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Carbon Labels for Buildings? How Data Transparency Can Drive Climate Goals

The climate crisis is an all-hands-on-deck moment. We’re setting ambitious goals for reducing carbon emissions at all levels of society. Countries, states, cities, corporations, and individuals are all trying to shrink our carbon footprints. We know we need to act, and act fast. But we’re not making full use of one of the most powerful tools at our disposal: data.

We’re living in an age of climate emergency–but we’re also living in the age of big data. Today’s tech tools generate vast amounts of data. In fact, many corporations collect more data about their customers than they can actually use. They’ve got a data surplus. If more of that (anonymized) data were available for public or public-interest use, it could be a game-changer for the climate.

Making consumers aware of the impact of their choices can change those choices—especially when the impact is large.

We know that making data available to the public can change behavior. Take nutrition information on food packaging. Research suggests that making nutrition information more transparent has had a double-pronged impact on what we eat. First, posting calorie counts in fast food restaurants does make customers order and eat lower-calorie options. And it’s worth noting that the effect is biggest for those customers who were previously ordering the highest-calorie meals. So making consumers aware of the impact of their choices can change those choices—especially when the impact is large.

But consumers aren’t the only ones whose behavior can be changed by data visibility. Nutrition labeling laws have also changed corporations’ behavior. These laws spurred companies to remove trans fats from their foods years before trans fats were fully banned. No corporation wants a customer to be thinking about how unhealthy their product is at the moment they’re making a decision. 

How building emissions data could influence consumer behavior

Can we create a similar double- or even triple-pronged effect when it comes to climate? Can we make carbon emissions as unattractive to customers as trans fats? 

The stakes are, obviously, high—particularly when it comes to the built environment, which is responsible for nearly 40% of all carbon emissions globally. We can’t choose not to build more homes or to maintain our infrastructure. We are already in the midst of a historic, years-long housing shortage, thanks in part to the Great Recession and the pandemic. We need to build millions more homes, while sharply reducing the total carbon emissions from the construction sector. To meet this challenge, we urgently need to work together, at all levels of society, to make our built environment more sustainable. 

Imagine if every building came with a carbon label, much like every latte at Starbucks comes with calorie information.

Better, more widely available emissions data could help. Imagine if every building came with a carbon label, much like every latte at Starbucks comes with calorie information. Individuals could then choose to rent apartments in lower-carbon buildings or buy lower-carbon homes. And those decisions wouldn’t have to be driven purely by concern for the climate crisis—more energy-efficient buildings with lower carbon footprints will also cost tenants or homeowners less in utility bills. New York’s Local Law 97 is a good start to create a kind of labeling system for large buildings in the city, by setting strict new emissions standards that take effect in 2024.

With more widely-available carbon emissions data, corporations could also better see how their choice of office space fits into their overall net-zero goals. Most companies aren’t clear on how they’ll achieve their net-zero pledges, and one in four have stopped sharing their progress towards their goals. Upgrading office spaces could actually make a significant difference for many companies—but corporations can’t know that without benchmarking data. Better climate data could create an even stronger green premium for sustainable buildings, and help homeowners and building owners dig into how to lower their carbon footprints. 

Contextual data is needed to move the real estate industry towards its climate goals

Besides the benefits of better visibility into building emissions for tenants and property owners,  this level of transparency into the emissions of the built environment overall will give developers better context against which to measure their progress—and the impetus to change their behavior.

A better understanding of various buildings’ carbon footprints and which elements contribute the most carbon emissions could help developers make greener choices from the start. This data could be added into cost-benefit analyses on different materials, design choices, appliances, and more, to help developers choose the climate-friendly actions that give them the most bang for their buck, both in terms of financial cost, and climate cost. And developers could then communicate that back to potential tenants, investors, and buyers, allowing them to reap the brand-building benefits of these greener choices.

Full transparency into the emissions of all buildings will give developers better context against which to measure their progress—and the impetus to change their behavior.

Finally, better building CO2 emissions data could help all levels of government push climate-friendly changes. Regulators can do a lot to change the economics of any reduced-carbon material, appliance, or design choice by offering tax incentives, rebates, and so on. The Inflation Reduction Act has already made heat pumps a much more attractive option, for example. More policy changes, including at the state and local level, could make converting old office buildings to housing as cost-competitive as it is good for the environment. 

Local governments have huge opportunities to take direct action to decarbonize whole neighborhoods. A pilot program in Ann Arbor is retrofitting older homes for the zero-carbon future, making energy-efficiency improvements, upgrading to new electric appliances, and installing rooftop solar. Another pilot program in Philadelphia has done energy audits on multifamily affordable housing buildings, made energy-efficiency improvements, and installed smart thermostats to collect anonymized data on energy use, to keep refining energy-efficiency recommendations. 

We’re not making full use of one of the most powerful tools at our disposal to decarbonize the built environment: data.

To meet our climate goals, every city and every neighborhood will need programs like these. But these programs can’t work without good data across all buildings. Policymakers, developers, and individuals together must understand the climate impact of their decisions to make better ones.

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