President-elect Joe Biden brings a marked shift in U.S. energy policy priorities, with clean energy being central to his plan. The Biden Plans to “Build a Modern, Sustainable Infrastructure and an Equitable Clean Energy Future” and “Clean Energy Revolution and Environmental Justice” will launch a national effort aimed at creating millions of jobs, building modern and sustainable infrastructure, and delivering a clean energy future. According to the Biden campaign, the plans are designed to “modernize our nation’s electric grid, making it smarter, more resilient, and ready to meet the changing needs of a net-zero greenhouse-gas-emissions economy.” I’ve been asked several times recently what this plan includes, so I spent an entire day sifting through the Biden Plan and removing jargon in an effort to identify its key components. Its key provisions include following:
To build the next generation of the electric grid, President Biden will leverage existing infrastructure and rights-of-way, along roads and railways, to promote faster and easier permitting. The Biden Administration will also work with utilities to install advanced metering equipment; deploy electric vehicle (EV) charging infrastructure, and upgrade transmission lines to support larger regional electric markets that can distribute renewable energy.
Clean Energy Innovation
- Infrastructure investments resulting in a 100% clean energy economy and net-zero greenhouse gas emissions no later than 2050. Specifically, the vision includes a carbon free power sector by 2035.
- Creation of a new cross-agency Advanced Research Projects Agency on Climate (ARPA-C) to target affordable technologies to drive cost reductions in clean energy technologies, including battery storage, negative emissions technologies, next generation building materials, renewable hydrogen, and advanced nuclear.
- Accelerate R&D on battery technology and domestic production capabilities, with a focus on developing the domestic supply chain of batteries for EVs and the grid to compliment renewable energy resources.
- Research investments and tax incentives for carbon capture and sequestration technologies, including lowering the cost of carbon capture retrofits for existing power plants.
- Accelerate innovation in supply-chain resilience by investing in research to bolster and build critical clean energy supply chains in the U.S., addressing issues like reliance on rare earth minerals.
- Investments in the national laboratories and high-performance computing capabilities.
- Appoint FERC commissioners who will drive market reforms, like expanding regional electric markets, integrating renewables and demand-response, and promoting long-term infrastructure planning to achieve a clean energy economy.
- Remove barriers to the use of EVs, including concerns about price, range, and access to charging stations.
- Build a national electric charging system of 500,000 public charging outlets so that Americans can drive anywhere in the United States in an EV by 2030.
- Help state and local governments plan for the widespread adoption of EVs.
- Restoring the electric-vehicle tax credit and incentivizing businesses to shift their fleets to EVs. Additionally, Biden says that he will ensure that the U.S. Department of Energy invests $5 billion over five years in battery and energy storage technology, to boost the range and slash the price of electric cars.
- The U.S. Department of Transportation will also provide an additional $1 billion per year in grants to ensure the charging stations are installed by certified technicians.
- Convene the U.S. Departments of Energy and Transportation to coordinate on special demonstration projects, e.g. testing new highways that can charge EVs while in transit, and pilot projects that use EVs as mobile energy storage units. The Departments will provide grants to cities, towns, and counties that are open to piloting new kinds of charging infrastructure.
- Enact policies to promote domestic manufacturing of EVs.
- Workforce training like the Electric Vehicle Infrastructure Training Program (EVITP).
Energy Efficient Buildings
- The Biden plan will reinstate tax credits for residential energy efficiency; it also expands tax deductions for energy retrofits, smart metering systems, and other emissions-reducing investments in commercial buildings.
- Increase investment in low-income weatherization programs and key technologies like electric heat pumps.
Work with local and state governments and the private sector to expand the use of Property Assessed Clean Energy (PACE).
- Reinstate the solar Investment Tax Credit (ITC), which will expire in two years.
by Christian Bergland, Building Energy Exchange — May 9, 2019
On April 18, the New York City Council passed the Climate Mobilization Act (CMA), an ambitious legislative package aligned with the City’s 1.5°C Climate Action Plan. This plan represents New York City’s commitment to the carbon draw-down targets set out in the Paris Agreement, pledging the city to carbon neutrality by 2050. Central to the Climate Mobilization Act is Local Law 97, First-of-its-kind legislation placing emissions limits on New York City’s large buildings, both commercial and residential.
A new department, the Office of Building Energy and Emissions Performance, will be charged with implementing and enforcing CMA policies. This department, headed by a design professional, will work in concert with City agencies and offices towards successful realization of the CMA’s goals. To this end, Local Law 97 also includes provisions for the creation of an advisory board tasked with hammering out detailed recommendations on the bill’s effective implementation and enforcement.
Requiring that buildings do their part to meet 80 x 50’s GHG reduction goals, Local Law 97 outlines two introductory compliance phases, with an initial period of 2024-2029. While some CMA specifics are set to be determined by the new department, initial compliance limits are fairly rigid, and are set to target those New York City buildings with the highest emissions intensity levels. Limits for the second compliance period of 2030-2034, meanwhile, are in line with the City’s interim emissions reduction goal of 40% by 2030 (40 x 30). The Office of Building Energy and Emissions Performance will have some discretion in determining the compliance path and the carbon calculation process through the rule-making process, but the 40% reduction limit is explicit in the legislation, with a requirement that any adjustments to emissions limits be at least as stringent as those laid out in the bill.
In addition to Local Law 97, the Climate Mobilization Act includes a number of other laws geared towards moving New York City’s buildings towards the City’s 80 x 50 goals, including:
- Local Laws 92 & 94 – Green Roofs & Solar PV: Requiring green roofs solar PV systems on certain new construction and renovation projects. Local Law 95 – Building Labeling: Adjusting metrics used for letter grades assessing building energy performance.
- Local Law 96 – PACE: Establishing clean energy financing tools for building owners (more on this below).
- Local Law 98 – Wind Energy: Obliging the Department of Buildings to include wind energy generation in its toolbox of renewable energy technologies.
Thankfully, there are resources to help building owners navigate this evolving regulatory landscape. The NYC Retro Accelerator supports building owners’ efforts to improve their buildings’ energy efficiency. At the state level, NYSERDA has a number of programs geared towards putting buildings on the path to energy efficiency. And, of course, Building Energy Exchange is here to ensure that building owners have a thorough understanding of options to improve their buildings’ energy usage profiles.
Does Local Law 97 apply to my building?
The bill broadly applies to buildings 25,000 square feet and larger, or to two or more buildings on the same tax lot together exceeding 50,000 square feet. Excluded from the bill are houses of worship, buildings with one or more rent-regulated units, and other forms of affordable housing.
How are emissions limits determined?
Emissions reduction targets are in line with the roadmap set out in the 1.5°C Climate Action Plan, and represent a 40% carbon reduction by 2030 and an 80% carbon reduction by 2050 relative to 2005 levels. Limits are assigned according to building occupancy type, with accommodations made for energy-intensive facilities involved in healthcare. Emissions limits for both the first and second compliance periods may be adjusted through the rule-making process. Limits are set to become significantly more stringent during the second compliance period, evidenced by the table below. Local Law 97 allows for these limits to be adjusted by rule-making, it mandates that any adjustments must be at least as stringent as the emissions limits put forth in the bill.
*Limits for 2035-2050 period will be determined by the Office of Building Energy and Emissions Performance, but the legislation sets out a citywide average emissions intensity target of 0.0014 tCO e/sf/yr for all covered buildings by 2050, a roughly 60% reduction beyond the 2024-2029 limits.
