Incentivising Rapid Carbon Abatement from Buildings –
The Case for Embodied Carbon White Certificates
The Paris Agreement goals require annual global emissions growth rate to be reduced by 10-70%. The production of materials for buildings and infrastructure is responsible for almost 55% of total annual global carbon emissions. A 20% consistent reduction in the embodied carbon intensity of property and infrastructure would amount to 10% total emissions abatement and go a long way towards achieving the 2 C target.
The property sector is familiar with the notion of “white certificates” in relation to end-use energy efficiency (or via NABERS rating improvement). The mechanism of NABERS ratings and the ability to generate revenue from certificate sale has created meaningful incentives for property owners to invest in abatement projects and initiatives. The materiality of operating energy emissions as a core sustainability issue is accepted.
The advantage of embodied over operating carbon abatement, is that it is certain and immediate and does not rely on human behavior over many years. As such, embodied emissions abatement is more valuable to the economy and environment (as proven by the principle of discounted cash flow theory). Given the urgency and scale of emissions abatement to meet Paris goals, we argue that the time is right to develop a “white certificate” scheme for embodied carbon for buildings.
Carbon life cycle assessment methods and inventories have improved vastly in the last decade and sufficient data and LCA expertise exists which now makes a scheme accessible and plausible. One simply needs to consider the regulatory requirement for materials LCA in The Netherlands and France to understand that such a scheme has a clear basis for deployment.
We commend the Green Building Council and the launch of the embodied carbon Innovation Credit for buildings. It is an important and essential first step in recognizing the importance of materials carbon in the built environment sustainability story, as well as a critical element to drive demand for carbon LCA of materials and carbon neutral certified products. This must be applauded.
Given that embodied carbon is vastly larger than operating carbon, even with 20-30% abatement delivered, the balance of a building materials carbon footprint is very large. The challenge with the Innovation Credit as defined is its cost. The objective is to reduce emissions and then “purchase offsets” to neutralize the balance. This structure presents the problem of a developer or owner “taxing” themselves to be a good corporate citizen, rather than incentivizing them to innovate.
We present here a recent study of ours to demonstrate the point.
The project is a Sydney CBD A-grade office development owned by a leading A-REIT. Embodied carbon savings of 16% of the total building were identified through a variety of design strategies, recycled content and supply chain (low carbon materials) initiatives. If the balance of materials carbon were to be “offset” with NCOS or similar certificates it would cost the owners $1.5 – 6.5 million dollars (at prevailing carbon credit costs). This level of cost is prohibitive. If however, the Owner were able to generate “white certificates” for the mitigated materials carbon, it would represent income / revenue or a capital cost contribution of $260,000 to $1.3 million. This would present a real incentive for the project team and further drive demand for materials LCA’s and also low carbon building materials.
Figure 1 – Cost of “embodied offsets” – Office Building.
There are of course many challenges with a white certificate scheme, including setting the reference case and also double counting. A NABERS style rating band with associated emissions intensity per square meter of building would significantly assist with simplifying administration and certification.
The Footprint Company has completed over 1,200 building related carbon life cycle assessments and we argue that there is sufficient expertise in the LCA community to enable the development of a white certificate scheme on a NABERS style basis – which, we argue, would, with the engagement of the design community and property owners, deliver fast design led carbon mitigation of the scale needed to make Paris goals a reality and provide a real incentive to do so beyond being a “good corporate citizen”.
We commend the steps of the Dutch and French governments in regulating materials LCA for new development. Applaud the Green Building Council and the Australian Federal Government for the new materials Innovation Credits and encourage our LCA peers and colleagues to support carbon life cycle assessment of buildings as a critical plank to solving climate change.
Figure 2 – Embodied NABERS Bands (TFC project results).
1. From Trends in Global CO2 Emissions – 2016 Report, PBL Netherlands Environmental Assessment Agency – European Commissions Joint Research Council, 2016