COVID-19 Stimulus Programs Could Fast Track Sustainability

Green Building

In 2018 alone, $4.5 trillion was invested in the construction industry which accounted for 7% of employment or 220 million jobs globally. What that means is that the construction industry has the potential to create a large number of jobs quickly which is what the economy will need. Creating stimulus packages for the construction industry that focus on sustainability has the capacity to help the economy while achieving climate change goals.

Buildings account for 40% of global carbon emissions—more than transport or industry. That means moves to sustainability here could have a major impact on reducing climate change. The green building industry has the potential to both help the economy to recover after the pandemic while moving the building industry to a more environmentally-friendly model. Sustainable building methods could save the US $1.1 trillion by 2050 according to the International Energy Agency.

The building industry has, in the past, been slow to adopt new technology and construction techniques. With construction methods failing to modernize, construction productivity has averaged 1 percent growth a year over the past two decades, compared with 2.8 percent for the total world economy and 3.6 percent for manufacturing.

The global economic shutdown thanks to COVID-19 presents a unique opportunity to jumpstart change in the construction industry. “Business as usual” is not something the construction industry should aspire to. Instead, a move to greener, more sustainable building practices should be encouraged.

These changes can be affected by updating building codes in the long run and providing incentives for immediate improvement. For example, Germany created an incentive program for energy-efficient buildings and renovations to existing residential homes, municipal and social buildings. In 2016, the German government provided 2 billion euros in funding which was utilized in energy-efficient upgrades to more than 400,000 homes and created 286,000 jobs. The energy-efficient upgrades resulted in savings of 1,730 GWh of energy and 619,000 tonnes of GHG emission the following year.

After the last financial crisis, the US invested $11 billion in stimulus funding for energy-efficient upgrades which saved $2 for every dollar spent in energy costs and created over 200,000 jobs. This goes to show that providing stimulus money for the construction sector can help reach economic, social and environmental goals.

Success can be achieved by:

  • Creating residential and commercial incentive programs with subsidies, grants and loans for the renovation of existing buildings and the building of new structures that adhere to more stringent green-building codes.
  • Public procurement programs that promote energy efficiency in both existing public buildings and new builds. Through more energy efficient hospitals, schools and municipal buildings, countries can create healthier environments while saving money on operating costs and reducing GHG emissions.
  • Programs that provide rebates and incentives for replacing old appliances with more energy efficient ones and programs that incentivise green energy creation (such as solar, wind and geothermal), all help to reduce GHG emissions.

Incentives should be augmented by improvements in the building code that ensure all future builds and renovations also adhere to more stringent environmental standards.

Stimulus packages for the construction industry should be contingent on the adoption of more energy-efficient building techniques. Greater financial incentives should be available to construction project that achieve higher sustainability goals.

Sustainable building projects should also gain preferential treatment for example, faster processing of building permits or lower building permit costs.

Economic stimulus programmes should be focused on reaching climate and sustainable development goals in order to accelerate national climate change policies.

By focusing on sustainable building, stimulus programs can provide an opportunity for economic growth while making real strides towards attaining environmental sustainability goals. The response to this economic crisis could become a valuable investment in creating a sustainable, resilient construction sector.


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