Building emissions are determined according to designated greenhouse gas coefficients for various fuel types. While the bill assigns coefficients for the initial compliance period, those for subsequent compliance periods will be determined via the rule-making process. Local Law 97’s emissions reduction targets, including its increased stringency from 2030 onward, is premised on New York City’s electric grid becoming much cleaner in the future. A cleaner grid will allow building owners to tap into emission savings by converting from polluting carbon-fueled building systems to cleaner systems powered by electricity from the grid. Large-scale offshore wind farms, increased solar capacity, linkages with Quebec hydro-power, and movement towards a decentralized grid together promise to
modernize our grid and increase electrification’s viability as a sustainability measure.
How can I pay for necessary building improvements?
Local Law 96 of the Climate Mobilization Act lays the groundwork for a property assessed clean energy (C-PACE) program. C-PACE financing is tied to a property rather than property owners, meaning that repayment obligations are transferable when a property changes ownership. This distinction helps mitigate property owners’ concerns about upfront costs relative to long-term energy savings.
Does the bill include any alternative compliance pathways?
Yes, the bill includes several alternative compliance pathways to help building owners meet their carbon reduction mandates, including:
Carbon Offsets During the first compliance period, up to 10% of a building’s annual emissions limit can be deducted with the purchase of greenhouse gas offsets, also known as carbon offsets. Offsets are credits generated in response to greenhouse gas reductions by a given party that can then be purchased by or exchanged with other parties to compensate for emissions in excess of defined emissions limits. New York City’s specific rules surrounding offset purchases will be determined through rule-making, with a mandate for strong consideration of environmental justice concerns. The role of offsets in subsequent compliance periods has yet to be determined.
In addition to offsets, building owners also have the option of purchasing unlimited renewable energy credits (RECs), also known as renewable energy certificates, to be deducted from their reported annual building emissions for electricity consumption. RECs are generated through the production of energy by renewable sources, per Local Law 97 and by convention denominated in megawatt hours (MWh). The bill requires that RECs represent energy that is deliverable to the NYC area (meaning no wind power credits from Texas, for example) and generated in the same year as the building emissions for which they are compensating. Local Law 97 also mandates that RECs must only be used for compliance with this particular bill and cannot be used in conjunction with other compliance mandates
(essentially: no double dipping).
Carbon trading represents another potential alternative compliance pathway. Local Law 97 mandates that the City study the development of a citywide emissions trading scheme (ETS) focused on greenhouse gas emissions from buildings by 2021. Emissions trading, also known as cap and trade, allows for covered parties – in this case, building owners – to balance their emissions with credits purchased from other parties whose building emissions fall under the emissions threshold. In practice, carbon trading might also allow for property owners with large portfolios –universities and major real estate companies, for example – to offset the poor performance of some of their buildings with exemplary performance from others. Tokyo currently has the world’s only buildings-based emissions trading scheme, and might serve as a model for New York City. As with greenhouse gas offsets, Local Law 97 mandates that the study incorporate environmental justice concerns so as to avoid localized pollution increases.
Buildings facing financial difficulties, defended by the application of tax liens or property tax exemptions, may be temporarily exempt from Local Law 97.
Emissions Limit Adjustment
A building facing mandated emissions reductions in excess of 40% of its overall emissions may receive an emissions limit reduction equivalent to 70% of the building’s emissions limits in the 2018 calendar year.
Is everything set in stone?
No. While Local Law 97 establishes guidelines for limiting New York City’s building emissions, many of the specifics have yet to be ironed out. As noted, while the bill includes guidelines for greenhouse gas coefficients during the initial compliance period, subsequent standards will be set through rule-making. In addition, the emissions limits are subject to change and lack specific guidelines for 2035 onward. While there exists some ambiguity regarding specific policies moving forward, there are still concrete steps you can take today to move your building towards compliance.
Where can I find information on how to improve my building’s energy performance?
The Building Energy Exchange has developed a catalogue of published reports and case studies illuminating diverse potential compliance pathways for building owners. Specific resources of interest include: Tech Primers offer an introduction to leading-edge efficiency solutions limiting building energy use. High Performance Retrofit Track: Participant Profiles highlight successful building retrofits completed by some of New York City’s most forward looking building owners.
Turning Data Into Action utilizes New York City’s building energy usage bench-marking data to assess energy efficiency Pursuing Passive details the theoretical pathways for various building types. Retrofit of an actual mid-century post-war building to the Passive House standard. Better Steam Heat identifies opportunities for improving steam heating systems in large multi-family buildings Lighting the Way offers guidance on commercial lighting system upgrades that can reduce energy use. In addition to our resources, the Building Energy Exchange offers the Passive House Primer, a one-hour seminar on Passive House fundamentals and their application in the NYC market.
Outside of the Building Energy Exchange, other organizations include the New York City Retrofit Accelerator, supplying building owners with free advisory services to streamline the building improvement process. Building owners in need of financing assistance can work with New York City Energy Efficiency Corporation, a non-profit specialty finance company geared towards providing custom-tailored solutions to close financing gaps for clean energy projects. For those involved in the construction and building-maintenance trades, GPRO offers training in high-performance sustainability methods.
DBRS Morningstar’s Commercial Property Assessed Clean Energy ABS Sector Outlook: Stable Despite Coronavirus
June 30, 2020
Despite the ongoing impact of the Coronavirus Disease (COVID-19) on the U.S. economy and on borrowers’ ability and willingness to repay outstanding debts, DBRS Morningstar’s outlook on the commercial property assessed clean energy (C-PACE) asset-backed securities (ABS) sector is stable. The coronavirus pandemic has had a limited effect on the C-PACE sector to date. With the closure of many nonessential businesses across the U.S., jobless claims have exceeded 47 million since mid-March, severely disrupting overall economic activity. We expect portfolios with exposure to hotel and retail properties to be the most negatively affected. Nonetheless, we expect limited credit deterioration in C-PACE securitizations due to the seniority of amortizing PACE assessments and underlying low loan-to-value (LTVs) ratios .
By providing short-term financial assistance, in the form of loans or grants related to the pandemic, the Coronavirus Aid, Relief, and Economic Security Act has alleviated some economic difficulties on borrowers experiencing hardship—including consumers, small businesses, and large corporations.While we expect more pronounced performance deterioration in higher credit risk portfolios, the structural features and protections in typical C-PACE transactions will likely help mitigate the effect of deteriorating borrower credit. However, the uncertain magnitude of the economic impact related to the coronavirus may exert differing degrees of downward pressure on certain subordinate tranches.
In the context of this highly uncertain environment and in the interest of transparency, we revised our set of forward-looking macro-economic scenarios for select economies related to the coronavirus in the commentary Global Macroeconomic Scenarios: June Update, published on June 1, 2020. In our rating analysis, the moderate scenario is serving as the primary anchor for current ratings, while the adverse scenario serves as a benchmark for sensitivity analysis. This moderate scenario primarily considers two economic measures: declining gross domestic product (GDP) growth and increased unemployment levels. For asset classes where commercial-based obligors are the source of cash flows to repay the rated transaction, among other things, GDP provides the basis for measuring performance expectations.
Key highlights for the U.S. C-PACE and Single Asset Single Borrower (SASB) C-PACE asset classes include:
- We believe that increases in C-PACE assessment payment delinquencies will be limited. The combination of priority, low leverage resulting in non-acceleration of senior payment relatively small loan payments, and debt provide the borrower (property owner) with strong incentives to pay the C-PACE assessment rather than risk losing ownership of the asset through a tax foreclosure sale which would jeopardize other typically larger capital components of the project. In the unlikely event of a borrower’s failure to pay the C-PACE assessment when due, the same combination of factors provides the first mortgage lender or other junior capital provider with significant capital exposure in the transaction with a strong incentive to make a protective payment to retain its lien on the property.
