Zero-Carbon Buildings in Cities

Cities play a key role in WLC policies for buildings. The OECD report Decarbonising Buildings in Cities and Regions (2022) highlighted four major advantages of cities in terms of decarbonising buildings: i) cities own public buildings themselves; ii) cities are responsible for building and zoning regulations; iii) cities are close to citizens and local businesses; and iv) cities are familiar with the local building stock (OECD, 2022[1]). These structural advantages enable cities to take the lead in pursuing their own initiatives, rather than just following national regulation. Drawing from the OECD Global Survey on Whole Life Carbon of Buildings (2024), this chapter delves into examples of WLC policies led at city level, often ahead of national governments.

While many national governments (as discussed in Chapter 3) and cities (as highlighted in Chapter 4) are implementing WLC policies for buildings, challenges in aligning efforts across levels of government, across sectoral entities, and across public-private sectors can create inefficiencies and slow down progress towards zero-carbon buildings.

First, a lack of vertical co-ordination between national and subnational governments can inhibit effective local implementation of WLC policies. Without support from the national level, subnational governments, particularly in small- and medium-sized cities, struggle in developing WLC policy instruments due to limited financial resources and technical capacity. National governments would also miss out on the opportunity to scale up innovative and ambitious local efforts if national and local policies are not aligned. Furthermore, disparities in WLC policy frameworks and calculation methodologies across different levels of government create regulatory uncertainty, hindering private sector investment and potentially affecting overall market efficiency in the construction and real estate sector.

Second, the responsibility of developing WLC policies for buildings is often distributed across different government agencies or different sectoral entities. In a fragmented policy landscape, WLC measures for buildings cannot be implemented effectively unless horizontal collaboration mechanisms are put in place to help overcome siloes across ministries at the national level and across sectoral entities at the city level, as well as achieve harmonisation of policies and standards across countries.

Third, the private sector and academia can play a pivotal role in knowledge co-creation for sustainable construction alongside the public sector. Unlike urban planning and public infrastructure carried out by the government, buildings are largely owned and financed by the private sector, involving various actors such as developers, architects, construction companies, housing companies, building material suppliers, and equipment (i.e. heat pump and solar panel) companies. Private sector engagement is therefore essential – not only because governments’ WLC policies have a full range of consequences on the construction and real estate industry, but also because the construction industry and LCA experts can bring critical technical and market insights. Similarly, universities and research institutes can provide specialised technical knowledge to help governments develop a sound methodology for WLC of buildings.

Furthermore, a WLC approach requires a broader, more holistic engagement of stakeholders across the entire construction value chain as well as the building policy arena. As opposed to operational carbon, where stakeholder networks focus on energy efficiency at the use stage of a building, WLC approaches engage stakeholders throughout all life-cycle stages. Recent studies on WLC of buildings reveal a complex landscape involving numerous stakeholders with competing interests. For example, a systematic literature review of 40 quality academic publications has identified 32 key stakeholders and 47 distinct roles in WLC of buildings, including construction professionals, property owners, building users, policy makers, manufacturers, building material and equipment suppliers (Falana, Osei-Kyei and Tam, 2024[2]). Consequently, the wide range of stakeholders complicates co-ordinated action, slowing down the development and implementation of WLC policies. Fragmented collaboration among stakeholders underscores the crucial need for multi-stakeholder collaboration across public and private sectors. Effective WLC policy development and implementation depends on early identification and engagement of private sector stakeholders to avoid ambiguity in roles, prevent conflicts, and ensure effective communication.

Moreover, it is often challenging to demonstrate any immediate and tangible co-benefits of WLC policies for occupants, such as energy cost savings, improved health, or enhanced comfort, which are typically associated with operational energy efficiency measures. Without these direct advantages, WLC policies are unlikely to gain traction if left solely to market forces. Assessing and reducing embodied carbon usually entails higher costs for construction stakeholders, with limited direct returns for end users. This economic imbalance makes WLC initiatives less attractive compared to energy efficiency policies.

This chapter will examine governance challenges and opportunities related to WLC policies for buildings around three axes: i) vertical co-ordination, ii) horizontal collaboration, and iii) public-private-academic partnerships (OECD, 2010[3]; OECD, 2024[4]).

Table 4.1 categorises city-led WLC initiatives into three groups, drawing on the three advantages outlined in the above-mentioned OECD report (OECD, 2022[1]): i) ownership of public buildings; ii) responsibility for local regulations and knowledge of the local building stock; and iii) proximity to citizens and local businesses. Even if cities are not authorised to have their own building or zoning regulations, they can implement a WLC approach by leveraging their unique characteristics.

