Two new U.S. laws — the Inflation Reduction Act of 2022 and the Infrastructure Investment and Jobs Act — make this a ripe moment to transform buildings in the United States into more modern homes, apartments, offices and civic spaces that will emit fewer greenhouse gases. At the same time, they will improve public health and safety, boost household savings and local economies, and advance social equity and innovation.
The Inflation Reduction Act provides $370 billion over 10 years to support clean electricity, electric vehicles, heat pumps and more, with the potential to cut emissions 40% below 2005 by 2030 and going a long way towards the U.S. climate goal of curbing emissions by 50-52% by the end of this decade. The Infrastructure Investment and Jobs Act encourages states and cities to invest in modern, accessible transportation to improve public health and safety and boost local economies.
The buildings sector is a fertile field for improvement because it accounts for over 30% of U.S. total greenhouse gas emissions, directly through the use of fossil fuels for heating, cooling and cooking; indirectly from electricity used to power buildings, and through emissions from making building materials, transporting them, construction and demolition – known as embodied emissions. Beyond emissions, the refuse created from construction and demolition amounts to 25-45% of the U.S. solid waste stream by weight and is often contaminated with materials harmful to public health and ecosystems.
Americans spend 90% of their time indoors. Better building design, construction and maintenance are critical to a healthier built environment that emits zero carbon, cuts utility bills and improves air quality. Denser urban environments and climate-friendly design foster economic mobility, support affordable housing and expand access to green space while mitigating the impacts of a warming climate.
This will require retrofitting existing buildings with more energy-efficient appliances and materials and using life-cycle design principles that help buildings last longer while reducing waste and embodied carbon. It would also create high-quality local jobs in design, construction and maintenance, and boost the clean energy economy. Zero-carbon buildings can also support resilient power grids through flexible demand management and on-site generation of renewable energy.
A new report from America Is All In describes the wide range of benefits from shifting to net-zero buildings. A companion paper offers guidance for states, tribes, cities, towns, universities, businesses and civil society actors on how to leverage federal opportunities to achieve decarbonization goals.
Here are a few of the health and economic benefits of zero-carbon buildings:
Zero-Carbon Buildings Offer Health Benefits
Zero-carbon buildings can improve public health by curbing fossil fuel combustion that worsens air quality, especially for children, the elderly and marginalized communities. Indoor air can contain two to five times more pollutants than outdoor air from fossil-fueled and poorly ventilated ovens, stove tops, heaters and clothes dryers with gas stoves alone emitting 21 harmful pollutants. It’s not just indoor air. Outdoor air pollution from residential buildings is responsible for an estimated 15,500 premature deaths in the U.S. each year.
Better building codes and building performance standards can reduce reliance on fossil fuels, enhance ventilation and make buildings less leaky, which would improve indoor air quality, decrease energy use and reduce emissions. So can installing windows that insulate better and replacing fossil fuel appliances with energy-efficient alternatives. For example, shifting from gas to induction stovetops improves indoor air quality, reduces the risk of children experiencing asthma symptoms by 42% and decreases home fire hazards. Climate-friendly green roofs can be twice as long-lasting as traditional ones, remove harmful pollutants from the air, lower temperatures to slow the formation of secondary pollutants, and reduce the need for heating and cooling.
Zero-Carbon Buildings Save Money and Create Good Jobs
U.S. households could save up to 25% on utility bills by replacing fossil fuel appliances with electric alternatives that are three to five times more energy-efficient, coupled with updates to building insulation and envelopes. Every $1 invested in retrofits like improved insulation, heat pumps, smart thermostats, LED lighting and other energy-efficient appliances saves $2 in avoided electricity generation and distribution costs. Lifetime cost savings are greater than the cost of switching to more efficient appliances. One study found that switching from gas to electric space and water heating alone would save the average American household $496 a year.
Two-thirds of low-income households spend a disproportionately high percentage of their household income on energy bills. The initial cost of replacing appliances can be a high hurdle, but the Inflation Reduction Act includes billions of dollars of funding to help make energy-efficient appliances and retrofits accessible for businesses and households, with specific provisions to support disadvantaged communities and low- and moderate-income households.
An important benefit of making the building sector low-carbon is the creation of high-quality jobs. Households that install four key appliances – electric heat pump space heaters and water heaters, upgraded breaker boxes and induction stoves – could create over 450,000 installation jobs and 800,000 related U.S. jobs over 10 years, with median wages higher than national norms. Energy efficiency jobs offer career paths even for those without college degrees. Additionally, 80% of energy efficiency employers contribute to health insurance and 78% contribute to retirement, while 11% of workers are covered by a union or project labor agreement, almost double the national average of 6%. Such jobs would be located throughout communities across the country and they couldn’t be automated or exported.