- We also believe the increased risk of construction delays on properties undergoing new construction or gut rehab should not translate into a significant increase in C-PACE assessment payment delinquencies. Most of these properties have completion guarantees from one or more principals of the developer to help mitigate the construction completion risk. A liquidity reserve account is typically established and funded from the proceeds of the C-PACE financing at the time of the loan closing. Proceeds in this account are typically structured to cover C-PACE assessment payments during the property’s construction and stabilization period. Because of the capitalized interest and principal reserves, the first C-PACE assessment due date for payments paid from property operations is typically a year or more out, after the construction is expected to be completed.
- In the unlikely event that a payment default forces a foreclosure sale and change of ownership, the new property owner will be required to make delinquent payments, pay any late fees, and take over future payments. Because C-PACE loans do not accelerate, the new owner will not be responsible for an immediate payoff of the current outstanding loan balance. This important characteristic facilitates the transfer of ownership and continuity of payments. However, notwithstanding this benefit, in some cases, the new owner may choose to pay off the outstanding C-PACE loan at time of transfer.
- Finally, there are structural features of C-PACE securitizations that are beneficial to investors. For example, a typical structure includes one class of notes, whereby the ultimate payment of principal and interest mitigates liquidity concerns. In addition, as mentioned above, capitalized interest reserves and interest only periods during project stabilization also help to minimize default risk in early loan periods.
For more information, please see our commentary Global Macroeconomic Scenarios: Application to DBRS Morningstar Credit Ratings, published April 22, 2020.
by Patrick Dolan (US) and Ryan Graham (US) — September 7, 2020
To promote growth of renewable energy projects, the New York State Legislature recently passed bill A.7805/S.6523 (the “C-PACE Bill”), which will allow real estate developers and commercial property owners to obtain Commercial Property Assessed Clean Energy (C-PACE) financing for new construction projects. C-PACE programs are thought to be beneficial for cities, promoting energy efficiency, reducing energy costs and promoting local economic development.
Generally, PACE financing is an attractive financing option that allows property owners to obtain funds from pre-qualified private lenders for energy efficient building improvements. PACE programs are administered by state government policies that classify certain clean energy upgrades as public benefits.
New York’s Commercial Property Assessed Clean Energy (“C-PACE”) program is administered by the Energy Improvement Corporation (“EIC”), a state agency, and dates back to 2009. The program was updated in 2019 to allow commercial property owners the ability to access third-party financing on favorable terms. For more information on the C-PACE program as previously administered in New York, refer to our News Wire update from August 2019.
Prior to the passage of C-PACE Bill, C-PACE financing was available only to finance improvements to already existing buildings. Under the new bill, the C-PACE program has been expanded to allow C-PACE financing for new construction projects. In passing the C-PACE Bill, the New York State Assembly emphasized that commercial real estate developers often fail to use the newest and most energy efficient equipment in new construction projects, because they could not take advantage of C-PACE financing. By saving 0n construction costs, real estate developers have gradually passed costs on to local communities via higher energy costs, emissions and pollution. In updating New York’s C-PACE program, the New York State Legislature hopes that real estate developers will be able to incorporate more energy-efficient equipment in new construction projects and mitigate future direct and indirect costs to local communities.
Industry advocates have widely applauded the New York State Legislature for passing C-PACE Bill. In particular, industry advocates have emphasized that the C-PACE Bill will benefit the New York economy that has been greatly impacted by the COVID-19 pandemic and subsequent economic downturn, and they hope that the C-PACE Bill will lead to an increase in investment and provide more work for construction workers, engineers and architects.
Governor Cuomo is expected to sign the C-PACE Bill in the coming weeks. The text of the C-Pace Bill can be found here. For regular reports on new developments affecting energy efficiency and clean energy, subscribe to the Norton Rose Fulbright Project Finance News Wire here.
The President-Elect has Included those with Climate Experience Across a Wide Swath of Federal Agencies
by Adam Aton, Jean Chemnick, E&E News on November 14, 2020
From the Pentagon to the General Services Administration, President-elect Joe Biden has embedded climate-minded officials throughout his sprawling transition team. Climate experts, former Obama administration officials and green activists abound among the teams managing the transition for EPA; the Energy, Interior and Agriculture departments; and the White House Council on Environmental Quality. Unlike past transitions, officials with significant climate or clean energy experience also popup in departments like State, Defense, Treasury and Justice.
They’re even handling the transition at agencies that, so far, have been on the periphery of climate policy, like the Small Business Administration and the Federal Reserve. Of Biden’s 39 agency review teams, at least 19 have one or more officials with some climate background. Perhaps just as telling, many of the transition officials had a hand in the 2009 stimulus, to date the largest government investment in clean energy and the model for Biden’s climate plan. The teams include a cross section of union representatives, progressive policy experts, establishment loyalists, activist scholars, corporate envoys and technocrats.
It’s the latest test of the Biden team’s balancing act between progressives, whom it courted during the campaign, and the establishment veterans who have proliferated in the former vice president’s orbit for years. In the short term, some of the Biden transition’s biggest challenges will come from simply restaffing and rebuilding the agencies that were deconstructed under President Trump, said Aaron Weiss of the Center for Western Priorities. “These folks are going to be coming into departments that have, in many cases, been eviscerated,” he said, pointing to the exodus of scientists and career staffers from the federal government over the past four years.
EPA, for example, shed more than 700 scientists under Trump and had only filled about 350 of those positions as of January, according to a Washington Post analysis. “The amount of rebuilding that will need to be done is unprecedented,” Weiss said. The exit of so much essential staff over the last four years presents a challenge, said Tim Profeta, director of Duke University’s Nicholas Institute for Environmental Policy Solutions. “But it’s also an opportunity in terms of recruiting new, motivated talented civil servants who would be dedicated to the mission of addressing climate change in the federal government,” he said.
Profeta helped lead the Climate 21 Project, or C21, which yesterday unveiled 300 pages of recommendations for a new administration to prepare for a full-court press on climate change (Greenwire, Nov. 11). The group’s suggestions cover 11 government offices, agencies and departments from the Office of Management and Budget to EPA to the State Department. It also calls for a new White House policy council to oversee work on climate across the federal agencies. The C21 plan was written in part by members of Biden’s transition team.
One is Joseph Goffman, serving on the EPA transition. He was EPA’s top lawyer on climate and air issues in the Obama administration, and he played a leading role in crafting the Clean Power Plan and regulations for methane from oil and gas operations. Another is Robert Bonnie, leading the transition at USDA. Bonnie was climate adviser to Agriculture Secretary Tom Vilsack—himself a close Biden ally—and later served as the department’s undersecretary for natural resources and environment. The EPA landing team will be held by Patrice Simms of Earthjustice, an environmental lawyer who began his career at EPA and served in the Obama administration as a deputy assistant attorney general in the Environment and Natural Resources Division at the Justice Department. Also on the team are Cynthia Giles, who served as EPA’s top official for compliance and enforcement under Obama, and Ken Kopocis, its top chief for water quality.
