Cleantech Market Intelligence
Carbon Metrics for Buildings
It’s no secret that, regardless of how the world addresses the challenge of reducing global carbon emissions, buildings are going to be a central part of the puzzle. Buildings represent about one-third of emissions worldwide and provide some of the quickest and most cost-effective ways to reduce carbon emissions.
The problem right now is that it’s hard to certify that an investment in energy efficiency measures for new and existing buildings will actually reduce carbon. For countries establishing long-term carbon reduction goals as well as corporations seeking business opportunities in the growing carbon management solutions market, that represents a major barrier.
National governments can meet their internal and Kyoto Protocol carbon emission reduction targets by establishing national policies and carbon reduction plans for buildings over which they have jurisdiction (i.e., buildings in their own country). But that leaves a lot of untapped investment opportunities in other countries that could actually be more cost effective.
Certification programs around the world, such as LEED, are starting to fold carbon considerations into their certification criteria to ensure that buildings keep carbon emissions down. But if, say, LEED measures carbon one way and HQE measures it differently, these programs may not serve as bulletproof ways to tie buildings into national carbon reduction plans.
However, a group of industry players, led by UNEP’s Sustainable Buildings and Climate Initiative (SBCI) has been working over the last few years to address the inconsistencies in carbon measurement techniques around the world. The group has been working to develop clear and transferable carbon metrics (known as the Common Carbon Metric) that can be used to measure carbon reductions in buildings, whether it’s a new office park in Mumbai or a retrofit program in Rio de Janeiro.
One of the group’s recent breakthroughs was to enable Clean Development Mechanism (CDM) projects to use these new metrics in CDM building projects. The CDM is a program that allows Annex I countries (i.e., the majority of developed countries) to invest in carbon reduction projects in developing countries and claim the carbon reductions for their Kyoto Protocol carbon reduction targets.
While building projects have technically been eligible for CDM status for the last ten years, inconsistencies in the methods for measuring carbon from CDM projects have made CDM projects for buildings prohibitively expensive. By making the Common Carbon Metric a viable pathway to measuring and certifying carbon reductions, it will be much easier for developed countries to invest in carbon-reducing building projects in the future.
That also means that energy efficiency vendors and service providers can expect new business opportunities in carbon management to open up, particularly in the developing world. As buildings will represent some of the most attractive early entry points for carbon investment no matter where, they will figure prominently into the carbon management market going forward. About $3.8 billion will be invested in just the software and services associated with buildings across a variety of sectors by 2015 – not to mention the additional revenue streams created for the companies that actually install the efficient building systems that will provide those carbon reductions.