South Africa’s buildings and construction sector, which includes operations of residential and commercial buildings, account for approximately 7% (34 MT CO2e) of the country’s direct emissions, according to a final report from the Climate Pathways and Just Transition Project run by the National Business Initiative (NBI), in partnership with Business Unity South Africa (BUSA) and Boston Consulting Group (BCG).
To achieve Net Zero, the sector will need to decarbonise but also face the dual challenges of 1) ensuring physical resilience, as South Africa is forecasted to be one of the region’s most severely impacted by the effects of climate change, and 2) addressing severe housing inequality with a shortfall of approximately 2.1 million homes and unequal access to public infrastructure such as water and sanitation.
The report finds that decarbonising the buildings and construction sector requires a two-pronged approach. Firstly, demand reduction through improved spatial planning and reduced use of emissions-intensive materials, notably steel and cement. Secondly, supply-side measures such as a shift away from fossil fuel-based combustion for space and water heating and cooking via renewable energy-based electrification as well as energy efficiency levers (e.g., increased building insulation).
Spatial planning in particular will be critical given its relevance to both the buildings and construction sector and the wider national decarbonisation and Just Transition effort. Simply put, better planning leads to a reduction in building material demand, and a reduction in the movement of goods and people and therefore energy consumption. It also has a major impact on driving economic inclusion through reduced transport costs, reduced commuting time and better social integration for all South Africans. Furthermore, given that the buildings and construction sector accounts for approximately 90% of local cement and 50% of local steel demand, it can catalyse decarbonisation across adjacent industries by creating a ‘demand-pull’ for material reuse and the use of lower-carbon-intensity materials in construction.
In this decarbonisation ‘pathway’, South Africa’s construction demand could double due to the construction boom to close the housing gap and realise increased infrastructure demand as the economy transitions to Net Zero. This creates an opportunity for job creation, potentially generating 0.8–1.4 million new jobs by 2050, nearly doubling the number of jobs currently provided by the sector, while also driving growth in adjacent sectors such as heavy manufacturing and power.
Driving the decarbonisation and climate resilience of South Africa’s buildings and construction sector, whilst ensuring that housing and construction remains affordable will not be easy and will take a nationally coordinated effort combined with integrated policy and regulatory design. This includes introducing more stringent building efficiency standards that can be extended to existing buildings to accelerate adoption, leveraging development finance to overcome the high upfront capital requirements for many decarbonisation initiatives and developing new city planning and building design approaches to achieve increased density and zoning for efficient cities (amongst other actions as outlined in the report). It will also require a significant amount of capital to be mobilised, estimated to be in the range of R 263 billion to R 285 billion by 2050. Most importantly however, addressing this challenge will require a high degree of collaboration across industries and all spheres of society to make a Just Transition to Net Zero a reality.
ABOUT THE STUDY:
The Climate Pathways and Just Transition study is anchored on a robust analytical fact base, the assumptions, and outcomes of which have been debated and socialised with a broad set of 450+ stakeholders from business, government, civil society, and labour in 200+ hours of workshops to drive alignment and establish the credibility of the proposed Net Zero pathways. The work was also supported by a group of Champions representing 30+ of South Africa’s largest companies across a range of sectors. All reports on the study can be accessed here.