The Interior team includes Maggie Thomas, who was a climate adviser to the Democratic presidential campaigns of Washington Gov. Jay Inslee and Massachusetts Sen. Elizabeth Warren, both of whom proposed ending Interior’s oil, gas and coal leasing. It also includes Kate Kelly, director of the Center for American Progress’ public lands program; Elizabeth Klein, an Interior veteran close with David Hayes, the deputy secretary under the Clinton and Obama administrations; Kevin Washburn, who was assistant secretary for Indian Affairs; and Bob Anderson, an attorney specializing in Native American law who was co-lead of Obama’s Interior transition.
The Energy Department team is led by Arun Majumdar, the initial director of the Advanced Research Projects Agency-Energy, which started under Obama. Also on that team is the AFLCIO’s Brad Markell, a strong advocate of carbon capture technology. The CEQ team is headed by Cecilia Martinez, the environmental justice advocate who was a member of the Biden campaign’s climate engagement advisory council. She’ll be joined by Nikki Buffa, who was deputy chief of staff at Obama’s Interior, and Bloomberg Philanthropies’ Shara Mohtadi, who helped lead America’s Pledge and the group’s anti-coal work.
The Department of Justice team includes Richard Lazarus, a Harvard University professor who worked on the landmark Massachusetts v. EPA Supreme Court case, which in 2007 established EPA’s obligation to regulate greenhouse gas emissions under the Clean Air Act.Earlier this year he published a book called “The Rule of Five” about the people and issues that shaped that case (Greenwire, Sept. 14).
Sue Biniaz, the State Department’s top attorney on climate change under four presidents, is a member of State’s landing team. She’s credited with saving the Paris Agreement at least twice by supplying diplomatic words in late-night scrums at climate conferences. That helped the U.S. negotiating team bring home a deal that wouldn’t require Senate ratification while satisfying other global players that the agreement would still have teeth. “Everybody always used to say that Sue knows where every comma is in the Paris Agreement,” said Nathaniel Keohane, senior vice president at the Environmental Defense Fund and a veteran of Obama’s White House.
The Treasury team includes Andy Green, now of the Center for American Progress, who worked on pricing climate risk as a lawyer for the Securities and Exchange Commission. Another Treasury transition official is Marisa Lago, who handled climate finance under the Obama administration and oversaw adaptation projects as chair of the New York City Planning Commission.
The Department of Transportation team includes Patty Monahan, a member of the California Energy Commission and a vocal advocate of electric vehicles, as well as Austin Brown, who was assistant director for clean energy and transportation in Obama’s Office of Science and Technology Policy.
The team for the General Services Administration—which oversees federal procurement and will figure heavily into Biden’s plan to de carbonize the government—includes Josh Sawislak, a former CEQ official who is now a senior adviser to the Center for Climate and Energy Solutions.
The Small Business Administration team includes Cliff Kellogg, executive director of the C-PACE Alliance, which works on financing energy efficiency and renewables projects.
The Defense Department team includes Sharon Burke, the former DOD assistant secretary who has focused on climate change’s impact on the military.
The Department of Homeland Security team includes Craig Fugate, the Obama administration’s Federal Emergency Management Agency director.
The team for the Federal Reserve includes Amanda Fischer, a vocal advocate of the Fed accounting for climate risk and a former chief of staff to progressive Rep. Katie Porter (DCalif.)- The transition team for the United Nations includes Leonardo Martinez-Diaz, global director of the World Resources Institute’s sustainable finance center. He was formerly the Treasury Department’s deputy assistant secretary for energy and environment. And the National Security Council team is headed by Jeff Prescott, who published an oped last year comparing Trump’s climate denial to the administrative failures that led to the Chernobyl nuclear disaster.
Reporters Maxine Joselow, Thomas Frank, Avery Ellfeldt and Benjamin Storrow contributed
Towards a Zero-Emissions, Efficient and Resilient Buildings and Construction Sector
Decarbonizing the buildings and construction sector is critical to achieve the Paris Agreement commitment and the United Nations (UN) Sustainable Developments Goals (SDGs): responsible for almost 40% of energy- and process-related emissions, taking climate action in buildings and construction is among the most cost-effective. Yet, this 2019 Global Status Report on buildings and construction tells us that the sector is not on track with the level of climate action necessary. On the contrary, final energy demand in buildings in 2018 rose 1% from 2017, and 7% from 2010.
These findings stand in stark contrast with the 2019 Emissions Gap Report, which states that we will have to cut almost 8% of emissions each year from 2020, and are confirmed by the International Energy Agency (IEA) World Energy Outlook 2019, which found that in 2018 the rate of improvement in energy intensity had slowed to 1.2% – less than half the average rate since 2010. Both reports underline the need for urgent action by policy makers and investors. To meet the SDGs and the IEA Sustainable Development Scenario, we need to reverse the trend and make a concerted effort to de-carbonize and enhance energy efficiency in buildings at a rate of 3% a year.
In 2020, Nationally Determined Contributions (NDCs) under the Paris Agreement are due for revision – an opportunity that cannot be missed to ramp up ambition in the buildings and construction sector. The 2018 Global Status Report on buildings and construction found that a total of 136 countries have mentioned buildings in their NDCs, yet few have specified the actions they will use to reduce emissions. Therefore, in their new NDCs, nations must prioritize actions to decarbonise this essential sector. This means switching to renewable energy sources. It means improving building design. It means being more efficient in heating, cooling, ventilation, appliances and equipment. It means using nature-based solutions and approaches that look at buildings within their ecosystem, the city.
The report also tells us that the building stock is set to double by 2050, which presents another important opportunity not to be missed. In making good on SDG 11 with its provision for affordable and adequate housing for all, we need to make sure we promote clean solutions and innovations to make buildings future-proof. In line with SDG 7, we have to double our efforts on energy efficiency to bring gains of at least 3% per year.
Such efforts must be supported through investments in energy efficiency; but here also, the numbers show that we are headed in the wrong direction: investment in buildings sector energy efficiency flattened in 2018 instead of showing the growth needed. In September, at the UN Secretary General’s Climate Summit, countries as well as the private sector made commitments to a zero-carbon buildings sector, and the goal of mobilizing USD 1 trillion in “Paris-compliant” building investments in developing countries by 2030 was set. At the same time, the Net-Zero Asset Owner Alliance was founded with the world’s largest pension funds and insurers – responsible for directing more than USD 2.4 trillion in investments – committed to carbon-neutral investment portfolios by 2050.
These are signs of hope. And change is in the works. This report provides examples of country, city and private sector actions, of how the buildings and construction sector is reforming. Through this Global Status Report series, we are keeping an eye on progress made. And through another joint product – a series of regional roadmaps – we are working with experts and policy makers in defining their re
It is well within the realm of possibility for the buildings and construction sector to deliver its full mitigation potential and help the world achieve its climate and sustainable development goals. Together, we can build for the future.
The buildings and construction sector accounted for 36% of final energy use and 39% of energy and process-related carbon dioxide (CO2) emissions in 2018, 11% of which resulted from manufacturing building materials and products such as steel, cement and glass. This year’s Global Status Report provides an update on drivers of CO2 emissions and energy demand globally since 2017, along with examples of policies, technologies and investments that support low-carbon building stocks. The key global buildings sector trends are:
- Global buildings sector emissions increased 2% from 2017 to 2018, to reach a record high, while final energy demand rose 1% from 2017 and 7% from 2010.
- Increases were driven by strong floor area and population expansions. While efficiency improvements continued to be made, they were not adequate to outpace demand growth.
- 2020 is a key year for countries to enhance their Nationally Determined Contributions (NDCs), especially concerning further actions to address energy use and emissions including embodied emissions in the buildings and construction sector.
