Search Climate Insights Directory

The report finds that IFIs have historically had limited exposure to the steel sector, with most investments focused on business-as-usual modernization rather than transformative decarbonization. While barriers such as the high capital intensity of steel projects and a lack of national policy frameworks in developing countries exist, the authors argue that IFIs can accelerate the transition by de-risking first movers, supporting green hydrogen strategies, and creating demand through green public procurement standards for infrastructure projects.

The Green Affordable Housing Finance instrument uses a two-pronged approach—a Guarantee Facility and an Enabling Environment Facility—to unlock local private finance for sustainable housing. It addresses the 'chicken-and-egg' problem where a lack of mortgage finance for low-income households disincentivizes developers from building affordable homes. The instrument will be piloted in Kenya in 2023, targeting the mobilization of USD 48 million in local loans during the pilot and over USD 400 million long-term. It requires all supported homes to be IFC EDGE certified, ensuring at least 20% reductions in embodied energy, energy use, and water use.

RMI advocates for a shift toward demand-side solutions in the buildings sector to address its contribution to nearly 40 percent of global carbon dioxide pollution. The strategy focuses on electrifying heating and cooking, implementing comprehensive energy efficiency retrofits, and reducing the embodied carbon of construction materials like steel and concrete, while centering benefits for underserved communities.

The document argues that while current building codes focus on operational emissions and 'Buy Clean' policies target material production, there is a gap in mitigating end-of-life climate impacts. It proposes five policy interventions for municipalities: planning permit incentives for adaptive reuse, design standards for future adaptability in new construction, improved C&D waste management ordinances, deconstruction ordinances for historic buildings, and the implementation of material passports for public 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.

The report examines pathways to reduce the carbon footprint of concrete in the Northeastern US, emphasizing the role of government procurement in driving market demand for low-carbon alternatives. It details technical solutions like supplementary cementitious materials (SCMs), the process and cost of carbon reporting via EPDs, and the associated economic and health impacts.

The global construction and buildings value chain is a primary driver of resource extraction and greenhouse gas emissions, with significant impacts often outsourced from high-income to lower-income regions. The document argues that sustainability depends on decisions made at early stages—planning and finance—rather than later construction phases. Key challenges include the high cost of low-carbon materials and the difficulty of decarbonizing steel and cement. To address this, the brief recommends a combination of transparent data, material innovation, green public procurement, sustainable urban planning, and expanded retrofitting.

Australia has become a global leader in decarbonizing high-end commercial buildings through 'ambition loops'—positive feedback cycles where government regulation, industry collaboration, and market demand reinforce each other. Early leadership from the Victoria state government and the Australian Sustainable Built Environment Council (ASBEC) helped overcome initial knowledge gaps and lack of demand. The implementation of mandatory efficiency codes and transparency tools, such as the Commercial Building Disclosure Program and the National Australian Built Environment Rating System (NABERS), created a competitive environment where sustainable buildings attract more corporate tenants and investors. This model has since influenced residential and construction sectors in Australia and exported rating systems to New Zealand and the UK.

The briefing highlights the critical need for transparent supply chains to mitigate human rights abuses and environmental damage associated with the energy transition. It proposes using digital tools, such as blockchain data architecture, to track both embodied greenhouse gas emissions and broader ESG factors, moving away from anonymous commodity markets toward a system where data follows the goods.

The GCF is developing its own Environmental and Social Safeguards (ESS) to replace the interim IFC Performance Standards. The proposed framework expands from eight to ten standards, adding dedicated standards for Stakeholder Engagement and Information Disclosure (ESS 9) and Climate Change Resilience and Adaptation (ESS 10). Key updates across all standards include a shift from a 'do-no-harm' to a 'do-good' approach, emphasizing the generation of positive co-benefits, the integration of circular economy principles, and a stronger focus on human rights, gender equality, and intersectionality. The document outlines specific structural and content changes for each standard, including new requirements for greenhouse gas (GHG) emissions disclosure, the use of a precautionary approach, and enhanced protections for Indigenous Peoples and vulnerable groups.

RMI proposes a decentralized, open-source technical architecture to replace static, estimate-based carbon accounting with a blockchain-based system. The proposed system focuses on the exchange of primary emissions data at the product level, using 'digital twins' to track embodied carbon from source to sale. This approach aims to improve the veracity of Scope 3 emissions reporting and enable more informed procurement decisions to drive industrial decarbonization.

The document explores the climate impacts of carbon-intensive building materials like concrete and steel, emphasizing that while recycling is necessary, it is insufficient to address the scale of production-related emissions. Panelists advocate for a transition toward reuse, natural building materials, and circular business models to lower embodied emissions. Key policy recommendations include federal 'buy-clean' legislation requiring environmental product declarations (EPDs), expanded product stewardship to hold manufacturers responsible for the entire life cycle of products, and the creation of a national circular economy plan to coordinate goals across states and cities.

India's buildings sector is a major source of CO2 emissions, with indirect 'embodied carbon' (EC) from material procurement and construction nearly tripling between 2000 and 2017. With India's total building space projected to more than double and its urbanization rate expected to reach 40% by 2030–31, the demand for energy-intensive materials like steel, cement, and bricks is set to rise sharply. The document highlights that while operational emissions are being addressed, EC emissions risk locking in high energy use for decades. It advocates for a whole-building life-cycle assessment approach and a national roadmap to transition toward low-carbon materials, suggesting that India could lead other developing economies in compatible economic expansion and emissions reduction.

The report argues that current GHG accounting systems rely too heavily on approximations and are unsuitable for comparing scope 3 emissions between companies. To resolve this, RMI proposes a framework consisting of unified accounting principles that prioritize primary data, a technical architecture based on distributed ledger technology to track embodied carbon at the product level, and the creation of "digital twins" of carbon emissions to enable emissions to function as a unit of trade. This system aims to transform climate intelligence into actionable business intelligence and support the development of a global carbon market under Article 6 of the Paris Agreement.

The policy brief advocates for targeted, refundable tax credits to drive the transition to zero-carbon buildings and deep energy retrofits in the US. It proposes six specific tax credit mechanisms—including improvements to existing credits like 45L and 179D and the creation of new ones for lead safety and clean heating—to overcome cost barriers, support low-income housing, and scale domestic manufacturing of heat pumps.

The report examines the implementation of a border carbon adjustment (BCA) in Canada to mitigate 'leakage'—where emissions-intensive and trade-exposed (EITE) sectors relocate or are undercut by foreign competitors with lower carbon costs. It proposes two primary design paths: a regulation-based BCA extending the existing output-based pricing system (OBPS) or a tax-based BCA accompanying a full carbon tax. The authors identify 11 high-risk product categories, including bitumen and synthetic crude oil, which represent 34% of Canada's GHG emissions. The report analyzes the EU's Carbon Border Adjustment Mechanism (CBAM) and the U.S. approach, noting that while the U.S. lacks a national carbon price, it may use low-carbon standards or Section 232 tariffs. Key recommendations include coordinating with the EU and U.S. to harmonize benchmarks and ensuring the system is 'future-proofed' to accommodate a transition from the OBPS to full carbon pricing.

The document argues that substituting portland cement with SCMs—such as fly ash, ground glass, natural pozzolans, and blast furnace slag—is a cost-effective way to reduce the embodied carbon of concrete. It highlights that up to 40% substitution is possible in the US, potentially saving 27 Mt CO2e per year and reducing emissions for specific applications by up to 80%. However, it notes that supply for some SCMs is geographically constrained or declining due to the phase-out of coal power, suggesting the reclamation of stored fly ash and the use of natural pozzolans as viable future alternatives.

The document challenges the notion that heavy transport and industrial heat are 'hard-to-abate' sectors, suggesting that they can be decarbonized profitably. It emphasizes the role of plummeting renewable energy costs and the potential for massive efficiency gains in trucking, aviation, shipping, and the production of steel and cement. The author advocates for 'integrative design' and structural efficiency to drastically reduce the volume of materials needed, thereby lowering both costs and emissions.

The CLEAN Future Act of 2021 proposes a national goal of a 100% clean economy by 2050, with an interim target of reducing greenhouse gas emissions by at least 50% by 2030 from 2005 levels. The legislation emphasizes 'climate federalism' by requiring states to develop emissions-reduction plans, and it integrates environmental justice through grants and increased air quality monitoring in burdened communities. Key sector-specific proposals include a Clean Electricity Standard requiring 100% zero-emissions power by 2035, over $100 billion for transportation electrification, and significant investments in building energy efficiency and industrial decarbonization. However, the document notes the bill lacks a national emissions cap for non-electricity sources and a mandate to phase out the sale of polluting vehicles.

The construction and operation of buildings contribute nearly 40% of global CO2 emissions, yet most regulations focus only on operational carbon. This case study highlights the Meishan Near-Zero Carbon Zone in Ningbo, China, which integrates a life-cycle assessment (LCA) standard and a whole-process management mechanism to target emissions across five phases: materials production, construction, operation, demolition, and waste recycling. The document also notes international efforts, such as France's E+C- scheme and California's Buy Clean California Act, as part of a global shift toward accounting for embodied carbon in the built environment.