Environmental Impact of the Real Estate Industry

A. The Real Estate Industry and its Impact on the Environment

The impact of the real estate industry on the environment may be assessed in terms of indoor pollution, individual health, national and international pollution effects such as acid rain, and global contributions such as depletion of the ozone layer. Some indoor human activities such as combustion for heating purposes, use of cleaning agents and pesticides result to immeasurable amounts of pollution. These among others have led to adverse effects on human health, comfort and the environment at large. For students seeking environmental studies dissertation help, understanding all these intricate relationships and their implications is critical.

The real estate industry is the greatest energy consumer in the global market, and continues to attain increased CO2 emissions. Measurement of the exact contribution is complex although the sector is approximated to be the most significant contributor in terms of Greenhouse gas (GHG) emissions. The real estate industry accounts for 40% of the annual energy consumed globally. It is also approximated that about 20% of the total global greenhouse gas emissions come from buildings. By the year 2030, the building CO2 emissions are projected to increase by 56%.

Currently, buildings account for 40% of the total annual global raw material use; amounting to 3 billion tonnes. It should be noted that most of these raw materials are generated from natural resources some of which are non-renewable hence continuous use may lead to unnecessary biological imbalances. The buildings also contribute to other significantly growing environmental aspects. For instance, by the year 2030, buildings are expected to consume up to 12% of the global fresh water, and produce up to 30% of the total waste in the European Union.

The socio-economic forces of the world market are likely to bring more significance in the contribution of the real estate to environmental effects. It is envisaged that by the year 2030, the total world population will grow beyond 8 billion with over 60% of this living in urban centers. For this reason, the construction and therefore, the real estate market will grow tremendously. The investable real estate will grow by 60% from 2015 to reach the US$69 trillion mark. The 750 largest cities accounting for 61% of the global Gross Domestic Product (GDP) will need additional 26o million homes, 540 million m2 office space and 60 million jobs in the industry (World Economic Forum, 2016).

During the UN 2015 Paris Conference on Climate Change (COP21), the parties agreed to maintain the collective global warming effect within 1.50C. The real estate industry will require to attain a 36% reduction in its CO2 emissions so as to maintain the threshold below 20C in global warming. This therefore, translates to annual reduction of 1.25% in terms of energy consumption and 3% in emissions within the sector.

Some efforts have been put in place by different economies (despite the difficulty in improving the already existing structures), to mitigate against environmental degradation through retrofitting and introduction of ‘green buildings’. It is approximated that about 13% of reduction in carbon emissions will be achieved by retrofitting. 46% of commercial buildings are expected to be lit by LED lighting, and improved energy efficiency through penetration of building management systems (BMS) by 2020. This will generally boost on environmental sustainability by ensuring reduced pollution from consumption of fossil fuels (World Economic Forum, 2016).

B. Environmental Policy and the Real Estate Industry

Energy Efficiency

The Energy Act of 2011 requires presentation of Energy Performance Certificates (EPCs) to prospective property buyers by the property owners. This is to aid in the pre-judgment of energy efficiency characteristics and benefits of a given property by renters or buyers. The Act also captures the requirements for Minimum Energy Efficiency Standards (MEES) for UK homes.

The European Commission directives and regulations has policies aimed at improving energy efficiency including ensuring up to 3% energy efficient renovation per annum for buildings occupied by government agencies. It also includes mandatory energy-efficiency certificates to accompany sale and rental of buildings, and labeling and tagging requirements for household appliances, boilers, lighting and televisions. The 200m smart electricity and 45m smart gas meters have also been captured in the policies (Coxall, 2020).

Air Pollution

The Zero Carbon Homes policy was announced in 2006 and effected in 2016 with the aim of restricting the construction of new buildings to adopt the use of renewable energies e.g solar and wind during and after their projects. This would then ensure construction of buildings with zero net carb on emissions (Heffernan et al.,2015). The UK through its Fifth Carbon Budget (2028-2032) has reaffirmed its undeterred commitment to energy efficiency and carbon reduction. The budget is aimed at financing processes and policy implementation in order to reduce the annual emissions to about 57% below the 1990s level by 2050. The budget places restrictions on the maximum amount of GHG emissions allowed within the UK over a 5 year period (Fuerst, 1997-2020).

This means that within the carbon budgets system, all the emitted GHG will be measured up to the year 2050, and that the UK Government will have to achieve a decrease in carbon emission in one sector for every corresponding increase in another. Maintaining the greenhouse gas emission at low levels is expected to go a long way in reducing the global warming effect and achieving the 1.50C target. The real estate industry has no choice but to comply with the Zero Carbon Homes policy so as to avoid any penalties associated with defaulting (Coxall, 2020).

