For most homes in the U.S. and many in Europe, per the report, heat pumps are cheaper to run than gas equipment and have lower total lifetime costs. Heat pumps make even more economic sense when consumers are considering installing an AC and a gas furnace; heat pumps are both in one.
These appliances also keep getting better. Manufacturers learn how to improve technologies with experience, as they have done with solar panels and wind turbines. The result is that heat pumps are becoming more efficient; getting smaller; and reaching higher temperatures as they transition to natural refrigerants (which also have lower global warming potentials), the authors write.
But policymakers need to address energy costs to encourage widespread electrification, according to the report. Countries with high electricity prices relative to those of gas lag in heat pump adoption.
Fixes include shifting environmental levies that are currently disproportionately piled onto electricity bills to gas costs, offering lower electricity rates for customers with electric heating, and putting a price on carbon, the report says. Banning gas equipment would be the most direct move, but “only a handful of countries, such as the Netherlands, have successfully outlined plans” to do so.
Make demand for grid power flexible
Buildings will need more power when they’re all-electric, potentially straining grids. Unchecked, global electricity demand for buildings by 2050 could grow 2.5 times what it is today, per the report. But with efficiency improvements, the commission expects electricity requirements to grow a more modest 45%.
That’s still massive. So, to decarbonize buildings without breaking the grid, we’ll need to make them flexible in their electricity demand, the authors note. By using power when it’s cheap, clean, and abundant, these edifices will also be more affordable than they’d be otherwise.
Low-cost smart thermostats and sensors can reduce demand by 15% to 30% and shift energy use automatically when prices drop. In some places, commercial building owners can already reap tens of thousands of dollars in annual savings by dialing down energy use when grid demand is highest.
The report recommends that all buildings aim to have the ability to shift when they actively heat or cool by two to four hours without compromising comfort. That’s doable with existing solutions that provide thermal inertia, including insulation and tank water heaters that can store hot water for when it’s needed.
Utilities and regulators can spur more flexible demand by implementing electricity rates or utility tariffs that reward customers for using power outside of peak periods.
“When the wind is blowing and the sun is shining, and we’ve arguably got an abundance of clean power on the grid, prices often go negative,” Audino said. Tariffs can reflect that reality, creating a clear financial incentive for households and others to shift their power usage. Without these more dynamic tariffs, “it’s really hard to see how we can drive this [shift] at scale.”
How to clean up embodied carbon
Building floor area globally is expected to grow by over 50% by 2050, according to the report. If structures are built with the same techniques as today, cumulative embodied carbon emissions could soar an additional 75 gigatons of CO2 between now and midcentury.
But that amount could be reduced to about 30 gigatons of CO2 by maximizing the utility of buildings that already exist, decarbonizing building materials, and designing new ones differently.
Using existing structures is “the biggest opportunity” for reducing embodied carbon, per the report: The strategy avoids adding any new embodied emissions at all. But it’s harder to implement this tactic than it is to change building techniques, the authors add.
Producing materials drives up-front emissions, and the biggest contributors are cement, concrete, and steel, the report notes: They account for 95% of the embodied carbon from materials in buildings.
Low- and zero-carbon cement, concrete, and steel can be made using electricity, alternative fuels, exotic chemistries (including ones inspired by corals), and carbon capture with storage. But developers need incentives to buy these clean materials, which aren’t yet widely available or competitive on cost alone.
A complementary approach is to design buildings with less of the emitting stuff. For the same floor space, a mid-rise structure uses less material than a high-rise, which needs a larger foundation and bigger columns. A boxy building is more efficient than an irregular one.
Developers can moreover supplement construction with alternative, lower-carbon materials, per the report. These include recycled materials, sustainably sourced timber, bamboo, rammed earth, and “hempcrete” — a low-strength, lightweight mixture of hemp, lime, and water that actually absorbs carbon.
Embodied carbon has been particularly challenging to curb because it’s largely invisible. In 2021, London regulators decided to change that, requiring major developers to tally all the carbon emissions, operational and embodied, over the building’s lifetime while still in the planning stage, the authors write.
Developers weren’t required to stay below any carbon-intensity threshold; they just had to report expected emissions, said Stephen Hill, associate director in the buildings sustainability team at firm Arup, a member of the Energy Transitions Commission.
“But it triggered a kind of race downwards in terms of embodied-carbon intensity for developers, all of whom wanted to have the lowest-carbon developments,” he added. “It’s a fascinating example of what transparency will do and how the market behaves.”
Stephen Richardson, senior impact director at the nonprofit World Green Building Council, emphasized at the commission’s panel event that to decarbonize buildings, governments need to do two things at once. “We need to incentivize, on the one hand, make it financially more appealing,” he said. And “we need to mandate.”
Large parts of Asia, most of Africa and South America, and even some U.S. states lack mandatory building codes, the report notes. And that’s the “absolute, No. 1” policy that needs to be in place, Richardson said. “Without policy, nothing happens — or very little.”
