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Martin Stuchtey WCEF2019: The built environment as a key sector for a circular future

World Circular Economy Forum
World Circular Economy Forum
World Circular Economy ForumWorld Circular Economy Forum

The World Circular Economy Forum presents the world’s best circular economy solutions and gathers together the most recognised experts and decision makers in the field. The event is organised by the Finnish Innovation Fund Sitra. Read more: www.wcef2019.com

Martin Stuchtey WCEF2019: The built environment as a key sector for a circular future

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The built environment as
a key sector for a
circular future
Martin R. Stuchtey
June 4th, 2019
11
Congruence, anomaly, or new paradigm?
Source: Thomas Kuhn, Structure of a Scientific Revolution (1964)
22
Measures of societal development that include natural capital depletion grow much slower
than GDP
Considerations
Social
Economic
Capital Natural
Human Development Index
Gross Domestic Product
0,8
Genuine Progress Indicator
Inclusive Wealth Index -0,2
2,0
-0,1









Source: UNEP (2014a), Kubiszewski et al. (2013)
Progress per capita3, globally, 1990-2010, real terms
1 1990-2005, as later data not available globally,
2 IWI exists in two versions, one unadjusted, and one where adjustments are made for environmental damage, oil capital gains, and total factor productivity. The adjusted version is shown here
3 Global population growth was 1.6 percent per year during the period
33Source: IRP (2019). Global Resources Outlook 2019
Analysis of the past 2 decades of Inclusive Wealth Index evolution shows our development
has been done at the cost of depleting natural capital
44Source: IRP (2019). Global Resources Outlook 2019
Well-being decoupling
Resource decoupling
Impact decoupling
Well-being
Economic
activity
Environmental
pressures & impacts
Resource use
time
We need to decouple well being from material use and environmental impact to have a
sustainable model of socio-economic progress
55
Material productivity has not improved since 2000 and extraction would more than double
before 2060 without a deep shift
Source: Global Resources Outlook. International Resource panel (2019).
Global Resources Extraction and Material Productivity, 1970 - 2015
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Martin Stuchtey WCEF2019: The built environment as a key sector for a circular future

  • 1. 00 The built environment as a key sector for a circular future Martin R. Stuchtey June 4th, 2019
  • 2. 11 Congruence, anomaly, or new paradigm? Source: Thomas Kuhn, Structure of a Scientific Revolution (1964)
  • 3. 22 Measures of societal development that include natural capital depletion grow much slower than GDP Considerations Social Economic Capital Natural Human Development Index Gross Domestic Product 0,8 Genuine Progress Indicator Inclusive Wealth Index -0,2 2,0 -0,1          Source: UNEP (2014a), Kubiszewski et al. (2013) Progress per capita3, globally, 1990-2010, real terms 1 1990-2005, as later data not available globally, 2 IWI exists in two versions, one unadjusted, and one where adjustments are made for environmental damage, oil capital gains, and total factor productivity. The adjusted version is shown here 3 Global population growth was 1.6 percent per year during the period
  • 4. 33Source: IRP (2019). Global Resources Outlook 2019 Analysis of the past 2 decades of Inclusive Wealth Index evolution shows our development has been done at the cost of depleting natural capital
  • 5. 44Source: IRP (2019). Global Resources Outlook 2019 Well-being decoupling Resource decoupling Impact decoupling Well-being Economic activity Environmental pressures & impacts Resource use time We need to decouple well being from material use and environmental impact to have a sustainable model of socio-economic progress
  • 6. 55 Material productivity has not improved since 2000 and extraction would more than double before 2060 without a deep shift Source: Global Resources Outlook. International Resource panel (2019). Global Resources Extraction and Material Productivity, 1970 - 2015
  • 7. 66 6 In search of a new logic Source: Martin R. Stuchtey (2013)
