This chapter provides three major policy recommendations to accelerate the effective design and implementation of decarbonising policies for buildings: i) tailor the step-by-step approach to place-based characteristics; ii) foster a multi-level approach; and iii) engage in international collaboration to learn from best practices and accelerate efforts.
Global Monitoring of Policies for Decarbonising Buildings
A Multi-level Approach
OECD Urban Studies
Abstract
Source: Author’s elaboration.
In order to reach the net-zero goals by 2050 as set out in the Paris Agreement, it is imperative to significantly accelerate the retrofitting of existing buildings and prioritise the construction of new buildings using low-carbon materials and highly energy-efficient building systems. Moreover, the widespread adoption of a whole-life carbon approach is important. While these tasks present significant challenges, several countries and cities have emerged as leaders in decarbonising buildings, providing valuable insights and examples for others to follow.
This chapter suggests policy recommendations for national and local governments to adopt and strengthen policies towards decarbonising buildings.
As shown in Chapter 3, governments need to develop their own customised step-by-step approach for effective policy implementation in the built environment. The OECD report, Decarbonising Buildings in Cities in the Netherlands: A Neighbourhood Approach, highlights the efficacy of this strategy in the Netherlands’ transition from natural gas heating. By initiating changes in small neighbourhoods and progressively expanding to entire municipalities, local authorities can create detailed plans encompassing short, medium and long-term goals (OECD, 2023[1]). This stepwise methodology is essential for successful policy execution. This report expands on this finding, providing a more in-depth framework applicable to various contexts. The key elements include: i) setting ambitious goals with concrete targets; ii) identifying the first step and design the following steps; iii) creating a roadmap with milestones and timelines; and iv) implementing a robust monitoring and supporting mechanisms.
Setting the stage: ambitious goals and measurable targets
The decarbonisation journey begins with establishing clear and ambitious goals. These goals should be translated into quantifiable targets such as the number of homes to be insulated or renovated to achieve certain energy efficiency levels by predefined dates. For instance, the Netherlands’ goal of heating 1.5 million dwellings without natural gas and providing 500 000 new constructions to district heating networks by 2030 represents a concrete and measurable target (The Ministry of the Interior and Kingdom Relations of the Netherlands, 2022[2]). Conversely, simply setting a percentage decrease of carbon emissions in the building sector lacks specificity and does not reveal actions needed nor investments expected in the future. More specific and quantitative targets can encourage private sector investment as well as synergies with local governments’ policies. Moreover, it is crucial to look beyond immediate priorities and consider future challenges, such as whole-life carbon assessments and retrofitting existing buildings, as highlighted by the findings of the OECD Global Survey on Buildings and Climate (2024).
Taking the first step: incremental progress and targeted action
Once the overall goal is set, it is important to break the process down into achievable steps. The key lies in identifying the first step and creating a long-term roadmap with deadlines for each stage. Drawing from the OECD Global Survey on Buildings and Climate (2024), two starting points are recommended to consider:
Roll out policy preparation and implementation plans: This involves gathering data, establishing benchmarks and testing strategies through pilot projects.
Target low-hanging fruits: This focuses on readily achievable building types such as public buildings or large buildings.
Preparation and implementation plan
Before diving headfirst into regulations, governments should invest in refining the methodology for decarbonising buildings. For this process, governments should first gather comprehensive data on building types, energy consumption patterns and existing energy efficiency measures. This data will inform targeted interventions and the development of effective regulations. Then, governments should establish benchmarks for energy consumption and carbon emissions across different building categories. This provides a clear baseline to measure progress and identify areas for improvement. Governments should also test and refine decarbonisation strategies in buildings through pilot projects on smaller scale. These projects can help identify challenges and best practices before wider implementation. During the process, governments should involve stakeholders representing building owners, architects, engineers, construction companies and citizen groups. This collaborative approach ensures all perspectives are considered in the development of regulations, fostering buy-in and smoother implementation.
