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Building Standards, Energy Codes and Decarbonization

Building Standards and Codes

The regular revision and upgrading of building codes and product standards is a policy area where governments, usually through regulatory agencies, have influenced and directed industry development. This is a more complex proposition than the use of BIM mandates because there is often no specific policy or set of policies that would qualify as an industrial strategy. Nevertheless, the use of building codes to influence industry development has a long history with some notable successes, because buildings are designed and delivered in conformance with those regulations. The building code of 1676 for the rebuilding of London after the Great Fire of 1666 classified buildings into types with specified materials and levied fees that paid for inspections. A new building code in 1844 included regulations for height, area, and occupancy of buildings.

Standards and codes establish allowable tolerances and how much variation is allowed for products and processes. They underpin quality control and are the basis of inspections to verify work being done, so a standard is a document structured around requirements for conformity and measures that certify meeting those requirements. During the late nineteenth century governments and insurers began raising the standards they set in building codes for access, light, safety, amenity and appearance, significantly improving the design and construction of buildings.[i]

The first standard was agreed in Paris for the International System of Electrical and Magnetic Units in 1881, and the International Electrotechnical Commission was established in 1906 to develop and distribute standards for the units of measurement used today. The British Standards Institution was founded in 1901, as were French and German institutes. In the US the Underwriters Laboratory was founded in 1894 by William Merrill, an electrical engineer, to provide testing of building materials for insurers, and the 1897 National Electrical Code on electrical wiring and equipment installation was the first US modern code. Insurers led the way in developing standards and methods for fireproofing the steel framed buildings that were becoming common, issuing a model building code in 1905 to reduce fire risk. Also in the US, the American Society for Testing Materials goes back to 1898 with their standard for the steel used to fabricate railway tracks. In 1902 it became the American Section of the International Association for Testing Materials, which eventually became the International Organization for Standards (ISO) in 1947. The American National Standards Institute was formed in 1918.

The ISO now has more than 22,000 different standards covering every aspect of organization management and production control. National testing and standards institutes are members of the ISO, they meet annually to review programs, and countries fund it in proportion to their trade and GDP. There is a six stage process for getting a standard published, typically based on research from the member institutes, and each standard has a guide for developing and maintaining it. Multiple standards are being combined to make them easier to manage.[ii] Although agreeing new standards is a lengthy process, they are universally accepted and applied because of the rigorous scientific and engineering research they are based on. Therefore, an important element in a strategy to increase innovation in construction of the built environment is to increase funding for testing laboratories.

Building characteristics like materials, access, ventilation and fire safety are regulated by standards and codes. The International Code Council produces a series of model International Building Codes that are widely used.[iii] Accreditation for standards like quality control, project management and digital twins for contractors are often required by clients. The performance of the built environment is to a large degree measured against the baselines set by standards for health and safety, energy and environmental management, and process control. When natural disasters like earthquakes, floods and hurricanes reveal shortcomings in existing standards, they lead to new standards and building code revisions.[iv] The higher standards improve resilience and drive improvements in the performance of buildings and structures. This is seen when rebuilding after fires with more fire resistant buildings due to code changes, or after earthquakes with updated standards and more durable designs. Seismic code provisions first appeared in Italy and Japan in the early twentieth century, and in the US in 1927.

Building codes establish a baseline for quality and performance. They protect buildings and people from collapse, fire, wind and other extreme events. They regulate structural integrity, electrical, plumbing and mechanical systems and safety, accessibility and energy efficiency. Codes thus underpin the work of architects, engineers, contractors and developers. Architects and engineers must ensure their building designs meet or exceed minimum code requirements Local authorities review plans before construction and issue permits. Inspectors verify the project is compliant.

Through revisions to building standards and codes innovations and new products are introduced in an incremental but typically slow process. While that reduces risk for designers and contractors, it also affects the rate of built environment product innovation and improved building performance. Revisions can be opposed or delayed, for example by residential builders worried about increased costs in a price sensitive market or by product manufacturers protecting market share. Nevertheless, a regular review and update process like the US three year cycle for building codes keeps them relevant and focused on the key issues of building quality, energy use and embodied carbon emissions from construction of the built environment.[v]

Built Environment Decarbonization

The role of building standards and codes in decarbonization,[vi] reducing energy use and cutting greenhouse gas (GHG) emissions is well known.[vii] A carbon budget for both the construction[viii] and operation[ix] of the built environment is required. The UN produces an annual Global Status Report for Buildings and Construction that says: ‘Cutting building-related emissions by improving energy efficiency is a crucial aspect of meeting net zero by 2050 climate change goals. Building energy codes provide a tool for governments to mandate the construction and maintenance of low-energy buildings.’[x]

To do this, the energy use of buildings must be monitored and managed, and buildings must be built and retrofitted to use less energy, and a global standard for determining greenhouse gas emissions for cities is under development.[xi] There are many startups in building energy management. Although many countries, particularly in Africa, have not yet got compulsory energy codes, countries with codes have been moving toward electrification of building operations, particularly for heating and cooking. This is a necessary requirement to reach net zero by 2050 because residential energy use accounts for around 40 precent of total emissions.

The EU is committed to net-zero carbon emissions by 2050.[xii] EU countries’ national climate plans outline how a country intends to address energy efficiency, renewables and GHG emission reduction and meet EU targets. The Energy Efficiency Directive (EED), the framework for energy-efficiency policy in the EU, was established in 2012 with a 20 precent energy-efficiency target by 2020 and revised in 2018 with a 32.5 percent non-binding energy-efficiency target for 2030, with an increase to 39 percent proposed. The EED also targets government buildings, requiring renovation of 3 percent of the floor buildings owned and occupied in line to minimum energy-performance requirements.