Environmental Impact Assessments

Environmental Impact Assessment (EIA) has to be carried out and an environmental statement (ES) has to be attached during the application for development consent or planning permission for some developments. These are governed by the Town and Country EIA regulations and includes: developments with potential of causing major environmental impacts for example commercial buildings, large residential apartment and industrial premises (Wathern, 2013). The determining authority (local authority or Secretary of State) must consider the ES to establish whether the permission should be granted or not. This may be time consuming, and may end up delaying real estate projects or in worst case scenarios, may result to denial of permit (Reuters, 2021).

Waste and the Circular Economy

These are regulated under the Environmental Permitting Regime (EPR) with the Environment Agency (EA) and Natural Resources Wales (NRW) as the regulators (Kesterson, 2018; O'Brien et al., 2016). The regulator may compose guidelines on waste management and disposal practices including landfills, waste recovery and incineration. The regulations prohibit treatment or disposal of any waste without a proper EP, treatment disposal or keeping of wastes in a manner prone to cause harm to human health or the environment (Lewis, 2015). Hazardous wastes are supposed to be handled and disposed according to the Hazardous Waste Regulations of 2005. Investors in the real estate are therefore expected to comply with the various policies under these regulations, failure to which they may be penalized, imprisoned or both (Reuters, 2021).

C. The Vodafone Net Zero Carbon Emission by 2040

This is an initiative by the Vodafone group, which was initiated with the aim of reducing greenhouse gas emissions from the company’s facilities and processes into the environment. The initiative is mainly informed by the UK national agenda of attaining Net Zero Emissions by 2040 so as to maximize environmental conservation. The company has sub-divided the vision into smaller and more manageable parts, with mid-term objectives for each. For instance, Vodafone has set a number of objectives (including switching to renewable energy by end of July 2021) for the period between now and 2030 (Foundation, 2021). The company’s targets for 2030 have been approved by the Science Based Targets initiative, and are said to be in line with the Paris Agreement of 2015, which seeks to maintain global warming at 1.50C.

Through the implementation of better ways of working at the Vodafone headquarters in the United Kingdom, the company has managed to improve its productivity by 20%. This achievement is associated with putting measures in place to increase efficiency in their operations and therefore, minimize losses. The cost savings due to this was £40.7 million and the associated reduction in carbon emission stood at 617 tons within the last five years (World Economic Forum, 2016).

The company has also adopted the ‘go green’ initiative in all its branches across Europe. They introduced the mobile working policy at their Netherlands branch, which allowed employees to work from home and only report to office on a need basis. For this reason, the employees did not need to travel to their place of work every day hence minimized the use of their automobiles. The company saw a 25% decrease in its carbon emission within the five year period (Foundation, 2021).

Vodafone is clearly headed in the right direction in terms of environmental conservation considering its adoption of best industrial practices so as to minimize emissions. It has set a number of sequential goals and targets which include:

1. Powering its entire European network by 100% renewable electricity by end of July 2021.

2. Reusing, selling and recycling all its generated waste by 2025.

3. Completely eliminating carbon emissions from their own activities and electricity they purchase and use by 2030.

4. Halving carbon emissions from their supply chain, business travel, joint ventures and the use of products they have sold by 2030.

5. Enabling reduction of CO2 emission by their corporate customers by 350 million between 2020 and 2030.

To achieve all the above, the company intends to bank on a number of strategies including the use of technology, formulation, implementation and enforcement of policies, and partnerships among others. A success in this project means production of negligible amounts of emissions hence a big step towards attaining the 1.50C global warming.

D. The Vodafone Net Zero Project Reporting and Measurement

Incremental Milestones

This involves step-by-step execution of tasks within the project (Shadu, 2015). The Vodafone Net Zero project (Foundation, 2021); is a long-term project which is divisible into smaller short-term activities. The activities gradually build on one another to result to the completion of the entire project.

The diagram above represents a schematic approach that the Vodafone project intends to follow in order to achieve the Net Zero Carbon emissions by 2040. From the model, the attainment of 100% zero emission depends on the 100% waste reuse, sell and recycle, which also depends on the attainment of 100% renewable power. The model is therefore to be implemented on a step-by-step basis from the first to the last.

Start/Finish Model

This focuses on the starting point and end points of the project (Shadu, 2015). The intermediate activities are not considered. The project is assumed to be at 50% complete once it starts then at 100% upon completion. This model is applicable to various activities within the Vodafone Net Zero Carbon emission project. For instance, the installation of the renewable power source is assumed to have been at 50% five years ago during initiation, and at 100% by end of July 2021. This also applies to the reuse, sale and recycle of waste from the company. It is quite difficult to establish the exact stage at which a power plant is at in terms of construction, since its performance is only determined by its ability to produce power. It is therefore easier to identify a power plant with the start/finish model. Waste reuse, sale and recycle may also be analyzed using a similar model.