- Countries are innovating and implementing measures to improve efficiency and reduce emissions from their building stock. As sharing effective measures globally would amplify their impact, regional roadmaps are being developed for this purpose.
Global Building Stock Emissions Continue to Rise
In 2018, global emissions from buildings increased 2% for the second consecutive year to 9.7 gigatonnes of carbon dioxide (GtCO2), suggesting a change in the trend from 2013 to 2016, when emissions had been leveling off. Growth was driven by strong floor space and population expansions that led to a 1% increase in energy consumption to around 125 exajoules (EJ), or 36% of global energy use.
A major source of rising energy use and emissions by the global building stock is electricity, the use of which has increased more than 19% since 2010, generated mainly from coal and natural gas. This indicates how crucial it is to make clean and renewable sources of energy accessible, and to use passive and low-energy designs more widely in building construction. From 2017 to 2018, energy intensity continued to improve for space heating (-2%) and lighting (-1.4%), but increased for space cooling (+2.7%) and remained steady for water heating, cooking and appliances. At an 8% increase in 2018, space cooling became the fastest-growing use of energy in buildings since 2010, though it accounted for only a small portion of total demand at 6%.
2020 NDC revisions are a new opportunity to reduce buildings sector emissions
As part of their plans to limit greenhouse gas (GHG) emissions, 184 countries have contributed NDCs under the United Nations Framework Convention on Climate Change (UNFCCC). Although most countries (136) mention buildings in their NDCs, few detail explicit actions to address emissions within the buildings sector. In the next round of NDCs, covering 2020 to 2025, further focus is needed on actions to mitigate building emissions through switching to low-carbon and renewable energy sources, and greater attention should be paid to low-carbon building materials, building envelope improvements, nature-based solutions, and equipment and system efficiency. These efforts will require higher investments than the USD 139 billion of 2018 – which was a 2% drop from the previous year. To tackle emissions and reduce energy intensities in the buildings and construction sector, governments, companies and private citizens must raise investments in efficiency adequately to offset growth.
New Policies Lead the Way Forward
Although greater ambition is needed, policy makers, designers, builders and other participants in the buildings and construction value chain globally are undertaking activities to de-carbonize the global building stock and improve its energy performance.
- In a number of countries, building codes are being introduced for the first time or are being strengthened, for example in India through the Eco-Niwas Samhita India’s first energy conservation code for the residential sector, and in Rwanda through the Green Building Minimum Compliance System. Policies regulating the energy performance of new buildings are a powerful means to address future emissions growth.
- Building owners continue to adopt advanced certifications for high energy performance or low- and zero-carbon buildings, which stimulates improvements in both the new and existing building stock. The World Green Building Council offers support for such actions through its Net Zero Carbon Buildings Commitment that is being developed among its partners.
- Investors are establishing dedicated products and funding schemes for low-energy and low carbon buildings across the world. For example, the EU Green Tagging strategy that sets rules for European green financing is the first to include recommendations for net-zero energy buildings (nZEBs) and green renovation.
These activities to enact regulations and enable greater market adoption of low-energy buildings are encouraging signs of efforts to curb future energy demand and emissions. Some countries have also established strategies to work towards achieving a net-zero-carbon building stock by 2050 or earlier. For example, Japan and Canada are developing new policies to achieve net-zero and net-zero-ready standards for buildings by 2030. As more countries prepare their NDCs, more ambitious strategies to address existing building stocks will be put forward.
The Global Alliance for Buildings and Construction (GlobalABC) and the International Energy Agency (IEA), in collaboration with regional members and stakeholders, are developing Regional Roadmaps for Latin America, Africa and Asia to forge pathways towards efficient and resilient zero-emissions buildings and construction sectors. The roadmaps:
- Highlight priority actions for each region in eight key areas: urban planning; new buildings; existing building retrofits; building operations; systems; materials; resilience; and clean energy.
- Are being developed through consultations, workshops and webinars held across the three regions to gather insights and opinions from regional, national and local stakeholders on the targets and timelines for delivering an energy-efficient, low-carbon building stock.
- Are regionally owned living documents that will be shared by the end of 2019 and continue to be developed throughout 2020.
Support activities such as national alliances that unite local construction value chains to enable the development and implementation of national strategies for zero-net-energy and-emissions buildings.
The buildings and construction sector globally is showing an increase in both emissions and energy use, limited progress on new and existing policies, and a further slowdown in energy-efficiency investment growth. More action is therefore needed to curb emissions and deliver a low-carbon, sustainable built environment.
Energy and emissions in the buildings and construction sector
Building construction and operations accounted for the largest share of both global final energy use (36%) and energy-related CO2 emissions (39%) in 2018 (Figure 2).
Global final energy consumption in buildings in 2018 increased 1% from 2017, and by more than 8 EJ (about 7%) since 2010 (Figure 3). While strong growth in the main buildings sector resulted from floor space and population expansion outpacing energy efficiency gains, floor area growth continues to decouple from energy demand, with floor area in 2018 having increased 3% from 2017 and 23% since 2010.
From 2010 to 2018, global electricity use in buildings rose by over 6.5 EJ, or 19%. Emissions, which result from the fuel sources used for electricity generation and still include high levels of coal, especially in emerging economies, also rose in 2018. Continued de-carbonization of the electricity supply is therefore needed to transition to clean-energy, low-carbon buildings. Also during 2010-18, renewable energy became the fastest-growing energy source for buildings, with its use
increasing 21% (up 3% during 2017-18 alone). Natural gas use rose 8% during the same period, meeting new demand as well as displacing coal use, which dropped by almost 10% globally during 2010-18 (-2% from 2017 to 2018).
Globally, greater end-use energy consumption due to significantly higher electricity use since 2010 for space cooling, appliances and hot water, is resulting in increased emissions (Figures 4 and 5). Space cooling demand rose more than 33% during 2010-18 and by 5% in 2017-18, while energy demand for appliances in 2018 increased by 18% since 2010 and for water heating by 11%. At the same time, space heating demand decreased 1% from 2010, though it has remained
stable for the past five years at one-third of total global energy demand in buildings.
From 2010 to 2018, changes in buildings sector energy intensity per unit of floor area (as a proxy for energy efficiency) show that the greatest improvements (i.e. reductions) were in global average space heating (-20%) and lighting (-17%) (Figure 5). Light-emitting diodes (LEDs) continue to be important in reducing energy consumption for lighting as floor area increases and falling consumption for space heating indicates that building envelopes have improved. However, as floor area has been expanding rapidly in hot countries, cooling demand is increasing. As better building envelopes are crucial to reduce energy use for heating and cooling, building codes must remain a policy priority along with technology efficiency improvements.
Factors influencing global buildings sector energy use include changes in population, floor area, energy service demand (e.g. more household appliances and cooling equipment), variations in climate and how buildings are constructed and used. Those that have contributed most to higher energy demand since 2010 are floor area, population and building use, while improvements in building envelopes (e.g. better insulation and windows) and in the performance of building
energy systems (e.g. heating, cooling and ventilation) and components (e.g. cooking equipment) have helped to offset energy demand growth (Figure 6). Nevertheless, total energy demand in buildings continues to increase and greater investments in efficiency and passive design strategies are needed to limit demand and reduce energy intensity.
