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Building Efficiency:
Europe's new climate-change mantra

by Sandrine Dixson-Declève

Buildings burn 40% of all energy consumed.
Insulating them effectively helps climate targets.

London.jpg
In Europe, buildings burn 40% of all the energy consumed. From 2021, a directive says all new buildings should burn zero energy.

Post-Durban, discussions around climate change and opportunities to decarbonise continue to gather momentum in Brussels. Although the Durban conference produced no groundbreaking commitments on emissions reductions, countries did formally adopt a second commitment period of the Kyoto protocol (until 1 January 2013) and, under the leadership of the EU, agreed to develop a new legal protocol that will be applicable to all parties to the UN climate convention by 2015 and implemented by 2020.

The decision signalled to the international business community that global targets will be forthcoming in the medium term. Such a steer is all the more important where investors, as well as businesses, are looking to invest in low carbon technologies as a way to get out of the recession and create stable growth and jobs.

Enter the buildings sector, potentially offering low-hanging fruit for greenhouse gas emissions reduction and job creation across the globe. In Europe, buildings burn up 40% of all the energy consumed, and the potential of refurbishing existing buildings to create savings and jobs is considerable and largely untapped. It has been estimated that, annually, 1.1 million new net jobs in the building industry could be created by 2050 through deep buildings renovation.

The European Commission and Members of the European Parliament in all parties have realised that energy efficiency in buildings is the best way to keep Europe's energy import bill down. It's also crucial to achieving the EU's objective of reducing greenhouse gas emissions by 80-95% by 2050 as the European Commission's 2050 Low Carbon Roadmap proposes, allowing the EU potentially to surpass the set 20% reductions target by 2020.

The roadmap states that "the built environment provides low-cost and short-term opportunities to reduce emissions, first and foremost through improvement of the energy performance of buildings". The commission's analysis has shown that emissions from the built environment could in fact be reduced by around 90% by 2050, a larger-than-average, long-term contribution to overall targets, and the largest contribution from a single sector. In the short- to mid-term, this underlines the importance of new buildings being much more efficient.

The re-crafted directive on energy performance of buildings adopted in 2010 states that buildings built from 2021 onwards should be nearly zero-energy. This process has already started, with many member states implementing stricter energy performance standards. But many believe that this is not enough. That is why the European Commission's newly proposed energy efficiency directive sets mandatory 20% energy efficiency targets. Currently under scrutiny in the European Parliament, this directive is one of the most hotly debated legislative proposals in Brussels today.

The European Commission's own impact assessment of the directive claims that GDP will not only grow if the EU meets its 20% energy efficiency savings target, but that a strong directive would offer direct benefits such as the creation of 2 million new jobs and €1000 savings in energy bills per household. A powerful precedent is Germany's KFW energy efficiency scheme. The Juelich Research Centre recently estimated that, for every euro invested by the state, the scheme brings in €4-€5 in tax revenues – for example, from previously unemployed workers now working in the building sector.

But the extent of EU ambition on the built environment is still up for debate. Although the proposed energy efficiency directive calls for a 3% renovation rate of public buildings – a doubling of the current renovation rate and a guaranteed increase in employment in refurbishment – the European Parliament's newest cross-party compromise proposal is centred on a 2.5% renovation rate, and a binding effort sharing savings target, which will aggregate to a consumption of not more than 1474m ton of oil equivalent by 2020. Even if the European parliament is moving in the right direction, national ministers discussing the directive are even more conservative in their readiness to adopt mandatory targets, claiming that no established methodology exists for measurement and monitoring and that a renovation rate of even 2% is too costly.

Once again, it's the costs and economic climate that have left policymakers uneasy. The commission projects that, over the next decade, investments in energy-saving building components and equipment will need to be increased by up to €200bn (£167bn). Although several member states have already implemented smart financing schemes, such as preferential interest rates for leveraging private sector investments in the most efficient building solutions, and although access to structural funds is seen as a real opportunity, overall the majority of member states are reluctant to mandate energy efficiency targets and seize the low-carbon and job-creation opportunities on offer.

So while the built environment is perceived by many as rich territory for decarbonisation and energy security, European governments do not seem ready to take a leap of faith in promoting ambitious action. It is therefore crucial that the European Parliament votes in favour of stronger legislation and sends a clear message to member states that energy efficiency in buildings is essential for European economic growth and jobs as well as meeting climate and energy security objectives.


Sandrine Dixson-Declève is a director of the Cambridge Programme for Sustainability Leadership & the EU Corporate Leaders Group on Climate Change.

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