In Tampere (Finland), developers are required to submit a climate declaration, including energy class A certification and carbon calculations, before leasing public land. As the city owns 70% of the inner-city land, this requirement has a significant influence on most construction projects (Tampereen kaupunk, 2022[5]). For public construction projects, a carbon footprint assessment must be submitted to the City Council, along with life-cycle and investment cost analysis for each design option (Box 4.1). Building design decisions are then based on these three parameters, with the Council typically prioritising lower-carbon designs over the least expensive options.

Similarly, in Helsinki (Finland), the city can set carbon footprint as a criterion, for example, in plot competitions and plot transfer terms. For example, the quality competition for residential plots in Verkkosaari, a residential area in eastern Helsinki, aimed at producing a green block of high architectural quality that would form a unique and feasible design for residential and commercial construction complex in terms of the cityscape. This competition holds significant importance for the construction industry, highlighting the Finnish sector’s readiness to adopt and implement low-carbon solutions that are both aesthetically pleasing and economically sustainable. The high quality of the proposals demonstrates that Finnish construction industry is equipped to incorporate energy-efficient, low-carbon innovations across a wide range of projects. In the winning proposal, out of twelve approved proposals, the carbon footprint was 25% lower than the average of competition entries, and emissions from product stage A1-A3 are about 20% lower than the carbon benchmark of common building types (City of Helsinki, 2021[6]).

Cities can leverage their close relationships with local businesses to accelerate innovation in the industry and create initiatives to implement WLC policies for buildings. For example, Malmö (Sweden)’s experience shows how public-private partnership can drive local climate action to achieve ambitious goals. The city’s LFM30 platform unites over 200 stakeholders from the construction sector under six focus groups, and promotes climate-neutral construction practices, fostering innovation and collaboration throughout the construction chain (LFM30, n.d.[8]) (Box 4.2).

With regards to WLC requirements on buildings, developers in the collaborative LFM30 platform mandate the use of environmentally friendly electricity and prohibit fossil fuel energy in all new and existing buildings starting in 2025. In addition, all their building sites are expected to achieve climate neutrality throughout the construction process (A1-A5), operational phases (B1-B7), and final stages (C1-C4) from 2030 and onwards (LFM30, 2019[9]). This approach is more ambitious than its national counterpart, since Sweden only requires the upfront carbon (A1-A5) climate declaration since 2022 (Boverket, 2020[10]).

Greater London (UK) is advancing WLC policies through extensive stakeholder engagement. The GLA’s consultation on the draft WLC assessment guidance has engaged a diverse array of stakeholders, including 50 formal survey responses, with 54% of identified respondents coming from the business sector and 243 individuals participating in an online seminar. The process also involved technical meetings with Greater London boroughs and industry experts, facilitating valuable insights on WLC methodologies (Greater London Authority, 2022[11]). Additionally, the Planning for Greater London Programme fostered stakeholder engagement on WLC assessment policies through deliberative events and roundtables, involving citizens, NGOs and developers (Mayor of London, 2023[12]) (Box 4.3).

Vancouver (Canada)’s Climate Emergency Action Plan, approved by the City Council in November 2020, aims to reduce embodied carbon in construction by 40% by 2030. In May 2022, the City Council approved changes to the Vancouver Building By-law (VBBL) to require designers to calculate, limit, and reduce embodied carbon in new Part 3 buildings, which refer to large buildings (>600 m² of building area and more than 3 floors) and where care, treatment and essential services are provided or assemblies are held (City of Vancouver, 2023[13]). Vancouver’s unique ability to adopt its own Building By-law is one of the success factors behind the city’s ambitious WLC policies. The Vancouver Charter enables the city to adopt by-laws to regulate the design and construction of buildings as well as the administrative provisions related to permitting, inspections, and the enforcement of these requirements (City of Vancouver, 2024[14]). This allows Vancouver to put in place embodied carbon requirements in the Building By-law before the provincial code or national model building code.

Helsinki (Finland) leverages its authority over city planning to set its own requirements. Although Helsinki does not have authority to set its own building codes, the city has established a planning monopoly through its “local detailed plan”, which enables it to adopt WLC policies ahead of the national government. In June 2023, the city first introduced a limit value of 16 kgCO₂e/m²/year on carbon footprint, calculated per 50 years of use. As a rule, the total carbon footprint requirement will be imposed on all building permits for apartment buildings (City of Helsinki, 2023[15]). In this way, although Helsinki cannot establish its own building codes, it can impose carbon limit values on all residential buildings within the city – not only those on city-owned land but also on private-owned land through its monopolistic power in city planning.