The French example of implementing the RE2020 regulation stands out as a model for refining methodology due to several factors. First, before the implementation of the regulation, France not only collected data but also convened a diverse group of stakeholders. This ensured the methodology considered the needs and concerns of various parties who would be impacted by the regulations, leading to a well-rounded approach. Second, the pilot projects (E+C-) were not simply theoretical exercises. They involved testing methods for assessing building performance in real-world scenarios. This ensured the methodology was not only effective but also practical and implementable on a larger scale. (Ministry of Ecological Transition and Territorial Cohesion, 2020[3]).
Low-Hanging Fruit: Early Wins, Big Impact
While establishing a concrete policy plan is essential, the fight against climate change demands immediate action. Governments should not wait for the perfect alignment of conditions before taking such urgent action. Targeting low-hanging fruit allows for immediate emissions reduction and builds momentum for larger initiatives. Two elements need to be considered when targeting low-hanging fruit buildings:
Feasibility: Targeting building types with existing resources or capacity for change, such as public buildings or large non-residential buildings can lead to quicker wins.
Impact: Alternatively, governments can prioritise buildings categories with the greatest potential environmental impact, like large commercial buildings.
Japan’s strategy of starting with mandatory energy efficiency standards for large non-residential buildings before tackling smaller ones provides a valuable case study for a step-by-step approach to decarbonising buildings. This approach can be analysed from both the feasibility and impact perspectives. First, large non-residential buildings tend to have dedicated building management teams and access to architectural firms with experience in energy efficiency measures. This existing knowledge base and management structure made implementing these standards more feasible initially. Since the number of new large non-residential projects is small compared to residential construction, this is feasible in terms of the capacity of both the applicant and the reviewer for building permits. Second, from the impact perspective, large commercial buildings, especially office towers and shopping malls, often have significantly higher energy consumption compared to residential buildings. Targeting these buildings first brings a greater immediate impact on overall building sector emissions reductions (Ministry of Land, Infrastructure, Transport and Tourism of Japan, n.d.[4]).
Sweden’s approach of tacking upfront carbon emissions in construction is another good example of a step-by-step approach. Sweden prioritised upfront carbon emissions (Module A) before tackling other phases of building life cycle (notably module C and D) (Boverket, 2023[5]).This allowed for immediate action without waiting for a comprehensive framework for all aspects of decarbonising buildings. In terms of impact, construction activities represent a significant portion of a building’s total carbon footprint. Addressing upfront carbon emissions allows for immediate reductions in overall building sector emissions. In addition, early regulations for upfront carbon emissions incentivise innovation in low-carbon building materials and construction techniques. This can lead to long-term benefits beyond the initial reduction in emissions.
By carefully considering these two approaches, governments can choose the most effective first step for their specific context and goals.
Strengthen partnerships with the private sector
Most buildings are designed, built, invested in, and sold or leased by the private sector. Governments should thus proactively engage with private sector entities to develop and implement comprehensive strategies for decarbonising buildings.
In order to facilitate the private sector engagement, governments need to set and share clear targets for building decarbonisation, which are aligned with national and international climate goals. These targets should address various aspects of building performance, including energy efficiency, emissions reduction, and use of renewable energy. Governments can also leverage existing policy framework such as EU Taxonomy, SDFR, EPC and MEPS, while the private sector can leverage its investment expertise and market reach. This shared approach accelerates progress towards decarbonising goals.
It is also important to establish policy dialogues or working groups comprising government officials, industry leaders, and other stakeholders to collaborate on decarbonisation strategies. These groups can identify challenges, share insights and develop joint solutions. France’s RE2020 exemplifies how private expertise in regulation can be leveraged. By involving the private sector in the early stages of developing the methodology for energy and environmental performance, the government made the most of private sector expertise, resources and innovative capacity (Ministry of Ecological Transition and Territorial Cohesion, 2023[6]).
Moreover, governments should focus on facilitating Public-Private Partnerships (PPPs) that address critical challenges faced by SMEs in meeting energy standards. This involves providing financial support, training programmes, and technical assistance to SMEs involved in building construction and renovation projects. By partnering with the private sector, governments can mitigate resource and labour shortages while ensuring that buildings meet stringent requirements.