  • 8. 77 2016, at the European Commission in Brussels "Circular economy will be a similar mega trend in economy as globalisation. I'm convinced that the circular economy can enable a triple win: economic, environmental and social." "I passionately believe in the opportunities of the circular economy. The future is not making things with finite components." "I am very impressed by the findings of Growth Within report, looking forward to developing our shared agenda" Jyrki Katainen - EU Vice President Jobs, Growth, Investment and Competitiveness Karmenu Vella, EU Commissionner Environment, Maritime Affairs and Fisheries Frans Timmermans, EU Commission First Vice President Source: SYSTEMIQ
  • 9. 88 The built environment has significant economic impact: Construction and housing form large shares of public and household spending Example construction investment and housing costs in Europe Source: Achieving Growth Within. SYSTEMIQ, Ellen MacArthur Foundation & SUN (2017); Eurostat (2017) EU-28 investments as share of GDP 2000 2005 2010 2015 25% 20% 15% 10% 5% 0% Construction Industrial Other Household consumption expenditure by purpose in the European Union, 2017 as % of total expenditure Finland 28.8% Malta 10.3% European Union 24.2%
  • 10. 99 The built environment is at the same time not fully meeting its social function Source: A blueprint for addressing the global affordable housing challenge. McKinsey Global Institute (2014) Spotlight affordable quality housing The challenge today… … and by 2025
  • 11. 1010 Structural waste in the built environment SOURCE: Norm Miller, Workplace Trends in Office Space: Implications for Future Office Demand, University of San Diego, 2014; GSA Office of Governmentwide Policy, Workspace Utilization and Allocation Benchmark, 2011; Flexibility.co.uk, Shrinking the office; IEA Statistics © OECD/IEA (http://www.iea.org/stats/index.asp) Energy Statistics and Balances of Non-OECD Countries, Energy Statistics of OECD Countries, and United Nations, Energy Statistics Yearbook; European Commission, Service contract on management of construction and demolition waste, 2011. Utilisation ▪ 60% of European offices are not used even in working hours ▪ 50% of residential dwellers report living too big Construction ▪ 0-0.5% productivity increase per year in most European countries 1990- 2015, whereas 2% per year achieved in some countries ▪ 10-15% of building material wasted during construction End of life ▪ 54% of demolition materials landfilled, while some countries only landfill 6% ▪ Most materials unsuitable for reuse as they contain toxic elements Utilities ▪ 20-40% of energy in existing buildings can be profitably conserved ▪ Passive building standards at or near profitability for most new-build segments, but still only constitute a minority of buildings Urban planning  50% of most city land dedicated to infrastructure  11 million households experience severe housing deprivation  Congestion cost 2% of GDP in many cities
  • 12. 1111 1 As many of the levers are working on the same cost drivers, the total cost reduction is lower than the sum of the standalone savings Total annual consumer cash-out cost per household; EU average, 1.000 EUR Example levers1 ▪ Depending on combination of levers that is applied ▪ As many of the levers are working on the same cost drivers the total cost reduction is lower than the sum of the standalone savings per lever ▪ Teleworking (combined with office sharing/flexible desks) significantly reduces need for office space ▪ Increased utilization of machinery through industrialized construction ▪ Sharing/renting of spaces eliminates hotel costs (Airbnb model) ▪ Design for durability increases building life time ▪ Building vertically saves land cost per m² floor area ▪ Looping (recycling, re-manufacturing re-use) of construction materials saves material costs ▪ Value engineering and industrial approaches reduce material waste from 10 to 1% ▪ Passive housing decreases heating/cooling energy need by 75% or more ▪ 3D printing/automation reduces labor and material cost significantly ▪ Shift to 100% renewable energy reduces energy cost by 50% ▪ Recovery of nutrients from sewage and waste water Total savings, % X 10% 15% 15% <2% <2% Share Loop Re- generate Today Optimize Exchange Virtualize Possible future 9.6 25-35% <2% Circular economy strategies have large potential to improve the built environment -ctd Source: Growth Within. McKinsey Center for Business and Environment, Ellen MacArthur Foundation & SUN (2015) In Europe, 6 levers have potential to reduce wastefulness and slash costs by up to 35%
