Climate policies for buildings

The UN Paris Agreement of 2015 set a goal of limiting global warming to under 2°C, and to pursue efforts to keep it as low as 1.5°C. It is widely accepted that the built environment is a significant contributor to greenhouse gas (GHG) emissions due to the operational energy demand from buildings and the embodied energy in the construction process and construction materials. A fundamental question is whether there is sufficient ‘policy literacy’ within the built environment community to convincingly engage with policy-makers and policy formulation to play an active role in generating, explaining and evaluating policy options. Evidence from two recent Building Research & Information special issues, ‘Closing the Policy Gaps: From Formulation to Outcomes’¹ and ‘Building Governance and Climate Change: Regulation and Related Policies’,² shows the built environment research community is developing new policy capabilities and levels of sophistication (Foxell & Cooper, 2015; Visscher, Laubscher, & Chan, 2016), as well as improving its engagement with other policy-related disciplines.

Over the past 40 plus years, the energy consumption in buildings has been an ongoing societal concern. From the energy ‘shocks’ in the 1970s to the later realization that fossil fuels have a significant negative effect on the atmosphere and human health, energy efficiency and energy demand have been significant research topics. However, the collective effort to reduce GHG emissions from the building stock has been a limited success. The various reasons for this have been chronicled by researchers in this journal, as well as elsewhere:

• the overriding focus on new buildings to the neglect of more substantial issues of the existing building stock and the renewal of the built environment

• social aspects: an overemphasis on technical solutions without sufficient regard for user-friendly design, occupant and facility manager engagement, their social practices and the revenge effects caused by users’ actions (the rebound and pre-bound effects)

• the failure of buildings to meet their hypothecated energy and comfort targets due to many design, specification, technical, build quality, commissioning and operational shortcomings (as well as poor predictive software) – the so-called performance gap

• unambitious energy targets: reductions are not linked to the overall environmental and climate agenda, and only represent a small percentage reduction of business as usual

• lack of pervasive building performance evaluation and feedback systems

• the lessons from post-occupancy evaluation are not widely or systematically fed back to clients, professionals and occupants

• the educational curricula and the professional institutes have been slow to incorporate sustainable thinking and an understanding of the impact of building performance into training built environment practitioners

Private-sector and market-based initiatives to motivate a demand for green buildings – Leadership in Energy and Environmental Design (LEED), Building Research Establishment Environmental Assessment Method (BREEAM) and many others – have not led to widespread and dramatic reductions in GHGs from buildings. In most countries, these schemes only have an impact in niche markets rather than the overall additions to the building stock. To their credit, these schemes have helped to establish a pioneering cadre of professionals conversant with green issues. Moreover, they have helped to make the notions of ‘green building’ more accessible to the public.

The research and practitioner communities have created successful demonstrations for low-energy buildings with Passivhaus, net-zero, net-positive and regenerative design as well as simple, robust, efficient buildings without any ‘eco-bling’. However, these have not become widely adopted due, in part, to ineffective drivers (regulations, mechanisms and incentives). Despite compelling and robust evidence that investment in low-energy buildings (both new build and retrofit) is beneficial, this message has not yet influenced the majority of building owners.

The best way to create rapid and lasting change is to provide an overarching policy framework that works in several different, complementary directions: top-down, bottom-up and middle-out (Janda & Parag, 2012). What this means for the built environment is there must be much clearer alignment of policy mechanisms, financial/business drivers and socio-technical engagement. To do so, as Grubb, Hourcade, and Neuhoff (2014) argue, one needs a set of interlocking policies to create a culture of satisficing behaviour, optimizing behaviour and transforming behaviour and embrace a spectrum of measures, financial drivers and investment strategies. More specifically, for the built environment, Rosenow, Fawcett, Eyre, and Oikonomou (2016) argue that a basket of interlocking policy mechanisms (not just building regulations) is needed.

Given the pressing urgency to meet the required global reductions in GHG emissions, what policies should the built environment community and wider civil society consider to achieve widespread, deep GHG emission reductions? Three broad approaches are briefly considered here: a carbon tax, a cap-and-trade scheme or a mandatory/incentivized retrofit scheme.

A carbon tax would raise the price of fossil fuels. The policy intent is to reduce overall energy use and make other renewable energy sources comparatively cheaper. However, for this to be effective it would require a radical leap in fossil fuel prices – something that no politician is likely to promote – particularly as a unilateral action at the national level. Even if such a national scheme were created, its continued existence would be at risk as subsequent politicians may seek to gain political capital by calling for its repeal. Therefore, the long-term viability of a carbon tax to effect significant change is doubtful. A tax on buildings with high levels of energy consumption would change the value of those buildings and mean that the poorest (and least able to afford energy) would be likely to inhabit the least energy-efficient buildings.

