Absolute Zero
“The climate crisis has already been solved. We already have the facts and solutions. All we have to do is wake up and change.” — Greta Thunberg
We have all seen organizational commitments around carbon reductions. In fact, I’m willing to bet some of you reading this work for organizations that have set such goals. In 2021, over $1.1 Trillion in Assets under management made commitments towards some degree of “Zero Net Carbon,” “Net Zero,” “Carbon Negative,” or “Science-Based” goal. But what do these mean? In true ESG form, we have taken a concept and spun it hard enough to make your head spin.
So let’s peel these back, as they may not really mean the same thing:
Carbon Neutral is the state where the amount of carbon emissions produced is offset by the amount of carbon emissions removed from the atmosphere.
Net Zero expands that definition, expanding the scope from carbon emissions to all greenhouse gasses, and refers to the state where the amount of greenhouse gasses produced is offset by the amount of greenhouse gasses removed from the atmosphere.
Zero Net Carbon, or Zero Net Carbon Building, defined by Architecture 2030, is “a highly energy efficient building that produces on-site, or procures, enough carbon-free renewable energy to meet building operations energy consumption annually.”
Science-Based or Science-Based Net Zero Standard covers a company’s entire value chain and includes Scope 1, 2, and 3 emissions. The Science-Based requirements require the decarbonization of 90-95% of the emissions from all three scopes.
You can see the definition gets progressively more rigorous with each category. For example, Carbon Neutral only applies to actual Carbon, not all Greenhouse Gases, and net Zero expands this to Greenhouse Gases. In both cases, we typically refer to Scope 1 & 2 emissions; although it would not be incorrect to apply it to Scope 3 as well, but it is not a requirement. In both cases, how you reach zero is not defined, and it is considered acceptable to use RECs or Carbon Offsets to reach the goal.
Zero Net Carbon pulls in the requirement of on-site production or procurement of energy, making it more complicated than just purchasing RECs or Carbon Offsets, yet still typically referring to Scope 1 & 2 emissions.
Science-based begins to pull in a clear, science-based definition of net-zero and is “consistent with societal climate and sustainability goals and within the biophysical limits of the planet.” Developed through the Science Based Target Initiative, the framework provides a clear blueprint for aligning net zero plans with science and includes guidance, criteria, and recommendations for organizations to limit global temperature rise to 1.5°C.
At Greenbuild last week, however, we heard from Lendlease and their goal of “Absolute Zero.” Ambitious, brilliant, and worthwhile are words that come to mind when Sara Neff speaks about her organization’s goal.
The term is based on the temperature term “Absolute Zero,” which refers to the temperature in which there is no thermal energy at all. This is the point on the thermometer where a system reaches its lowest possible energy or thermal motion.
When we apply the term Absolute Zero to Real Estate, we are referring to achieving net zero emissions - without using offsets and covering Scope 1, 2, & 3 emissions. However, in addition to your own organization’s emissions, Absolute Zero also emphasizes enabling others to offset their emissions.
Including Scope 3 emissions in getting to “Absolute Zero” means you will have to more than offset your own energy consumption. You will need to offset that of the material emissions generated within your supply chain. This means having frank conversations with your vendors - those garbage trucks that pull up to my building - I need to know the emissions from those if those emissions are material. That paint, the carpet, if its material, we need to figure out what it is and work with that vendor to reduce their impact on our emissions. That means working across the entire value chain to eliminate emissions across your sphere of influence.
What does this look like in action? Ikea is pursuing a similar commitment they have called “Climate Positive.” Their goal is by 2030 to reduce greenhouse gas emissions in absolute terms from all parts of their value chain. This includes a commitment towards the entire life cycle of their products to minimize waste and rely on reused, refurbished, remanufactured, or recycled raw materials for all products and includes a commitment to use 100% renewable energy. Part of their goal is to support their nearly 1000 suppliers in their own absolute zero goals, which allows Ikea to have an impact on a footprint four times larger than their own (source).
Not to be outdone, H&M has made a similar “Climate Positive” by 2040 goal by focusing on three key areas:
“Reduce Energy need across the value chain”
“Ensure energy comes from renewable and sustainable resources”
“Take actions to reduce greenhouse gases from the atmosphere beyond the footprint caused by our value chain”
For more details on the H&M Climate Positive initiative - see this link.
The formula for reaching these goals should always be to first reduce energy consumption by eliminating inefficiency. Not only does this reduce carbon production, but not purchasing energy that is wasted also reduces the amount of energy purchased - as in, there is financial value in eliminating energy inefficiency. This is Net Operating Income improvement; every dollar reduced in operational expense falls to the bottom of the p&l.
The second step is to look at the energy generation - as in, where does the energy come from that you use in your building? What is its source? If it is electricity that comes from the grid, then how is that electricity made? If it is another form of energy, what is that source - is it a fossil fuel like natural gas or propane?
Obviously, if you have Scope 1 emissions, you generally use a fossil fuel that is combusted on-site to produce the energy. Electrification is a strategy to eliminate the use of fossil fuels for on-site energy generation. This means looking at your heating components and evaluating if alternative options are available.
The interesting thing about electrification is it tends to be much more efficient than burning fossil fuels on-site. We often assume that this low cost equals efficiency due to the current price of natural gas. However, this price doesn’t reflect the externalities or subsidies that help artificially push down the cost of natural gas. This is reinforced by strong gas lobbying groups that push a narrative that the carbon impact of natural gas is somehow less than electricity. Of course, the fallacy in that position is that it does not consider the source of the electricity generation. If the electrical generation is from renewable sources, it is naturally lower in emissions than natural gas. This is the very reason why, despite the objections of the gas lobby, electrification is a conduit to reduce carbon emissions - as the electric grid can be decarbonized - but a gas line will always contribute to your carbon footprint.
Perhaps when compared to the most inefficient forms of electrical heating, such as electrical resistance, the gas device is more efficient; after all, we see gas furnaces at 95% efficient - but what does that actually mean? This doesn’t mean it is better than 95% of other furnaces; it represents 95% of the gas or fuel is converted into heat - but it also means 5% of the fuel escapes or is not used. This also fails to account for the fumes or emissions related to the burning of the gas, which includes carbon monoxide and other harmful residue fumes.
While 95% may sound good, the leading-edge residential heat pump can deliver heat at 600% efficiency. This means for every unit of fuel, the heat pump delivers six units of heat.
While we are on the topic of decarbonization, allow me to address one other fallacy being marketed at the moment. A natural gas generator is not going to reduce the carbon emissions of your building. These devices are being marketed as helping to achieve sustainability goals, but when you peel back the layers, they are talking about resiliency, not decarbonization. While accurate, a backup generator can provide backup power, so can batteries. Burning gas will always result in increased emissions, a problem if your goal is zero.
The electrification debate aside, energy generation can also be addressed through on-site renewable energy and procuring renewable energy if you are in a deregulated energy supply market. In fact, procuring renewable energy where you have a choice is one of the easiest, most cost-effective, and quickest ways to decarbonize your property.
If you are going for Absolute Zero or Carbon Positive, you will need to get to zero and beyond with those steps alone. It is an ambitious goal but an achievable one.
You can help reduce the impact of the built environment by sharing this blog with your peers. Together we can impact the 39% of greenhouse gasses attributed to the built environment. It starts with awareness, and we succeed with teamwork.
Stay well!
Chris Laughman is the ThirtyNine Blog author, a blog dedicated to reducing the built environment’s impact. When not blogging, Chris is helping residents, clients, and investors reduce their energy, carbon, waste, and water impact as the Senior Director of Energy and Sustainability for Greystar. Our team’s insight into the utility consumption of our managed and owned portfolios provides insight into opportunities to identify and mitigate risk. We leverage innovation and experience to ignite solutions with real impacts while tracking performance, ensuring the trendline stays laser-focused on the goal. We in real estate have a tremendous opportunity to make a difference in the built environment. Standing shoulder to shoulder, we will get this done. I can be contacted at: chris.laughman@greystar.com for questions, concerns, or collaboration.
The opinions expressed in this blog are my own.
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