- If we want to achieve our climate goals, it is imperative that we reduce emissions from the built environment.
- Buildings account around 40%Global energy consumption and emissions.
- These are the top 10 priority areas for decision-makers in both public and private sectors.
After spending my entire career in real estate, it is both humbling and overwhelming to realize that buildings are responsible for so much of my income. around 40%Global energy consumption and emissions.
I believe decarbonization is going to have an impact on nearly every aspect of my professional and personal life. However, creativity, innovation, as well as the use of technology, I believe we can achieve the necessary transformation. Below I have listed a number of key issues in our built environment that require urgent collaboration between government and business to move us closer to our common goals.
Cities account 75%they are the largest contributors to global emissions and are most likely to be the most affected by climate change. 14 of the 17 largest cities in the world are located along the coast, making them vulnerable to climate-related extreme events. As cities are forced to fight climate change and its consequences, the old saying “Necessity is a mother of invention” takes on new meaning. Future-thinking cities will be able to address key issues such as regulations governing building construction and operation, as well as planning policies that promote sustainable transport. New YorkThey are leading the charge.
We saw the benefits from fewer vehicle movements after a pandemic-induced lockdown. Emissions fell 88% across Europe during quarantine. Restrictions and eventual bans are being implemented on combustion engine vehicle. CitiesTo encourage the adoption and use of electric vehicles, it is often necessary to start with public transport infrastructure. The introduction of the Clean Air Zone in Birmingham (UK) has had a significant impact on travel patterns (see figure below). Permanent retention of cycle lanes that were introduced in Paris to address COVID is being done. Urban transportation policymaking must include carbon accounting.
The labour market has also been affected by the pandemic, which saw record numbers of resignations and plenty of job openings. Employers’ environmental, social, and governance (ESG), credentials will play an increasing role in attracting and keeping top talent. Employees increasingly believe that their employer should have a social or environmental conscience. Companies’ carbon footprints will be affected by the buildings they choose, the locations they choose, and the way they allow their staff to work. This will also impact their reputation as an ‘environmentally responsible company’.Choose your employer‘.
The equivalent of a Paris-sized city will be built every other week over the next 40 year. Concrete production alone accounts for approximately 80% of all concrete production. 8%To reduce our global carbon emissions, the way that we design and construct new buildings must change dramatically. The’minimize the carbon footprint’ initiative is a result of improvements in design, innovative materials, new construction techniques, and increased technology use.Whole-life carbonThe impact of new developments. The potential of digital twins to regulate energy use in buildings is great. Typical buildings use more energy than they are designed for. 3.8 timesThe ability of digital twins, which can diagnose and correct such inefficiency, makes a significant contribution towards reducing carbon emissions.
Retrofit vs. new Construction
Perhaps the greatest challenge is the huge stock of buildings that still need to be used but that must be managed more efficiently. Retrofitting occupied buildings poses both practical challenges in upgrading facilities without disrupting business operations and the more complex issue of cost allocation. Both the public and private sectors have been quick to adopt these models, which is a good example for others. However, the UK and EU have different rules. Regulated by the governmentBuilding standards are already in danger of becoming obsolete. This is to alter the cost-benefit ratio. Others are likely to follow their footsteps. Although financing and completing the retrofits required is a daunting task, it also presents huge opportunities. Commercial opportunitiesFor those with the right vision and skills.
While legislation is slow to directly impact the real-estate sector, successive waves regulatory and market forces have already had an impact on the financial and banking sectors upon which the property industry is built. Banks are exposed to mortgage finance and construction loans. climate riskThis is becoming more important and being costed, monitored, and measured. Funds that are explicitly focused on ‘green” investments are becoming more common. However, funds that are not focusing on ‘brown’ investments will be less common. Already, sustainable finance is a reality Growing exponentiallyThis will have a significant impact on the availability and cost of equity and debt for each real estate project.
Real estate is intrinsically geographically fixed. However each location is subject to its unique combination of regulatory climate and physical climate risks. Occupants and investors alike are now reassessing their geographic exposure to these new risks. These new risks are only now being identified and priced appropriately. Already, rents and capital values are being adjusted at the Level of constructionHowever, it is difficult to see how climate impacts on value at the urban and regional level. In response to recent extreme weather events, property insurance costs have risen. This, surely, is an indicator of how the real-estate value landscape is being reshaped.
Parts of the world, and sections of society, that are most affected by climate change, suffer the most. They are the least capable of protecting themselvesClimate events can be overcome or reversed. Millions of people will be affected by climate change, whether they lose their homes or their livelihoods or even their lives. As the World BankIt can be summed up as follows: Climate change is not only an environmental crisis, it is also a social crisis.
I believe we are all part a human ecosystem. The towns and cities that make up our lives are at the heart. The real estate sector was responsible for the creation of the buildings in which we live and work. But we cannot solve this current crisis by ourselves. We must now reach out to other sectors, both public and private, to help us tackle the problem of decarbonizing our built environment for the greater good of society.
These views are solely those of the author and not the World Economic Forum.