Exploring the impact of the EU emissions tradings system allowance price on sustainable construction: a Dutch case study

Exploring the relation between the allowance price and the affordability of a wooden structure compared to conventional structures out of steel and concrete for a large distribution centre

Master thesis (2022)

Authors

R.J. de Jonge Civil Engineering & Geosciences

Contributors

H.L.M. Bakker Integral Design & Management - CEG (supervisor 1)
M. van den Boomen Integral Design & Management - CEG (supervisor 1)
A. Meijer Building Energy Epidemiology - Architecture and the Built Environment (supervisor 2)
Faculty
Civil Engineering & Geosciences
Copyright: © 2022 Rinke de Jonge
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Published Date

29-04-2022

Language

English

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Faculty

Civil Engineering & Geosciences

Abstract

The global population is growing rapidly, so the construction sector must keep up by increasing the number of houses and improving the infrastructure. The construction sector is importance to support economic growth and social development within society. However, the conflict that arises here is that the activities of the construction sector are also responsible for a tremendous amount of greenhouse gas (GHG) emissions. This makes the construction sector a key player in the fight against global warming and its consequences. The construction sector can help reduce its emissions and slow down global warming by constructing more sustainable. Sustainable construction minimises the impact on the environment and assures safety and comfort while a financial profit is made. However, the most significant barrier to the implementation of sustainable construction is the affordability of sustainable projects. Sustainable construction often results in higher costs than conventional construction methods, which slow down the return on investment for the project owner.

In 2005, the European Union (EU) introduced the emissions trading system (ETS). The ETS is a policy measure aimed to lower the European emissions by letting the polluter pay for its emissions of GHGs. This policy measure could help overcome the barrier of affordability towards implementing sustainable construction. This research aims to find the ETS allowance price tipping point that financially stimulates the use of natural construction materials like timber over conventional materials like steel and concrete. The tipping point results could stimulate the implementation of sustainable construction and help to slow down global warming.

The results show that the allowance price could help lower the barrier of affordability because a higher allowance price increases the market price of carbon-intensive construction materials like steel and concrete. However, the found allowance price tipping point is unlikely to occur based on the current allowance price of around € 85. Therefore, the current ETS can be considered helpful but not decisive towards a financial favourable timber structure for buildings in the Dutch built environment.