WBCSD Project: Energy Efficiency in Buildings

1. WBCSD Project:Energy Efficiency in Buildings EURIMA May 31, 2007 Budapest

2. Talking points • A few words about WBCSD • Energy and Climate change • Building Project - EEB • Questions

3. WBCSD Coalition of 190 leading companies • 112 headquartered in EU and G8 countries • Market capitalization: USD 6trillion • Regional network partners in 60 countries

4. Who are we? WBCSD Member Companies

5. Geographic Overview of WBCSD Members 65 32 49

6. Why do companies join? • Providing a business vision on Sustainable Development(SD) An antennae for emerging issues and trends • Advocating the business case for SD Influencing the debate and public policy • Bringing a collective business voice “We can punch above our weight” • Providing a platform for leading companies and senior level decision makers • Delivers learning by doing and by sharing

7. Talking points • A few words about WBCSD • Energy and Climate change • Building Project - EEB • Questions & discussion

8. Climate change • “It’s show time for climate change” • Public opinion is at “a tipping point” • A growing sense of urgency in society • ….but no strong actions…..

9. A carbon constrained world September 2006

10. The Context Challenges • We do need energy….more energy..much more… • Strong growth in demand and investments • Developing countries : new capacity • OECD: replacements • Climate Change messages: • Don’t go over 2Co global warming • Stay within the range of 450 – 550 ppm carbon concentration by 2050 • “Cheaper to act now than wait” (Stern) • Next 10 years of actions and investments crucial

11. Theoretical carbon emissions profiles published in IPCC 3rd Assessment Report WRE 450 (IPCC) WRE 550 (IPCC) WRE 1000 (IPCC) High and low carbon pathways 16 14 Global Carbon Emissions, GT 12 10 8 6 4 2 0 2000 2010 2020 2030 2040 2050

12. « Five ” in our energy system Oil Biomass Gas Coal Nuclear Renewables Primary Energy Power Generation Direct combustion Industry and Manufacturing Liquids Energy Energy Energy Final Energy Mobility Buildings Consumer Choices

13. Options for change – technological and behavioural Emission reduction Renewables A further shift to natural gas Bio-products Carbon capture and storage Nuclear power Energy conservation and efficiency Mass transportation Road transport Low energy appliances Doing things differently Buildings

14. Can all that change tomorrow?? • Many advocate that a much more rapid change inour energyinfrastructure is the only solution to the threat ofclimate change. However: • Major transitions at the global level will take time to implement • The speed with which new technologies diffuse depends on many factors.

15. Buildings 45+++ years Hydro75+ years Coal power 45+ years Nuclear 30 – 60 years Gas turbines 25+ years Motor vehicles 12 – 20 years Size and lifetime matter !! The rate of technological change is closely related to the lifetime of the relevant capital stock and equipment 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 ++

16. B. National/Sectoral Goals & Targets Efficiency Buildings Industry xx % p.a. Domestic through to 20xx Power Renewables xx MW p.a. by 20xx Generation CCS xx tonnes CO2 p.a. Mobility Bio-fuels xx litres p.a. by 20xx Efficiency xx mpg by 20xx Choice Hybrid / Diesel uptake Mass transit C. National Policies Buildings – adopt new country building standards, design awareness Industry – Sectoral agreements, emissions trading, technology standards Domestic – carbon labeling, increased product standards (e.g. standby energy) Renewable Energy – renewables targets. CCS – funding for infrastructure, tax cuts on capital investments, price signals for carbon via emissions trading Biofuels – targets, support for manufacturing, CO2 labeling Vehicle Efficiency - support technology, incentives, sectoral agreements Mobility Choice - consumer incentives, promote public/private partnerships for transport networks Opportunity starts at the national / sectoral level A. Opportunity Wedges (National) (Developed Country Example) CO2 Emissions, MT per annum National CO2 trajectory

17. We need a global framework… Two key intergovernmental processes • Formal climate negotiations / UNFCCC • Stalled at present • G8 + 5 Gleneagles Plan of Action • Can help bring the UNFCCC negotiations “back to life”

18. The Complimentary Roles of Business and Governments • Two key questions from governments on business and climate change • How far can business go on its own, based on the normal operations and investments? • How can governments facilitate and enhance further actions by business? Not good enough answers provided by Business

19. A new direction is needed

20. Talking points • A few words about WBCSD • Energy and Climate change • Building Project - EEB • Questions & discussion

21. Project Vision A world where buildings consume zero net energy

22. Our “argument” climate change is urgent buildings can and should be zero net energy building energy use can be cut dramatically now there are business opportunities there are barriers preventing progress these barriers can be overcome

