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Climate change and the challenge it poses influences the way the global population behaves in an effort to reduce greenhouse gases. According to Jones and Glachant (2010), putting into considerations the environmental costs caused by current operations is one of the ways through which this challenge is being pursued. In the housing and construction industry, the process of constructing a building is dependent mainly on natural resources for the production of the building materials to be used. Through the production/manufacture/processing of these materials, large quantities of energy are used (referred to as embodied energy) (Dimoudi and Tompa, 2008) and this is linked with greenhouse gas emissions. According to Pullen (2010), the opportunities for reduction of the negative impact on the environment in the production of construction materials are diverse and substantial and researchers in the industry have speculated that it is certainly achievable (Crawley, Pless and Torcellini, 2009; Glass, Dainty and Gibb, 2008).

According to Crawley et al. (2008), there is a significant effect on the environment and energy use in the building industry and this is supported by the fact that, the sector accounts for thirty six percent of energy associated with carbon dioxide emissions in the industrialised nations (Nässén, Holmberg, Wadeskog and Nyman, 2007). It is from this statistic and understanding of the challenge of climate change that the concept of low-carbon building – also referred to as low-greenhouse emitters – and subsequently, carbon-neutral buildings come in. However and according to Innovation & Growth Team (2010), there is a lack of change drivers in the industry and this is a major barrier to the realization of low-carbon housing and building developments.

The challenge of lack of drivers is further discussed and reinforced by Jiang and Tovey (2009) in their research study of low-carbon business constructions in Beijing and shanghai. In addition, the lack of a, adequate building and construction control at the level of legislative regulatory standard is the other barrier (Jiang and Tovey, 2009). To achieve or even fast track low-carbon developments in the building and construction industry, a coherent legal framework is required (Clarke, Johnstone, Kelly, Strachan and Tuohy, 2008; Li, 2008). Moreover, realization of carbon-neutral constructions and buildings is faced with a number of issues because such other factors among them transportation of building materials, possible demolition of constructions and buildings at the end of their life-cycle, and on-site building and construction processes have to be taken into consideration (Innovation & Growth Team, 2010; Clarke et al., 2008).

This paper therefore seeks to define carbon neutrality in the housing and construction industry, determine the cost and benefits of realization of carbon neutrality, the emission that can be included in the three scopes chart, how the boundaries of accounting for emissions should be set, the significant barriers to determination, apportioning and justification of emissions, recommendations for offsetting, and how these recommendations are applicable to other players in the industry at a global scale. This will be done through review of available literature materials.


Carbon neutrality in housing and construction

Carbon neutrality in housing and construction is in reference to use of energy and it means use of no fossil fuels greenhouse gas emitting energy to operate the various building and construction process. The various operations in will include heating, cooling, lighting, transportation of the building materials, processing of the resources like cement, etc. Carbon neutrality in housing construction can be achieved through implementation f innovative sustainable design strategies, generation of on-site renewable energy or purchasing less than 20% of renewable energy or certified renewable energy credits (Zhao, Hwang and Gao, 2015). According to Aktas and Ozorhon (2015), carbon neutrality is a subset of sustainable designing as building that are modern and include issues of sustainable design in their mandate are already likely to be addressing some of the aspects that support reduction of carbon.

According to Chiang, Li, Zhou, Wong and Lam (2015), the issue of carbon in housing construction is complex as there is carbon that is involved in the extraction of resources in their natural occurrence for use in the creation of constructed products; in the moving of these products to the construction site; in the process of constructing the structure; in the operation of the structure; and then in the utilization of the product by people as they carry on with their businesses. Currently, carbon neutrality involves holistic design which looks to reduce the carbon emissions that are associated with all of the aspects of the entire lifecycle of the project and the development created (Zhao et al., 2015; Chiang et al., 2015).