Legislation is based on the Energy Performance of Buildings Directive (EPBD). The 2018 amendments aim for full decarbonization of Europe’s building stock by 2050 while focusing on how to modernize the existing stock. The EPBD requires Member States to develop national long-term renovation strategies, outlining how a country aims to decarbonize the building stock by 2050. To reach the ‘2030 climate target of reducing GHG emissions by at least 55% compared to 1990, and climate neutrality by 2050, the EU must significantly increase its rate and depth of renovation, reduce GHG emissions from buildings by 60% compared to 2015, and by 2030 increase the deep renovation rate to 3% annually, up from the current 0.2%’.[xiii]

There is no national energy code in the US, where state, county and city authorities all play a role in setting standards and codes. Model energy codes are developed through the International Code Council and the American Society for Heating, Refrigeration and Air-Conditioning Engineers (ASHRAE). Residential and commercial buildings typically reference a version of the International Energy Conservation Code, but California and Washington have their own codes. Codes are typically decided at local or municipal level, then adopted by the state level. York City will phase-out fossil fuel combustion in new buildings from 2024., as will San Francisco and more than 40 other cities in the Bay Area.

More than three-dozen US cities have benchmarking policies where owners report energy data annually to local government. Some also have building labelling, which requires owners to display an energy score or ranking based on benchmarked data.[xiv] Building performance standards set energy or emissions targets using a range of metrics, including energy intensity, GHG emissions intensity, or third-party scoring (like an Energy Star rating) for existing buildings. They get stricter over time, and as well as metrics and a target they include a plan of steps to be taken to reach the target. In 2022 eight US jurisdictions have implemented them. The graph below shows how improvements to the ASHRAE energy code are expected to close the gap to the 2030 target.

Figure 1. Energy efficiency and ASHRAE codes

Source: Institute for Market Transformation, 2022. Mapping US energy policy on energy efficiency in buildings[xv]

In many other countries sub-national local or regional authorities have been leading on climate change, for example in Australia the Federal Government’s reduction 26 percent target for 2030 greenhouse gas emissions is significantly lower than State Governments’ 50 percent target. California is another example. It was the first US state to introduce an energy code in 1978, with the three year review and update cycle used in the US. Major updates included electric vehicle charging measures in 2015 and a rooftop solar mandate in 2020. California’s 2022 building code update is considering all-electric construction, meaning buildings must use electric heating and cooking appliances, with no option to use gas.[xvi]New York City in 2016 required benchmarking of energy and water use and from 2020 buildings had to display their grades (from A to F) in their entrance, based on the US Energy Star system.[xvii]


[i] Pfammatter, U. 2008. Building the Future: Building Technology and Cultural History from the Industrial Revolution until Today. Munich: Prestel Verlag. Davis, H. 2006. The Culture of Building, Oxford: Oxford University Press. [ii] For details and a history of the ISO, and for several standards, see Rich, N. and Malik, N. 2019. International Standards for Design and Manufacturing: Quality Management and International Best Practice, London: Kogan Page. [iii] [iv] Miao and Popp studied innovative responses to three natural disasters: earthquakes, flooding, and drought. Based on the frequency and location of natural disasters and a panel of patent data from 1974-2009, they find that a billion dollars of damage in a country from natural disasters increased innovation by 18 to 39 percent. Miao, Q. and D. Popp. 2014. Necessity as the Mother of Invention: Innovative Responses to Natural Disasters. Journal of Environmental Economics and Management. 68(2): 280- 295. [v] The effectiveness of standards encouraging the use and diffusion of environmental technologies like renewable energy and energy efficiency are reviewed by Vollebergh, H.R.J. and E. van der Werf. 2014. The Role of Standards in Eco-Innovation: Lessons for Policymakers. Review of Environmental Economics and Policy. 8: 230–248. [vi] On the importance of sustainability and the contribution construction economics can make to decarbonization see Myers, D. 2017. Construction Economics: A new approach, 4th Ed. London: Spon Press. [vii] For a comprehensive review see Popp, D. 2019. Environmental Policy and Innovation: A Decade of Research. CESifo Working Paper No. 7544 (on SSRN). This updates the earlier review: Popp, D., R. Newell and A.B. Jaffe 2010. Energy, the Environment, and Technological Change. In Handbook of the Economics of Innovation: vol. 2, Hall, B. and Rosenberg, N. (eds.), Academic Press/Elsevier, 873-937. [viii] Armstrong, A., Wright, C., Ashe, B., and Nielsen, H. 2017. Enabling Innovation in Building Sustainability: Australia's National Construction Code, Procedia Engineering, Volume 180, 320-330. [ix] Leibwicz, B. D. 2017. Effects of urban land-use regulations on greenhouse gas emissions, Cities, 70, 135-152. [x] United Nations Environment Programme. 2021: 59. Global Status Report for Buildings and Construction: Towards a Zero-emission, Efficient and Resilient Buildings and Construction Sector. Nairobi [xi] [xii] In Europe national building codes set energy requirements to induce innovation. One study found positive effects from policies to improve energy efficiency in new residential buildings, such as energy-efficient boilers and improved insulation, lighting and materials. Prices were found to have an effect on innovation for visible technologies such as boilers and lighting, but not for less-visible technologies such as insulation that are installed by builder. Noailly, J. 2012. Improving the Energy Efficiency of Buildings: The Impact of Environmental Policy on Technological Innovation. Energy Economics. 34: 795-806. [xiii] p. 11. [xiv] [xv] [xvi] [xvii]

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About the Blog

This blog is concerned with the organisation of the building and construction industry, in the economic sense of combining factors of production to create output.


The modern industry's origins in the 19th century can still be seen in many of its characteristic features, and many contemporary issues are also found in projects from the past.


Like many industries, it is being reshaped by unprecedented rapid and widespread advances in materials, technology and capability.

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