Building renovation – powering our economic recovery
The importance of high-performing and comfortable buildings received renewed focus over recent months. While governments and city administrators must deal with the current situation with the COVID-19 pandemic, they will soon need to start thinking about how to address its economic impact. Institutions all over the world have shown solidarity and populations have heeded the call, collectively staying healthy by staying apart.
Even during normal times, the majority of people spend 90 percent of their time indoors. With social distancing measures and work from home orders in place, this number grew exponentially. The current situation of confinement has highlighted the vital role building renovation must play now and in the future. As national and city governments start moving towards recovery, considering renovation and retrofitting structures with energy-efficient solutions present a significant opportunity to jump-start local economies.
Setting the economic recovery agenda with energy renovation and sustainable initiatives
To build a sustainable future for the world and its inhabitants, accelerating the pace of building renovation in cities should be on every governments’ recovery agenda. By renovating the spaces where people live and work to be more energy-efficient and resilient to climate change, local economies can be boosted, and cities can achieve their sustainability goals and reduce their carbon footprints while recovering from the current crisis.
Buildings are an essential part of our infrastructure. The rate of urbanisation in Europe and across the world means more people now live and work within close proximity. At the same time, building stocks are aging. Half of Europe’s entire building stock dates to pre-1970, making the heating, cooling and indoor environment of these structures inefficient. Renovation is a way to create local jobs, improve life quality, reduce energy poverty and make populations more comfortable while keeping them safe.
Economic benefits of energy renovation and initiatives
Investing in energy renovation is a key enabler for economic recovery. The current economic climate shows how much inhabitants depend on central and local governments to support populations and respond to a crisis with a collective effort. Energy renovation is an innovative and cost-effective strategy to enable Small and Medium Enterprises (SMEs) to get back to work quickly.
Requiring populations to confine themselves to their homes highlights just how vital it is to invest in renovation initiatives. For those living in poor quality housing, time spent indoors means having to deal with challenging conditions over long periods. Poor quality housing does not just put the health of inhabitants at risk, it is also costly to the health care system and puts the environment in greater jeopardy.
Energy renovation can help solve today’s economic challenges while providing future populations with resilience built into their buildings and public infrastructure. The United Nations’ Secretary-General, António Guterres, listed the following as recovery actions for city governments to prioritise around the world:
- Enabling green transition
- Creating green jobs
- Investing in a greener economy
- Supporting sustainable solutions
- Facing up to all climate risks
- Cooperating with all stakeholders for better outcomes
What energy renovation looks like
The idea of using renovation as an economic recovery tool has found support in all spheres of society. Scaling-up investments in sustainable mobility, renewable energy, and improving the energy efficiency of buildings all help promote a circular economy. Using sustainable materials, processes and practices to improve the world’s building stock can help humanity win the fight against the climate crisis.
Construction accounts for 7 percent of global employment and between 11-13 percent of gross domestic product. Bringing this sector back with renovation policies, financial incentives and broad-based support can help cities weather the economic storms that will follow. In the construction sectors of OECD countries, SMEs account for 80 to 90 percent of employment. Getting them back to work with strategic stimulus plans will create immediate benefits within local economies.
These companies make up the backbone of the construction industry, stimulating local economies. They contribute more than 80 percent of the sector’s value-added services and products. Artisans typically generate two-thirds of their revenues within a 50-kilometre radius of their localities.
How governments can stimulate the economy with energy renovations
Every €1 billion invested in building renovation creates or supports approximately 20,000 jobs. This increases tax revenues but also leads to additional economic activity from indirectly connected businesses. Considering how energy renovation benefits local communities, using it as a recovery measure can help alleviate some of the economic burdens all cities will face over the next few years.
To achieve the United Nations’ Sustainable Goals, the world needs to cut carbon emissions and design a low carbon future in line with the 1.5-degree Celsius scenario. Making the buildings where people spend most of their time more energy-efficient is the easiest pathway to accomplishing this.
By investing in energy renovation, governments and cities can help their populations recover economically, recuperate mentally and relax healthily. As the world looks towards cities to face-up to the current pandemic and its aftereffects, it has become just as important to provide populations with safe, sustainable and comfortable living arrangements.
Governments and cities can start by renovating public buildings and infrastructure. Investing funds into improving the energy-efficiency in schools and hospitals can bring immediate benefits to city populations. Schools make up 17 percent of the total building stocks in Europe, with hospitals accounting for 7 percent. These strategies have the added advantage of improving the conditions of the places where people learn and recover delivering a positive benefit on both, while also helping cities get closer to reaching their sustainable development goals.
Learn more about our commitment to building a better future for the world’s populations with energy renovation.