Editing IPCC:AR6/WGIII/Chapter-9 (section)

=== 9.9.6 Investment in Building Decarbonisation ===

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As [[#9.6.3|Section 9.6.3]] points out, the incremental investment cost to decarbonise buildings at national level is up to 3.5% GDP per annum during the next thirty years (the global GDP in 2019 was USD88 trillion). As the following figures illustrate, only a very small share of it is currently being invested, leaving a very large investment gap still to address. The incremental capital expenditure on energy efficiency in buildings has grown since AR5 to reach the estimated USD193 billion in 2021; Europe was the largest investing region, followed by the USA and China (Figure 9.21). The incremental capital expenditure on renewable energy heat vice versa declined to reach USD24 billion in this year; the leading investor was China, followed by Europe (ibid). The total capital expenditure on distributed small-scale (less than 1MW) solar systems in 2019 was USD52.1 billion, down from the peak of USD71 billion in 2011; most of this capacity is installed in buildings ( [[#Frankfurt%20School-UNEP%20Centre/BNEF--2020|Frankfurt School-UNEP Centre/BNEF 2020]] ). The US was the largest country market with USD9.6 billion investment; notably USD5 billion was deployed in the Middle East and Africa (ibid). [[#IEA--2021b|IEA (2021b)]] provided an estimate of annual average incremental investment needs in building sector decarbonation between 2026 and 2030 of USD711 billion, including USD509 billion in building energy efficiency and USD202 billion in renewable heat for end-use and electrification in buildings. Such investment would allow being on track towards meeting the goals of the WEO Net Zero Emissions Scenario, as presented in Box 9.2. To reach these levels, the respective investment must grow from their average volumes in 2016–2020 factor 3.6 and 4.5 respectively. As the investment needs estimated by ( [[#IEA--2021b|IEA 2021b]] ) are significantly lower the investment intervals reported by bottom-up literature ( [[#9.6.3|Section 9.6.3]] ), the actual investment gap is likely to be higher.

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[[File:1444b54f83c712387380d0671782600a IPCC_AR6_WGIII_Figure_9_21.png]]

Figure 9.21 | Incremental capital expenditure on energy efficiency investment (left) and renewable heat in buildings, 2015–2021. Notes: (i) An energy efficiency investment is defined as the incremental spending on new energy-efficient equipment or the full cost of refurbishments that reduce energy use. (ii) Renewable heat for end-use include solar thermal applications (for district, space, and water heating), bioenergy and geothermal energy, as well as heat pumps. (iii) The investment in 2021 is an estimate. Source: [[#IEA--2021b|IEA 2021b]] .

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