Net Zero Carbon Buildings in Cities: Interdependencies between Policy and Finance

This report uses network analysis to examine 75 policy and finance instruments and 22 barriers to achieving net zero carbon buildings in cities. It identifies financial barriers as the most critical, particularly for residential buildings, and emphasizes that mandates (such as building codes) are central to the transition. The authors argue that capacity development and fiscal instruments must act as systemic enablers to make mandates and financial mechanisms effective.

• Buildings are a major contributor to global emissions, accounting for 37% of global energy-related greenhouse gas (GHG) emissions, ranking as the third highest sector behind transport, electricity, and heat.
• The report identifies 22 key barriers to net zero carbon buildings across four categories, with financial barriers viewed as the most critical. This is particularly acute for residential buildings, which comprise 80% of the total global building stock floor area. Financial barriers are often linked to regulatory and market readiness issues, such as a lack of technology standards or technical expertise.
• The transition requires a sequenced approach to 75 instruments, divided into 31 policy instruments (capacity development, mandates, and incentives) and 44 financial instruments (including grants, fiscal, equity, risk mitigation, business models, debt, asset finance, and structured finance). Capacity development and fiscal instruments act as systemic enablers for mandates and incentives.
• Mandates—such as building codes, performance standards, and bans—are central to the transition and exhibit the most interdependencies among all instrument categories. They depend on capacity development and fiscal instruments to be effective but are essential for the development of new financial mechanisms.
• City governments can drive decarbonization by phasing out fossil-fuel-based appliances (like gas and oil heating) and mandating the tracking and disclosure of energy use to establish benchmarks and energy intensity limits.

APA

Micale, V., LaSalle, J. M., Rosane, P., Solomon, M., Meattle, C., Press-Williams, J., & Negreiros, P. (2024). Net Zero Carbon Buildings in Cities: Interdependencies between Policy and Finance. Climate Policy Initiative. https://www.climatepolicyinitiative.org/publication/net-zero-carbon-buildings-in-cities-interdependencies-between-policy-and-finance/

Chicago

Micale, Valerio, John Michael LaSalle, Paul Rosane, Matthew Solomon, Chavi Meattle, Jessie Press-Williams, and Priscilla Negreiros. Net Zero Carbon Buildings in Cities: Interdependencies between Policy and Finance. Climate Policy Initiative, 2024. https://www.climatepolicyinitiative.org/publication/net-zero-carbon-buildings-in-cities-interdependencies-between-policy-and-finance/.

Wikipedia

{{cite report |last1=Micale |first1=Valerio |last2=LaSalle |first2=John Michael |last3=Rosane |first3=Paul |last4=Solomon |first4=Matthew |last5=Meattle |first5=Chavi |last6=Press-Williams |first6=Jessie |last7=Negreiros |first7=Priscilla |title=Net Zero Carbon Buildings in Cities: Interdependencies between Policy and Finance |publisher=Climate Policy Initiative |date=16 January 2024 |url=https://www.climatepolicyinitiative.org/publication/net-zero-carbon-buildings-in-cities-interdependencies-between-policy-and-finance/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{micale2024net, author = {Micale, Valerio and LaSalle, John Michael and Rosane, Paul and Solomon, Matthew and Meattle, Chavi and Press-Williams, Jessie and Negreiros, Priscilla}, title = {{Net Zero Carbon Buildings in Cities: Interdependencies between Policy and Finance}}, institution = {Climate Policy Initiative}, year = {2024}, month = jan, url = {https://www.climatepolicyinitiative.org/publication/net-zero-carbon-buildings-in-cities-interdependencies-between-policy-and-finance/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }