The buildings sector is not on track to help meet the world’s climate goals. Modest improvement in the efficiency of buildings is occurring at a global scale, but this is being swamped by the construction of new buildings, most of them in the developing world and many of them built to standards far below what is achievable. Counting the electricity they use, buildings account for 26 percent¹ of the world’s energy-related emissions, so cleaning them up is critical.

Building emissions did fall somewhat during the pandemic years, and there was hope those declines might be the beginning of a sustained trend. It turned out to be a vain hope: building emissions recovered in 2022, then dipped only slightly the next year due to milder weather. There is no sign yet of the sustained downturn in building emissions that is urgently needed.

One of the prime measuring sticks for tracking progress on climate goals is the Net Zero Energy by 2050 scenario published by the International Energy Agency. That scenario calls for total building emissions to fall by about 50 percent by 2030, but all indications are that they are likely to keep rising in the near term, despite a small dip in 2023 from milder weather. The 2030 goal looks quite challenging in this sector.

As with most of the other ways we are off track, this is a failure of public policy. Governments have not adopted sufficiently strict building codes; when they do adopt them, they fail to enforce them. This problem is pervasive even in the rich countries, where builders and property brokers have done their best to torpedo tough standards on the grounds that it raises the cost of construction. It does do that, slightly, but building occupants recover the money in lower energy costs, leaving them better off in the long run.²

The problem is greater in the developing world, where breakneck urbanisation means that millions of buildings are going up with inadequate construction standards or oversight. Every bad building we put up wastes energy for decades, so the neglect of this problem means we are locking in unnecessary emissions for the long term.

Roughly half the world’s population lives in hot climates, and the International Energy Agency found that only about 15 percent of them had air-conditioning as of 2021. In fact, for most of history, new buildings going up in tropical countries had neither heat nor air-conditioning, so the energy problem was not so acute. But that is changing fast: as the climate crisis unfolds and killer heat waves become more common, a mad rush to install air-conditioners is under way. This is not necessarily a luxury: as global overheating reaches life-threatening levels, access to air-conditioning is becoming a necessity. At least a quarter of the world’s population is potentially exposed to heat stress due to a lack of indoor cooling.³

This bleak picture does feature a few bright spots. Only a third of the emissions from buildings come directly from the burning of fossil fuels on-site.⁴ The bulk of the energy used is electricity from the grid. This means that as the world’s grids are cleaned up, buildings will get intrinsically cleaner without their owners or occupants having to do anything. However, we need to worry about the overall strain on the power grid as we electrify more and more of the economy, so having buildings wasting power is far from ideal. Tighter construction standards in buildings would be good for the grid as well as for the people paying the energy bills in those buildings.

The proportion of building energy coming from fossil fuels is on track to shrink. Heat pumps — electrically powered devices that can replace both furnaces and air-conditioners — are claiming market share from gas boilers and furnaces. Heat-pump sales actually dipped in 2023, but in many countries, sales of gas appliances fell further. A combination of factors seems to be at play: the rush to heat pumps that occurred during the energy crisis has abated somewhat; households squeezed by inflation are putting off major purchases of all kinds; and in some countries, subsidies for heat pumps have been reduced. Still, the case of Germany shows how heat pumps are continuing to claim market share.

This trend is important for the climate because heat pumps are far more efficient than furnaces. In China, emissions over the life cycle of even the least efficient heat pumps are nearly 50 percent lower than from gas boilers, and in Canada, that figure is 75 percent.⁵ If heat pumps run on clean electricity, they may create no operational emissions at all. In many countries, they do still cost more up-front than furnaces or boilers, so governments have supported the switch to heat pumps with subsidies and other incentives. It is one of the few areas where public policy has led to a genuine climate success in the buildings sector.

Another big problem with buildings has to be tackled promptly. While most of a building’s emissions are caused by operating it over its lifetime, a significant fraction — often a third to half — of the emissions are in the form of ‘embedded carbon.’⁶ This term describes the emissions of carbon dioxide and other greenhouse gases that were used to create the building materials used to construct the building.

In principle, these emissions can be lowered, either by substituting materials or using less material overall. Countries need to adopt national regulations requiring such calculations, and setting standards regarding how fast the embedded emissions of new buildings need to fall. Countries that have recently adopted regulations on embedded emissions, or are on the verge of doing so, include France, Denmark, Finland, Sweden, the Netherlands and New Zealand.

For decades the construction industry fought off such requirements, but they are finally starting to lose the battle, and more progressive builders are embracing the need to find a better way. Some are experimenting with building materials that can cut emissions sharply, or even store away carbon for decades. Timber used in construction, for example, stores carbon away from the atmosphere, assuming trees are allowed to grow back in place of those that are cut. Efforts are under way to prove that timber, specially treated with modern techniques, can be the main structural material even in very large buildings.⁷