Climate change is no longer a distant threat—it's a present-day reality. From wildfires in California to devastating floods in South Asia and Europe, the impacts are undeniable. Reducing greenhouse gas emissions is critical to avoiding the worst effects and buildings and construction are central to this challenge, accounting for nearly 40% of global carbon emissions. This includes both the energy used to operate buildings and the emissions embedded in their construction. Tackling emissions in the built environment is crucial to meeting climate goals and offers the most immediate opportunity for impactful change.
In the United States, the Inflation Reduction Act (IRA) offers a pivotal opportunity to accelerate sustainable change, offering targeted financial incentives designed to make sustainable building practices both widespread and financially viable across the country. However, in conversations with clients and colleagues, a recurring sentiment is that the European Union (EU) is perceived to be ahead of the U.S. in energy transition, decarbonization projects and the policies supporting them. So how does the U.S. compare to European nations in terms of policies, progress, and outcomes when it comes to leveraging the built environment to tackle climate change? And more specifically how can the IRA support the U.S. in transitioning to net-zero buildings and infrastructure? Let's explore these questions in more detail.
The U.S. versus Europe: progress and challenges
In the U.S., buildings account for nearly 40% of total carbon emissions, with about 70% of those emissions due to energy use. Globally, this proportion is similar, but the specifics of how emissions are managed and reduced vary greatly between countries. Both the EU and the U.S. are advancing in sustainable policy and construction, however each region’s approach to sustainability differs significantly. Europe’s approach to sustainable construction emphasizes regulatory compliance and environmental sustainability supported by EU-wide regulations and a robust policy framework via the European Green Deal. The region's progress is also more unified thanks to EU-wide regulations and a robust policy framework via the European Green Deal. Many European countries have also adopted strict monitoring and reporting regulations as well as financial incentives to curb emissions from the built environment.
In contrast, the U.S. tends to prioritize market forces over regulation and environmental concerns. With a fragmented regulatory landscape, the U.S. exhibits a more varied approach to decarbonization compared to Europe’s unified strategy. While some states, like California and New York, have made substantial progress through stringent energy codes and benchmarking requirements, the U.S. lacks the comprehensive, federal-level building standards seen in Europe. This patchwork of policies makes it harder to achieve consistent, nationwide progress toward net-zero emissions.
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The future of the IRA
Since the IRA’s implementation, clean energy spending has surged, with billions flowing into technologies such as energy storage, battery manufacturing, solar, and sustainable aviation fuel. However, the impact of the newly elected administration on the law remains uncertain. At present, states governed by both Republicans and Democrats are benefiting from the IRA's investment in wind, solar, and battery production. Leaders across the political spectrum have recognized the economic potential and job-creating capacity of clean energy technologies.
While we cannot yet predict how specific recommendations for decarbonization will be incorporated in the future, we are closely monitoring developments and look forward to the continued evolution of these strategies and the opportunity to support our clients in leveraging them for long-term sustainability. By accessing available funding and incentives, our clients can make meaningful investments in sustainability, enhancing asset value and advancing toward a more environmentally friendly future. For a deeper understanding, I recommend exploring Arcadis' 2024 Built Asset Insights Report and connecting with our technical advisory services team to learn how best to utilize the IRA’s benefits. Together, we can harness the full potential of these opportunities and work towards cultivating a sustainable urban future that benefits both our communities and the planet.
