New Horizons for Sustainable and Healthy Built Environments
Built environments have the potential to transform from primarily 'users' of natural resources to 'providers' of societal value, which in turn can create infrastructure that is in harmony with people and nature. But to reach this goal stakeholders must be aligned behind this ambition.
A rainbow bridge is pictured at Tangdao Bay Binhai Park in Qingdao, Shandong Province, China. Image: Wang Peike/VCG via Getty Images.
Introduction
Reducing carbon emissions from the built environment will be vital to remaining within the limit of 1.5°C global warming. In 2017, the building sector (defined as materials manufacturing, construction and building operation) contributed 39 per cent of global energy-related emissions, with a 78-22 per cent split between operational and embodied carbon.1 To have a high probability2 of limiting global warming to 1.5°C, embodied-carbon emissions must be reduced by 65 per cent from their value in 2019 by 2030 and net-zero operational carbon installed as soon as possible, with the target of zero emissions by 2040.3 Embodied-carbon emissions will become particularly important as the energy efficiency of buildings improves – with their share of emissions reaching around 50 per cent in new construction by 2050.4
Action taken to tackle built environment emissions in the next five years will be critical to the direction of travel for decades to come because of the inter-generational timescales over which buildings and infrastructure are financed, designed, developed and maintained. Decisions made today over the type and use of built environments lock in processes for decades. This criticality is compounded by increased urbanization, which is driving rapid increases in demand for materials. The annual weight of materials consumed by cities is expected to grow from 40 billion tonnes a decade ago to 90 billion tonnes in 2050.5 To prevent this demand being met with high-carbon processes, urgent steps are needed to put built environment development onto low-emission pathways.
As infrastructure markets in Asia and Africa grow, there is a small window of opportunity to ensure that these developing markets are not locked into high embodied-carbon pathways. The majority of new materials demand will come from countries in Asia and Africa, with China alone set to add approximately 2 billion square metres of new buildings annually over the next two decades.6 Clearly, the carbon problem requires low-carbon solutions that will work in growth markets, and with new construction, comes the opportunity to pursue innovative material, design and building uses, offering even a potential for built environments to act as global carbon sinks.7
Setting out possible visions of built environments in 2040 has enabled identification of areas of collaboration and gaps that need to be filled across culture, materials, investments and data, all of which are fruitful areas of shared interest that can help to break down silos.
Cultures of Change
Without amplifying signals of cultural change, actions will remain limited in scope and fail to achieve the systemic shift needed. Built environments are a physical manifestation of choices made across multiple different systems by a wide range of actors – all of which are underpinned by culture and norms, from governance to fashion and to urban design. Choices that shape the built environment are made at all these various layers, which means that making progress towards delivering sustainable and equitable living spaces will require an alignment of agendas, incentives and capacities across the whole value chain. The scale of urgent action required to lower carbon emissions in built environments is vast yet encouragement can be taken from current demonstrations of rapid cultural adaption. A green COVID-19 recovery has the potential to create a culture of accelerated change.8 For example, Germany has increased funding for CO2-focused building renovation by EUR 1 billion to EUR 2.5 billion in 2020 and 2021, as part of its COVID-19 stimulus package.9
Built environments are more than a collection of materials that deliver utility – they can generate value to society through providing healthy and sustainable places to live in the long term. While widespread campaigning has encouraged citizens to respond to the climate crisis, embodied carbon within the built environment has not yet garnered public attention. Promisingly though, there are signs of culture change: traditional urban-development approaches that focus on growth are being challenged and debated, while health and sustainability are becoming more central to urban-development models.10 Ultimately, future urban landscapes should combine wellbeing with utility. A core facet of this will be increased sustainability, which will sharpen the focus on systemic change and systemic transition.
Government at the local, regional and national level, along with the media, can provide momentum to shift paradigms. Inter-city competition for healthy and sustainable cities can be kick-started by devolving governance to regional and metropolitan levels; this is especially timely during the COVID-19 green recovery, which has been identified as an opportunity to address spatial inequalities through giving more procurement to city, local and regional authorities.11 Simultaneously, the role of the media in changing perceptions and celebrating transformations across the built environment and championing new values should increase the competition and desire for greener cities. Such efforts can be supported by new narratives, informed by research, that underline the limits and costs of the built environment model, such as lack of access to green space for lower-income households and the negative health impacts for the most vulnerable.
Setting up ‘virtuous engagements’ between key actors in materials, finance, policy and design will be essential to generate the critical mass needed to overcome system inertia and accelerate the rapid transitions required within the next five years. At the moment, the multitude of stakeholders in the sector makes it harder to generate consensus, let alone alignment, on how best to reduce levels of embodied carbon. Different actors, even those interested in the issue, have varying motivations and power to act. Making better connections between different stakeholders and their actions is an essential step in getting to more sustainable and healthy built environments.
