Editors Note: The following content has been provided by Noah Ibrahim CEO of Novarick Homes, and developer of the first solar-powered residential community in Nigeria.
The housing sector is facing a critical challenge as the world increasingly shifts towards clean energy transitions.
Environmental sustainability drives the sectors’ long-term returns, but failure to address growing calls to reduce greenhouse gas emissions could threaten their long-term social acceptability and profitability.
Climate change has over time caused an extreme occurrence of weather phenomena, which may in the long run cause damage to human life, health, assets, cultural heritage, the economy, and the natural environment. One of the major sources of climate change could be attributed to the greenhouse gas emissions emitted by several carbon-intensive industries.
It is noteworthy to state that the built environment is one of the major contributors to global carbon emissions, which means real estate investors can make a huge difference to climate change.
The housing sector has been greatly impacted by climate change, heat is majorly caused by an increase in temperature, and this can in turn sand dune encroachment, speed up the deterioration of housing stock and bitumen roads, and increase energy demands through increased use of air conditioning/other cooling systems. An increase in rainfall can cause flooding in urban and rural areas, accelerate erosion and cause landslides, and lead to deterioration of roads and other infrastructure.
Housing deterioration can be caused by either low or high rainfall and decreasing the overall quality of housing in settlements. Climate change has a lot of negative effects on the housing sector, it can cause houses and island communities to disappear, threaten critical public and private infrastructure, and may create the need to rebuild levees, dykes, and other protective measures. Lagos and communities in the Niger Delta are particularly vulnerable.
However, the built environment is one of the major contributors to global carbon emissions, which means real estate investors can make a huge difference to climate change.
How can real estate meet the challenges of climate change?
Meeting the needs of climate change in the real estate sector might not look easy, but with the right effort and innovation, there would be a worthwhile solution. There are two major ways the real estate sector can meet the needs of climate change, the first would be to regulate the operational carbon footprint or the energy required to keep buildings running and maintained.
Energy efficiency and employment of renewable energy can make real estate sustainable and green after some time. Building green is one of the best strategies for meeting the needs of climate change because the technology to make substantial reductions in energy and carbon dioxide emissions already exists.
The second area is reducing the carbon footprint, or carbon emissions from materials, transport of materials, and construction of buildings. According to the Sixth Assessment Report (AR6) of the UN’s Intergovernmental Panel on Climate Change (IPCC) released in August 2021, the built environment demands around 40% of the world’s extracted materials, while waste from demolition and construction represents the largest single waste stream in many countries. Building and construction are responsible for 39% of global carbon emissions, with operational emissions accounting for 28%. The remaining 11% comes from embodied carbon emissions or upfront carbon that is associated with materials and construction processes throughout the building lifecycle and value chain.
Reducing carbon emissions associated with the property industry is therefore crucial throughout the property’s life cycle from the initial planning and investment to building operations, refurbishment, and final demolition. Switching these materials for more sustainable, carbon-intensive ones is one way to draw down emissions in a building’s life cycle.
Climate change is growing by the minute which is, in turn, driving the demand for sustainability due diligence and mitigation planning among real estate investors. While new buildings generally perform higher on sustainability metrics, most buildings in Africa are aging and deteriorating. However, it takes fewer emissions to upgrade existing stock which presents significant overall emissions reduction opportunities.
Real estate is capable of driving change in the sector and meeting the needs of climate change. However, it requires a substantial commitment and an increased level of ambition from all stakeholders, including policymakers, developers, occupiers, users, owners, and investors.