency, through insulation, use of the thermal mass of buildings to regulate temperatures, use of more efficient electronics and appliances, smart devices and the Internet of Things, and demand-side management.
- Electrify HVAC and cooking, and use of heat pumps, to reduce and eliminate fossil fuel use and carbon emissions from heating oil, natural gas, etc.
- Reduce/eliminate methane leakages from natural gas infrastructure. Reduce/eliminate leakages of other GHGs such as in refrigerants.
- Decarbonize the electricity sector that powers buildings, use of distributed solar and on-site energy and thermal storage.
- Decarbonize building-related transportation, such as switching to electric vehicles and other alternative fuel vehicles or mass transit, and provision of EV recharging and other refueling infrastructure.
- Embodied carbon
- Cement and steel emissions alone account for some 5-6% of global emissions. Decarbonizing these sectors through multiple avenues, including renewables + electrification, clean hydrogen, and carbon capture and storage, are crucial for decarbonizing buildings and wider heavy industry.
- Decarbonize construction and deconstruction activities, including construction machinery fuel use and transportation fuel use for moving materials.
Demand-side Mitigation for Buildings and Other Sectors
Source: IPCC
Commercial property owners face rising energy expenditures as electricity and natural gas prices remain at multiyear highs, although these could move lower in the US as wholesale prices are expected to ease. For example, natural gas prices paid by commercial and residential building owners moved to multiyear highs in 2022 but have come off since and could ease further.
The residential sector includes buildings, houses, apartment buildings, and mobile homes. The commercial sector includes commercial buildings, government buildings, schools, and institutional living quarters.
The wholesale natural gas price is only one component of residential and commercial natural gas prices. The end-user data published by the EIA include all costs associated with the sale, such as taxes, transportation fees, connection fees, storage fees, and program participation fees.
Buildings also need to consider investments in climate adaptation measures. Meanwhile, outside of climate mitigation measures – reducing emissions to reduce the impacts of climate change – some amount of physical risk is already happening and already locked in even with maximal emissions reductions beginning today.
Climate adaptation also needs to be managed for the buildings sector, for resilience, and health and safety, in the wake of more frequent and intense storms, flooding, droughts, wildfire, and other physical risks. For more information on this subject, please see Multi-Asset Strategy - Macro to Micro: IRA and Local Policies Should Spur Commercial Building Energy Retrofit Projects to Reduce Carbon Emissions
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