23. CONTRIBUTING ORGANIZATIONS Co-Chairs Lafarge UTC Core DuPont EDF Philips TEPCO Sonae Sierra Core CEMEX GDF Kansai Sponsoring Arcelor BP ITT RioTinto Secretariat WBCSD Approached: Arup, GE, IKEA, JCI, Nexity, OwensCorning, WalMart, Allianz, Shell, Skanska, Swiss Re … Institutions: Int’l Energy Agency, UN Environment Program, Lawrence Berkeley National Labs, Int’l Institute for Energy Efficiency Economy, PassivHaus, Renewable Energy and Energy Efficiency Partnership, China MOC…

24. Detailed Work Plan Detail work plan and commitment in place Formally Announce Project (Beijing) Setting Direction Report Industry Response Report Final (Action Plan) Report Facts & Trends Report 2009 2006 2007 2008 Assurance Group Assurance Group Assurance Group Opportunity Design/Develop Validation CEO Gate CEO Gate CEO Gate Local EEB with the Regional Network

25. BUILDING SECTOR, BY REGION Total area Area per capita Source: WBCSD EEB Phase I Facts & Trends Equipment Sector Report

26. ENERGY CONSUMPTION, SOURCES Source: WBCSD EEB Phase I Facts & Trends Equipment Sector Report

27. CONSUMPTION FORECAST Building Energy Consumption by Region Worldwide Building Energy Consumption 130% 51% TWh 32% 14% 98% 114% 25% 30% -4% 120% 4% 0% 2002 21.3 TWh Source: International Energy Outlook, EIA, 2005 USA Western Europe FSU/ Eastern Europe China Japan Other Emerging Source: International Energy Outlook, EIA, 2005 Note: Canada, Mexico, Australia and New Zealand not represented in the chart; they add up to 1.2 TWh in 2002

28. DEMAND BY SUBMARKET Increasing Intensity Increasing Consumption Source: Energy Information Agency, 2003 Commercial Buildings Energy Consumption Survey

29. ESTABLISH BASELINE FACTS Detail Matrix: Work in Progress Brazil China India Japan Europe US Availability Consistency Statistics

30. Energy and people • What people think they spend energy (Germany) Think Reality Car 14 % 31 % Hot water 18 % 8 % Heating 25 % 53 % El.Equip 39 % 8 % Don’t know 3 % n.a Source: PassivHaus

31. Objectives for Market Research study To measure, in different regions of the world – specifically Japan, China, India, Brazil, the US, and EU (Spain, France and Germany): • The perception of sustainable buildings • The level of understanding and level of maturity of this new concept • The readiness to adopt sustainable buildings and the constraints faced by investors, architects and contractors

32. We used qualitative then quantitative interviews for different audiences • Qualitative research • Quantitative research • Opinion leaders • Regulators • Finance community • Specifiers and Developers • Agents and Landlords • Corporate Owners and Tenants • Architects • Journalists • NGOs • Academics • Policy makers • Politicians • Regulators • Investment bank construction-industry analysts • Investment bank real estate financiers • Property investment companies • Architects and engineers • Specifiers and developers • Builders and contractors • Real estate agents • Professional landlords • Corporate property managers • 45 interviews • In-depth face-to-face and telephone interviews • 150-200 interviews per market (total = 1423) • 15 minute telephone questionnaire • Focus of this presentation • Qualitative research helped us to optimise the quantitative research design • Non-professional landlords; domestic owners • Households Excluded

33. EXPERIENCE BY COUNTRY Source: WBCSD EEB Market Research, 2007

34. EXPERIENCE BY SECTOR Source: WBCSD EEB Market Research, 2007

35. When asked about their role in driving change, very few of our decision-makers see their role as leading the move to sustainable building Q16. What do you see as the role of your company in the adoption of sustainable building practices All respondents Specifiers/ developers Agents/ owners/ landlords Corporate tenants N/A Percentage of respondents Source: WBCSD EEB Quantitative Research

36. Some of our findings As it relates to energy efficiency and buildings … Low awareness of environmental impact & cost of green Low leadership actions, sector is complex & fragmented Know-how and experience is lacking Holistic approach is key Lack of financial instruments Energy efficiency is not an investment criteria Behavior and cultural lifestyles are key factors Market Perceptions Business Levers

37. Cross sector factors for industry transformation Materials Finance, Design, Ops Energy Equipment

38. Project Vision A world where buildings consume zero net energy

39. EEB contacts WWW.wbcsd.org/web/eeb WWW.eeb-blog.org

40. WBCSD Project:Energy Efficiency in Buildings Staff meeting EEB project April 17, 2007 Geneva