Financing Net Zero Carbon Buildings

The report examines the role of the buildings sector in global GHG emissions, which account for 37% of energy-related emissions. It identifies key technical solutions for decarbonization, including reducing embodied carbon in materials and improving operational efficiency in heating and cooling. The document evaluates various financial instruments—ranging from traditional mortgages to specialized on-bill financing—and policy tools like building codes and green labels. It emphasizes that the transition requires a network of instruments tailored to different building archetypes and regional contexts, providing specific deep dives into the unique challenges and opportunities in Nigeria and Indonesia.

• Buildings are responsible for 37% of global energy-related GHG emissions, with 9% from on-site energy generation, 18% from grid electricity, and 10% from materials and construction.
• Global investment in the buildings sector needs to increase from USD 4.9 trillion in 2017 to approximately USD 5.4 trillion by 2050 to limit warming to below 2°C, with 60% of these investments expected in China, India, the EU, and the US.
• Embodied carbon, primarily from materials, accounts for about 10% of total energy-related emissions and a third of buildings-related emissions, and is expected to represent half of total emissions for buildings built between 2020 and 2050.
• Cooling is the fastest-growing energy end-use, with demand concentrated in emerging markets; over a billion people currently lack access to cooling.
• Traditional financial instruments like mortgages and bonds are scalable but lack incentives for green buildings, while specialized instruments like on-bill repayment and PACE loans struggle to scale and reach low-income households.
• In Nigeria, key challenges include the use of fossil fuel generators for power shortages and poor material quality, with clean cooking representing a major opportunity to reduce 60 million tons of CO2 emissions if adopted by 30 million households.
• Indonesia's building sector is the third-largest final energy consumer, and while new national green building regulations exist, their success depends on the implementation capacity of municipalities.
• The report defines a net zero building as one powered by on-site or off-site carbon-free energy with materials that have net zero lifecycle emissions or use carbon removal to offset residual emissions.

APA

LaSalle, J. M., Micale, V., Fernandes, P. D. A., Haesra, A., Masale, E., Rosane, P., Wijaya, E., Zeki, M., & Negreiros, P. (2022). Financing Net Zero Carbon Buildings. Climate Policy Initiative. https://www.climatepolicyinitiative.org/wp-content/uploads/2022/07/Buildings-Scoping-Paper-final.pdf

Chicago

LaSalle, John Michael, Valerio Micale, Pedro de Aragão Fernandes, Alke Haesra, Eyerusalem Masale, Paul Rosane, Ery Wijaya, Muhammed Zeki, and Priscilla Negreiros. Financing Net Zero Carbon Buildings. Climate Policy Initiative, 2022. https://www.climatepolicyinitiative.org/wp-content/uploads/2022/07/Buildings-Scoping-Paper-final.pdf.

Wikipedia

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BibTeX

@techreport{lasalle2022financing, author = {LaSalle, John Michael and Micale, Valerio and Fernandes, Pedro de Aragão and Haesra, Alke and Masale, Eyerusalem and Rosane, Paul and Wijaya, Ery and Zeki, Muhammed and Negreiros, Priscilla}, title = {{Financing Net Zero Carbon Buildings}}, institution = {Climate Policy Initiative}, year = {2022}, month = jul, url = {https://www.climatepolicyinitiative.org/wp-content/uploads/2022/07/Buildings-Scoping-Paper-final.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }