Nila Kartika Wati
The global building and construction sector is set to take center stage at the 31st United Nations Climate Change Conference (COP31) in Turkey, scheduled for November 2026. This heightened focus follows the "Belem Call to Action" for sustainable and affordable housing, marking a pivotal shift in how the international community perceives the built environment. According to the recently released Global Status Report for Buildings and Construction 2025-2026, published by the United Nations Environment Programme (UNEP) and the Global Alliance for Building and Construction (GlobalABC), stakeholders must urgently reframe buildings not merely as a source of environmental degradation, but as a critical platform for climate solutions, economic affordability, and societal resilience.
As the world grapples with record-breaking temperatures and rapid urbanization, the report, titled "Building Fast, Falling Short as Climate Risks Rise and Cities Grow," warns that the decisions made today regarding the built environment will lock in emission trajectories for decades. Martin Krause, Director of the Climate Change Division at UNEP, emphasized during the report’s launch that because a vast majority of the future building stock has yet to be constructed, current policy and design choices will dictate the health, quality of life, and carbon footprint of global populations through the mid-century and beyond.
The Global Footprint: A Sector in Crisis
The scale of the building sector’s impact on the global climate is immense and, in many ways, disproportionate. Currently, the sector accounts for approximately 11% to 13% of the average global Gross Domestic Product (GDP). However, its environmental cost is far higher: buildings and construction are responsible for an estimated 37% of global energy-related carbon dioxide (CO2) emissions. Furthermore, the sector consumes roughly one-third of the world’s energy and is responsible for nearly 50% of global material extraction, including sand, gravel, and metals.
Oliver Rapf, Executive Director of the Buildings Performance Institute Europe (BPIE) and a lead contributor to the study, highlighted the staggering rate of expansion. The global building floor area has reached approximately 273 billion square meters, growing by 1.7% in a single year. To put this into perspective, this annual growth is equivalent to building the area of Berlin four times over or Delhi twenty times over. Critically, 77% of this new growth consists of residential housing, which also accounts for 70% of the sector’s total energy demand.
Despite the goals set by the Paris Agreement in 2015, the sector is moving in the wrong direction. The Global Buildings Climate Tracker, a diagnostic tool developed for the report, reveals that while emissions should have decreased by 30% to align with the net-zero pathway, they have instead risen by 6.5% since 2015. While energy intensity per square meter is gradually declining, the sheer volume of new construction is outpacing these efficiency gains.
Regional Disparities and the Energy Demand Surge
The report identifies a significant geographic divide in energy consumption trends. Europe stands out as the only region where energy consumption in buildings has seen a measurable decline. This success is attributed to the European Union’s comprehensive policy packages, which have been implemented over several years, focusing on strict building codes and large-scale renovation projects.
In contrast, demand is surging in Sub-Saharan Africa, the Middle East, Eurasia, and the Asia-Pacific region. These areas are experiencing rapid population growth and urbanization, which drive the construction of new buildings and increase the demand for energy-intensive services like space cooling. While the transition to renewable energy is underway—with the share of renewables in the sector’s energy mix increasing by 4.7 percentage points since 2015—it remains insufficient. The adoption of renewables for heating and cooling, in particular, has not yet reached the mainstream adoption levels required to meet global climate targets.
The Financial Gap and the Investment Imperative
Addressing the decarbonization of the building sector requires a massive infusion of capital. Current global investment in building energy efficiency ranges between $270 billion and $300 billion annually. While this represents a steady increase, it only covers about two-thirds of the estimated $5.9 trillion needed cumulatively by 2030 to meet climate goals.
Hanane Hafraoui, Programme Officer at the Global Alliance for Buildings and Construction, argues that the sector is on the "wrong track" but stresses that the solutions are within reach. She emphasizes the need for a strategic shift in how public funds are utilized. Governments must move beyond simply funding construction to creating market demand for low-carbon solutions through procurement policies and subsidies for high-performance materials.
"The cleanest energy is the energy we do not need to use," Hafraoui noted. This philosophy underpins the push for a 25% reduction in energy intensity per square meter by 2030. Achieving this will require a combination of mandatory building codes, minimum energy performance standards (MEPS), passive design principles, and aggressive retrofitting of existing structures.