Charting the course: a comprehensive roadmap
Having taken the first step, governments need to develop a comprehensive roadmap outlining the sequence of policy measures needed to achieve the goals. Governments can backcast and breakdown long-term plans into achievable milestones. Moreover, the roadmap should not be limited to regulations, but it should encompass a wider range of actions including developing standards, enhancing financial incentives, and strengthening staffing and training.
Whether setting specific goals or crafting the roadmap, clarity is crucial. Clear communication about future investment requirements, as well as the specific roles and responsibilities of each party, is essential for fostering collaboration and ensuring successful implementation. To achieve greater transparency and build a successful roadmap, involving diverse stakeholders throughout the process is essential. Their input ensures the plan is achievable, addresses diverse needs and fosters ownership.
Ensuring success: monitoring and support mechanisms
Robust monitoring and support mechanisms, particularly at the local level, are essential for effective policy implementation. This involves identifying and addressing challenges faced by local authorities, fostering accountability and facilitating timely intervention and enhancing co-ordination between national and local stakeholders.
Source: Author’s elaboration.
To effectively address interconnected challenges in the transition towards sustainable and low-carbon built environments, governments should adopt a multi-level approach that fosters horizontal co-ordination, facilitates vertical co-ordination, and engages in partnerships with the private sector.
Foster horizontal co-ordination
Efforts to decarbonise buildings traverse various policy domains, including energy, environmental sustainability, housing, building regulations, and urban development strategies. The OECD Global Survey on Buildings and Climate (2024) indicates that in 93% of surveyed countries, at least three ministries are involved in decarbonising buildings. Breaking siloes of different ministries and agencies is the key in bringing policy coherence and maximising impact.
Facilitate vertical collaboration between national and local governments
Cities are at the forefront of decarbonising buildings, with 54% of surveyed countries acknowledging their leadership in adopting more ambitious policies compared to national governments, as per the 2024 OECD Global Survey on Buildings and Climate. Leveraging cities as testbeds can enable national governments to implement ambitious policies and identify scalable measures.
Helsinki’s carbon footprint limit for new buildings highlights the effectiveness of utilising nationally developed methods at the local level, providing practical demonstration of their applicability. This approach emphasises the importance of shared resources and expertise between different levels of governments in driving decarbonising buildings (City of Helsinki, n.d.[7]). City-level initiatives yield valuable data and insights crucial for informing policy making at higher government levels.
It is also important to establish policy dialogues or working groups comprising government officials, industry leaders, and other stakeholders to collaborate on decarbonisation strategies. These groups can identify challenges, share insights and develop joint solutions. France’s RE2020 exemplifies how private expertise in regulation can be leveraged. By involving the private sector in the early stages of developing the methodology for energy and environmental performance, the government made the most of private sector expertise, resources, and innovative capacity.
In the face of climate and energy crisis, policies need to speed up further. Moreover, it is now more crucial than ever to enhance international dialogue to address this pressing issue. Understanding other countries’ experiences and challenges in implementing ambitious and innovative policies will be very useful when considering next steps.
Governments should actively participate in international policy dialogue to stay informed of global trends and developments in environmental policies, as shown by the Chaillot Declaration, signed by more than 70 countries. The Declaration was signed during the Global Forum on Buildings and Climate in 2024, which was the first high-level ministerial meeting on buildings and construction. The text notably emphasises the importance of international collaboration in promoting buildings’ decarbonisation and climate resilience. 10 action areas of commitments are outlined to establish national pathways, policies and measures for building decarbonisation and climate resilience and calls for strengthened international collaboration of all actors in the building and construction sectors (Ministry of Ecological Transition and Terriotorial Cohesion, 2024[8]) (Box 5.1).
The Chaillot Declaration, signed by 70 countries across the world, includes 10 key policy commitments for decarbonising buildings and enhancing climate resilience.