Materials: Moving Beyond Tensions
Market-driven material innovation should be pursued to improve use of existing materials and add to the choices of materials available to drive down their embodied carbon. Competition from the scaling up of established alternatives and emerging disruptive materials, such as cross-laminated timber (CLT), bamboo or Blue Planet aggregate (which converts CO2 into building materials as a form of carbon-capture storage12) are a credible threat to incumbent players, some of whom are now beginning to innovate to keep pace with the low carbon demand criteria.
Competition between incumbent and innovative materials markets will also differ between geographies and sectors. In Europe, the battle for market share looks to be between CLT and concrete producers, with CLT experiencing a compound annual growth rate of 16 per cent between 2010 and 2017.13 This increasing use of timber is helping to drive low carbon innovation in the concrete sector. Conversely, with few currently viable alternatives, steel manufacturers globally are currently not ‘feeling the pain’ from pressure to decarbonize from external actors, such as investors and advocacy groups, ultimately making comparatively slow progress.14
Incorporating more circular concepts into building use and life-cycle design will be equally important as the materials used in construction. Beyond the physical composition of the material, its purpose and the way it is used will have implications when planning for future embodied-carbon emissions. Increased densification of urban areas and building designs that encourage re-use of materials or recyclable structures represent viable pathways to reducing carbon emissions. For example, scenario analysis conducted by the Ellen MacArthur Foundation has found that reusing buildings and recycling cement has the capacity to reduce carbon emissions annually by 0.6 billion tonnes of CO2.15 Expanding the multi-use purpose of buildings to combine office space, living areas, restaurants, green areas and affordable housing can also reduce the need for new materials and make better use of existing space. In London, for example, 20 per cent of buildings are fit for double-purpose renovations by 2036 (including living and office space combined).16
Demonstration projects that are low-carbon and affordable exist but need to be promoted. These provide positive stories about ‘pioneers’ and evidence to those actors who wish to drive change. To scale up innovative material use, projects that have successfully combined cost effectiveness with trail-blazing sustainable design need to be celebrated. Exemplar projects include Low Carbon Concrete Code of Marin County in California,17 which has prescriptive standards and performance criteria that result in lower-embodied carbon concrete, and Dalston Lane, a ten-story timber building in London. These examples set market precedents for competitors and reduce the perception of risk about financing innovative new materials, increasing investor buy-in.
Utilizing low carbon materials can achieve multiple objectives and align with broader governance priorities for urban built environments that deliver wider social benefits. As there is a drive for largescale construction,18 regional and city authorities can leverage pressure through material-procurement policies to fulfil criteria that deliver healthy, sustainable living and working arrangements. Urban environments are not homogeneous and locally led governance can create appropriate local responses.
Investments: Shifting from a Complex Dance to a Virtuous Circle
Appetite among leading investors to deliver net-zero embodied-carbon portfolios can build pressure for progress. Investors exercise considerable influence over the future of the built environment, given the interplay between policy and finance in the sector. This is particularly true in growth markets. Within the private sector, annual real-estate investments reached $1.8 trillion in the 12 months to June 2018; 52 per cent of this was in Asia.19 Relevant high-power actors within the investor sphere include asset managers, building owners, city-governance stakeholders and policymakers.
Investment regimes of the future are already beginning to emerge. No less than 450 investors with assets totalling $40 trillion have joined the Climate 100+ group;20 26 investors with $4.7 trillion in assets have committed to carbon neutrality as part of the Net-zero Asset Owner Alliance;21 and 35 property owners have combined to form the Better Building Partnership to enhance the sustainability of the current commercial building stock22. This demonstrates investor push for business models that align with a net-zero carbon future economy.
A clear investor roadmap is needed to turn this ambition into support that can scale low carbon built environments. While the life cycle for large-scale property and building projects often operate on generational timescales, interim targets and steps are critical to steer large shifts. Long-term investment commitments need to be placed in the ‘meaningful now’ by connecting them to shorter-term targets and implementation steps that can deliver low-carbon built environments.
Elements of this roadmap should include targeted and proactive support for innovative material development and use. While this remains potentially risky for investors, there are also risks in holding assets that become stranded because of their poor carbon performance. Investors should be prepared to manage patient capital portfolios focused on long-term value creation that allow for materials markets to mature and new processes to be scaled up in use.
