For the building and construction sector, COP26 in Glasgow marked a crucial moment to bring consensus around systemic change in the industry. It was the first time in COP history that the Built Environment had a dedicated day, alongside Cities and Regions. Buildings were recognized as a critical solution to achieving the Paris Agreement goals and they were heavily integrated into the dialogue around reaching net zero, which reached a fever pitch.
As we reflect on priorities for transforming the sector and achieving net zero ambitions, here are five takeaways from COP26 that will inform how we advance building decarbonization in the new year:
1. Countries are getting serious about building decarbonization in their NDCs
As a part of COP26, 136 countries included building efficiency or building decarbonization in their climate goals, or Nationally Determined Contributions (NDCs), up from 88 countries in 2015. This is more than any other mitigation measure except renewable energy generation. The good news is that 80 of these countries have building energy codes at the national or sub-national level – and of these, 43 countries have mandatory codes. The not so good news is that 82% of estimated population growth by 2030 (and subsequent building construction to house all these new people) is in countries without mandatory building energy codes and 44% in countries without any building energy codes.
Turkey, which ratified the Paris Agreement in October, submitted new NDCs that highlight buildings and urban transformation as a key planning and policy area for lowering greenhouse gas emissions. WRI is supporting these efforts with the Zero Carbon Building Accelerator, which is working with Turkey to develop a national building decarbonization roadmap along with two city action plans for local implementation in Konya and Gaziantep.
2. More cities and regions are making public commitments to net-zero carbon and building decarbonization
COP26 saw more nations and cities endorse commitments to net-zero emissions than ever before. Over a thousand cities have now signed up to Cities Race to Zero to achieve net-zero carbon emissions by 2050 at the latest, an incredible step toward a more sustainable future.
With the built environment responsible for nearly 40% of energy-related emissions, transforming the building sector on a global scale will be crucial to achieving net-zero goals. With that in mind, UNEP and the Global Alliance for Buildings and Construction launched the Buildings as a Critical Climate Solution Commitment at COP26. WRI co-hosted a kick-off event with GlobalABC where governments discussed the commitment and the importance of decarbonization roadmaps to move this into action. Colombia’s Vice Minister of Environment and Sustainable Development and the Planning Director of Cali, Colombia, joined to share their insights on aligning national roadmaps and action plans as a part of the Zero Carbon Building Accelerator.
Embodied carbon and materials, which includes the host of emissions associated with building construction, were hot topics at COP26 as actors in the construction sector detailed paths toward decarbonizing materials at every stage of the supply chain. New industry investment coupled with new commitments for net-zero futures had governments and funders discussing the need to accelerate the transition from efficiency in buildings to sectoral decarbonization.
During a panel co-hosted by WRI in the SDG7 Pavilion, Kedibone Modiselle, director of mitigation programs and sustainability resource mobilization for Tshwane, South Africa, highlighted her city’s achievements as a part of the Building Efficiency Accelerator (BEA), including the development of a building efficiency and green building hub, city retrofitting guidelines for building efficiency, and capacity building through stakeholder engagements and retrofitting trainings. Now, Tshwane is in the process of creating a climate action plan to become a carbon neutral and resilient city by 2050. Zero-carbon buildings will be key in achieving the plan’s objectives and lowering whole-lifecycle carbon emissions by including renewable energy sources and green building guidelines to reduce embodied carbon in building materials.
Other governments, like Chile, Yucatan and Finland, also spoke about their interest in pursuing zero-carbon buildings and the climate impacts of this transition. With 60 cities a part of the BEA network already working on advancing energy efficiency projects and policies, there is great potential to capitalize on this interest and expand on activities to include whole-lifecycle building decarbonization.
3. Collaboration between national and local governments is critical to driving action
While building efficiency policies such as building codes are under the control of local jurisdictions, achieving building decarbonization at scale requires renewable energy resources, low-carbon building materials, electrification of heating, and efficient cooling, all of which tend to be under national jurisdiction. As we heard more nations commit to developing roadmaps for decarbonization at COP26, it will be crucial that cities are included in the planning process for successful implementation.
As a part of a panel in the GEF Pavilion, Carolina Urrutia, secretary of the environment for Bogotá, shared her city’s work in the BEA to develop an implementation protocol of the national building code. She worked collaboratively between the Ministry of Environment and the urban planning department, something that had not happened previously. Seeing the impact of a unified front, Bogotá is now bringing this cooperative spirit to the Zero Carbon Building Accelerator. The city is now integrated into the national planning for building decarbonization process, sitting on the advisory committee guiding the national roadmap development and giving input on the challenges and opportunities for implementation at the local level. This kind of national-local collaboration is fundamental as nations develop roadmaps for building and construction sector transformation.
4. Private equity has a role to play in building decarbonization investment
The private sector made it clear at COP26 that they want to take a more active role in finding solutions to mitigate and adapt to climate change. In the last 10 years, private equity has surpassed nearly all other asset classes in growth. While the industry has been slow to align its investments with climate action efforts, more firms are beginning to recognize that climate change is both an investment risk and opportunity.
To successfully transform the buildings sector, private equity needs to invest in the decarbonization of their real estate assets and make improvements in the facilities of their portfolio companies. They also need to partner with energy services providers and invest in start-up companies that provide innovative climate technology and solutions that address every phase of the building carbon lifecycle. Sustainable real estate investors and private equity firms can play a key role in pushing the market toward zero carbon buildings through their development standards and public reporting of commitments and performance.
At the International Chamber of Commerce’s Make Climate Action Everyone’s Business Forum, we heard from Mikkel Bülow-Lehnsby, co-founder of Nordic Real Estate Partners, about his private equity firm’s investment strategies to make the urban value chain more efficient and the industry more customer-centric and sustainable. With successful investments in new green developments and built environment technologies addressing embodied carbon and clean energy, the firm has been able to deliver investors a 20% internal rate of return over the last 20 years, according to Bülow-Lehnsby. As more nations commit to net-zero emissions, the private sector has a huge business opportunity to transform the building sector and real estate market.
5. Many cities have implemented successful pilots, but we need to focus on scaling up
Throughout COP26, cities and subnational governments that are part of the BEA network spoke about their successes in developing policies, implementing pilot projects and reporting impressive progress. But leaders also recognized that to achieve climate goals, this work needs to be scaled, which will require additional financial and technical support.
During his presentation at the SDG7 Pavilion, Nyambayar Munkhchuluun, head of the Ulaanbaatar Environment Department, identified reducing heat loss in buildings as a key element to increasing efficiency and decreasing energy consumption in Mongolia and shared how the city analyzed its building stock and started retrofitting inadequate public housing as a part of the BEA. The city was able to leverage this work to garner additional support from the Global Green Growth Institute and GIZ, the German development agency, expanding an initial pilot project to help meet the city and nation’s target to lower greenhouse gas emissions 27% by 2030. Ultimately, this kind of work will need to be scaled in every city in every country to meet the Paris Agreement goals.
The successes shared and commitments made at COP26 in Glasgow represent significant progress in recognizing the importance of building decarbonization for global climate action. Much remains to be done, but progress in these five areas will put us on the right path toward a future where buildings are green, clean and healthy for all.
Kayla Rakes is the Engagement Coordinator for the Buildings Initiative at WRI Ross Center for Sustainable Cities.
Clay Nesler is a Senior Fellow for Buildings and Energy at WRI Ross Center for Sustainable Cities.
