Decarbonising housing could provide sector with economic boost – report

The real estate industry could profit from efforts to decarbonise housing in Germany, for example by retrofitting, switching heating systems and carrying out other efficiency improvements, said a report by insurer Allianz and Allianz Trade. The sector’s value creation in Germany could increase by one trillion euros in the years until 2050, especially from 2040 onward as with increased energy efficiency operational costs fall, demand for such measures rises, and energy efficiency improves. Allianz’ scenario analysis said that 107,000 new jobs could be created in the country.

“This transformation acts as a driver for economic growth and employment,” said Arne Holzhausen, head of insurance, wealth and trend research at Allianz SE. The transformation in the sector could be achieved through a combination of higher CO2 prices, targeted financial support and improved political framework conditions.

In Germany, France, Italy and Spain a combined 3 trillion euros of investments would be needed to make homes climate neutral by 2050, with energy savings only partially footing the bill. “Carbon prices have to play a pivotal role in bridging the investment gap,” the report reads. However, sufficiently high price levels (around 350 euros per tonne of CO2) “seem politically and socially infeasible.” Thus, state subsidies and the right regulatory framework would be necessary.

The report said that direct emissions from residential buildings account for 14 percent of total German emissions. This comes mostly from heating, cooling, lighting and household appliances and does not include indirect emissions, such as from the construction of buildings. German buildings and construction minister Verena Hubertz recently told Clean Energy Wire that key decisions must now be made for climate protection in the buildings sector. The sector has in the past failed its climate targets and progress is slow as most homes are still heated with fossil fuels.