Source: Unsplash

Decarbonising the built environment- levers for change

McKinsey’s latest research entitled “Building value by decarbonising the built environment” has sought to assess potential decarbonisation levers and pinpoint those with the greatest near-term potential. Carried out in partnership with the Net Zero Built Environment Council, the research assessed more than 1,000 levers for decarbonisation a found 30 which it claims could have the biggest impacts in the near-term. Promisingly, it found that over 50 per cent of buildings emissions can be reduced with existing technology by 2030 and that many of these technologies required to do so are already cost-effective[i].

The built environment ecosystem includes real estate and infrastructure, therefore covering everything from homes and offices to factories and highways. It is estimated that this sector is responsible for a quarter (26%) of global greenhouse gas emissions (GHG), amounting to 14.4 metric gigatons of CO2 equivalent (GtCO2e) annually[ii] and approximately 37 per cent of combustion-related emissions[iii].

Findings suggest Twenty-two ‘levers’ can reduce operational emissions by up to 90%

McKinsey’s research finds that while all areas of the built environment can benefit from decarbonisation, particular areas are primed for reductions, such as residential space heating and water heating. Emissions from these processes account for roughly three-quarters of operational emissions for residential buildings. In fact, the research argues that a single lever- heat pumps, could reduce emissions by as much as 60 per cent.

Figure one: decarbonising the built environment

Source: McKinsey & Company

The research identified a core 22 levers that, if implemented at scale in the next five to ten years, have the potential to reduce emissions from the built environment by up to 75%. These levers were assessed across various asset types and geographic locations to account for specific factors such as climate and regulations. While the research estimates that roughly three-quarters of operational emissions are attributable solely to residential buildings, the remaining quarter comes from commercial buildings; in fact, infrastructure contributes little to no operational emissions once constructed.

Reductions in embodied carbon crucial for net zero goals

Challengingly, many of the resources used by the global construction industry are high in embodied carbon- these are greenhouse gas emissions resulting from extracting and processing materials and making them into products and buildings, alongside the emissions associated with transport and work on a construction site.

McKinsey’s research finds that its 22 key levers could reduce 60% of embodied emissions. They stress that this is critical, given that the typical 30-to-130-year lifetime of a building means 80% of the housing stock expected to exist by 2050 has already been built. It is, therefore, imperative that the remaining 20% utilises low-emissions materials to avoid up-front embodied emissions that can never be recovered[iv].

In terms of multifamily residential dwellings, most embodied emissions- roughly 2,000 metric tons or 50% are driven by concrete, followed by steel (about 900 metric tons or 22%). Of the 1,000 levers assessed, McKinsey found that approximately 50 were relevant to this category. The top nine levers alone could abate roughly 81% of embodied emissions relative to the current baseline. The report proposes three key solutions, which it argues are available today and are cost-effective: these include increasing the use of Design for Manufacture and Assembly (DFMA) techniques and promoting on-site construction practices, replacing cement with fly ash, and scaling up the utilisation of low-carbon insulation[v].

Back in March, we discussed findings from Green Alliance which stated that the UK’s high levels of embodied carbon were due to the construction industry’s reliance on raw materials. The research argued the case for a new approach to resource use, suggesting a move to a circular economy, and that failing to do so will likely mean the sector will fail to meet net zero in line with the UK Government’s 2050 deadline[vi]. Like McKinsey, Green Alliance believe existing technologies could offer substantial benefits in reducing the usage of raw materials. Their findings show that:

“By 2035, techniques and technologies already available could reduce the use of raw materials by over a third. This could also reduce the sector’s carbon footprint by 39 per cent in addition to relieving pressures on land use, biodiversity, water and waste”[vii].

References

[i] Building value by decarbonizing the built environment | McKinsey

[ii] Ibid

[iii] Ibid

[iv] Ibid

[v] Ibid

[vi] Circularity seen as critical if the UK construction industry is to reach net zero (zerocarbonacademy.com)

[vii] Circular-construction.pdf (green-alliance.org.uk)

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