Clearly, the way we consume goods and services is not only a result of our actual needs, but more often also influenced by how goods and services are designed, produced and presented to the consumers. And lack of signals from the consumers to the producers about their needs and wishes, causes a systematic failure in optimizing the features of goods and services, often leading to waste of resources, high costs and environmental degradation.
The case of energy use in buildings is an excellent example of this problem. We have today access to technology and solutions that could significantly cut energy use for heating, cooling and ventilation of buildings. There are today even buildings that can be entirely independent of external energy supply. These solutions often come at a higher initial cost than more conventional energy designs for houses. However, the operational costs are lower, since less energy is consumed. If you consider the life span of buildings, the total costs for more energy efficient houses are also lower than for conventional houses.
But this is where the systematic market failure comes into play: The designers and the builders of the house are typically competing for the construction contract and looking to minimize the construction costs, thereby selecting more conventional and less energy efficient solutions. The property developer is usually also not interested in the long-term energy efficiency as he/she is typically not going to use the building himself, but will sell or let the building to other tenants. Those tenants are the ones that will be shouldering the costs for the energy use. But the tenants have very limited options for influencing the property developer or landlord on the design of the energy system of the house. Thus, even if more energy efficient houses are both cheaper and more sustainable from a life cycle perspective, the market signals still favour older and less efficient solutions.
Within UNEP, the Division on Technology, Industry and Economics here in Paris, is leading UNEP’s work on sustainable consumption and production. It was only last year that we celebrated our 30 year anniversary, and we have come a long way since we started out in 1975. A basic realization for our work is that true progress can only come about when you work together with your stakeholders. As opposed to many other organizations in UN, we have therefore not only worked with governments and civil society, but also in close cooperation with the private sector. We have today established partnerships with a range of different sectors, including the financing sector, the telecom sector, the auto-manufacturing sector and the tourism sector, to mention just a few. Now, we feel it is about time for us to also move forward with the sustainable development agenda within the building and construction sector.
At the same time, the building and construction sector has a significant negative impact. Energy use, use of natural resources, waste generation and consumption of hazardous materials are examples of prominent environmental impact from this sector. On a global average, buildings are responsible for up to 40 % of the total energy use in society, thereby also contributing to significant CO2 emissions. 30 to 40% of landfilled waste comes from the building and construction sector, and more than 20 % of fresh water resources is consumed by this sector.
Taking into account a growing population and an ageing stock of buildings, needing renovation or replacement, the future outlook suggests that both resource consumption and waste generation will increase in absolute numbers by 30% over the next 20 years.
Clearly, the building and construction sector has an important role in shaping the society of tomorrow. It would be impossible to have a society without this sector, but having a sector that functions as it does today is unthinkable.
This situation is especially obvious when you look at some of the global problems facing the industry. As I mentioned, the building and construction sector is responsible for up to 40% of the total energy use in society, with accompanying greenhouse gas emissions. Climate change is perhaps the most serious environmental threat our society is facing and experts around the world now agree that far more drastic measures than have been taken to date to reduce greenhouse gas emissions are required, if we are to avoid global collapse of the climate system. It is unthinkable that the building and construction sector, contributing with such a large share of energy use, would remain outside efforts to combat climate change.
The Kyoto Protocol, the current global mechanism for climate change abatement, will come to an end in 2012, after which we are looking forward to a new global agreement. An agreement that by necessity will have to be much more severe in the reduction requirement of greenhouse gas emissions from all sectors of society.
Even so, there is today no global, sector-crosscutting effort to enable the building and construction sector to take an active role on greenhouse gas emission reductions. It is true is that many energy efficiency schemes and incentives exist for buildings at the national level, especially in countries that have a reduction commitment under the Kyoto Protocol. But the mechanisms that would enable buildings to be equipped with energy systems optimized for the life time of the buildings are still lacking. And there is no sector-wide effort to prepare the tools and methods necessary to include building stakeholders as active partners under the Kyoto Protocol or what will follow after the Kyoto Protocol.
Sustainable Building and Construction Initiative
February 21st 2006