The Road Ahead for Home Building

Looking ahead to 2025 and beyond, we can expect to see the continued decarbonization of the built environment, largely in response to the trifecta of:

• Environmental reality. We’ve hit 1.5 degrees Celsius warming and we’re quickly heading to 2 degrees C, which is considered the tipping point when it comes to planetary survival. Given that homes and buildings in the U.S. account for 40 percent of our nation’s energy use, 70 percent of electricity use, and 40 percent of carbon emissions, there is no doubt that progress will continue on local, municipal, and state levels to bring the built environment in line with climate targets.
• Social reality. There are high levels of climate anxiety, especially among younger generations. COGNITION Data indicates that 77 percent of Millennials and Gen Zs consider the future to be frightening due to climate change, and 56 percent believe that humanity is doomed because of climate change.
• Financial reality. Many investors, lenders, supply chain partners, and other stakeholders now believe that strong sustainability strategies reduce risk for companies and stakeholders.

An Evolving Transformation

The transformation of the regulatory landscape is already underway. For example, in July 2024, California implemented one of the most ambitious embodied carbon regulations in the U.S., mandating the disclosure and reduction of embodied carbon for all commercial buildings over 100,000 square feet.

This regulation affects around 45 percent of California’s commercial real estate market and is projected to cut carbon emissions by approximately 6 million metric tons annually by 2030. While these regulations are focused on commercial buildings for now, they’re inevitably going to make their way into the residential sector.

California’s embodied carbon regulations affect 45 percent of its commercial real estate market and is projected to cut carbon emissions by approximately 6 million metric tons annually by 2030.

Furthermore, California will enforce carbon data disclosure requirements in 2025 for businesses with over $1 billion in annual revenue, including Scope 3 emissions by 2026. These Scope 3 emissions, which include embodied carbon from building materials, represent an often-overlooked yet significant portion of the carbon footprint for real estate portfolios—accounting for up to 50 percent of total emissions for some companies.

On the other coast, Boston’s Planning & Development Agency (BPDA) approved a zero-carbon emissions requirement earlier this year for certain types of new and existing building projects filed after July 1, 2025. Recognizing climate change as “the existential threat of our time,” the BPDA asserted that “it’s up to cities to lead” and that zero-carbon zoning initiatives are “something that cities must do.”

The new zoning requirements will also require real estate developers to report on their projects’ embodied carbon, which includes raw material procurement for products, manufacturing, transportation, construction, demolition, and waste disposal.

Boston’s Planning & Development Agency has implemented a zero-carbon emissions mandate that requires real estate developers to report on their projects’ degree of raw material procurement for products, manufacturing, transportation, construction, demolition, and waste disposal. CREDIT: Flickr/Chris Rycroft

A Time For New Tools

Because of these emerging regulations, new risks will materialize for builders, developers, building owners, and other stakeholders throughout the building industry, such as non-compliance fines, permitting delays, and reputational damage.

Yet, many builders and developers still lack the tools to measure, let alone mitigate, embodied carbon, underscoring the need for enhanced carbon accounting tools that evolve alongside new mandates that can provide real-time insights.

ANSI’s upcoming standard 1550 will define the scope for calculating embodied carbon and provide a methodology for conducting calculations for residential projects.

Fortunately, such tools are being developed, such as new ANSI standard 1550, “Standard for the Calculation and Labeling of the Embodied Environmental Impacts of Dwelling Units Using the Environmental Performance Index.” This standard will define the scope for calculating embodied carbon and provide a methodology for conducting calculations for residential projects. The standard is under development and is expected to be released sometime in 2025.

Decarbonization Essentials

There are three key tenets that will facilitate the ongoing decarbonization of the built environment.

The first tenet centers on addressing performance through climate responsive design, building science, and green construction, following best practices such as:

• Implementing passive heating, cooling, and ventilation strategies
• Enhancing energy efficiency and thermal comfort
• Converting to all-electric
• Designing for health and wellness
• Adopting renewable energy
• Installing advanced technologies for control optimization
• Inspecting, testing, and measuring performance throughout the build and ongoing operations.

Converting to an all-electric vehicle is key to an ongoing decarbonization of the built environment.

The second tenet involves the meticulous specification of low-carbon products (for example, those with Environmental Product Declarations [EPDs]) from low-carbon companies. In a very short timeframe, EPDs have transformed from obscure to vital. According to a recent COGNITION survey:

• Approximately 85 percent of builders currently specify products with EPDs. Of those builders who aren’t currently specifying products with EPDs, 50 percent say that they’ll start doing so within the next year, and 45 percent say they’ll start doing so in the next few years. Less than 5 percent say that they won’t specify products with EPDs.
• When asked why they specify products with EPDs, the top three responses were understanding product roadmaps, regulatory requirements, and consumer demand.
• More than 60 percent of builders assert that they’re seeing an increased demand for products with EPDs by consumers. Another 20 percent respond that while consumers might not be asking specifically for EPDs, they’re looking for product certifications and information to verify sustainability attributes.

Eighty-five percent of builders specify products with EPDs; half of the ones that do not plan to do so within the next year.

The third tenet includes purchasing carbon offsets to reach the “last mile” of eliminating carbon emissions, since there simply aren’t enough low carbon products, construction and waste management practices, or transportation and packaging solutions to build net zero carbon homes or structures today.

A carbon offset is a transaction that removes CO2 or other greenhouse gasses from the atmosphere to compensate for emissions made elsewhere. One carbon offset is equivalent to taking 1 metric ton of carbon out of the air. The most common carbon offset projects today focus on emissions reductions (like landfill gas capture), forest management and conservation, biodiversity protection, renewable energy, biochar, and direct air capture.

High-quality carbon offsets address additionality, provide robust and timely data, eliminate double accounting, ensure permanent carbon removal, provide accurate reporting, and offer well-defined pricing, benefits and results. 

In response to growing demand from stakeholders throughout the building industry, Green Builder Media has launched the COGNITION Carbon Offsets Marketplace to streamline access to carbon offsets. 

Through the COGNITION Carbon Offsets Marketplace, the purchasing of carbon offsets doesn’t have to be difficult or expensive. For example, the average estimate for employee commute emissions is 7 kilograms (kg) per day (or 2.55 metric tons annually), and office emissions is estimated to be 18 kg per day (or 6.57 metric tons annually). The combined total purchase of 9.12 metric tons of carbon offsets annually can counterbalance an employee’s commute and office emissions, which only equates to an investment of $91 if offsets are purchased from GBM’s Impact Light portfolio (priced at $10 per metric ton).

In another example, according to the Environmental Protection Agency (EPA), the average American home emits 14 metric tons of CO2 annually. It costs $140 per year to abate emissions entirely.

Check out the COGNITION Carbon Offsets Marketplace for more information and to purchase carbon offsets to mitigate emissions.