Greater London (UK) mandates WLC assessments for strategic developments, making it the first city in the United Kingdom to impose such a policy. The London Plan, introduced in March 2021, requires development proposals referable to the Mayor to calculate whole life-cycle carbon emissions through a nationally recognised WLC assessment and demonstrate actions taken to reduce life-cycle carbon emissions (Greater London Authority, 2021[16]). Most applications for new development are submitted to Greater London’s boroughs, but strategic projects need approval from the GLA. While only a small number of applications are under the jurisdiction of the Mayor, they represent a significant proportion of total new development in the city: in 2022, 63,700 residential units were given permission in London, and around 73% of them (46,844) were part of a Stage 2 application, which is required to refer to the Mayor of London (UK Government, 2023[17]). The GLA thus emphasises the need to tackle big projects first, as they have the most substantial impact. Greater London has adopted a multi-level planning approach, spearheading WLC policies while letting the boroughs decide on smaller development projects within their limits (Greater London Authority, n.d.[18]). To this day, there is no WLC policy on the national level in the United Kingdom.

Tokyo (Japan)’s Green Building Programme – the green building plan submission and publication scheme – requires building owners to submit environmental documentation, with a summary published on the Tokyo Metropolitan Government’s website. This approach encourages building owners to pursue environmental targets. Currently, the programme focuses on reducing operational carbon, but starting in April 2025, its scope will expand to encompass embodied carbon reduction. Under this revision, new buildings larger than 2 000 m² will be encouraged to assess upfront carbon emissions and prioritise low-carbon materials by a grading system. When a building owner conducts a WLC assessment and publishes the results, the highest grade will be awarded in the “Appropriate Use of Resources”’ category. However, the assessment is not mandatory. Rather, it is intended to serve as an incentive for building owners to conduct LCA in order to enhance market competitiveness. This step is projected to have a significant impact: although new buildings over 2 000 m² make up only around 2% of all new constructions, they represent approximately 50% of the total gross floor area being built. The implementation of WLC policy in Tokyo is ahead of national regulations, as the Japanese government does not yet have a concrete plan to implement WLC regulations (Tokyo Metropolitan Government, 2024[19]).

By leveraging their local strengths and adopting tailored approaches, cities can often act faster and set more ambitious WLC standards than national governments. Table 4.3 categorises city-led initiatives according to three characteristics: faster pace, more ambitious targets, and unique approaches compared to national policies.

Helsinki (Finland), for instance, has implemented a limit value requirement for new apartment buildings ahead of national mandates from the Finnish government, pushing for more ambitious reductions in building-related emissions. Figure 4.2 illustrates the timeline for establishing limit values in Helsinki, in comparison with the national timeline. The city started by conducting case studies of over 60 buildings and thoroughly calculating their emissions. This allowed Helsinki to gain knowledge on the carbon intensity of its building stock. Helsinki’s initiative is particularly noteworthy because it leveraged the calculation method developed by the national government, serving as a practical demonstration of the method before its broader application at the national level. Helsinki has communicated with the national government and shared information on its experience about limit values (City of Helsinki, n.d.[20]). This approach therefore underscores the effectiveness of sharing resources and expertise for driving impactful change.

Similarly, Tampere (Finland) promotes the implementation of LCA by incorporating carbon footprint as a key criterion to select public building projects (Tampereen kaupunk, 2022[5]). Although neither Helsinki nor Tampere has the power to enact independent building codes, both cities leverage their planning monopolies and public project competitions, respectively, to encourage WLC reduction in their building projects.

Malmö (Sweden) has adopted an ambitious approach by expanding system boundaries for carbon assessment in construction to include the B module (use) (LFM30, 2019[9]). This stage accounts for emissions produced during a building’s operational phase, such as maintenance and repair, which go beyond the Swedish government’s current national requirement. Nationally, Sweden mandates the assessment of upfront carbon emissions (stages A1–A5), which focus on emissions from raw material extraction, transport, and construction processes (Boverket, 2020[10]). Malmö’s approach does not only support its ambitious goal of climate neutrality by 2030, but also ensures that the city captures a more comprehensive picture of a building's carbon footprint throughout its life-cycle.

Moreover, unlike any national regulations, Helsinki (Finland) and Malmö (Sweden) require compliance with, and submission of the limit value both at the planning stage and at the after-completion stage, reflecting all the as-built information. In this way, cities can control that low-carbon design is carefully considered at the designing phase, and that the building is constructed appropriately to meet the limit value.

While some cities control both at the design and at the completion stages, national governments that have adopted WLC policies – such as France, Denmark, and Sweden – require compliance only at the after-completion stage. This suggests that national governments tend to take a simpler, lower-workload regulatory approach, whereas some cities have the capacity to adopt more ambitious, multi-stage controls, indicating further potential for cities to accelerate carbon reduction efforts. The World Business Council for Sustainable Development (WBCSD) also underscores the importance of addressing embodied carbon reduction at the earlier stages of a project, as the potential for carbon reduction is highest at the outset and decreases as the project advances (Figure 4.3).

