Sep 24 2009

There's Gold in Them Thar Buildings

Posted by: Jonathan Marshall

If an environmentalist were to give just one word of advice to a young adult seeking a green career, it certainly wouldn't be "plastics." But it could well be "buildings."

While experts debate the relative merits of solar and nuclear power, CO2 sequestration technology and algae biofuels, one of the biggest untapped clean resources lies underfoot and over our heads: potential energy efficiency improvements in the buildings where we work and live.

Buildings globally consume more energy than any other sector of the economy or society--38 percent of all energy produced worldwide, versus 26 percent for transportation. Counting all the energy used in materials and construction, the total soars to more than 50 percent. In the United States, they consume three-quarters of all electricity produced.

Those facts make tackling energy efficiency in the building sector priority number one in the battle against global warming. At the same time, major progress would hold down energy bills for renters, homeowners and businesses.

Barack Obama gets it. The president-elect said in December,"First, we will launch a massive effort to make public buildings more energy-efficient. Our government now pays the highest energy bill in the world. We need to change that. We need to upgrade our federal buildings by replacing old heating systems and installing efficient light bulbs."

A new study by Trevor Houser, visiting fellow at the Peterson Institute for International Economics and senior advisor to the U.S. Special Envoy on Climate Change, makes a key point: "aggressive, whole-building improvements in energy efficiency" can cut harmful emissions more cheaply than most other proposals for slashing carbon pollution.

Experts at McKinsey & Co. have popularized the notion that the building sector is rife with opportunities for money-making investments in better lighting, heating and cooling systems, insulation and other means of lowering energy costs. 

Houser isn't convinced these improvements will come so cheaply, but he agrees that market failures are slowing progress--for example, the disconnect between building owners and renters often prevents energy-reducing investments that would save end-users big money.

In all, he concludes, the building sector could slash carbon emissions 8.2 billion tons by 2050 at a net cost (beyond energy savings) of about $180 billion worldwide. That's the target needed to reach an overall 50 percent reduction in global greenhouse gas emissions.

That works out to be cheaper, per ton of carbon, than emissions reductions from the power sector or from industry. But getting there will require tough new building standards to overcome market barriers. To that end, the Obama administration has announced significant new standards--for example, covering building lighting--and hundreds of millions of dollars in stimulus funding for building energy efficiency.

There's still a long way to go, but it's an important start.

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