Introduction:
This introduction provides the necessary context in order to understand the research
problem.
In late 2015, the Conference of Parties (CoP) in Paris produced a new Climate
Accord (Nea, 2023). This Climate Accord will go into effect in 2020 once more than
55 countries have ratified it, accounting for more than 55% of global emissions. The
Climate Accord is set to decrease the total worldwide emissions in order to stop the
global warming from increasing (Unfccc, 2015). The Netherlands is among those 55
countries. The Climate Accord affects many industries on a national level, including
the real estate industry (Bierenbroodspot & De Graaf, 2023). Real estate looms large
in the climate debate, and not just physically. Buildings consume 40% of Europe's
energy emissions (IIgcc, 2022). According to Arup (2022), The World GBC Global
Status Report of 2018 found out that Building Operations is accountable for 28% of
the carbon emissions. In order to show the world that change needs to happen, the
Netherlands decided to implement some sustainability rules.
First of all, The Netherlands took steps to reduce the number of emissions generated
by their real estate industry. The Netherlands enacted new legislation rules to reduce
emissions in order to get closer to the Climate Accord's goal of reducing total
emissions. One of those new legislation rules is by labeling the office buildings,
known as the “Energy Labels” (Rvo, 2022). According to the Rijksoverheid voor
Ondernemend Nederland (RVO), 50% of Dutch office buildings do not meet current
legislation. Office buildings that have not taken any measurements on increasing
their energy label will risk getting a fine (Bogers, 2022). The office buildings in
question have an energy label lower than label C, having an energy label D till G.
The law requires office buildings to have an energy label C or higher, starting at the
1st of January 2023. Energy label C or higher means that the office building has a
primary energy use of up to 225 kWh maximum per m2 per year (Rvo, 2018). KWH
stands for one kilowatt-hour the amount of work done, or energy consumed when a
kilowatt-power device is used for an hour at rated voltage (Byjus, 2023). Examples of
energy usage in office buildings comes from refridgeration and equipment, lighting,
cooling, heating, ventilation, and hot water (Twinview, 2023).
Secondly, when looking back at the total amount of office buildings in the
Netherlands, 50% that do not meet the requirement is quite a lot. However, there is
more to the legislation. For example, the Terneuzen city hall building has an energy
label G, but since it is considered, a monument building it does not have to meet the
energy label criteria (Giele, 2023). Another example is the former Rabobank building
on the Merk in Joure, which also has an energy label G but is not a monument
building and therefore has to meet the conditions of energy label C (Van Dijk, 2021).
The transition to a better energy label decreases the emissions generated by the
buildings operationally, so that the Netherlands has a lower generation of overall
emissions and comes closer to the objectives of the Climate Accord. Yet these are
not the only emissions that are generated, to see the full picture one should look also
at the total emissions generated in the life cycle of a building so far (Climate
Knowledge Portal, 2022; Architecture 2030, 2023).
,In order to define the emissions of the production/construction phase, one should
look at Embodied Energy (Hammond & Jones, 2008). Embodied Energy is the
energy required to produce a building/material, corporated into the building/material
itself (Abbasabadi & Azari, 2018). Embodied Energy looks at the total energy used to
construct, maintain, and finally demolish a building (SE2050, 2020). Except for the
energy required to operate the building (Operational Emissions). Embodied Energy
takes into account all upstream and downstream energy flows in a building's life
cycle. It also considers the total energy used to extract raw materials, manufacture
and transport products and components, and construct a building. Their research
concluded that Embodied Energy together with the (Operational) Emissions define
the total generated pollution of a building’s life cycle.
However, there is more to consider when examining the overall pollution of office
buildings. In addition to the Embodied Energy and Emissions, there is an operational
phase that must be taken into account. Most office buildings are owned either by
investors or companies themselves, both of whom are responsible for making
decisions to reduce the building's embodied energy and emissions (Feldmanequities,
2023). These owners can be classified as stakeholders, meaning that they have a
vested interest in the decision-making and activities related to owning an office
building (Barney, 2023). There are two main forms of office building ownership:
"owner-user," where businesses both own and occupy their own buildings, and
"landlord ownership," where building owners rent out their properties to one or more
office tenants. To understand the changes that may need to be implemented to
reduce embodied energy and emissions in Dutch office buildings, it is important to
examine the financial planning process of these stakeholders. Financial planning is a
comprehensive plan that outlines the financial goals, strategies, and actions required
to achieve those goals. By taking into account the financial planning process of office
building owners, future changes to the buildings can be shaped to reduce embodied
energy and emissions. The implementation of energy labels and the growing
concerns about embodied energy and emissions will involve these stakeholders, and
they may need to make changes to their buildings in the future (Ozassigments,
2017).