Governments committed to the Declaration aim to establish and implement inclusive decarbonisation and resilient pathways for buildings at all levels, with adjustments to actions based on each country’s specific context.
The suggested policy action areas are:
1. Implementing long-term regulatory roadmaps and frameworks, mandatory building and energy codes for all buildings, or supporting the adoption of these at the subnational level; requiring integrated comprehensive design;
2. Implementing an appropriate financial framework, including financial and fiscal incentives and regulatory tools such as taxonomies, to dramatically increase affordable near zero emission and climate resilient buildings and to phase out the financing of emissive and non-resilient ones;
3. Advancing and promoting the adoption of standards, labels and certifications in the buildings and construction sector or supporting the adoption of these at the subnational level;
4. Leading by example through ambitious procurement policies with particular attention to public building procurements;
5. Promoting the production, development and use of low-carbon and sustainably sourced construction material at affordable costs;
6. Promoting collaborative value chains, as well as research and development for innovative, sustainable, affordable, cost-effective and healthy solutions, particularly for conventional and hard-to abate industries, enhancing local sourcing of traditional appropriate low-tech solutions;
7. Enhancing skill capacity and capacity building at all levels, notably by strengthening local knowhow and ensuring working conditions are protected and enhanced by mitigation and adaptation strategies;
8. Developing multi-level governance, multi-stakeholder co-ordination, and a participative approach to ensure appropriate implementation, co-ordination and compliance;
9. Developing tools and regulatory frameworks to collect and share best practices and the geographical, energy and environmental data necessary for effective decision-making;
10. Sharing best practices to enhance awareness and advocate for sustainable choices.
Furthermore, governments should actively promote peer learning among countries, particularly in examining the experiences of similar nations and those leading in decarbonising buildings. By studying the best practices and adapting them to their specific contexts, governments can accelerate their own decarbonisation efforts. Additionally, learning from countries at the forefront enables governments to identify their next steps and refine their strategies for achieving ambitious decarbonisation goals.
References
[5] Boverket (2023), Climate declaration for new buildings - Boverket, https://www.boverket.se/en/start/building-in-sweden/contractor/tendering-process/climate-declaration/#:~:text=The%20act%20on%20climate%20declarations,buildings%20that%20require%20building%20permits. (accessed on 1 February 2024).
[7] City of Helsinki (n.d.), , https://www.hel.fi/en/urban-environment-and-traffic/plots-and-building-permits/applying-for-a-building-permit/carbon-footprint-limit-value (accessed on 26 February 2024).
[8] Ministry of Ecological Transition and Terriotorial Cohesion (2024), , https://www.ecologie.gouv.fr/forum-mondial-batiments-et-climat-declaration-chaillot#:~:text=Dans%20la%20d%C3%A9claration%20de%20Chaillot,pays%20et%20villes%20en%20d%C3%A9veloppement. (accessed on 18 April 2024).
[6] Ministry of Ecological Transition and Territorial Cohesion (2023), , https://www.ecologie.gouv.fr/experimenter-construction-du-batiment-performant-demain-0 (accessed on 17 April 2024).
[3] Ministry of Ecological Transition and Territorial Cohesion (2020), Guide RE2020, https://www.ecologie.gouv.fr/sites/default/files/guide_re2020.pdf (accessed on 16 April 2024).
[4] Ministry of Land, Infrastructure, Transport and Tourism of Japan (n.d.), , https://www.mlit.go.jp/en/ (accessed on 16 April 2024).
[1] OECD (2023), Decarbonising Buildings in Cities in the Netherlands: A Neighbourhood Approach, https://www.oecd.org/cfe/decarbonising-homes-in-cities-in-the-netherlands-b94727de-en.htm (accessed on 15 April 2024).
[2] The Ministry of the Interior and Kingdom Relations of the Netherlands (2022), Programma Verduurzaming gebouwde omgeving, https://www.volkshuisvestingnederland.nl/onderwerpen/programma-verduurzaming-gebouwde-omgeving/documenten/publicaties/2022/06/01/programma-verduurzaming (accessed on 18 April 2024).