Weighted or Equivalent Units

This involves a project with various sub-tasks which are measurable in different units (Shadu, 2015). The progresses for the various units are determined independently then they are weighted together as a percentage of the overall project. Due to its implementation of better ways of working, Vodafone has been able to attain an overall improved productivity of 20% within five years. This can however, be broken down into various component including reduction in CO2 emission by 617 tons, reduced energy consumption (measured in kWh) and increased efficiency. These components have been summed up together and expressed as a percentage of productivity.

E. Critical Analysis of the Project

The United Nations and other stakeholders including the European Union have over the years worked very hard to educate the world and emphasize on the need to conserve the environment starting from a personal level. The Vodafone Net Zero Carbon Emission by 2040 project is one of a kind. It aims at completely getting rid of any carbon emissions within its processes in efforts to conserve the environment.

Project viability is established through conducting of project appraisal by carrying out a feasibility study. The project Vodafone project was first defined in terms of its intended users, technologies to be used, the expected outputs and facilities to be constructed. This enabled clearer understanding of what the project was about. Initial investment, operating, repair and maintenance costs were approximated alongside the expected revenue throughout the project life cycle. This was done extensively and extensively to give insights on cost-benefit relations. Environmental impact assessment, social impact assessment, technical and legal feasibilities and other initial assessments were done exhaustively so as to establish the foundation for decision making.

The project is considered viable considering the envisaged end results, their impact on the environment and on the productivity of the company. Despite the high initial costs of investment, renewable power has relatively higher return on investment compared to non-renewable power.. Different capital investment evaluations also show that per unit cost of energy (COE) for renewable energies is relatively lower as compared to that of non-renewable energies. This means the project involving the use of renewable power will make more profit by the end of the project’s life cycle.

The Vodafone project embraced renewable energy systems, which are more efficient, compared to non-renewable systems. The high efficiency implies that the given system is associated with minimal losses and therefore, emission of greenhouse gases. This means the company maintains its full production, only with lesser impacts on the environment. Its contribution to global warming is therefore averted. The project also applies reuse and recycle of waste. This means the amount of waste released into the environment will reduce, making the environment cleaner, healthier and safer to live in.

To make a greater impact in addressing the climate change issue, Vodafone may consider:

1. Implementing the Net Zero Carbon project in all its branches across the world rather than in Europe alone.

2. Recycling waste from its customers and other smaller companies other than only waste generated from its facilities.

3. Partnering with the Governments and other willing agencies to train other industrialists on how to reduce emissions and its significance to the environment.

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References

Coxall, M. a. (2020). Environmental Law and Practice in the UK (England and Wales): Overview. Evironmental Law, 1-35.

Foundation, V. (2021). Net Zero by 2040. Retrieved July 14, 2021, from Vodafone Group PLC: https://www.vodafone.com/sustainable-business/our-purpose-pillars/planet/net-zero-by-2040#our-strategy-in-action

Fuerst, F. a. (1997-2020). Real Estate Sustainability: UK Approaches Junction. Retrieved July 14, 2021, from IPE Real Assets: https://realassets.ipe.com/sustainability/real-estate-sustainability-uk-approaches-junction/10024556.article

Reuters, T. (2021). Environmental law and practice in the UK (England and Wales): overview. Retrieved July 14, 2021, from Practical Law: https://uk.practicallaw.thomsonreuters.com/6-503-1654?transitionType=Default&contextData=(sc.Default)&firstPage=true#co_anchor_a815295

Shadu, R. (2015, March 28). Measuring Project Progress. Retrieved July 14, 2021, from Plan Academy: https://www.planacademy.com/measuring-project-progress-methods/

World Economic Forum. (2016). Environmental Sustainability Principles for the Real Estate Industry. World economic Forum, 6-28.

Wathern, P. ed., 2013. Environmental impact assessment: theory and practice. Routledge.

Heffernan, E., Pan, W., Liang, X. and De Wilde, P., 2015. Zero carbon homes: Perceptions from the UK construction industry. Energy policy, 79, pp.23-36.

Kesterson, A., 2018. Implementing the Industrial Emissions Directive: The UK Environmental Permitting Regime for High-Risk Activities. In Developments in Environmental Regulation (pp. 205-223). Palgrave Macmillan, Cham.

O'Brien, M., Morris, S. and Davies, A.R., 2016. Amendments to Reservoirs Act 1975 in Wales and Natural Resources Wales potential reservoirs project. In Dams–Benefits and Disbenefits; Assets or Liabilities? Proceedings of the 19th Biennial Conference of the British Dam Society held at Lancaster University from 7–10 September 2016 (pp. 3-13). ICE Publishing.

Lewis, K., 2015. The framework for environmental regulation in Wales: Natural Resources Wales speaks with ‘One Voice’–Has the statutory voice for nature been silenced?. Environmental Law Review, 17(3), pp.189-206.