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COP29's Impact on Real Estate and Construction: Canada's Role and Challenges in Enhancing Energy Efficiency

Published on

November 26, 2024

‍The 29th United Nations Climate Change Conference (COP29) underscored the critical role of the real estate and construction sectors in achieving global climate goals. With buildings accounting for approximately 37% of global CO₂ emissions, the conference emphasized the need for enhanced energy efficiency and sustainable building practices¹. This article explores the global agreements reached at COP29, their potential impact on Canada, the nation's leadership in this arena, and the challenges it faces in improving energy efficiency within the industry.

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Global Agreements at COP29

At COP29, held in Baku, Azerbaijan, from November 11 to 22, 2024, world leaders and stakeholders convened to address climate change, with a significant focus on the built environment. Key agreements included:

Doubling Energy Efficiency by 2030: Delegates committed to doubling the rate of energy efficiency improvements by 2030, recognizing that current progress is insufficient to meet critical climate targets². This ambitious goal aims to reduce energy consumption and greenhouse gas emissions across various sectors, including real estate and construction.
Promotion of Net-Zero Emissions Buildings: The conference highlighted the importance of transitioning to net-zero emissions buildings, encouraging the adoption of sustainable design and construction practices that minimize energy consumption and integrate renewable energy sources³.
Financial Support for Energy Efficiency Upgrades: Recognizing the financial barriers to implementing energy-efficient technologies, COP29 emphasized the need for increased investment and financing mechanisms to support energy modernization projects, particularly in developing nations⁴.

Impact on Canada

As a signatory to the Paris Agreement, Canada is committed to reducing its greenhouse gas emissions and enhancing energy efficiency. The agreements reached at COP29 have several implications for the Canadian real estate and construction sectors:

Alignment with National Policies: The global commitment to doubling energy efficiency aligns with Canada's existing policies, such as the Canada Green Buildings Strategy, which aims to achieve a net-zero emissions buildings sector by 2050⁵. This strategy focuses on decarbonizing buildings, enhancing energy efficiency, and supporting the adoption of clean technologies.
Increased Investment Opportunities: The emphasis on financial support for energy efficiency upgrades presents opportunities for Canadian businesses and investors to engage in retrofitting projects and the development of energy-efficient buildings⁶. Programs like the Canada Infrastructure Bank's Building Retrofits Initiative aim to bridge economic gaps that typically make deep energy retrofit projects unfeasible with traditional funding sources.
Regulatory Enhancements: The promotion of net-zero emissions buildings may lead to stricter building codes and regulations in Canada, necessitating the adoption of sustainable construction practices and materials⁷. The Government of Canada has committed to introducing a regulatory framework that will phase out expensive and polluting oil heating systems in new construction by 2028.

Canada's Leadership in Energy Efficiency

Canada has demonstrated leadership in promoting energy efficiency within the real estate and construction sectors through various initiatives:

Energy Efficiency Regulations: The Energy Efficiency Act provides for the making and enforcement of regulations concerning efficiency standards for energy-using products, as well as the labelling of these products. Between 2024 and 2026, Canada will update or add energy efficiency standards for several energy-using products⁸.
Building Codes Acceleration Fund: The Government of Canada promotes the adoption and implementation of the highest feasible energy performance tiers of the national model energy codes through this fund, helping provinces and territories meet high-performance building goals⁹.
Support for Low-Carbon Building Materials: The Canada Green Buildings Strategy includes the development of a Low Carbon Building Materials Innovation Hub to promote the use of sustainable construction materials¹⁰.

Challenges in Improving Energy Efficiency

Despite these efforts, Canada faces several challenges in enhancing energy efficiency within the real estate and construction sectors:

Aging Building Stock: Nearly half of Canada's housing stock was built before 1980, when energy efficiency wasn't prioritized. Retrofitting these older buildings to meet modern energy efficiency standards requires significant investment and expertise¹¹.
Financial Barriers: The upfront costs of energy-efficient technologies and retrofits can be prohibitive for homeowners and developers. While programs like the Canada Greener Homes Loan provide financial assistance, broader access to funding is necessary¹².
Skilled Workforce Shortage: Implementing energy-efficient building practices requires a workforce skilled in the latest technologies and methods. Canada must invest in training and education programs to address this gap¹³.
Regional Disparities: Energy efficiency initiatives may not be uniformly adopted across provinces and territories, leading to inconsistencies in building standards and practices¹⁴.

Conclusion

The agreements reached at COP29 underscore the critical role of the real estate and construction sectors in addressing climate change. For Canada, these global commitments align with national strategies aimed at enhancing energy efficiency and reducing emissions. While the country has demonstrated leadership through various initiatives, significant challenges remain. Addressing these obstacles will require concerted efforts from government, industry, and stakeholders to create a sustainable and energy-efficient built environment.