Final energy consumption in residential buildings made up more than 70% of the global total in 2018, with growth resulting primarily from floor area and population increases, while floor area alone remains the main driver of higher consumption in non-residential buildings (Figure 7). Consumption in residential buildings rose more than 5 EJ during 2010-18, and 3 EJ in non-residential buildings. Growth in residential demand continues to reflect population and floor area increases as well as development in emerging economies, along with a continued shift away from the traditional use of biomass towards modern fuels (e.g. electricity, liquefied petroleum gas and natural gas).
GHG Emissions Trends
In a reversal of the previous five years, buildings sector emissions appear to have risen to 9.7 GtCO2 in 2018 – an increase of 2% since 2017, and 7% higher than in 2010. Buildings represent 28% of global energy-related CO2 emissions (39% when construction industry emissions are included). Indirect emissions (i.e. from power generation for electricity and commercial heat) account for the largest share of energy-related CO2 emissions in the buildings sector, representing around 68% of total buildings-related emissions from energy consumption in 2018 (Figures 8 and 9). The increases in emissions in 2016 and 2017 correspond with floor area and population expansions as well as growth in electricity demand (i.e. indirect emissions). Building construction emissions – those related to the manufacturing of building materials – amounted to a further 11 GtCO2 in 2018, for a total of 39% of global energy-related emissions.
Sustainable Buildings and Construction Policies
By 2020, countries are requested to communicate their new or updated nationally determined contributions (NDCs) setting out their efforts to reduce national emissions and adapt to the impacts of climate change. 2020 is therefore a key year for countries to enhance their NDCs and commit to more aspirational targets. In addition to NDCs, the coverage and strength of energy performance building codes and certification policies have continued to expand, and in 2018 several countries with updated codes adopted meaningful improvements that should reduce buildings sector energy demand growth, especially for heating and cooling, and make buildings and construction more sustainable.
Nationally Determined Contributions (NDCs)
Reporting on NDCs is an international process during which countries announce their national-level commitments to reduce emissions to limit the rise in average global temperature to less than two degrees Celsius (°C) above pre-industrial levels by 2100, as set out in the Paris Agreement. The 24th Conference of the Parties (COP24) in Katowice, Poland, presented the Katowice Climate Package that sets out the procedures and mechanisms to operationalize the Paris Agreement.
Within the package is guidance on communicating efforts to adapt to climate impacts; a transparency framework for efforts on climate change; a process for conducting a global stock take of overall progress towards the aims of the Paris Agreement; and directions for assessing progress on technology development and transfer. The package also contains directions for a further round of NDCs to be submitted by 2025.
To ensure comparability across all NDCs, it outlines how to develop mitigation goals and activities, specifically covering:
- mitigation co-benefits
- capacity-building support to help developing countries produce their NDCs
- a common time frame for communicating NDCs
- negative impacts of response measures on certain countries and sectors
- modalities for operating and using the public NDC registry.
To date, most countries (184) and the European Union have submitted NDCs, and many countries (136) mention buildings, although most NDCs still do not include explicit actions to address buildings sector energy use and emissions (Map 1). Seven countries updated their NDCs in 2018-19, and the Marshall Islands submitted their second NDC in 2019.
To help countries address buildings-related emissions, GlobalABC has developed guidance on how to include buildings in the NDCs through mapping, prioritizing, implementing and monitoring (UNEP, 2018). GlobalABC supports ambitious buildings sector climate actions, defined as those that will move the sector towards zero emissions by 2050 while increasing the built environment’s resilience and adaptive capacity.
NDCs submitted in 2018-19 focus on improving building performance codes and standards, fuel conservation and phasing out inefficient products and equipment (Box 1).
Of the 136 NDCs that now reference the buildings sector, most do not have specific targets or policy actions (Figure 10). While existing policies and NDCs covered more than 50% of buildings related CO2 emissions as of 2018,1 if committed NDCs were to become policy, the coverage would increase to more than 60%.
Building Energy Codes
Building energy codes, or standards, are requirements set by a jurisdiction (national or sub-national) that focus on reducing the amount of energy used for a specific end use or building component. In 2018, 73 countries had mandatory or voluntary building energy codes or were developing them.
Building energy codes play an important role in setting standards for building construction that will reduce the long-term energy demands of the buildings sector. With mandatory and progressive codes, energy use can be better managed as floor space expands, and progressive codes can respond to changes in legislation and the availability of cost-effective technologies. For maximum impact, it is essential that a building code be strong, be improved progressively over time and be implemented effectively. It is also advisable to move towards mandatory codes for both residential and non-residential buildings.
Of the 73 countries with codes, 41 have mandatory residential building codes and 51 have mandatory non-residential codes; 4 have voluntary residential codes while 12 have voluntary non-residential codes; and 8 more are in the process of developing building codes. Greater coverage, adoption and strength are needed to continue improving the energy performance of new buildings and major refurbishments.
There is still considerable need for countries and sub-national jurisdictions to develop and effectively implement building energy codes to reduce future energy demand and avoid expensive retrofits later. There are signs, however, that such codes are being considered by a number of countries in central Africa and Central America.
Building Energy Certification
Building energy certification involves programs and policies that evaluate the performance of a building and its energy service systems. Certification may focus on rating a building’s operational or expected (notional) energy use, and can be voluntary or mandatory for all or part of a particular buildings sector. The aim of energy performance certification for buildings is to provide information to consumers about their buildings and to gradually create a market for more efficient buildings.
As of 2018, 85 countries had adopted building energy performance certification programs(Map 3), and several countries and sub-national jurisdictions also updated their building energy certification policies in 2017-18 (see Box 3). The use of certification programs is growing, with voluntary certification for high-end buildings becoming a popular means of adding value, but there is still a lack of large-scale adoption of full, mandatory certification programs outside the European
Union and Australia. This means that tracking building energy performance over time and subsequently disclosing the information is still limited.
Investment and Financing for Sustainable Buildings
Total energy efficiency spending2 on buildings amounted to USD 139 billion in 2018 (Figure 11), a decline of 2% from 2017 (IEA, 2019). Driving this deceleration is the slowdown in investment within the European Union, even though the United States and China continue to invest in more energy efficient building systems. Within Europe, governments have either limited investment expansions (e.g. the United Kingdom and France) or have cut it back (e.g. Germany). In China, by comparison, overall real estate investment has grown 6% per year since 2015 to over USD 1.8 trillion in 2018. Chinese investment has been focused largely on residential buildings, with investments in efficiency rising to USD 27 billion in 2018 – a 33% increase from 2015. In the United States, investments in both residential and non-residential construction grew at a rate of 3.8% from 2015 to 2018, to reach USD 1.4 trillion, but the share of investment for improving building energy efficiency is in decline at 2% of total 2018 investment. The real estate market continues to embrace and invest in green buildings and green-building rating systems, with their overall Environmental, Social and Governance (ESG) scores increasing, which is a promising sign for the sector (GRESB, 2019). The 2018 Global Status Report (IEA and UNEP, 2018) provides further details on past investment and financing in sustainable buildings.
The overall investment trend mirrors slower progress for energy efficiency outcomes, with 2018 marking the third consecutive year in which the energy efficiency improvement rate slowed. An underlying factor was the static energy efficiency policy environment in 2018, with little progress made in implementing new efficiency policies or increasing the stringency of existing ones.
In the summer of 2019, an online questionnaire was sent to all GlobalABC members requesting their input for the 2019 Global Status Report, as well as case studies. The questionnaire provided members the opportunity to highlight their activities in support of low energy and low-carbon buildings and cities through actions such as new or improved building codes and standards, building certifications and NDCs. The following sections present insights from the responses.
