The window for solving climate change is narrowing; any solution must include embodied carbon. The Sixth Assessment Report published by the IPCC (Intergovernmental Panel on Climate Change) concludes that the world can emit just 500 gigatonnes more of carbon dioxide, starting in January 2020, if we want a 50 percent chance of staying below 1.5 degrees. In 2021 alone, the world emitted about 36.3 gigatonnes of carbon, the highest amount ever recorded. We’re on track to blow through our carbon budget in the next several years. To quote the IPCC directly: “The choices and actions implemented in this decade will have impacts now and for thousands of years (high confidence).”
The real estate industry is the single most significant contributor to climate change after the oil and gas industry, responsible for about 40% of all greenhouse gas emissions globally. Of that, building materials are responsible for about 11% of all greenhouse gas emissions globally—more than all fashion and flights combined. While that’s less than the global emissions associated with operating assets, as the grid decarbonizes and buildings electrify, embodied carbon from building materials will make up an increasingly large portion of the real estate sector’s total emissions. Already, the upfront emissions associated with constructing a building are equivalent to upwards of 10 years of operating that building.
Although structure materials make up the majority of a building’s embodied carbon emissions related to upfront construction, experts estimate that finishes & furnishings are responsible for over 50% of a building’s carbon impact over the lifespan of the building. One recent report put the impact of furniture, alone, at around 50% of a commercial building’s carbon impact.
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Urgent Issue: 10 Strategies to Decarbonize ArchitectureWhat’s more—whereas energy efficiency and renewables procurement can improve over time, the emissions from building materials get largely “locked in” to the atmosphere at the point of manufacturing and construction. There is no going back or reducing the carbon footprint once those materials have been selected.
The case for measuring embodied carbon is clear, but most firms are not yet measuring their emissions—even though for many real estate developers, embodied carbon represents over 80% of their emissions in a given year. Although embodied carbon has a significant climate impact, most real estate firms are not currently not measuring it—even though for many firms, embodied carbon represents up to 83% of their emissions in a given year. Why is this?
First, the industry has been more focused on operational carbon, so embodied carbon may be seen as a “nice to have.” This is starting to change, given legislative tailwinds in North America. In the State of California, the newly approved California Green Building Code (CALGreen) specifies a 10% reduction below baseline as one path to compliance starting in 2024. In the City of Toronto, Toronto Green Standard Version 4 requires adherence to an embodied carbon intensity of 350 kg CO2e/m2. While this is optional for private developments, it is expected to become mandatory. And in Vancouver, buildings will need to show a 10-20% reduction below baseline starting in 2025.
It has also historically been challenging to measure embodied carbon. However, tools like Tangible, EC3, and BEAM are making measuring embodied carbon more accessible and easier to understand for a wider set of stakeholders–including real estate owners and developers.
Real estate actors have also expressed fear of what they’ll find if they do measure embodied carbon. While firms may be intimidated by high carbon figures, the reality is that disclosure laws like the law just passed in California may seed the way to a carbon tax, so starting with measurement can help firms get ahead of potential costs down the line.
There remain challenges in tackling embodied carbon. Addressing this problem head-on requires greater stakeholder coordination and internal resources. However, taking initiative is an important first step, especially if firms want to keep up with leading players in the market.
Some initial steps:
- Establish an embodied carbon baseline to compare against. Every developer is different, so it’s important to know what’s realistic for typical assets. The only way to do that is to start measuring embodied carbon consistently, and ideally in as much detail as possible.
- Know what to target. Understand if there are peers to track against, or regulations to meet, and use these to establish decarbonization goals.
- Find areas for immediate improvement. Understand where there are especially high carbon materials, and in which product categories. Taking steps, even small ones, to implement higher standards across a portfolio can help empower delivery teams in the future.
Lastly, if we are able to limit global warming to 1.5 degrees Celsius, rather than 2 degrees Celsius, we “could reduce the number of people exposed to climate-related risks and susceptible to poverty by up to several hundred million by 2050.” Climate science speaks loud and clear.
Notes
1-The emissions released at the end of life do matter, but these are largely unpredictable from the standpoint of a real estate developer’s scope of responsibility.
2-A few select developers that have disclosed the percentage of their annual emissions that come from Scope 3 / embodied carbon emissions:
