This book includes a plain text version that is designed for high accessibility. To use this version please follow this link.
Towards a green economy

20,000,000 16,000,000 12,000,000 8,000,000 4,000,000 0

2010 G2

sector 2010–2050 Source: GER model simulations

Removing these barriers, for example through the application of appropriate policy instruments, will increase overall economic output and net employment by increasing average returns to capital economy- wide. Policy interventions (more below) also need to address constraints in the planning and procurement of construction projects, and the lack of capacity in the local industry.

3.4 Investment scenarios for increased energy efficiency in buildings

A comprehensive analysis of investment in greening the building sector would investigate the effects from implementing the range of measures discussed above including new building and construction methods and design as well as retrofitting existing buildings. Conducting such analysis is, however, limited by a lack of global data particularly on the building stock and its evolution in recent years.

The modelling of green investment scenarios in this report includes an analysis of the effect from increased energy efficiency in buildings.24

This analysis is feasible

using existing data on energy supplied to the building sector. Although investment in energy efficiency is only part of a range of investment needed to shift to green buildings, it is a major component.

24. The modelling of green economy investment scenarios is presented in detail in a separate chapter.

25. In order to be conservative about projected reductions in emissions in the buildings sector, G2 results are compared here with BAU only. When G2 results are compared with BAU2 results, the extent of emission reductions would be more significant because BAU2 projects higher growth in emissions than BAU.

26. All monetary figures are in constant US$ with base year 2010.

27. As seen below, the somewhat lower investment amounts modelled here also lead to lower emissions reductions than in IEA (2010), although as explained, part of the emissions reduction in the G2 scenario owes to investment in renewable energy, which is not included in the costs presented for investment in energy efficiency.

358 2020 BAU Figure 5: Total power demand per year in buildings 2030 2040 2050

12 10 8 6 4 2 0


1980 G2

1990 2000 BAU

Figure 6 : Total CO2

sector 2010–2050 Source: GER model simulations

The economy-wide model assumes 2 per cent of the global GDP to be allocated on a yearly basis as additional investment in 10 green sectors (G2) over the period 2011-2050. The results of this investment are then compared with those of a BAU scenario without additional investment, and a BAU2 scenario, in which the same additional amount is invested following the projected trends of BAU.25

2010 2020 2030 2040 2050

emissions per year in buildings

Within this multi-sector

model, the building sector is allocated 0.2 per cent of the global GDP to increase energy efficiency. Since model projections result in GDP growth (under all scenarios), this annual investment under G2 continues to rise: from US$ 134 billion in 2011 to US$ 389 billion in 2050 (with a yearly average of US$ 248 billion).26

These amounts are

somewhat lower than but generally comparable in scale to the latest estimates from IEA and OECD (2010).27

The effectiveness of these investments in energy efficiency is simulated in the model by using the average emission-abatement costs estimated by IEA (2009a) for introducing the measures in the building sector. These rise from about US$ 18/unit/t CO2

unit/t in 2030 and US$ 166/unit/t in 2050, reflecting the expectation that measures to reach further efficiency improvements will become more costly over time.

Under a BAU scenario, power demand from the building sector almost doubles from 9.4 million Gwh in 2010 to 17 million Gwh in 2050 (Figure 5). The G2 results, in contrast, suggest the possibility of decoupling buildings’ power demand from economic growth. In the simulation, power consumption peaks at 10.9 million Gwh in the period 2025-2030, then drops slightly to 10.1 million Gwh by 2050 while GDP continues to grow in that period.

In terms of reduction in the intensity of buildings’ power demand per unit of GDP, the results of the simulation show that under G2, by 2020, the intensity will decline by 17 per cent over the baseline in 2010, compared with a reduction of 5 per cent under BAU. By 2030, the

in 2015 to US$ 58/


Gigatonne CO2


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43