Green Building Materials and Carbon Taxes on the Building Sector: Reducing Emissions from the Built Environment

Authors:

Kyle Horn: Building Construction Technology

Augustin Loureiro: Geology

Daniel MacDonald: BDIC, Agricultural Research and Extensions

Eric Vermilya: Environmental Science

 

 

Introduction

For those of us looking to do our part to help achieve the goal of preventing climate change and pollution, the answer starts in our homes. Turning off lights, using a clothesline during the warm months, and taking quick showers to save water and electricity are common ways to reduce our impact on the environment. These activities help to cut down on the operational emissions that a home releases into the atmosphere. Unfortunately, there is not much an average individual can do to reduce the embodied emissions that were released when their home was built. In fact, according a study by the Commonwealth Scientific and Industrial Research Organisation, during the construction process of an average residential home, the materials used have embodied emissions equal to 15 years of operational emissions. During the fabrication process of any given material, embodied emission, which are the total emissions produced throughout the entire life of an object, are released. For building materials, this includes emissions from extraction, manufacturing, and transportation (Milne & Reardon, 2013). For people who are trying to do their part to save the environment, this can be a frustrating fact to learn. The building industry which generates new housing and maintains important infrastructure is a major contributor to the emissions that are changing our environment. In fact, according to the IPCC, the Intergovernmental Panel on Climate Change, the building sector accounts for 6% of global greenhouse gas (GHG) emissions (IPCC, 2014). However, this figure does not take into account the embodied emissions of the building materials that are used by the industry. GHG emissions contribute to ambient GHG concentrations which causes the negative effects of climate change. Fortunately, there are a few ways to reduce emissions of GHG’s such as CO2. The first method, is to use materials that have lower embodied emissions. The second method to reduce CO2 emissions, would be to impose a carbon tax on building materials. A carbon tax would deter people from using materials that have high embodied emissions while also providing a source of revenue. This revenue could be funneled into research and development of alternative low emission building materials and/or put into government subsidies on low emission materials which would provide further incentive for people to use materials that are more environmentally friendly.

Material Impacts

In the IPCC’s fifth assessment report, they break global CO2 emissions down by industry. This report states that the building sector accounts for 6% of all global emissions (IPCC, 2014).  While 6% seems nominal, that only takes into account the direct impacts of the building industry (impacts through construction and demolition). What is not taken into account, is the impact that the materials have already had prior to construction. Most of the embodied emissions of a building material are from the extraction/harvesting and manufacturing of the material from its most fundamental components.  In the IPCC assessment report the impacts of harvesting and manufacturing raw materials into building materials are accounted for in the industry sector which accounts for 21% of global CO2 emissions.  When looking at the true impact of the building sector, it is necessary to take into account both the direct impacts of buildings along with the impact that the building materials had on the environment prior to construction.

One of the most commonly used materials in construction is concrete.  Concrete is produced using water, cement and an aggregate for texture (sand or gravel).  Typically, the cement is derived from limestone or calcium carbonate rock (contains CO3).  During the process of creating cement, the carbonate rock is heated in a large kiln to over 1500o C which causes the carbonate to go through a chemical process called calcination in which CO2 is a byproduct.  This process of calcination accounts for 60% of the CO2 produced by concrete.  The rest of the CO2 emitted is primarily due to electricity use during the manufacturing process and gasoline products used during the harvesting of the raw materials (PCA, 2017). In fact, the global cement industry alone accounts for 6% of total global CO2 emissions (Zhang et al. 2014, p. 2541).  According to the Portland Cement Association which is the largest manufacturer of cement in the United States, the building sector in the US used 94.4 million metric tons of concrete in 2015 (PCA, 2017).  During typical concrete production, 0.9kg of CO2 will be produced for every kg of concrete (Mohammadi & South, 2017).  Using the this data we can estimate that concrete production in the US produces around 85 million metric tons of CO2 per year.  To put his number in perspective, the average passenger car in the US emits 4.6 metric tons of CO2 per year. Therefore, production of concrete in the US produces CO2 emissions equivalent to an additional 18.5 million cars on the road.

Reinforced steel is another high demand and high environmental impact building material.  According to statistics provided by the International Trade Association, steel consumption in the US was 34.6 million metric tons in 2017 (ITA, 2018).  The Organisation for Economic Cooperation and Development found that demand from construction accounts for 50% of total world steel consumption (OECD, 2010). Using this information, we can estimate that the building Industry in the US consumes about 17.3 million metric tons of industrial steel.  During production of reinforced steel, iron ore is heated using coal or natural gas in a furnace until it is liquid, it is during this process that 70-80% of the total CO2 emissions of steel production are released through carbon in the ore reacting with oxygen in the air to produce CO2 (ULCOS, 2013).  Once the iron has been extracted from the raw ore it is purified in a blast furnace where the hot iron is blasted with oxygen to yield crude steel.  The crude steel can then be further refined and given specific qualities depending on its future use, reinforced steel is pulled through small round openings while still at a high heat to give it maximum structural strength (ULCOS, 2013).  As of 2010, steel production in the US produced 2.9 tons of CO2 for every ton of steel (IPCC, 2014).  While production of steel produces huge amounts of CO2, the extraction of the raw materials required to produce steel also cause large amounts of emissions.  Depending on purity, approximately 90% of steel is made from iron (ULCOS, 2013). This means that the consumption of 17.3 million tons of steel from the building sector required ~15.6 million tons of iron.  Carbon emissions from metal extraction are highly debated as many different techniques can be used. However, in a study looking at the average emissions across the entire industry, it was found that during the extraction process of 1kg of useful iron ore, approximately 0.482 kg of CO2 is emitted (Ruth, 1998).  Using all this information we can estimate the total CO2 emissions in the US due to steel used by the building sector using the following equation. Total emissions = (building sector steel consumption)((emissions from extraction of iron x kg of iron/ kg steel  )+ emissions from production). Using this equation, we estimate that steel used by the building sector in the US is responsible for approximately 57.7 million tons of CO2.  Comparing this to passenger cars, steel use in the US has CO2 emissions equivalent to 12.5 million cars on the road for one year.

Why we Care

Global temperatures have been consistently rising over the last century in close correlation to the emission of greenhouse gases (GHGs) into the atmosphere as a byproduct of human activity.  Since 1880, the average global temperature has risen by 0.8o Celcius with two-thirds of the total warming occurring since 1975 (Carlowicz, 2014).  While this small amount of atmospheric warming may seem inconsequential, the warming rate is expected to continue accelerating unless extreme measures to reduce are implemented GHGs soon.  In the Intergovernmental Panel on Climate Change’s (IPCC’s) fifth assessment report (AR5), a comparison report of results produced by hundreds of climate models, predicts an additional 3.5o global temperature rise by 2100 if business and emissions continue on their current trend (IPCC, 2014).  A global temperature rise of this magnitude would have severe negative effects on the environment and climate across the globe. These effects include rising sea levels, species extinction(Cahill et al. 2012), and increased extreme weather (Wuebbles et al. 2017).  As temperatures increase, glaciers which are huge pieces of ice sitting on land, melt and flow into the ocean, this melting causes a global sea level rise. NASA projects this global sea level rise to reach between 1.0-2.0 meters by 2100 in its business as usual projections (Melillo, Richmond, & Yohe 2014).  Many of the highest density cities in United States are located in coastal areas and large portions of this coastal land would no longer sit above sea level with just a 1 meter rise in sea level. This makes limiting global sea level rise a primary concern of the United States. In the IPCC’s AR5, there is a consensus amongst the science community that human activity in the form of GHG emissions are causing Earth’s atmosphere to trap more energy from the sun and increase global temperatures.  Of the total GHG emission released since 1900, 65% of the total emissions have been in the form of carbon dioxide (IPCC 2007). With carbon dioxide being the driving factor in climate change, it is imperative that measures be taken on a national scale to limit our total carbon dioxide emissions in order to limit the negative consequences associated with increasing temperatures.

Proposal

In order to combat the negative effects of GHG emissions from the building sector, the industry needs to move away from using carbon intense materials and switch over to using materials with low embodied emissions. However, these carbon intense materials are often used because they are cheaper than alternative materials. Therefore, to achieve this goal, there needs to be a reversal in the cost of low CO2 materials vs conventional high CO2 materials. The simplest method to achieve this is a carbon tax on the manufacturing of building materials.

Low Carbon Materials

Common building materials are responsible for such large sums of CO2 being released into the atmosphere and so, it is important for the building sector to move towards using more environmentally friendly materials.  The simple answer is that as of today, it is generally most cost effective to use materials that have higher environmental impacts than “green materials”.  Superior alternatives are available, lithium compounds can be added to concrete during the manufacturing process to stop the alkali-silica reaction (ASR) that can destroy the structural integrity of concrete leading to a shortened lifespan (Mirriaga, Lozano, Silva, Claisse, 2014).  Unfortunately this lithium concrete along with many other “green” materials are more expensive than their more harmful counterparts. The cost of lithium nitrate to treat one cubic meter of concrete is 10 to 20 dollars depending on the chemistry of the concrete and cost of transportation (Fhwa.dot.gov, 2007, p. 21). For a large scale project, this cost can add up very quickly.  However, there are some material alternatives that are actually less expensive than their conventional counterparts. For example, cement mixed with fly ash from coal power plants has the same structural properties as normal concrete and is also effective at resisting the effects of ASR, but is actually slightly cheaper. The price of conventional cement is $50 to $75 per ton where as fly ash cement prices range from $15 to $40 per ton (Aberdeen Group, 1985, p. 2). Fly ash cement is typically made with 25-35% fly ash leading to a significant reduction in the amount of cement used, and also, a reduction in the embodied emissions of the material (Aberdeen Group, 1985, p. 3).

One method to reduce the carbon footprint of a building project, is to use Mass Timber Construction (or MTC) practices. This building style utilizes engineered wood products (EWPs) as the primary structural material and can be used for low to mid-rise structures in the public and private sectors(Teh, Weidmann, Schinabeck, & Moore 2017). A 2017 study by Teh, Weidmann, Schinnabeck, & Moore on the potential implications of a switch to MTC practices in Australia, found that a national switch to MTC practices using cross laminated timber (CLT) instead of steel and concrete, could decrease the of GHG emissions of the Australian residential building sector by up to 182% by the year 2050 (Teh et al., 2017, 184). This is due to the fact that much of the concrete and steel that is typically used in construction is replaced with wood alternatives. Furthermore, wood products usually have negative emission values because of atmospheric carbon sequestration during the life of the trees (Building Construction Design, 2015).

Carbon Tax

A carbon tax in general has only been implemented on the overall CO2 emissions over every sector as an economy wide tax. We are proposing a strict carbon tax applied solely on the building sector and embodied emissions from building materials. We believe we can implement a carbon tax which would lead to lower CO2 emissions and counteract the potential crippling effects that such a tax could have on the economy. In 2012, the Congressional Budget Office (CBO) estimated that an economy wide carbon tax of $20 per ton of CO2 with annual increase of 5.6% each year, would raise around $1.2 trillion in the first decade while lowering the amount of CO2 emissions by 8% (cbo.gov). Although the impact of a carbon tax on the environment is extremely straightforward, the effects of the carbon tax on the economy is relatively complex. Creating a ‘cost’ for CO2 emissions will lead to higher production costs, transportation, and household fees. The carbon tax could have a negative effect on the economy, but this economic stress could be mitigated with the money raised from the tax. The first option to mitigate economic stress would be to implement a tax swap. Dale Jorgenson who is an economist, has worked out a strategy to recycle the money raised from the carbon into the economy by reducing taxes on capital. This particular tax swap is considered by Jorgenson as a triple dividend as it will lead to improved economic efficiency, decreased emissions, and an improvement in human health (Shaw 2014). The second option would be to create a tax relief or subsidy on more environmental friendly building materials. According to the Congressional Budget Office, a tax relief will tend to have less of a beneficial economical effect than a direct tax swap, but on the other hand, will be more beneficial to the environment and create more of a incentive to use environmentally friendly building materials. In the end, the CBO believes policies that reduce tax deficits generally have a positive effect on the economy in the long run (cbo.gov). We would recommend placing a tax swap as it will be a lot easier to calculate, enforce, and to mitigate the economic burden from implementing the new tax.

