Bottom-up assessment of potentials and costs of CO₂ emission mitigation in the buildings sector: Insights into the missing elements

The Fourth Assessment Report of the Intergovernmental Panel on Climate Change (IPCC) has calculated and shown that, currently, the buildings sector has the largest potential for low-cost carbon dioxide (CO₂) mitigation in the short to medium term from application of technological options among the sectors examined, based on bottoms'up studies. The potential estimates, however, were derived with no regard to indirect costs of CO₂ mitigation, associated benefits, and non-technological options; these factors might change the magnitude of the potential and the costs associated with its implementation. The question emerges how accurate the indicators of the economic potential are according to the current IPCC method and how much they might change if all factors mentioned were taken into account. While research results are presently not sufficient to fully answer this question and quantitative analyses of non-technological options, transaction costs associated with barriers, and non-energy benefits are scarce and fragmented, this paper makes a first attempt to assess the presently available literature in the field. The paper concludes that the ballpark is right for the figures reporting the cost-effective potentials in the buildings sector; however, these assessments indeed need to be corrected by incurred transaction costs and co-benefits relevant for the particular assessment, as well as the potential of non-technological options. The paper also outlines a research agenda in the area so that a possible next Assessment Report of the IPCC can derive a more accurate estimate of the bottom-up potential of CO₂ mitigation.