The sooner commercial properties begin the process to become net zero by 2050, as called for in the Paris Climate Agreement, the sooner property owners can realize the benefits of limited carbon footprints and lower energy costs.
The pathway will not be the same in every U.S. real estate market. The primary energy source (e.g., crude oil, natural gas, or coal) powering the grid, age of the real estate stock, and the local climate all contribute to the amount of greenhouse gas (GHG) that must be reduced. In cold-weather cities, such as Boston and Chicago, a shift to modern HVAC heat pumps would lead to significant reduction in carbon emissions. But these and other northern cities have older building stocks that make it expensive to transition to more energy efficient systems.
Meanwhile, newer, more energy efficient building stock and renewable energy alternatives, such as solar, often provide Sun Belt markets with a more economical pathway to decarbonization. Coastal Californian cities have the added benefit of a temperate climate.
Local politics also factor into decarbonization timelines. More than two dozen U.S. jurisdictions have enacted Building Performance Standards (BPS), which mandate GHG reductions. These frameworks provide a guide for harder-to-transition Northeastern cities and could speed up energy transitions in many Sun Belt markets. Ultimately, cities with BPS policies already in place should have the quickest route to decarbonization.