Indonesia’s Microcosm: Cooling and Efficiency Challenges
The challenges and opportunities of the building sector are vividly illustrated in Indonesia, where urbanization is accelerating. Research from the International Finance Corporation (IFC) indicates that the building sector currently accounts for 30% of Indonesia’s total energy consumption, a figure expected to rise to 40% by 2030. However, the IFC also found that green buildings in the country can yield 30% to 80% lower utility costs compared to conventional structures, offering a compelling economic case for sustainability.
A primary driver of energy demand in Indonesia is the "cooling crisis." According to data from CLASP, an international non-profit focused on appliance efficiency, only about 6% of Indonesian households currently own an air conditioning (AC) unit. However, this is projected to explode to 85% by 2050. Without stringent efficiency regulations, this surge in AC usage could jeopardize national climate targets and strain the power grid.
Field tests conducted in Jakarta, Medan, and Bali have demonstrated that inverter AC units—which adjust power based on cooling needs—can save approximately 28% more electricity than standard non-inverter units. Although inverter models have a higher upfront cost, the savings on monthly electricity bills typically offset the initial investment within a few years. The Indonesian government has begun addressing this by introducing energy efficiency standards for various appliances, including fans, televisions, refrigerators, and AC units. These policies are projected to reduce CO2 emissions by 100 megatons and save 136 terawatt-hours of energy by 2030.
Bridging Modern Tech with Vernacular Wisdom
Experts argue that the path forward should not rely solely on high-tech mechanical solutions. Oliver Rapf and Indonesian architect Yu Sing, founder of Anakoma Studio, both advocate for the integration of vernacular architecture—designs rooted in local culture and climate conditions.
Indonesia’s traditional architectural heritage, such as the homes of the Badui people in Kanekes or the structures in Kampung Naga, offers a blueprint for sustainable living. These designs utilize natural materials like bamboo and wood, which, if sourced from sustainably managed forests, act as carbon sinks. Furthermore, these traditional designs prioritize natural ventilation and shading, significantly reducing the need for mechanical cooling.
Yu Sing emphasizes that even modern luxury buildings can adopt "passive design" principles. "When we use materials from nature that are managed sustainably, we are inherently protecting the environment," he explained. However, he cautioned that individual building efficiency is not enough. In densely populated urban areas, buildings must be supported by integrated city planning. This includes the creation of "green corridors" and the planting of urban forests to mitigate the "urban heat island" effect, which can raise city temperatures several degrees above surrounding rural areas.
The Path to COP31: Strategic Recommendations
As the world looks toward COP31 in Turkey, the UNEP report lays out a clear set of priorities for the next six years:
- Accelerating Renovations: Transitioning the existing building stock is as important as building new green structures. Strategic use of public funds is needed to de-risk private investment in deep retrofits.
- Tripling Renewable Energy Integration: The share of renewable energy used in buildings must increase threefold by 2030. This includes the electrification of heating systems and the integration of on-site solar and wind energy.
- Strict Building Codes: Governments must implement and enforce mandatory building codes that regulate energy performance. Many countries currently experiencing construction booms lack the regulatory framework to ensure new buildings are climate-compatible.
- Embodied Carbon Focus: Beyond operational energy, the industry must address "embodied carbon"—the emissions associated with the manufacturing and transportation of construction materials like cement and steel.
- Collaborative Design: Architects, developers, and engineers must collaborate from the earliest design stages to incorporate efficiency. Martin Krause noted that integrating these elements from the start is significantly cheaper than retrofitting a finished building.
The transition to a decarbonized building sector is not just an environmental necessity but an economic opportunity. By lowering utility bills, creating jobs in the green construction industry, and improving indoor air quality, sustainable buildings offer a direct path to improving global standards of living. As the "Belem Call to Action" and the upcoming COP31 discussions suggest, the global community is finally recognizing that the walls around us are one of our most potent tools in the fight against climate change. The challenge now lies in moving from reporting and pledges to the rapid, large-scale implementation of these proven solutions.