The survey received 43 responses from a mixture of civil society organisations (30%), national governments (28%), the private sector (21%), non-governmental organizations (NGOs) (7%) and others. Although the majority of countries noted that no updates had been made to their NDCs in 2017 or 2018, several had updated their commitments relating to strategies for 2050 on buildings and construction (see Box 4) and most that responded had begun the 2020 revisions process.
A number of countries identified financing schemes to facilitate investment in low-emissions buildings through forms of green financing, for example a state grant in Sweden to support low rent apartments, whereby a higher grant can be received if the building’s energy performance surpasses the building code. In Senegal, local governments are offering reduced taxes on development when local materials are used in housing construction.
In 2018 and 2019, building energy codes were updated in three respondent countries: Colombia, Japan and Senegal. For Colombia, this involved revision of its mandatory local and regional building energy codes for both residential and non-residential buildings, covering public and transport spaces for the first time. Japan’s revisions included an update to the national partially mandatory energy code for both residential and non-residential buildings.
Several countries are considering innovative building codes or expanding existing ones to cover broader lifecycle emissions beyond energy. For example, Sweden is investigating addressing the environmental impact of new buildings by using an environmental certification. Currently in the process of revising its CO2 Act, Switzerland is considering introducing a very strict CO2 emissions cap for existing buildings, which in most cases would result in the banning of fossil fuel-based
heating systems unless the building is very well insulated. Meanwhile, Canada’s codes seek to leverage high-performance technologies and construction practices that are at the commercialization stage, and to include more climate change adaptation and resilience measures.
Building energy performance certification remains largely voluntary among respondent countries, with some exceptions for certain building types (commercial buildings in Tokyo, New York and Singapore, for example) or locations (e.g. both residential and non-residential buildings in the European Union). A range of certification types are being used around the world to indicate performance, and they are a mix of predicted and measured approaches. Respondents that
recently updated their certifications include Sweden (2018), which has included mandatory overage for all building types, and Medellin, Colombia (2019), which updated its voluntary coverage for residential and commercial buildings.
Global Roadmap Recommendations
A global transformation to a highly energy-efficient and low-carbon buildings and construction sector is essential to realize global ambitions to limit the rise in average global temperature to less than 2°C above pre-industrial levels by 2030. The critical window of opportunity to address buildings and construction emissions is in the coming decade, to avoid locking in inefficient buildings for decades to come. There is an equally critical need to address energy performance improvements
and emissions reductions in the world’s existing building stock.
The following section outlines the key priority areas identified in GlobalABC’s 2016 Global Roadmap (UNEP and GlobalABC, 2016) as well as the actions necessary to deliver a zero-carbon global building stock.
Future GlobalABC work includes developing regional roadmaps to provide targets that are more country- and region-specific. For further information on best practices and examples of existing policies and technologies for the buildings sector, see www.iea.org/buildings. Updates on Global Roadmap activities
GlobalABC roadmaps focus on developing a collaborative approach across eight thematic areas necessary to create a sustainable built environment for the future. Efforts exemplifying roadmap ideas are being made in countries and cities all around the world, and this section highlights numerous country-level case studies across various themes as examples of these activities (Box 5).
Urban planning policies should be used to reduce energy demand, increase renewable energy capacity and improve infrastructure resilience. Globally, local jurisdictions have significant control over how energy is used, and the emissions created by transportation, building construction and
lifetime building operations can be regulated through urban planning. Urban planning can also help combat climate risks by ensuring building resilience. Key actions in the area of urban planning include:
- Enacting urban planning policies that account for the long-term goal of de-carbonizing the buildings and construction sector.
- District energy planning, i.e. enabling a systemic approach that can integrate energy demand and supply at the district level to deliver more efficient low-carbon solutions.
There needs to be a higher uptake of net-zero-operating-emissions buildings. With the global population increasing by 2.5 billion by 2050, new buildings will have an important effect on future buildings-related energy use and emissions. Several key policy, investment and design actions can achieve sustainable (low-emissions, efficient and resilient) new buildings:
- Develop and implement mandatory codes. Transition from voluntary to mandatory codes that set a minimum efficiency for new buildings.
- Strengthen building codes. Establish a building code improvement cycle to strengthen performance requirements every three to five years, with the aim of achieving zero emissions and net-zero-energy codes.
- Integrate renewable energy into new building designs to achieve net-zero emissions or net-zero energy.
- Mobilize sustainable building financing. Facilitate widespread designing and construction of sustainable buildings by raising access to/use of financing to enable private investment.
- Lead by example. Develop policies ensuring that all new government facilities are efficient low-emissions buildings.
The rate of energy renovations and the level of energy efficiency in existing buildings need to be increased. Key steps to raise the performance of existing buildings involve increasing both the number of buildings improved and the amount of improvement achieved.
- Increase renovation rates in industrialized countries to an average of 2% of existing stock per year by 2025, and to 3% by 2040. Renovation rates in developing countries should reach 1.5% by 2025 and 2% by 2040.
- Increase the depth of renovation. Enable deep energy renovations that reduce energy consumption of existing building by 30-50% or more.
- Make renovation financing available. Raise renovation rates by increasing access to/use of financing to enable private investment in renovations.
- Lead by example. Develop policies ensuring that existing government facilities are renovatedto become efficient low-emissions buildings.
Better energy management tools and operational capacity-building can reduce the amount of operating energy needed and, hence, emissions. While delivering efficient and resilient low emissions new or renovated buildings is essential, it is equally important to manage existing buildings efficiently. Key actions to improve the energy management of buildings include:
- Installing energy management systems. Offer training in energy management systems and use energy management processes in all buildings, particularly non-residential ones.
- Strengthening human resources. Hire sustainability and energy managers and support capacity-building among them.
- Using smart controls. Deploy temperature, lighting and ventilation system controls and sensors as well as energy metering.
- Making information accessible. Provide data and information that will help building operators and occupants make better decisions.
It is important to reduce energy demand from systems, appliances, lighting and cooking. Energy consuming lighting, appliances and equipment systems, which commonly have a shorter lifetime than the buildings they are in, offer a significant opportunity to reduce emissions in new and existing buildings. Key actions to increase system sustainability in buildings include:
- Establishing minimum energy performance standards (MEPS). Develop, enforce and improve standards to set product quality and performance requirements.
- Mobilizing financing for clean systems. Facilitate the use of sustainable products by increasing access to/use of financing to enable private investment.
- Leading by example. Develop policies ensuring that all government buildings invest in low emissions and efficient systems.
Taking a lifecycle approach can reduce the environmental impact of materials and equipment in the buildings and construction value chain. Key actions to increase the sustainability of building materials and products include:
- Encouraging people to purchase low-energy and low-emissions products and materials by implementing policies that promote better purchasing decisions based on embodied carbon and energy.
- Reducing demolition by implementing policies to help people make better decisions based on the impact of building demolition versus reuse.
- Recycling construction materials. Support the development of material recycling processes for products and materials that can reduce lifecycle embodied energy and emissions.
- Phasing out high-global-warming-potential (GWP) refrigerants through policies and technology evolution, enabling a phase-down and then phase-out of refrigerants that give off global warming emissions.
- Introducing information and awareness campaigns to disseminate information on low-carbon materials and technologies (e.g. wood and earth constructions, innovative concrete) among professionals involved in building design and construction.
- Leading by example, by developing policies that ensure all government buildings invest in low emissions and efficient materials based on lifecycle analyses.
- Developing a circular economy by embracing a cradle-to-grave or cradle-to-cradle lifecycle approach in the buildings sector to promote systemic, material-neutral, performance-based methods and business models.