Resistant Audience

Now the reason there are only eight countries with a carbon tax is due to it being a fairly new idea and creates a lot of controversy. The majority of people who disagree with a carbon tax believe it will increase the cost of living and could be crippling to any economy in our carbon-constrained world. In the case against a carbon tax, the CATO institute believes that a carbon tax causes more economic damage than generic taxes. They claim that “even a revenue neutral carbon tax swap will probably reduce conventional GDP growth.” (Murphy, Michaels, Knappenberger 2015). Most of the these concerns are speculations and to understand the true economic effects of a carbon tax, we need to look at economies that have already implemented similar carbon taxes. British Columbia which is a province of Canada, has been a leading example of the carbon tax and has inspired Canadian lawmakers to place a nationwide carbon tax at the end of 2018. The province started its carbon tax on July 1, 2008 and battled the initial economic setbacks with a tax swap by lowering the national income tax. The carbon tax that they implemented, “started at a rate of $10 (Canadian) per metric ton (tonne) of carbon dioxide and incremented by $5 / tonne annually.” (Komanoff, Gordon 2015). Now, with the carbon tax in full swing, British Columbia’s gross domestic product (GDP) has outpaced the rest of Canada with an annual average increase of 1.55% per year vs. 1.48% outside the province from 2008 to 2013. (Carbon tax) Not only did the GDP increase, but the carbon tax did its job by lowering greenhouse gas emissions compared to previous years, but British Columbia outperformed the rest of Canada by a significant margin. The carbon tax site takes two similar time frames, a pre-tax period (2000-2007) and a post tax period (2008-2013) and compares GHG emissions. Now, British Columbia has lowered its GHG emissions by 6.1% from the pre-tax period to the post-tax period, while the rest of Canada increased it’s GHG emissions by 3.5%. (Komanoff, Gordon 2015)

Conclusion

The building sector is heavy contributor to the total GHG emissions into the atmosphere. While alternative materials that are better for the environment than conventional building exist, they tend to be more expensive and lack incentive for use. We believe that our proposed carbon tax will effectively lower the relative cost of green building materials and financially persuade the building and construction industry to move away from the use of harmful conventional materials. Furthermore, we believe that this tax will not have a significant negative impact on the economy or the the cost of housing. Instead, this tax has the potential to significantly reduce total global GHG emissions and slow the negative effects of climate change.

 

Sources Cited:

Aberdeen Group. (1985). Fly ash how much to use? What are the cost savings?. Retrieved from http://www.concreteconstruction.net/_view-object?id=00000153-8b9c-dbf3-a177-9fbd58630000

Bauman, Y., Komanoff, C. (2017). Opportunities for Carbon Taxes at the State Level. Retrieved from  https://www.carbontax.org/states

Building Construction Design. (2015, August 10). Carbon sequestration – locking up carbon and unlocking the full potential of timber. Retrieved April 22, 2018, from http://www.buildingconstructiondesign.co.uk/news/carbon-sequestration-locking-up-carbon-and-unlocking-the-full-potential-of-timber/

Cahill, A. E. , Aiello-Lammens, M. E. ,Fisher-Reid, M. C., Hua, X., Karanewsky, C. J., Ryu, H. Y.,

Wiens, J.J (2012),  How Does Climate Change Cause Extinction?.  Proceedings of the Royal Society B, 280, 1750-1758 DOI:10.1098/rspb.2012.1890

Carlowizc, M. (2014). World of Change. Global Temperatures Retrieved from https://earthobservatory.nasa.gov/Features/WorldOfChange/decadaltemp .php

Congressional Budget Office. (2013) Effects of a Carbon Tax on the Economy and the Environment (Publication No. 44223). Washington, DC: U.S. Congressional Budget Office.

EPA (2017). Global Greenhouse Gas Emissions Data. Environmental Protection Agency, Retreived from www.epa.gov/ghgemissions/global-greenhouse-gas-emissions-data.

Fhwa.dot.gov. (2007). The Use of Lithium to Prevent or Mitigate Alkali-Silica Reaction in Concrete Pavements and Structures. Retreived from https://www.fhwa.dot.gov/publications/research/infrastructure/pavements/concrete/06133/06133.pdf

Milne, G., Reardon, C,. (2013)“Embodied Energy.” YourHome, 29 July 2013, Retrieved from www.yourhome.gov.au/materials/embodied-energy.

