Buildings Climate Wins of 2023 (and what’s ahead in 2024!)

By Charlotte Matthews and Sukanya Paciorek ?

This past year saw great progress in reducing emissions from buildings; from innovative retrofits of affordable housing, to surging heat pump sales, to first-of-their-kind policies passed. With climate, affordability, health, and resilience as our north stars, RMI continues to meet the challenges to building decarbonization head-on, working with partners in industry, government, finance, and advocacy to put the “further, faster, together” mantra into practice. Below we highlight six areas of building decarbonization that were especially exciting this year and share what we see on the horizon for 2024. ?

1) Retrofitting old and inefficient buildings is a global priority.

Nearly 80 percent of the buildings that will stand in 2050 have already been built . Retrofitting millions of these properties to eliminate pollution and boost performance will require a monumental effort. 2023 marked progress in the US retrofit market, and we expect the rate of retrofits to increase in 2024 as new federal and state funding hits the streets .

Our multifamily team is at the forefront of this progress, advancing cutting-edge retrofits and innovative prefabricated technologies for affordable housing in 2023. In Massachusetts, we partnered with Local Initiatives Support Corporation to launch the 1,000 Apartment Challenge and kickstarted deep energy retrofits across 35 buildings with $15 million in project funding secured for owners. Standout partners like the Allston-Brighton CDC will cut emissions by an impressive average of 55 percent for 103 residential units across three properties in Boston.

In California, we delved into high-impact financing models, unveiling studies on tariffed on-bill and energy service agreements for multifamily building retrofits. An upcoming release in 2024 will provide design guidelines for energy retrofits in the state.?

2) #HeatPumpNation?

Heat pumps have taken a starring role in national and local efforts to electrify residential and commercial buildings. RMI's 2023 analysis underscored the technology’s game-changing potential in the US residential sector: swapping a gas furnace for a heat pump could slash climate pollution by 35–93 percent across all 48 continental states.?

Notable adoption occurred in colder states like Maine, which surpassed its goal of installing 100,000 heat pumps two years early. Many more families will have access to these double-duty comfort machines moving forward, with 25 US governors committing to install 20 million heat pumps by 2030 and President Biden leveraging the Defense Production Act to accelerate heat pump manufacturing.??

In addition to these commitments, we also have our eyes on the market for window unit heat pumps and how this technology could enable more apartments and renters to go electric.??

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3) Green building policies won big.

The Inflation Reduction Act turned one , with billions of dollars of funding for home and building upgrades poised to transform the US buildings sector. Meanwhile, in states like New York , California , and Washington , new policies were passed to pave the way for more efficient buildings that use zero-emission appliances like heat pumps, induction stoves, and heat pump hot water heaters.??

In Massachusetts, utility regulators issued a first-in-the-country ruling that sets a framework to decarbonize the gas system and accelerate heating electrification solutions such as thermal energy networks, which can deliver clean heat to multiple buildings at once. More states and cities nationwide are looking to these trailblazing efforts to adopt similar policies that will help lower reliance on fossil fuels and steer more buildings toward electrification.??

Follow RMI's policy article and Building Decarbonization Coalition’s tracker for progress updates on local building electrification policies and initiatives.?

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4) Cooling is a defining issue of our time.

The past year was the hottest year on record. Without concerted action, 8.3 billion people globally — 74 percent of the projected global population — will be exposed to deadly heat conditions by 2100.? Access to cooling that does not exacerbate global warming is a critical societal and development need that has prompted the Global Cooling Pledge, endorsed by over 60 countries . The pledge targets a 68 percent reduction in cooling emissions by 2050, which RMI is helping to make happen through market-shaping efforts to commercialize room air conditioner technology with 5X lower climate impact .?

Providing thermal comfort through a mix of passive strategies and modernized cooling technologies is a key goal for our partners at Lodha Group, one of India’s largest real estate developers. Together with RMI India Foundation, they hosted the first annual RMI-Lodha Sustainability Conclave as a platform for industry stakeholders to devise strategies and solutions for a net-zero future in India's built environment. The two-day event highlighted the achievements of the Lodha Net Zero Urban Accelerator, a groundbreaking effort, launched in July 2022, that aims to align the sector with India’s 2070 net-zero emissions target . ?

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5) Low embodied carbon?buildings can happen today.

U.S. Green Building Council (USGBC) and RMI unveiled a report at this year's Greenbuild Conference to provide strategies for the US building construction sector to reduce embodied carbon emissions and answer frequently asked questions from the industry. Our collaboration with USGBC informed the evolution of LEED v5 , emphasizing low-embodied carbon practices and the significance of Environmental Product Declarations (EPDs) (essentially building materials nutrition labels) for constructing and renovating buildings with sustainable materials.?Notably, EPA's new grant program aids EPD development, signifying a pivotal shift in the quality and availability of embodied carbon emissions data, which is especially important for advancing the market for lower-embodied carbon material alternatives. ??

On the residential side, new home construction in the US creates over 50 million tons of embodied carbon emissions annually, equivalent to the yearly emissions from entire countries such as Norway. However, an RMI study found that homebuilders can take immediate steps to achieve 30 to 50 percent emissions reductions at cost parity with currently available tools and materials. Knowing this, we soft-launched the Homebuilders Carbon Action Network to assist builders in understanding and integrating embodied carbon reduction strategies into decarbonization plans. Fifteen builders, including some of the largest in North America, have already joined. The official launch is scheduled for early 2024.? ?

6) RMI research elevates the importance of Indoor Air Quality

In 2023, a critical focus on the health impacts of gas stoves reshaped perspectives on indoor air quality and its intersection with public health and climate change. A comprehensive peer-reviewed report by RMI, the Medicine and Health - University of Sydney , and the Albert Einstein College of Medicine estimated that nearly 13 percent of childhood asthma cases in the United States are linked to having a gas stove in the home, drawing national media attention and prompting Americans to rethink gas stove purchases .?

As more Americans are paying attention to the air they breathe inside their homes, the importance of indoor air quality guidelines and the lack thereof has come into focus. RMI's report on the need for US indoor air quality guidelines addresses the relationship between indoor air quality, overall health, and climate change. Promisingly, decision-makers in four states have taken steps to advance indoor air quality guidelines and considerations, including the Illinois Department of Public Health (IDPH) and the California Air Resources Board .??

Another critical area in the buildings sector where air quality is of high concern is K-12 schools. Research by RMI and UndauntedK12 on how outdated HVAC systems in schools affect student health and learning gained prominence this year and was one of RMI's most downloaded reports. It received multiple accolades from new and existing partners, strengthened the case for policy efforts (e.g., CalSHAPE ), and was featured in Education Week. ?

What’s in store for 2024?

Next year, we are strategically zeroing in on reducing climate pollution from single-family homes, affordable multifamily buildings, and large commercial and government portfolios. Across these sectors, we will place new emphasis on addressing the economics of electrification - where it works today and what we need to change to make it broadly affordable and cost-effective. Apart from our sector-specific work, we will continue to leverage our cross-RMI expertise to achieve efficient, cost-effective cooling globally, to reduce emissions from high-emitting industries like steel and cement, and to ensure energy demand management is a part of our grid resilience strategy. ?

Thanks to our incredible partners and funders – we feel ready for the challenges ahead and confident in our collective ability to speed up the transformation to better buildings and healthier, more resilient communities for everyone.?

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