Why Buildings Should be First

In December of 2007, the consulting firm McKinsey & Company developed a comprehensive and detailed cost base analysis to understand the costs and potential options for reducing Greenhouse Gas (GHG) emissions in the United States [5]. Shown in the Fig. 7.2 below, the curve illustrates that given aggressive policies to overcome market barriers; emissions can be cut up to 30% from current levels by 2030. The cost curve suggests two major conclusions:

• Significant reductions in greenhouse gas emissions are achievable. The analysis implies that implementing all measures below $50 per ton of CO2e (equivalent carbon dioxide) would reduce emissions to 40% below 1990 levels in 2030, assuming full realization of the identified opportunities in the given timeframe [5].

• Significant quantities of 'negative-cost' opportunities are available. These opportunities would allow the U.S. to reduce emissions at no net cost to the economy. Many of these negative-cost opportunities relate to building heating and cooling, lighting and building appliances. These reductions would involve pursuing abatement options available at marginal costs less than $50 per ton, with the average net cost to the economy being far lower if the nation can capture sizable gains in energy efficiency. The options on the left, falling below the zero-line, actually save money over their lifecycle; those on the right above the zero-line have a positive lifecycle cost. Forty percent of the abatement options identified actually save money - they return more than they cost over their lifecycle.

Replacing carbon-emitting fossil fuels with most alternative energy sources, including clean-coal (with carbon sequestration), nuclear power, biomass, wind, solar photovoltaics (PV) and concentrated solar power (CSP) will have substantial abatement costs. However, improving energy efficiency in buildings has the potential to save the economy money. Achieving these reductions at the lowest cost to the financial market, however, will require strong, coordinated, economy-wide action that begins in the near future.

Fig. 7.2 The figure, published by the consulting firm Mckinsey & Company, presents emissions reducing options that represent in the best return on investment by plotting costs against potential for CO2 emissions reductions. The curve illustrates that given aggressive policies to overcome market barriers; emissions can be cut up to 30% from current levels by 2030 [5]

Fig. 7.2 The figure, published by the consulting firm Mckinsey & Company, presents emissions reducing options that represent in the best return on investment by plotting costs against potential for CO2 emissions reductions. The curve illustrates that given aggressive policies to overcome market barriers; emissions can be cut up to 30% from current levels by 2030 [5]

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