- Building efficiency can achieve gigaton scale by 2020 for an investment of $61 billion, creating 681 thousand direct new jobs, and enhancing energy security by reducing energy consumption.
- Building efficiency is the lowest-cost pathway (of the 9 in this report) to achieve 1-gigaton CO2e reduction by 2020.
- New energy-efficient building designs show little to no up-front cost and more than 30% energy savings.
- Developers and homeowners both lack incentives and information to implement building efficiency.
- Multiple gigatons of CO2e could be avoided with current building efficiency technology.
New buildings can be designed to use 1/3 to 1/2 less energy than they use today, with little to no increase in the cost of construction. Design examples include residences featured in the U.S. Green Buildings Council Leadership in Energy and Environmental Design (LEED) 2008 annual report. There are also recent examples of "Net-zero" energy use in new construction. Net-zero buildings pair energy-efficient design with distributed onsite generation, such as photovoltaic panels to reduce energy use - and utility bills - to zero. The additional cost of energy-efficient design and construction is small and continues to fall. Payback periods are generally less than 2 years. The lifetime energy savings can range from thousands to tens of thousands of dollars.
It is well understood that building efficiency is the low-hanging fruit in terms of dollar-per-ton of carbon reductions. The 2007 McKinsey study showed that carbon reductions through building efficiency measures actually saved money and did not cost money, thanks to energy savings. A compelling finding of this study is that the investment required to achieve gigaton-scale energy provision and carbon reduction through building efficiency is a fraction of the investment required for new electricity generation. The investment for gigaton-scale building efficiency is less than 1/10 the investment in any new generation pathway examined. A kilowatt-hour saved is equivalent to a kilowatt-hour generated in terms of energy demand.
It is also increasingly understood that the savings opportunity in the building sector is immense. More than 25% of the total global CO2e emissions projected in 2009 - an estimated 9.3 gigatons - will come from the building sector. Building-sector emissions have grown at approximately 2% a year during the past 30 years and at this rate are projected to reach more than 11 gigatons of CO2e by 2020. It is debatable exactly what fraction of emissions can be reduced cost effectively, but, based on estimates suggesting energy use could be halved economically, the savings could be upwards of 5 to 6 gigatons annually by 2020. A 10% cut in total projected building energy use globally during the next 10 years would meet the gigaton goal.
Despite the potential to reduce energy use, cut energy-related costs, and deliver CO2e savings, the efficiency industry hasn't taken hold. Less than 5% of homes in the U.S. have undergone an energy-efficiency retrofit. There are a number of explanations. An unwillingness to pay up-front investments in efficiency, the disaggregated benefits of energy efficiency, and a lack of consumer awareness all thwart adoption of efficiency technologies. Achieving gigaton-scale energy savings in buildings will require policy action, leadership in the building sector, and public awareness. Together these actions can shift incentives and deliver the energy and carbon savings currently locked up in this sector.
The biggest area for policy action is establishing new building codes for both new construction and resale. Comprehensive new efficiency standards are needed for this sector to deliver major carbon reductions. Even with major action in the private sector, adoption will likely be too slow to make a difference by 2020 without new codes. There is a compelling argument for immediate action in the new construction sector: failure to implement new standards for new construction locks society into wasteful energy use for decades to come. Asia is a key market for new construction standards, with more than half of new construction globally set to take place there in the next 10 years.
The first section of this chapter outlines four strategies for reducing energy use through new standards in the global building sector. Each strategy can deliver 1 gigaton of CO2e reductions in the next 10 years. Each of the four strategies has large economic benefits related to both energy savings and the creation of several million jobs in the next 2 to 3 years. The retrofit of existing buildings and the construction and design of energy-efficient buildings are two labor-intensive processes. An estimated 1 million jobs would be added per year for construction workers, retrofitters, and other trained building professionals if the U.S. were to roll out a major efficiency program aimed at achieving gigaton scale in the building sector.
The second part of this chapter shifts focus to specific technologies and their potential to deliver gigaton-scale carbon reductions. Three building technologies are highlighted that can achieve major reductions of CO2e: lighting, insulation, and windows. These three technologies fall into the category of negative cost. That is, over the product lifetime, the (discounted) cost savings from energy reduction will exceed the up-front investment. The three examples offer insight into how efficiency industries must scale to meet gigaton objectives.
A number of strategies that reduce building energy use by 10% can deliver a 1-gigaton reduction in CO2e in 2020. In general, the emissions reduction potential of efficient technologies involves an efficiency/adoption trade-off; the higher the efficiency of a technology, the lower the market penetration level required to reach the 1-gigaton goal.
Four possible strategies to reduce carbon emissions by 1 gigaton in 2020 are:
- Broadly deploying energy-efficiency measures over all sectors of the world's existing building stock.
- Targeting climate zones, end uses, and industries with comparatively higher energy use.
- Implementing a comprehensive overhaul of the U.S. building stock.
- Converting new construction worldwide to net-zero energy use.