The efficacy of a carbon tax is also doubtful as price elasticity would mean that the reduction in fossil fuel use would not follow. The introduction of a tax may initially reduce demand, but this eventually gets accepted and absorbed (by some) as part of the cost of living and seems not to change practices in the medium-term. At the international level, it is difficult to agree a carbon price amongst different countries due to their differing economies, the varying degree of their dependence on fossil fuels and the variations in how a specific electorate might be affected. This policy can be characterized as a high-risk approach: an inability to deliver deep GHG reductions, the uncertainty of its survival and a potential to exacerbate social inequality (fuel poverty).

An alternative policy is a cap-and-trade system for buildings (as distinguished from the European Union’s Emission Trading Scheme, which did not include buildings). The cap-and-trade scheme for buildings was pioneered in Tokyo and has been successful in delivering actual reductions in GHG emissions (Nishida, Hua, & Okamoto, 2016). This particular scheme was designed to target the largest non-domestic GHG emitters. It established an energy baseline for each facility, set a reduction target that the facility owner had to meet, and then validated the energy demand and energy sources to ensure compliance: an approach that is measurable, reportable and verifiable. Unlike a carbon tax, its focus is on outcomes: achieving actual GHG emissions reductions. The beauty of this scheme is that the decisions on how to achieve the reduction are given to the facility owner – which entails a series of actions coordinating organizational, management, operational, behavioural and technical inputs. This allows an organization to consider a range of options and choose what is best suited to them. It also creates convergence between the social and technical aspects of solutions. This is a radically different approach than found in most building regulations that might stipulate a technical solution (e.g. the boiler efficiency or U-value of the external envelope) – but most regulations omit the need to validate the actual GHG reduction. The cap-and-trade for buildings has been shown to be a viable model in terms of implementation, robust in terms of delivering GHG reductions and verifiable.

Given the success of the Tokyo scheme, this poses a challenge to how it can be more widely emulated or adapted into different cultures and value systems. If cap-and-trade is to be applied elsewhere, researchers and leaders in the built environment should address these concerns:

• What political capital is needed and what specific narratives are persuasive?

• Is it scalable to other kinds of properties?

• Would a parallel scheme be appropriate for (large) domestic buildings?

• How could social equity be achieved?

• Can a baseline for each participating building be formed with the available data?

• What are the cultural implications when transferring a scheme between different countries?

• Can the scheme design deter users from simply trading credits and instead focus their efforts on GHG emission reductions?

A complementary policy option is a mandatory or incentivized retrofit programme. It depends on whether and how a government (central or local) can orchestrate this. Indications from pilot projects in the Netherlands (Rovers, 2014) suggest there is strong potential to create a mass retrofit programme and deliver substantial GHG reductions. Their success so far is a reflection of alignment of public policy, organizational policy (housing association), an appropriate (new) financial model (which offsets operational savings against capital costs and property value), a positive engagement process with inhabitants, and a strong technical solution (not only to retrofit the property with a minimum of disruption but also to ensure the building performance – residents will have no energy costs under normal use). The success of a mass-retrofit programme depends on the clients and their professionals having a high degree of policy literacy as well as a requisite range of social, financial and technical skills.

Concerns that need to be addressed in relation to a mass retrofit programme include:

• How can building modelling systems address existing fabric conditions?

• How can retrofit financial models be transferred successfully from one country to another?

• What are the cultural implications of managing retrofit programmes in relation to different housing histories, stocks and climates?

• How can existing housing surveys be used to optimize delivery at scale?

• How can mass retrofit programmes address different forms of tenure, particularly mixed tenures?

Imperative for whatever policy measures are chosen is the need to consider the social practices. Owners’, occupants’ and facility managers’ expectations, behaviours and practices have a crucial role in energy and other forms of consumption. Changing the expectations surrounding what constitutes thermal comfort, entitlement to it and defining what is healthy are key issues. Policy design must ensure their practices are addressed and a change process is supported in order to avoid various revenge effects. The notions of satisficing, optimizing and transforming occupant practices will be central to this.

Given the vast scale and variable condition of the existing building stock, it is likely that not all existing buildings will be transformed. This further emphasizes the need for researchers and policy-makers to engage with changing the culture, expectations and practices to reduce energy demand.

Policy frameworks and measures hold great potential to delivery deep, lasting GHG reductions. What cap-and-trade and mass-retrofit approaches show is that interventions are feasible and deliver GHG reductions in particular situations, provided there is sufficient policy literacy and the policy architecture is robust and supportive. The challenge is how to scale up and develop these approaches appropriately. The research community has an essential role in exploring these (and other) policy measures in order to develop an integrated approach to effective policy design and delivery.

Acknowledgement

The author thanks Fionn Stevenson for commenting on an earlier draft version.

ORCID

Richard Lorch http://orcid.org/0000-0002-7501-8825

Notes

1 See http://www.tandfonline.com/toc/rbri20/43/4/

2 See http://www.tandfonline.com/toc/rbri20/44/5-6/