Holistic carbon neutral design includes the operation energy, the construction and materials, and the carbon associated with commercial, residential, or institutional use of the building by the users after construction works are over (Hwang, Zhao, See and Zhong, 2015). This brings into consideration the nature of the activity or work that is being undertaken within the facility. Given transportation of raw materials and the users is a crucial part of holistic carbon neutral designing, location of a building is becoming important somas to locate it suitably for reduction of transportation costs therefore, this includes neighbourhood and regional planning aspects (Pan, 2014).

Use of innovative construction technologies is a strategy that helps in the realization of carbon neutral building development and this means the reduction of carbon emissions. A study by Nässén et al. (2007) found that reinforced concrete is one of the largest contributors of carbon emissions and because reinforced concrete is used extensively in the building and construction industry, especially for commercial structures, it is evident hat a change in the use of this construction material would be necessary for cutting down on carbon emission in the industry. Newton and Tucker (2010) have studies alternative hybrid building configurations and their role in reduction of carbon footprint and argue that design has influence on the same.


The costs and benefits of achieving carbon neutrality

Achieving carbon neutrality has a financial cost and this doesn’t equate to the benefits that come with carbon neutrality. According to Intergovernmental panel on Climate Change (IPCC), (2014), the economic models for assessing the costs of achieving carbon neutrality are not very good at capturing the full range of the costs. The main costs of achieving carbon neutrality in building sector involve the use of green forms of energy which might cost more. The use of green forms of energy according to Lohmann (2006), the cost of carbon neutral is best expressed in the final cost of the complete building.

According to the IPCC (2013), the economic models also do not capture the climate justice lens, which is the costs of mitigation action against the costs of inaction, which is the effects of climate change and are not experienced in equal measure by everyone. The effects of climate change are borne more severally by the poor of the society (IPCC, 2014). In the real life setting, sovereign states and persons have rights that cannot be traded off as the case in economic models. It is therefore not right that the loss of human lives, threats to their sovereignty, and diminishing human rights can be put at the same footing as the potential economic losses for the main carbon-emitting economies.

Carbon neutrality produces significant benefits and co-benefits for instance, reduction of air pollution which is a contributor to around 3.7 million deaths annually (IPCC, 2014). In the housing sector, achieving carbon neutrality means that the industry has reduced the impact on climate change, considering the industry is one of the major contributors towards pollution (Pan and Ning, 2014). Through realization of carbon neutrality, it is an opportunity for third parties to recognize and acknowledge the sector’s climate change ad carbon management efforts which are sure to have positive returns on the sector, especially for individual developers (Ozorhon, Abbott and Aouad, 2013). Carbon neutrality and the realization of the same is an opportunity to cut down on the resources used by a developer in the housing and construction industry, which has the potential for saving money.

Through achieving carbon neutrality, there an opportunity for an investor in the housing and construction industry to strengthen the company’s reputation within the market place thus a competitive advantage against industry competitors (Pan and Ning, 2014). As the world and consumers in general become more sensitive on climate change and sustainable development, carbon neutrality in the housing and construction sector has potential to position products as carbon neutral alterative and thus increase neutrality and demand. Products that are carbon neutral are certified as such and this provides a platform for accessing the official Carbon Neutral Program branding (Hwang et al., 2015). One of these branding opportunities is becoming a member of the Carbon Neutral Network and thus benefiting from the benefits that accrue. Additionally, by creation of carbon neutral products provides a benefitting opportunity to the person using them to lower their carbon account.


Emissions included under the three scopes

According to the Carbon Neutral Design Protocol Tool, there are scope 1 – direct emissions, scope 2 – indirect emissions, and scope 3 – other indirect emissions.

