New IEA report points to critical role of buildings in clean energy transition

New IEA report points to critical role of buildings in clean energy transition

The world’s energy supply is almost as carbon intensive as it was two decades ago. Energy-related carbon dioxide (CO2) emissions rose by 1.7% in 2018, following an increase of 1.6% in 2017. This comes after three years of emissions staying flat and is due to a variety of factors, including economic growth, extreme weather and a slowdown in efficiency improvements, according to a new report from the International Energy Agency (IEA).

The report  “Global Energy & CO2 Status Report 2018” shows that the buildings sector accounted for about 28% of total energy-related CO2emissions, two-thirds of which is attributable to emissions from electricity generation for use in buildings. The sector’s energy intensity per square metre improved, but its emissions increased more than 25% since 2000. This reflects a 65% increase in floor area since then, growing demand for energy services and rising electricity consumption. Electricity use in buildings grew five-times faster than improvements in the carbon intensity of power generation since 2000, and rising demand for equipment such as air conditioners is putting pressure on electricity systems.

In fact, since 2000, the rate of electricity demand in buildings increased five-times faster than improvements in the carbon intensity of the power sector.

CO2 emissions need to peak around 2020 and enter a steep decline thereafter. In the Faster Transition Scenario, energy-related emissions drop 75% by 2050. The carbon intensity of the power sector falls by more than 90% and the end-use sectors see a 65% drop, thanks to energy efficiency, renewable energy technologies and shifts to low-carbon electricity. The buildings sector sees the fastest CO2 reduction, falling by an average of 6% per year to one-eighth of current levels by 2050.

Role of technology

Technology can reduce CO2 emissions from buildings while improving comfort and services. In the Faster Transition Scenario, near-zero energy construction and deep energy renovations reduce the sector’s energy needs by nearly 30% to 2050, despite a doubling of global floor area. Energy use is cut further by a doubling in air conditioner efficiency, even as 1.5 billion households gain access to cooling comfort. Heat pumps cut typical energy use for heating by a factor of four or more, while solar thermal delivers carbon-free heat to nearly 3 billion people.

A surge in clean energy investment will ultimately bring savings across the global economy and cut in half the proportion of household income spent on energy. Realising sustainable buildings requires annual capital flows to increase by an average of USD 27 billion (United Sates dollars) over the next decade – a relatively small addition to the USD 4.9 trillion dollars already invested each year in buildings globally. Yet, cumulative household energy spending to 2050 is around USD 5 trillion lower in the Faster Transition Scenario, leading to net savings for consumers, with the average share of household income spent on energy falling from 5% today to around 2.5% by 2050.

Role of Government

Government effort is critical to make sustainable buildings a reality.Immediate action is needed to expand and strengthen mandatory energy policies everywhere, and governments can work together to transfer knowledge and share best practices. Clear policy support for innovation will enable economies of scale and learning rates for industry to deliver solutions with little increase in cost. Policy intervention can also improve access to finance, de-risk clean energy investment and enable market-based instruments that lower the cost of the clean energy transition.

Delaying assertive policy action has major economic implications. Globally, the scale of new buildings likely to be built by 2050 under inadequate energy policies is equivalent to 2.5-times the current building stock in the People’s Republic of China (“China”). Waiting another ten years to act on high-performance buildings construction and renovations would result in more than 2 gigatonnes of additional CO2 emissions from 3 500 million tonnes of oil equivalent of unnecessary energy demand to 2050, increasing global spending on heating and cooling by USD 2.5 trillion.

Further information

April 17, 2019