Given their unique characteristics and agility for change, cities can serve as dynamic testbeds for new policies, offering a fertile environment for experimentation, feedback, and innovation. Pilot-testing solutions to complex challenges in cities can help inform broader scale policy frameworks and contribute to shaping more resilient and sustainable communities. However, challenges remain in terms of collaboration across levels of government as well as alignment of local initiatives with national regulations. Co-ordination between different levels of government is further discussed in Chapter 5.

[10] Boverket (2020), Regulation on climate declarations for buildings, https://www.boverket.se/globalassets/publikationer/dokument/2020/regulation-on-climate-declarations-for-buildings.pdf (accessed on 22 October 2024).

[15] City of Helsinki (2023), Hiilijalanjäljen raja-arvo talonrakentamisen ohjauksessa, https://ahjojulkaisu.hel.fi/712749CF-D40E-CD43-9541-88FBB070000D.pdf.

[6] City of Helsinki (2021), Verkkosaareen rakennetaan vähähiilinen ja erittäin energiatehokas kortteli – kilpailulla suuri merkitys rakennusalalle, https://kestavyys.hel.fi/verkkosaareen-rakennetaan-vahahiilinen-ja-erittain-energiatehokas-kortteli-kilpailulla-suuri-merkitys-rakennusalalle/.

[20] City of Helsinki (n.d.), Carbon Footprint Limit Value, https://www.hel.fi/en/urban-environment-and-traffic/plots-and-building-permits/applying-for-a-building-permit/carbon-footprint-limit-value (accessed on 28 October 2024).

[14] City of Vancouver (2024), Vancouver Building By-law (CBO), https://vancouver.ca/your-government/vancouver-building-bylaw.aspx.

[13] City of Vancouver (2023), Embodied Carbon Guidelines, https://vancouver.ca/files/cov/embodied-carbon-guidelines.pdf.

[2] Falana, J., R. Osei-Kyei and V. Tam (2024), “Towards achieving a net zero carbon building: A review of key stakeholders and their roles in net zero carbon building whole life cycle”, Journal of Building Engineering, Vol. 82, https://doi.org/10.1016/j.jobe.2023.108223.

[11] Greater London Authority (2022), Whole Life-Cycle Carbon Assessments LPG Consultation summary, https://www.london.gov.uk/sites/default/files/lpg_-_wlca_consultation_report.pdf.

[16] Greater London Authority (2021), The London Plan, https://www.london.gov.uk/sites/default/files/the_london_plan_2021.pdf (accessed on 28 October 2024).

[18] Greater London Authority (n.d.), Referral process for LPAs, https://www.london.gov.uk/programmes-strategies/planning/planning-applications-and-decisions/referral-process-lpas (accessed on 28 October 2024).

[9] LFM30 (2019), How we collectively develop a Climate Neutral Building and Construction Industry, https://lfm30.se/wp-content/uploads/2021/01/Local-Roadmap-LFM30-English.pdf.

[8] LFM30 (n.d.), Vi lovar att implementera Malmös färdplan & målsättningar för en klimatneutral bygg- & anläggningssektor i vår egen verksamhet, https://lfm30.se/bakgrund/.

[12] Mayor of London (2023), Whole life-cycle carbon (WLC), Circular Economy (CE) and retrofit, https://consult.london.gov.uk/pflp-stakeholder/brainstormers/whole-life-cycle-carbon-wlc-circular-economy-ce-and-retrofit.

[4] OECD (2024), Global Monitoring of Policies for Decarbonising Buildings: A Multi-level Approach, https://www.oecd.org/en/publications/global-monitoring-of-policies-for-decarbonising-buildings_d662fdcb-en.html.

[1] OECD (2022), Decarbonising Buildings in Cities and Regions, https://doi.org/10.1787/a48ce566-en.

[3] OECD (2010), Cities and Climate Change, OECD Publishing, Paris, https://doi.org/10.1787/9789264091375-en.

[7] Tampere City Council (2023), Kaupunginhallitus, kokous 5.6.2023, https://tampere.cloudnc.fi/fi-FI/Toimielimet/Kaupunginhallitus/Kokous_562023/Hiedanrannan_koulun_ja_paivakodin_uudisr(335397).

[5] Tampereen kaupunk (2022), Kiinteistöt, tilat ja asuntopolitiikka 2022-2025, https://www.tampere.fi/sites/default/files/2022-09/Tampereen%20kaupungin%20asunto-%20ja%20maapolitiikan%20linjaukset%202022-2025_web%20%281%29_0.pdf.

[19] Tokyo Metropolitan Government (2024), 建築物環境計画諸制度の改正概要について, https://www7.kankyo.metro.tokyo.lg.jp/building/240221_briefing.pdf.

[17] UK Government (2023), Planning applications in England: October to December 2022, https://www.gov.uk/government/statistics/planning-applications-in-england-october-to-december-2022/planning-applications-in-england-october-to-december-2022#:~:text=During%20October%20to%20December%202022%2C%20authorities%20granted%2079%2C500%20decisions%.