Energy Efficiency in Buildings:
The World Business Council for Sustainable Development
Buildings represent 40% of primary energy use globally, and unchecked energy consumption in buildings is projected to rise substantially. To achieve the Intergovernmental Panel on Climate Change's recommendation of of 450 ppm atmospheric CO2 stablization, a radical 70-80% reduction in primary energy consumption is necessary in the building sector. And unlike transportation and other sectors, we already have the fundamental technology to make this possible. Indeed, with transportation consuming 26% of global primary energy, we can save more through building efficiency than the entire transportation sector. A solar challenge in buildings would be much more effective than any other sector.
Yet despite this, to date there had been essentially no modeling on what it would take to get
decision makers in the building industry to adopt energy efficient solutions,
radical or incremental. 
For example, to transform a typical
residential home in the US or Europe will require an additional roughly $50,000
of equipment and materials normally not spent, including more insulation,
triple pane windows, efficient and natural heating and cooling, efficient and
natural lighting, and onsite renewables including solar thermal hot water and
photovoltaics. Doing all of this will generally eliminate the home's utility
bills and thereby save about $3000 per year, roughly a 20 year payback. Would you do it? What would it take to
convince you to make this necessary investment to achieve the planet's goals on
climate change? The problem with the building sector is that the necessary
reductions to prevent climate change do not
pay.
Robust Systems and Strategy was contracted by the World Business Council for Sustainable
Development (WBCSD) to create a bottom's up decision based simulation of
the world's building stock including construction, operation and renovation.
We did this by analyzing the entire global population of buildings on a
submarket basis, such as single family residences in the US Southeast,
apartment buildings in Northern China, and mid-sized commerical office
buildings in Kanto prefecture of Japan, for example. We modeled the building
stock with a statistically representative sample of buildings, and we virtually
simulated how these and newly constructed additions to the stock upgrade (or
not) over time. 
This was done through a
novel virtual decision simulation, where the decision by each building owner
over alternative construction options (insulation level, HVAC equipment
choices, lighting choices, etc.) was simulated using economic criteria
(payback, first cost, etc.) and non-economic criteria (value enhancement,
appearance, reliability,etc.). This decision model was a multi-stakeholder
decision model including the influence of building owners, occupiers,
designers, contractors and financing on the decision result. Based on
outcomes, alternatives are rank ordered, and the share of new construction and
refurbishments computed for each alternative. This is repeated year after
year to 2050, and thereby the change to building stock levels computed. Based
on energy consumption levels of the different fuels (electricity, natural gas,
etc.) used by the alternatives and their carbon emission factors in each
submarket, we compute the total level of energy consumption and carbon
emissions in the submarkets, which are then totaled for a global result.
The WBCSD EEB core group then lead efforts to interrogate the model. 
After much verification and validation work, as a group we repeated this
analysis for several scenarios, including business as usual, typical policies
and industrial investments occuring today. We also then began exploring
scenarios that promoted radical change.
For futher reading and details on the results and analysis of the EEB work, see a recent presentation at MIT, or see the World Business Council for Sustainable Development's "Transforming the Market" report.