  • 13. 1212SOURCE: Web search, company websites; Office space across the world, Cushman & Wakefield Research Publication, 2013; REN21 Global status report They are already being tested and in some cases implemented at commercial scale 1 In a 2012 survey (500 corporate executives), over 70% indicated that the gross sq.ft per person in their organization would drop to 100 sq.ft or below over the next five years, down 55% from the current industry average. 2 Based on the utility bill and doesn't reflect the capital cost of the system Loop Virtualize Share Optimize of building components (walls, doors, shelves, etc.) get reused/refurbished when moving into a new space when using DIRTT’s modular construction80% EUR per year energy surplu2s per household in the 59 households, in the ‘Solar Settlement’ in the Vauban district4,000 days to erect a 30 story hotel with 200 construction workers through rapid assembly of factory build modules15 Estimated reduction of the average office area per employee due to teleworking and increased shared offices within 5 years155% Explore Full-sized houses 3D-printed in 24 hours using a mixture of dry cement and construction waste at a cost of less than USD 5,000 per house10 of the newly installed power generation capacity in EU in 2013 is renewable. Distributed generation is revolutionizing the power sector, driven by rapid technological advancement (e.g. solar cost decreasing 11% p.a. over last decade) 72% 30% Office floor reduction realized at Microsoft Sweden, moving from 650 individual desks to 300, while adding an extra 1500 seats in shared spaces Million people stayed at Airbnb on New Year's Eve 2014 . With the number of spaces listed growing at 90% p.a., totaling more than 1 mln spaces in >190 countries now (compared to total of 14 mln hotel rooms worldwide) >0.5
  • 14. 1313 …to rethinking the system as a wholeFrom optimising elements of the system independently ▪ Industrial approach and value engineering ▪ Pre-construction ▪ Material bank ▪ Durable/advanced materials ▪ Automated maintenance Teleworking Connected, circular, smart appliances Energy efficiency Distributed energy production ▪ Water and waste recycling/treatment ▪ Rain water collection ▪ Filtered and circulated air Mixed use Vertical/ urban farming Denser areas/compact growth Shared spaces Smart urban planning leveraging inner city unlocked land by mobility and increased modularity Smart grid Walkable areas, bicycling Modular walls and flexible volume Transit-oriented development Unlocked land Reused/ remanufactured/ recycled materials Passive architecture Source: Adapted from: A Good Disruption. Martin R. Stuchtey, Per-Anders Enkvist, Klaus Zumwinkel (2016) But for full impact across building and use phase and to avoid rebound effects we need to approach the circular shift in a system
  • 15. 1414 Construction materials are predicted to continue dominating materials use in the future – and to more than double in absolute volume until 2060 Left chart: Global Material Resources Outlook. OECD 2018. Based on International Resource Panel Database. Source: International Resource Panel (2018). The Weight of Cities. If developing countries expand their infrastructure to current average global levels, the production of infrastructure materials alone would generate around 470 billion tonnes of CO2 emissions by 2050 (IPCC, 2014b)” Context: IPCC calculates a remaining carbon budget of 420 GtCO2 for a two-thirds chance of limiting warming to 1.5°C
  • 16. 1515 These materials cause severe impact on the environment and human health already today Source: 1) Upcoming report ‘Resource Efficiency and Climate Change”. International Resource Panel (2019). 2) Global Resources Outlook. IRP (2019) Ca. 40% for buildings (in GHG emissions)1 Particulate matter health impacts from extraction and primary processing Throughout the value chain, construction material processing causes ca. 30% of global air pollution 46% 21% 5% 5% 12% 8%
  • 17. 1616 In addition to its construction materials, the built environment causes environmental impact in its use Example carbon impact of the built environment in the UK Carbon impact of the built environment in the UK, 2014 Source: UK Green Building Council. https://www.ukgbc.org/climate-change/ NEW CONSTRUCTION EXISTING BUILT ASSETS TRANSPORT 48MtCO2e was embedded through new construction 138MtCO2e was generated by operational energy use (e.g. heating) 44MtCO2e was generated through plug loads and cooking in buildings 119MtCO2e was generated by direct emissions from road and rail transport 831MtCO2e was the total carbon footprint of the UK in 2014 42%349 MtCO2e was attributable to the built environment 22%was total operational and embodied carbon footprint of the built environment 185 MtCO2e
  • 18. 1717 Where are we on the maturity curve of circular construction?