International Trade Association (2018), Steel Imports Report: United States. Retrieved from https://www.trade.gov/steel/countries/pdfs/imports-us.pdf

International Panel on Climate Change (2014). The Physical Science Basis. Contribution of Working Group I to the Fifth Assessment Report of the Intergovernmental Panel on Climate Change. Retrieved from https://www.ipcc.ch/publications_and_data/ar4/wg1/ en/spmsspm- projections-of.html

International Panel on Climate Change (2007). The Physical Science Basis. Contribution of Working Group I to the Fourth Assessment Report of the Intergovernmental Panel on Climate Change. Retrieved from http://www.ipcc.ch/publications_and_data/ar4/wg1/en/spm.html

Komanoff, C., Gordon, M., (2015). British Columbia’s Carbon Tax: By The Numbers. Retrieved from https://www.carbontax.org/where-carbon-is-taxed/british-columbia

Kundak M., Lazic L., Crnko J. (2009). CO2 Emissions in the Steel industry. Metalurgua, 48, 193-197. doi:10.1098/rspb.2012.1890

Melillo, J.M., T.C. Richmond & G.W. Yohe, Eds. (2014), Climate Change Impacts in the United States: The Third National Climate Assessment, U.S. Global Change Research Program, 841 pp., doi:10.7930/J0Z31WJ2

Mirriaga J. L., Lozano J., Silva J., Claisse P. (2014).  A novel assessment of the Electrochemical Lithium Impregnation Treatment used to mitigate Alkali-Silica Reaction in Concrete. Concrete Solutions 2014: Chapter 29, 205-208, DOI: 10.1201/b17394-33

Mohammadi, J., & South, W. (2017). Life Cycle Assessment (LCA) of Benchmark Concrete Products in Australia. International Journal Of Life Cycle Assessment, 22(10), 1588-1608. doi:10.1007/s11367-017-1266-2

Murphy, R., Michaels, P., Knappenberger, P. (2015) The Case Against a U.S. Carbon Tax. Retrieved from https://object.cato.org/sites/cato.org/files/pubs/pdf/cato-working-paper-33.pdf

Organization For Economic Co-operation And Development. (2010).  Perspectives on Steel bySteel-Using Industries, Retrieved from https://www.oecd.org/sti/ind/45145459.pdf

Portland Cement Association (2017). United States Cement and Concrete Industry, Retrieved from, http://www.cement.org/docs/default-source/market-economics-pdfs/cement -industry-by-state/usa-statefacsheet-17-d2.pdf?sfvrsn=e77fe6bf_2

Ruth M. (1998), Dematerialization in Five Metal Sectors: Implications for Energy use and CO2 Emissions. Resources Policy, 1-18. doi:10.1016/S0301-4207(98)00003-8

Shaw, J. (2014) Time to Tax Carbon: Enhancing Environmental Quality and Economic Growth. Retrieved from http://harvardmag.com/pdf/2014/09-pdfs/0914-52.pdf

Teh, S. H., Wiedmann, T., Schinabeck, J., & Moore, S. (2017). Replacement Scenarios for Construction Materials Based on Economy-Wide Hybrid LCA. Procedia Engineering, 180, 179-189. doi:10.1016/j.proeng.2017.04.177

Ultra-Low CO2 Steel Making. (2013). CCS for Iron and Steel Production, retrieved from, https://www.globalccsinstitute.com/insights/authors/dennisvanpuyvelde/2013/08/23/ccs-iron-and-steel-production

Wuebbles, D.J., D.W. Fahey, K.A. Hibbard, D.J. Dokken, B.C. Stewart, T.K. Maycock (2017), Climate Science Special Report: Fourth National Climate Assessment, 470. doi:10.7930/J0J964J6.

Zhang, J., Liu, G., Chen, B., Song, D., Qi, J., & Liu, X. (2014). Analysis of CO2 emission for the cement manufacturing with alternative raw materials: A LCA-based framework doi:10.1016/j.egypro.2014.12.041