GHG Emissions in Canada’s Construction Sector

CSBE news, GHG budgeting

Researchers: Hatzav Yoffe, Keagan H. Rankin, Chris Bachmann, I. Daniel Posen, Shoshanna Saxe

This paper examines the tension between needing to build more infrastructure and housing and simultaneously reducing greenhouse gas emissions (GHG) to avoid the most catastrophic impacts of climate change. This study uses an Environmentally Extended Input-Output (EEIO) approach to conduct a high-resolution top-down analysis of Canada’s national construction GHG emissions. Our findings highlight that Canada’s current construction practices cannot accommodate the construction required to restore housing affordability by 2030 without substantial environmental consequences.

On a consumption life cycle basis, the construction sector was responsible for approximately 90 Mt CO2e in 2018, equivalent to over 8% of Canada’s total GHG emissions, while delivering less than a third of the new annual housing Canada now needs. We show that residential construction was already responsible for the largest share (42%) of total construction emissions and that 84% of emissions are from material manufacturing. Under current construction practices (i.e., current material use patterns and emissions intensities), meeting Canada’s 2030 housing affordability and climate commitments requires an 83% reduction in GHG emissions per construction product (i.e., per home) compared to the 40% economy-wide reduction promised in Canada’s international reduction commitments. We find that 35% of construction emissions are imported, underscoring the need for a comprehensive regulatory framework addressing both domestic and imported emissions. Mitigating the GHG gap between emission caps and housing demands calls for changes in the ratio of housing to other infrastructure (e.g. fewer roads, less fossil fuel infrastructure), changing construction approaches (e.g. increasing material efficiency) and/or disproportionally allocating climate budget to construction. The implications of our study extend beyond Canada, offering valuable insights for other growing countries with climate goals. The results emphasize the urgency in considering and establishing sectoral GHG budgets for construction and for transformative changes in the construction sector to meet national GHG emission reduction commitments.

Paper preprint: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4721584

Interim results slide deck: November 14, 2023