Scope 1 – direct emissions Scope 2 – indirect emissions Scope 3 – other indirect emissions
i) Stationary combustion – to produce energy (electricity, steam, heat) through fixed equipments e.g. generator

ii) Mobile combustion – fuels used in transportation e.g. trucks ferrying materials, cars carrying personnel, and emissions from non-road equipments used in building construction.

iii) Physical and chemical processes in the building and construction industry for example, manufacture of cement, iron sheets, tiles, aluminium, metals, etc.

iv) Fugitive sources – release from production, storage and use of fossil fuels and other substances that don’t pass through a stack, vent, chimney, exhaust pipe or other opening functioning same as these.

i) consumption of energy to provide water

ii) off site waste water contracting

iii) waste management


i) Mobile sources emissions that do not lie under the project entity.

ii) emissions resulting from extraction and production of material bought

iii) utilization of sold services and products

iv) outsourcing activities

v) waste disposal




Boundaries for accounting emissions

According to Liu, Feng, Hubacek, Liang, Anadona, Zhang & Guan (2015), establishing a suitable and consistent system boundary and calculation process for calculating carbon emissions is challenging. This means at a regional level and regions can have varying boundaries of emission accounting based on varying definitions and objectives of the analysis. As argued by Liu et al. (2015), there is no centralised and statistically supported carbon emissions boundary and there are huge discrepancies among economic development levels and this leads to uncertainty. In addition, neighbouring regions have intensive interactions for system boundaries for example domestic and international transportation, inter-regional electricity transmission and flow of services and goods, and energy that is bought and generated outside the system boundary. As argued by Zhang & Anadon (2014), these cross boundary activities have the potential to significantly affect carbon emission calculations for the boundary in question.

According to Zhao et al. (2015), Aktas and Ozorhon (2015), Chiang et al. (2015), and Hwang et al. (2015) carbon footprint is the direct and indirect carbon emissions that are associated with consumption within a certain system boundary and these have the potential to contribute to carbon emissions upstream outside the boundary. Carbon emissions such as embodied emissions or consumption-based emissions have the potential to affect dramatically the regional emission baseline. For example, in china, non-consideration of the emissions embodied in important, the carbon emissions of Beijing during the 2008-2010 period, decreased but carbon footprint calculated by consumption-based emissions showed a fast increment in the same period (Liu et al., 2015).

The Greenhouse gas Protocol and the International Council of Local Environmental Initiatives (ICLEI) has put forward three varying scopes of regional carbon emissions; scope 1 emissions also referred to as territorial emissions, scope 2 emissions which are emissions embodied in power/energy/electricity that is produced and brought from outside or is bought from outside the boundary, and scope 3 which refers to emissions embodied in products and services that are imported (Kennedy, Steinberger, Gasson, Hansen, Hillman, Havránek, … & Mendez, 2010).

With the consumption based accounting, that is emissions that are embodied in imports less emissions embodied in experts, which is the most used method for estimation of national carbon footprints, Kennedy et al. (2010) identified four  different system boundaries for emissions calculation; system boundary 1 uses scope 1 emissions, system boundary 2 uses scope 1 and 2 emissions, system boundary 3 uses scope 1 and three emissions, and system boundary 4 uses consumption based emission (carbon footprint). Research done on the basis of scopes 1,2,3, and consumption based emissions found that in the modern globalised world, carbon emissions embodied in electricity bought outside the boundary and goods and services imported have the potential to account for large proportions of carbon footprint of countries nations or regions in particularly for areas that are developed and are involved in outsourcing production and pollution (Dimoudi and Tompa, 2008; Jones and Glachant, 2010; Glass et al., 2008; Pullen, 2010).

For the UK housing and construction industry, the system boundary for calculation of carbon emission should be system boundary 2 and system boundary 3 which both use embodied emissions as these are part of the carbon emission in the nation.


Barriers to measuring, apportioning and justifying emissions

There are a number of barriers that hinder the measurement, apportioning, and justifying of emissions in the UK housing and building industry. The first is the fact that the industry is highly fragmented. The majority of buildings have a long life cycle that involves many and different stakeholders at the various phases f the building life (Innovation & Growth Team, 2010; Clarke et al., 2008). These stakeholders include the property developers, financiers of building projects, architects, engineers, construction managers, the owners and the occupiers. The decisions that are made by each of these stakeholders at the time they are involved in the building have an impact on the level of carbon emissions of the building. However, there are very few opportunities or incentives where these stakeholders get to work or coordinate. For example, decisions made at the feasibility assessment and design in the early design phases of a building construction project will have major effect on the level of carbon emissions from the structure in the operational phase (Zhang & Anadon, 2014; Kennedy et al., 2010).  However, the majority of feasibility assessments do not take into consideration the life-time running costs of the structure as there are not paid for by the property developers.

