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 the World Business Council for Sustainable Development's "Transforming the Market" report.