Managing an Equitable Transition
Energy efficiency measures often require upfront investments that are inaccessible to many Americans. Renters may also miss out on benefits due to building owners who don’t face the same incentives to save on utility bills. Innovative strategies, like community solar installations that offer renters or those without control of their roofs the chance to subscribe to a nearby clean energy project and receive credits for their electricity bill can help bridge this gap. Companies like BlocPower leverage private and public capital to offer residents and community organizations in low-income neighborhoods equipment leases or low-interest loans that make installing and leasing climate-friendly home technologies affordable. Because U.S. residential buildings can expect to last between 30 and 60 years, buildings constructed today will affect communities for generations. This longevity, combined with the fact that 50% of household energy consumption is attributable to households earning $60,000 or less, highlights how critical the Inflation Reduction Act’s provisions to make low-carbon technologies affordable are to lowering emissions and improving health outcomes for all.
Lastly, gas infrastructure maintenance costs are spread across the entire consumer base, and as consumers shift to electric appliances, those left using gas will bear a higher share of the maintenance cost. To ensure that customers who are last to make the transition – probably those in older buildings or who can’t afford retrofits – don’t see large cost increases, adjustments to utility rate design, potentially including strategies that shift fixed cost recovery from gas customers to the general tax base, are needed. Furthermore, to avoid adding to this burden, state and municipal governments can take steps to end new gas construction and cease subsidizing the expansion of the gas network, as California did recently.
Maximizing the Impact of Zero-Carbon Buildings
Zero-carbon buildings are critical to creating a more equitable, resilient and healthy future. Their impact can be maximized through coordinated efforts to promote urban density, integrate buildings with the needs of electricity grids and communities, embed life-cycle approaches in the sector and support innovation across the economy.
Designing More Densely
Denser communities produce fewer per capita carbon emissions than spread-out ones, partly because people don’t drive as much but also due to better insulation because of shared walls and shifts in land-use patterns. Updating zoning laws to make communities more dense can include a “density bonus” that allows developers to build taller, denser projects in exchange for meeting higher energy efficiency standards. This can bring higher potential rates of return for developers who can then build more housing at a time when affordable homes are in short supply. Removing parking minimums supports walkable neighborhoods and promotes shifts in transit modes and land use decisions that prioritize affordable housing, access to transit and green space. Densification also benefits local economies, improving access to jobs, reducing commutes for residents and decreasing logistical costs and geographic market constraints for businesses while offering access to a wider talent pool.
Support Grid and Climate Resiliency
Renewable energy procurement and incorporation of distributed generation technologies like solar panels, batteries and vehicle-to-grid (V2G) charging into building design can contribute to lower carbon footprints, savings on building operation costs and more resilient electricity grids. Grid-linked technologies and time-of-use electricity pricing are key to optimizing energy demand, saving consumers and utilities money as it eliminates the need to build more generation and distribution capacity. One estimate found that between 2030 and 2050, energy savings from building efficiency and flexibility measures could erase the need for one-third of coal- and gas-fired power generation.
Building features like green roofs, as well as designs that incorporate tree cover and access to green spaces, can help alleviate urban heat effects where high concentrations of heat-absorbent pavement raise daytime temperatures as much as 7°F. Trees aren’t equitably planted, though. Low-income blocks have an average of 15% less tree cover and 2.7°F higher temperatures than high-income blocks, and neighborhoods with predominantly non-white residents have less tree cover than white neighborhoods in most U.S. communities, even after accounting for trends in income. Higher temperatures are associated with higher summertime energy use, and heat death risk in U.S. urban areas rises 2.5% for each 1°F increase in heat wave intensity. Investing in green buildings and development in historically disadvantaged communities presents an opportunity to rectify historic injustices, relieve financial and health burdens, and ensure a more climate-resilient future.
Foster a Circular Economy
Building materials like steel, cement and aluminum account for 21% of global greenhouse gas emissions and 3% of U.S. emissions due to their carbon-intensive production processes. Reducing, diverting and recycling waste created on construction sites is critical to cutting embodied carbon and emissions from the building sector. Life-cycle approaches that repurpose rather than discard building materials, modular design that uses common material sizes to ease retrofitting and designing buildings to be deconstructed in the future can reduce waste. Building design that prioritizes flexibility of use in spaces and makes shared use possible can help extend the life of structures, avoiding emissions from demolition and new construction. While such processes may require energy, transportation, labor or additional materials to make buildings and materials useful again, they can also make supply chains more secure, cut costs and create jobs.
Leverage Procurement to Support Innovation
Investment in low-carbon materials can help spur demand for innovation in carbon-intensive sectors like cement and steel production, which will be key to putting American industry at the forefront of the clean energy economy and attaining decarbonization goals. States, cities, tribes, businesses, universities and civil society groups can adopt low-carbon product standards and “Buy Clean” initiatives to reduce embodied emissions while accelerating this process. By ensuring demand for clean products, standards can promote the uptake of existing low-carbon products, attract long-term investment in emerging technologies and promote transparency in emissions accounting along the global supply chain. Both California and New York have implemented low-carbon procurement standards for specific construction materials, and cities like Pittsburgh have led the way in leveraging procurement to meet climate goals through building efficiency and renewable energy commitments.
Ensuring a Zero-carbon Future for U.S. Buildings
Unprecedented investments from the Infrastructure Investment and Jobs Act and the Inflation Reduction Act are a great opportunity for non-federal actors to make zero-carbon buildings the foundation of the climate-aligned communities of our future. To create a more climate-resilient future that advances environmental justice, public health and local economies, we must transform the U.S. building sector now.