How Lofty Are World’s Zero-Emissions Goals

Lofty goals, global energy consumption and real estate are coming together in the discussion about taking the world to a “zero emissions future.”

Former president and CEO of the U.S. Green Building Council, Mahesh Ramanujam, together with a veteran team of sustainability and ESG experts, say that “current efforts will not generate scalable climate solutions in time to avert a planetary calamity” and announced the launch of the Global Network for Zero (GNFZ) initiative.

Its stated goal is to help lead the world to a “zero emissions future.”

GNFZ comprises an international collective of business and policy leaders devoted to the rapid realization of a zero emissions world. It said it hopes to achieve this through innovation and the public-private sectors and “bringing together the most influential individuals and institutions in technology, finance, business, and organizational sustainability” and is “positioned to prioritize the expansion of environment, social, governance (ESG) across sectors.”

America’s climate goals are to transition to 100% clean electricity by 2035 and net-zero emissions by 2050.

Green Housing, ‘That’s Not Happening’

There is debate within the housing industry about the demand for these goals, at least for now.

Based on a RentCafe/Yardi Matrix spreadsheet of “green buildings” delivered between 2001 and 2022, spokesman Doug Ressler said that developers want to be “more-green,” and renters want to live in sustainable buildings.

“However, that’s not happening,” Ressler said.

“The data shows there’s a slowdown in green construction; and if there’s demand for this type of development, the market would find a way to deliver more units of this kind. Costs are still an issue in 2022 and construction overall is booming as long as developers have confidence in sustained demand.”

Edie Weintraub, managing director, terra alma, tells GlobeSt.com that none of her restaurant/retailer or developer clients are taking a drive toward zero emissions into account, “but the cities are pushing for 20% of parking in certain markets to be EV charging stations.”

McKinsey: Requires $6 Trillion a Year for 30 Years

More concerning, according to some, is the fate of the poor, having to adjust to the costs of new climate initiatives and the soaring demand for fossil energy over the short term and long term.

Stuart Gottlieb, a professor at Columbia, wrote recently in The Wall Street Journal that “This aggressive timeline is increasingly at odds with reality, Gottlieb wrote, “because the agenda is economically unsustainable. 

Gottlieb said that according to the federal Energy Information Administration, global demand for energy will rise nearly 50% by 2050, with fossil fuels still accounting for roughly 75% of world supply. 

“There are no economic models showing how that could occur without causing massive harm to the underlying economy,” Gottlieb said.

A McKinsey & Co. report shows that to reach net-zero emissions by 2050 would take $6 trillion in new spending globally each year for the next 30 years.

Gottlieb argues that case would be worse for the poor, as it “wouldn’t resolve the severe economic costs of energy-supply volatility throughout the transition.”

‘Alternative Energy is Not Replacement Energy’

Wall Street Journal columnist Holman Jenkins, writing about the unprecedented rise in fossil energy demand globally, days before the imminent passage of the “Inflation Reduction Act” in the US Senate, said “Alternative energy is not replacement energy.”

He said legislative packages such as these “are sold on the public’s faulty intuition that an erg of green energy consumed is an erg of fossil energy that stays in the ground.”

Jenkins then quoted from what he called the most widely celebrated paper in recent years on the economics of climate change: Princeton’s Jose Luis Cruz Alvarez and Esteban Rossi-Hansberg, which concluded that green-energy subsidies “mostly just increase total energy consumption rather than displace fossil fuels.”

Jenkins added, “Total energy consumption is growing—last year it jumped a walloping 5.8%, the biggest increase ever, including a 2.6% increase in renewables and a 5.7% increase in coal.”

Investors Seeking ‘Emerging Technologies’

For investors, Jameson Hartman, Vice President at RET Ventures, said at a recent industry conference, both attendees and speakers from the multifamily sector discussed how the investment landscape is shifting based on an increased interest in portfolios’ ESG performance.

“Specifically, owners and operators mentioned how investors are pressing them to demonstrate how each new property acquisition moves the needle for their overall portfolio in the way of decarbonization and sustainable progress — especially as it pertains to net zero goals,” Hartman said. 

“Investors are also vocalizing increased interest in emerging technologies that assist in identifying value-add spend opportunities that can address growing regulatory requirements, while also providing a meaningful ROI that drives both financial and sustainable success.”