Building risks related to climate change can be reduced by adapting building designs and improving resilience. Key actions to increase the resilience of buildings include:
- Incorporating risk-zoning into urban planning. Use data and information to document potential risk exposure by location to enable improved decision-making during the building and infrastructure design process.
- Employing wind- and seismic-resistant construction methods. Implement policies and use best-practice designs and strong materials to make buildings more resistant to natural disasters and extreme weather events.
- Managing storm water. Require improved storm water retention within properties to reduce the negative impacts of water flowing to other properties and to surging waterways.
- Endorsing thermal-resistant construction. Implement policies and use best-practice designs to make buildings more resistant to extreme temperatures. The anticipated increase in cooling demand in particular needs to be addressed through the promotion of building designs that avoid excess cooling demand and use passive cooling measures and external shading.
Increasing access to secure, affordable and sustainable energy can reduce the carbon footprint of energy demand in buildings. Key actions to support the clean energy transition in buildings include:
- Integrating onsite renewable energy by including building-integrated photovoltaic (BIPV), solar thermal and micro-wind renewable energy projects in the planning and design of buildings and neighborhoods.
- Eliminating onsite fossil fuel-burning equipment by replacing systems with equipment that use clean energy, including highly efficient heat pump technology.
- Connecting buildings to low-emissions district energy systems. Support district energy system clean-energy transitions by connecting buildings when districts commit to upgrade their systems to clean energy.
- Purchasing only green power to support electricity grid clean-energy transitions.
- Implementing zero-carbon policies that support the clean energy transition based on the lifecycle benefits of the measures.
GlobalABC Work Areas
GlobalABC aims to bring together all elements of the buildings and construction industry as well as countries and stakeholders to raise awareness and facilitate the global transition to low-emissions, energy-efficient buildings. GlobalABC works on a voluntary collaboration basis in five working areas in which members are invited to take part.
Work Area 1: Awareness and Education
The purpose of this area is to support capacity-building to promote the transition to a resilient, efficient and zero-emissions built environment and to raise awareness of the sector’s transformation potential, convey a sense of urgency, develop common narratives, and formulate key messages. It aims to disseminate new approaches and solutions, share best practices through the new GlobalABC website, establish an interactive knowledge database to enhance peer learning, and provide training and education through webinars and online courses.
Work Area 2: Public Policies
This area attempts to unite the numerous independent and scattered building and construction sector stakeholders – particularly public authorities – through effective regulations and norms as well as financial and fiscal incentives. It also aims to support the development of national alliances, promote the integration of sustainable building objectives into NDCs, and enable city and sub-national engagement. A local government public policies group has been created to identify opportunities, facilitate community-level climate and energy strategies and promote co‑ operation among national and sub-national governments. Another sub-group focuses on adaptation and is developing a report to be released in 2020 on how the building industry is readjusting.
Work Area 3: Market Transformation
This area is designed to engage businesses and other stakeholders in de-carbonizing the entire buildings sector value chain, fostering multiple partnerships and a common culture among private and public sector participants to facilitate market transformation. This involves defining voluntary arrangements to prepare regulations and enable innovation in the market. It also include developing guidance on science-based targets that can be used to help transform the buildings and
construction sector by identifying a common metric and language for all companies to use through the Science-Based Targets for Buildings (SBT4buildings) project led by the World Business Council or Sustainable Development (WBCSD).
Work Area 4: Financing
This area is working to narrow the public and private financing gap for investing in efficient and resilient zero-emission buildings and construction, including property development. It is also helping draw attention to the sector’s financing needs, mapping existing financing opportunities,promoting innovative financing tools, enabling the flow of reliable information for investors, and informing public bodies of the budgeting and funding policies needed to conceive and implement
energy efficiency measures in buildings. For example, the International Partnership for Energy Efficiency Cooperation (IPEEC) and the Japanese government organized the G20 Global Summit on Financing Energy Efficiency, Innovation and Clean Technology, recognizing in its final Tokyo Declaration how important it is for the real estate and buildings sector to begin shifting financing towards energy efficiency.
Work area 5: Measurement, Data and Information
The purpose of this work area is to elaborate a fair and harmonized measurement system to close the information gap and thereby support buildings and construction sector policies and investments with measurable, reportable and verifiable data. Key barriers, however, relate to information availability, collection, quality, reporting, storage and accessibility. To overcome these obstacles, the work area team is coordinating an industry-wide global effort to develop a digital
building data and information collection tool, known as a “building passport”, to promote greater cross-sectoral data transparency and consistency and information exchange. All work areas welcome new participants. Please contact [email protected] for more information.
GlobalABC Members and Activities
Launched at COP21, GlobalABC is a voluntary partnership of national and local governments, intergovernmental organizations, businesses, associations, networks and think thanks committed to a common vision: an efficient and resilient zero-emissions buildings and construction sector. GlobalABC functions as an umbrella or meta-platform – a network of networks – that brings together initiatives and participants focused on the buildings and construction sector. The GlobalABC network currently has 128 members, among which are 29 countries (Map 4), and it welcomes new members interested in contributing to the global transition to a low-carbon, energy-efficient and resilient buildings and construction sector.
Program for Energy Efficiency in Buildings
The French and German governments jointly initiated the Program for Energy Efficiency in Buildings (PEEB) at the end of 2016 at COP22, and the program was catalyzed by GlobalABC. PEEB supports implementation of the Global Roadmap: Towards Low-GHG and Resilient Buildings in its first partner countries: Mexico, Morocco, Senegal, Tunisia and Viet Nam. PEEB is a partnership program implemented by the Agence Française de Dévelopment, Deutsche Gesellschaft für
Internationale Zusammenarbeit GmbH and the Agence de l’Environnement et de la Maîtrise de l’Énergie (ADEME). PEEB has identified EUR 600 million worth of energy-efficient building projects and has already committed EUR 160 million.
National Alliances: Mobilizng for a Buildings Sector Transition
Action at the national level is needed to work towards an efficient and resilient zero-emissions buildings sector, and national alliances are ideal to help various professions connect and exchange information, and to make the topic more visible in national policy debates. Alliances can be organized by the public or private sector as either volunteer-based or formalized structures. National alliances offer recommendations for policy makers and actively work to enhance economic activity. Typical pursuits range from awareness-raising, training sessions and project assistance to legislative lobbying.
National alliances have been successfully established in France, Germany, Mexico, Morocco and Tunisia, in many cases inspired by GlobalABC. Forming bridges among various sectors and industries, these alliances bring together leading representatives of public, private and civil society institutions for the creation of a sustainable buildings sector:
- Plan Bâtiment Durable (PBD) [Sustainable Building Plan], France
- Allianz für Gebäude-Energie-Effizienz (geaa) [German Alliance for Building Energy Efficiency], Germany Alianza por la Eficiencia Energética (ALENER) [Mexican Alliance for Energy Efficiency], Mexico
- Alliance Marocaine du Bâtiment pour le Climate (AMBC) [Moroccan Alliance for Buildings and Climate], Morocco
- Alliance Tunisienne Pour les Bâtiments et la Construction (ATBC) [Tunisian Alliance for
Buildings and Construction], Tunisia
PEEB currently supports the national alliances in Mexico (ALENER) and Morocco (AMBC) with awareness-raising activities as well as capacity-building and training for their members. Most recently, expert working groups discussed the topic of buildings according to the five GlobalABC working areas during the relaunch of the Mexican national alliance in September.