  • 19. 1818 The interplay of building material and use phase circular strategies differ in ‘brownfield’ vs ‘greenfield’ realities Figure: The Weight of Cities. International Resource Panel (2018). Implications: SYSTEMIQ Context-based impact objective Key circular approaches Reality of different built environments INDUSTRIALIZED COUNTRY CITIES: large stock; low growth in material use even in a BAU scenario DEVELOPING COUNTRY CITIES: insufficient stock; massive growth in material use in a BAU scenario “BROWNFIELD APPROACH” Focus on use-phase approaches; combine with building material and process approaches; attention to trade-offs “GREENFIELD APPROACH” Circular urban planning i.e. combine designing for circular use with circular building material and processes with Reduce negative environmental and health impacts strongly; maintain and improve social function Minimize growth in negative impacts strongly; raise social function/quality + large stocks existing in industrialized country cities The composition of global urban DMC by aggregate world regions Billions Urban DMC (tonnes/year)
  • 20. 1919 Example brownfield circular approach with climate impact focus: -> Large improvements are possible through a use-phase focused circular strategy mix minimizing trade-offs 46 Remaining building emissions Cumulative building emissions in a 2-degree scenario based on SSP11 GHG reduction through reducing floor space GtCO2-eq. GHG reduction through other material efficiency -8 -2 -36 Figure: Cumulative life-cycle GHG emissions 2015- 2050 from buildings in G7 countries Source: From upcoming report ‘Resource Efficiency and Climate Change’’, preliminary results for the G7 Environment Ministers 2019. International Resource Panel. (1) ‘Shared Economic Pathways’ as used by IPCC (c) wood instead of reinforced concrete and brick “Sneak Peek” findings from upcoming IRP report, unpublished – do not cite Case: Residential buildings in G7 countries, modelling of cumulative emissions reductions 2015-2050 Modelling insight Circular strategy implication Reducing floor space per person is key impact lever (18%) intensify use -> minimize new building in balance with discarding high-operational-energy buildings -> enable intensification: redesign neighbourhoods for diversity, sharing, new communities… Prolonging life-time can have stark trade-offs with operational energy use repair/maintain selectively and combine with use efficiency upgrading Renewable materials(c) have moderate effect choose renewable materials in remaining new building need Recycling applied in iso- lation has minimal impact combine recycling with reducing floor space and upgrading levers
  • 21. 2020 Note: Realities and best strategy mixes will also differ amongst industrialized countries Figure: The Weight of Cities. International Resource Panel (2018). Atlanta Urban area Barcelona Urban area 5.3 Population million 7,692 Urban area km2 6.9 Transport carbon emissions p.c. tonnes 5.0 Population million 648 Urban area km2 1.16 Transport carbon emissions p.c. tonnes
  • 22. 2121 Circular urban planning in fast growing developing country cities Source: SYSTEMIQ; Wikipedia Global Commons, Photo: Ahron de Leeuw de Amsterdam, Creative Commons Photo : Anton Zelenov in the immediate vicinity of the image Scene of Dhaka street Scene of Rocinha, neighborhood of informal building in Rio de Janeiro
  • 23. 2222 Future cities must leapfrog to “circular urban metabolisms” Source: Graphic adapted from UNEP (2018). Sustainable Urban Infrastructure Transitions in the ASEAN Region: A Resource Perspective. UN Environment. Numbers from IRP (2018). The Weight of Cities. Circular houses in a circular urban system 5) Easy access through (active) mobility 2) Diversity of Use and Income in Neighbourhoods 1) High Density Nodes with strong interconnection and low-density surrounding 4) Small distance to inter-node transit Can also enable better appliance and transport sharing 3) Design for activity, nature and community spaces • Land – and material efficient • Heating-efficient • Mobility efficient • Natural spaces between nodes for light, wind, air quality, heat moderation, biodiversity Facilitates intensified use and reduced floor space demand • Reduces commuting • Enables waste-heat reuse • Enhances service/leisure (building) use intensity The ideal circular urban system could reduce energy use by x10, support social cohesion and boost productivity
  • 24. 2323 For a circular system shift in the built environment, we need ‘Entrepreneurial Urban Governance’ Source: SYSTEMIQ. Adapted from International Resource Panel. ‘The Weight of Cities’ 2018. National governments Policy incentives to circular system stakeholders Public procurement of circular system elements Architects, designers, engineers Innovating circular building and neighbourhood design Developers and investors Circular neighbourhood planning and financing Citizens and communities Promoting and implementing circular neighbourhoodsEntrepreneurial Urban Governance*  Integrated and orchestrated  National priority  Yet open and nimble, supporting experimental approaches by different stakeholders Exchange with science Exchange with global frontrunners Reduce uncertainties Construction companies Realizing circular buildings and neighbourhoods City/communal governance housing and infrastructure planning Public procurement of circular system elements Planning and policy incentives to circular built environment Learn of possibilities Connected sectors Suppliers, recyclers Technology enablers Sharing apps, community apps, energy use efficiency management tech…
  • 25. 2424 Thank you! Photo by Tapio Haaja/Ryan Searle on Unsplash martin.stuchtey@systemiq.earth Munich + London + Jakarta martin.stuchtey@uibk.ac.at University of Innsbruck