Real estate emissions need to be tackled – JLL

As political and business leaders met in Davos there are new calls for greater public-private partnership to enhance the ability of cities across the globe to play their part in reducing carbon emissions.

In a study of 32 global urban centres, “Decarbonizing Cities and Real Estate”, specialist professional services firm JLL’s revealed that real estate’s contribution to emissions averages 60%, even higher in the world’s largest business centres, as much as 78% in London, 73% in Tokyo, 71% in Washington, DC, 70% in Paris and 66% in New York.

It added city governments are setting ambitious sustainability targets, often well ahead of national goals; yet plans to tackle the carbon emissions from buildings are frequently given insufficient attention. To deliver a holistic and effective decarbonisation plan for buildings, partnerships with landlords, investors, developers and occupiers are paramount.

The study found there is a significant gap between the policies enacted in municipalities, the impact of the real estate industry and the climate science that indicates the need to reach peak emissions to limit global warming. The research identified that the most successful cities to advance decarbonisation will be those that balance regulation, incentives, innovation and accelerators.

“Partnerships between the private-sector and local governments are critical to driving tangible progress in decarbonizing the economy, particularly in the Global North where so much retrofit is required of existing building stock,” said Guy Grainger, global head of sustainability services and ESG for JLL. “If this doesn’t happen expect local governments to introduce heavy regulation and penalties on building standards – there will be winners and losers as cities race to zero.”

Several cities were praised for their “innovative approaches” to reducing emissions from buildings, including New York City with a raft of local laws that are among the most stringent globally; Singapore and Vancouver, which have set out holistic approaches to greening their buildings; Paris and Amsterdam, which are taking a lead in considering embodied carbon; London and Los Angeles which are setting the pace on biodiversity; and Tokyo’s cap-and-trade program which incentivizes building owners to reduce emissions.

However, the research warned that at the global scale, policy is lagging the science today and this puts a greater onus on the private sector to take the lead in climate action. Waiting for regulation to take action is not advised, and those who act now will have more resilient assets and even a competitive edge.

“One of the biggest gaps in realising net-zero targets is in greening energy grids,” the study added. “A challenge corporates have no direct control over and one that often requires larger collaboration at the multi-city or national level. To meet this challenge of both breadth and urgency, cities will need to collaborate with neighbouring local, state and national governments to develop large-scale renewable energy and storage infrastructure.”

The research also identified the pivotal role that knowledge sharing and accelerator programs play in facilitating the retrofitting of existing buildings, particularly for small owners and occupants. In developed cities, 80% of the building stock that will be standing in 2050 has already been built. To meet 2050 targets, retrofitting rates will need to exceed 3% per year – they currently stand at 1-2% – making knowledge sharing of sustainable practices between governments and large and small entities critical to keep pace.

“This research highlighted a wide array of regulations and reporting structures being rolled out by governments, and different metrics and definitions being adopted,” added Grainger. “Cross-border collaboration will be needed, especially to help mitigate the worst impacts of climate change for the planet, and in particular for the most vulnerable cities in the Global South.”

Several cities were praised for their “innovative approaches” to reducing emissions from buildings, including New York City with a raft of local laws that are among the most stringent globally.

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