Setting Incentives for Emission Reductions in Developing Countries: The Case of Social Housing in Colombia

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Colombia faces a number of challenges including growing need for social housing in metropolitan areas driven by accelerating urbanisation associated with a growing electricity demand as well as increasing hydroelectric uncertainty as a result of changes in the el Niño weather phenomenon. At the same time, Colombia actively implementing its NDC under the Paris Agreement. These include measures to improve energy efficiency in the residential sector overall. Policies for renewable electricity, building codes, and appliance energy performance standards all play a role in these efforts. However, these policies are not currently putting Colombia on a path towards the decarbonisation of the building sector. Through Article 6 of the Paris Agreement, countries can cooperate in NDC implementation to allow for higher climate ambition. There may be an opportunity to construct Net Zero Energy Buildings though an Article 6 pilot in the social housing sector, which would reduce energy consumption, reduce emissions, reduce energy poverty, reduce energy consumption subsidy payments, and improve public health and energy security. Such a pilot could, together with a larger policy roadmap towards increasingly stringent energy efficiency standards, help put the Colombian building sector on a path towards decarbonisation and alignment with the Paris Agreement.


Main findings:

Globally, buildings were responsible for 9.18 giga tonnes of greenhouse gas emissions or 19% of global emissions in 2010. Especially in developing and emerging economies, rapidly growing and urbanising populations will require more housing and infrastructure expansion. At the same time, radical improvement of the building sector is an urgent challenge to address in order to meet the objectives of the Paris Agreement to limit global warming to well below 2°C with best efforts for 1.5C. This requires reaching a balance between emission sources and sinks in the second half of this century, much of which can be done cost effectively or even at negative costs. For the building sector, this means that to limit global warming to 2°C, global emissions from the building sector need to fall by 77% by 2050 compared to 2010; to limit global warming to 1.5°C, emissions need to fall by up to 90%.

Colombia is no exception to these global trends and will face the challenges of rapid urban growth and the associated housing shortages, especially for social housing, while meeting its commitments under the Paris Agreement. This includes working towards decarbonisation of the building sector. International cooperation, both through international climate finance and possibly also through the opportunities presented through Article 6 of the Paris Agreement, may present options to help mobilise private capital and steer the Colombian building sector towards a more climate compatible and sustainable growth. Such efforts however will regardless require significant Colombian domestic effort to make the most of opportunities and steer the building sector to a Paris compatible pathway.

The building sector and the social housing sector in particular, while not a major emitter, is an important sector for further action both in terms of the needs of the growing urban population in Colombia and in order to reach commitments under the Paris Agreement in the context of sustainable development. Through Article 6 of the Paris Agreement, countries can cooperate in implementing their NDCs to allow for higher climate ambition. Given the dynamic nature of the sector, ensuring environmental integrity through an overall sectoral approach to Article 6 transfers is likely to be challenging especially in terms of additionality, baseline setting, and monitoring reporting and verification. However, an Article 6 pilot approach based on Net Zero Energy Buildings in the social housing sector, could reduce energy consumption, reduce emissions, reduce energy poverty, reduce energy consumption subsidy payments, and improve public health and energy security. Such a Net Zero Energy Building pilot as part of a larger policy roadmap to-wards increasingly stringent energy efficiency standards, help put the Colombian building sector on a path towards decarbonisation and alignment with the Paris Agreement.


Contact for further information: Aki Kachi, Carsten Warnecke