The second barrier is the lack of indicators for measurement of energy performance in buildings. The majority of building occupants in the housing sector have very little or no information on the energy saving potential of the building that they occupy and live in (Newton and Tucker, 2010; IPCC, 2013). Moreover, there are no clear and verifiable indicators which can be used by house owners to measure, determine, and compare energy consumption and this makes it hard to gauge the savings that are derived from energy efficiency improvements wherever such are done. Energy indicators and performance requirements are one of the main pre-requisites for a successful greenhouse gas mitigation strategy in the housing and building sector (Li, 2008).

The third barrier is lack of awareness on low cost energy efficiency measures. This barrier is compounded by a perception among property developers and contractors that energy efficiency measures do add significantly to the overall costs of a building project and in particular through costly technological solutions. This perception is however misinformed and there is need for awareness and sensitization activities across board for the various stakeholders about low cost energy efficiency measures that have been scientifically proven to be equally or even more effective than the application of technologies that are very costly (Zhang & Anadon, 2014; Liu et al., 2015).


Role of carbon offsetting, if any, and valid offset option

Internal greenhouse gas emissions reduction should be the foremost priority in housing to reduce carbon footprint of houses (Block, Van Praet, Windels, Vermeulen, Dangreau, Overmeire & … Vandecasteele, 2011). Carbon offsetting requires that for houses with greenhouse gas emissions purchase financial instruments to help for projects that reduce greenhouse gas emissions elsewhere. The object of this strategy was to compensate for the greenhouse gas emitted by promoting friendly projects elsewhere, but as argued by Pan (2014), this rarely worked. Nevertheless, carbon offsetting can be used to meet interim cap emissions reduction targets when good faith internal reduction efforts fall short.

However, the credibility of all offsetting projects has been further undermined by the fact that emissions in the modern day are not emissions being neutralised over a period of time. The main reason why companies using offsetting can argue for the same is because they are using a carbon calculation method that is best referred to as the ‘future value accounting’. This same method has been used cunningly to inflate profits with disastrous effects by Enron (Crawley et al., 2009). Every time there is an offset of carbon emissions, the amount of carbon emitted is automatically in the atmosphere and the time it takes to neutralise this carbon is much longer, up to 100 years. With continued emission, the amount of carbon in the atmosphere increases at a rate higher than it supposed neutralisation (Li, 2008).

The best and valid carbon offsetting option is based on energy efficiency and rely on technical efficiencies to reduce energy consumption hence result to reduction of carbon emissions. These improvements are often realized through introduction of more energy efficient lightening, heating, cooking, and cooling systems (Dimoudi and Tompa, 2008). According to Block et al. (2011), these are and valid offset option and they result to real emissions reduction. In addition, this option provides most likely the simplest offsetting option that is easy to adopt for low carbon practice.


Applicability of provided recommended approach

The UK in general has clear set sights for reduction of carbon emissions and the realization of carbon neutrality. In the design for buildings for the type of high level holistic environmental performance and leads to a carbon neutral nation, the above recommendation of using a valid offset option of reducing emission is highly applicable. The above option is easy to adopt by almost every organization, sectors and industry, and country across the globe (IPCC, 2014; Ozorhon et al., 2013). This is because the option involves cutting down or complete replacement of the high carbon emitting resources with low-carbon emitting alternatives.

Moreover, the above recommended option diverges from the traditional carbon offsetting objectives to provide carbon neutrality strategies. Therefore, based on this, it is guaranteed to make a significant contribution towards reducing carbon emission in housing. This is attached to the fact that, a majority of carbon emission in the housing department are during the operation phase of the house (Jones and Glachant, 2010). Use of low-carbon emitting systems has a direct impact on carbon reduction and thus achievement of carbon neutrality.



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