Finding the right regulations and incentives will be crucial in spurring investors to ensure that their portfolios address embodied carbon and generate long-term societal value. To encourage sustainable and healthy investment decisions, there is a need for consistent approaches to policy that affects the built environment. The twin policy instruments of incentivizing low-carbon projects while regulating carbon-intensive designs can encourage investors to finance sustainable portfolios. The EU Green Taxonomy is helping to improve clarity on what counts as a ‘green’ investment in the built environment sector. Investor-mobilization efforts, such as the Institutional Investors Group on Climate Change and the UNEP Finance Initiative can support leading investors in decarbonizing their portfolios and drawing on sector-specific knowledge and expertise about the built environment.23
In parallel, regulation can force the hands of laggard investors. But without transparent or consistent policy narratives on embodied-carbon reduction, investor uncertainty is increased. This dissuades finance actors from developing transitional portfolio plans that move beyond the confines of energy efficiency. Better policy will need a more detailed understanding of investor granularity among policymakers.
Increasing external pressure for sustainable investments can help to bend incentives towards low carbon, especially in blended or public financing for built environment projects. In the United Kingdom’s infrastructure pipeline from 2016, 19 per cent of the finance is publicly sourced (£73 billion), while 12 per cent will be blended public/private financing.24
Investment in urban development that delivers for environment, society and the economy is a focus of the European Investment Bank, which can be held accountable to citizens through several routes including its Civil Society Division.25 Therefore, citizens can be advocates for the better financing of low carbon and healthy built environments. Citizen interests can emphasize the importance of urban landscapes in delivering wider societal goals such as reduced air pollution, more walkable cities and safer built environments.
Data: A Form of Accountability and Change-Maker
Reliable and comprehensive data is a key element that connects the various actors in the built environment system. It needs to be scaled. Data is a critical bridge between the technical, financial, policy and societal spheres. But lack of detail, time-consuming collection processes and fragmented accounting methodologies for sustainability criteria means it remains a missing link. This gap makes it hard to operationalize many high-level commitments to a low carbon future. As a result, policy and investment decisions cannot be measured or monitored. As steps are taken to address this and to develop rich datasets, such as the CDP City Wide Emissions open database26 and the Embodied Carbon in Construction Calculator27, local, city and regional governance and oversight will be needed to ensure that data remains transparent, accessible and open.
Making visible the social and environmental impact of built environment choices increases accountability and empowers scrutiny. Through operational and open datasets, construction and materials stakeholders will be accountable to the public, urban activist groups, policymakers and investors. Accountability will allow individual company performance to be tracked, while benchmarking companies can also spur ambition by increasing competition and "shaming" competitors into action. This brings increased impact as climate and wellbeing criteria become more incorporated in decision-making by regional and city authorities, and as a result of citizen and inter-generational advocacy.
Towards New Horizons for Built Environments
Looking forward, sufficiently rapid progress will be made only through orchestrated and coordinated action. While high-power actors, such as planners, developers, regulators and asset managers exert dominance over their respective elements of the built environment, individual actors cannot decarbonise the overall value chain. However, aligned action by multiple influential and interested stakeholders can achieve the necessary system acceleration required to reach net-zero embodied-carbon emissions by 2040.
Actors with high interest in low carbon and healthy cities – such as architects, city planners, engineers and new materials producers – need to be supported to amplify their impact in built environments and across the value chain. Innovators across the value chain should be celebrated and promoted across wider stakeholder networks. Increasing the visibility of successful innovations and disrupters will encourage other stakeholders to follow suit.
New stakeholder voices and ideas need to be included in the system to disrupt business-as-usual thinking and challenge inertia. By building new narratives for built environments that include health and wellness, and supporting the voices of such new stakeholders, decision-making processes can be reframed to amplify ideas about systems transition. Previous examples of this, such as Doctors against Diesel,28 have enabled different narratives to be delivered to wider audiences. As wellbeing becomes increasingly intertwined with urban-development models, wider stakeholder voices – such as public health, children's29 and environmental advocates – should become more central.
A changing climate will increasingly demand changes to how we finance, design and construct built environments as well as how we live and work in them. The scale of this issue brings the opportunity to redesign built environments so that they work better for all of us. The re-imagining of our relationship with cities and built environments caused by COVID-19 provides a glimpse of how we could remake our built environments to be sustainable, just and resilient in the face of the climate and biodiversity crisis. By reframing our built environments as providers of societal value (through green buildings, reduced air pollution, reduced carbon and inclusive landscapes) instead of being consumers of resources, we can achieve built environments in harmony with people and nature.
This summary was informed by discussions from two workshops titled ‘New Horizons for Low carbon Built Environments’. The workshops were hosted by the Hoffmann Centre for Sustainable Resource Economy at Chatham House with the support of the European Climate Foundation (ECF) and in collaboration with Architecture2030 and the School of International Futures (SOIF).