To sum up, the Climate Accord has led to worldwide objectives to decrease
emissions. 40% of the emissions are generated by buildings in Europe. To act on
this the Netherlands wants to serve as an example to decrease emissions. Which led
to the implementation of the energy labels, mainly focusing on office buildings. Since
50% of them do not comply with the current energy label C. Producing more than
225 kWh maximum per m2 per year. The emissions that are generated because of
that are considered as operational carbon emissions. However, the embodied
energy is not taken into account here. Embodied energy still generates a lot of
emissions that affect the whole carbon life cycle of a building. Commercial real
estate in the Netherlands could be more sustainable in order to ready for the future
objectives of climate change. The impact of Embodied Energy and Emissions on
office buildings highlights those stakeholders, including owner-users and landlords,
have a vested interest in the decision-making and activities of owning an office
building. The implementation of energy labels and concerns around embodied
energy and emissions will require stakeholders to make changes to their buildings.
Financial planning processes could be used to shape future changes to Dutch office
buildings to address these concerns. But before one could tell that, more research is
, required into the effects of embodied energy and emissions on office buildings in the
Netherlands.
Literature Review
This study's three main research questions include three core concepts: Embodied
Energy and Emissions, as well as the Operational Phase of the Building Life Cycle
and the Financial Decision-Making process. This chapter offers theoretical
background information on these topics.
Embodied Energy
Embodied Energy is a hot topic within the real estate sector since the increasing
concerns about climate change. The term embodied energy is known throughout
civilization, starting in the time when accounting became popular thousands of years
ago (Weiner, 2000). However, it was more commonly known back then as building a
system of accounts that records the energy flows through an environment. Embodied
energy’s main method “The accounting of Embodied Energy” comes from Wassily
Leontief’s input-output model (Leontief, 1966). Wassily Leontief, was a Soviet-
American economist born in Munich in the German Empire in 1905. His model is
known as “Input-Output Embodied Energy analysis model”. In 1973 that model was
adapted to embodied energy analysis by Hannon to describe ecosystem energy
flows (Hannon, 1973). Hannon's modification calculated the total direct and indirect
energy requirements (the energy intensity) for each system output. The embodied
energy was the total amount of energies, direct and indirect, for the entire amount of
production. In order to stay on track, the definition scopes down towards a more real
estate definition.
In a literature review to identify the parameters for embodied energy measurement
Culp et al., (2010) found a well phrased interpretation of embodied energy. The
interpretation stated that buildings are made from a variety of building materials, and
each material consumes energy during the manufacturing, use, and deconstruction
stages. These stages include the extraction of raw materials, transportation,
manufacture, assembly, and installation of the product, as well as its disassembly,
deconstruction, and decomposition. The energy used in production is referred to as
the "embodied energy" of the material, and it is a source of concern for energy
consumption and carbon emissions. The concern was confirmed by Gonzales &
Navarro (2006), who did an assessment of the decrease of CO2 emissions in the
construction field. The result marked that embodied energy was generated too much
and could cause. Yet both of these sources seem to be relevant but are considered
old, published more than 13 till 16 years ago. The term “embodied energy” was
subject to various interpretations rendered by different authors and its published
measurements were found to be quite unclear by Miller (2001). In these recent years
the term had more popularity and there is more information about the term embodied
energy available. Culp et al. (2012), gave a newer definition of the term embodied
energy. Stating that embodied energy is the total amount of energy consumed during
the manufacturing, use (renovation and replacement), and demolition phases.
Referred to as embodied energy, whereas operational energy is the energy required
to operate the building in processes such as space conditioning, lighting, and
operating other building appliances. Recently embodied energy has been reviewed
in relation with operational energy, looking more at the total lifecycle’s energy of a
building instead of the term alone (Ferrara & Guidetti, 2023).
