The increase in prosperity and expanding middle class in the developing world drives growing use of energy within buildings.
In the ET scenario, energy used in buildings grows (1.5% p.a.) more strongly than in industry or transport, with its share of overall energy consumption edging up to around a third by 2040.
This growth is driven entirely by developing economies, where improving wealth and living standards allows people to live and work in greater comfort.
Energy growth in much of the developed world and CIS essentially flat-lines as increasing activity is offset by efficiency gains.
The vast majority of the growth in energy used in buildings over the Outlook is provided by electricity, reflecting greater use of lighting and electrical appliances and the increasing demand for space cooling in much of the developing world (Asia, Africa and the Middle East) as living standards increase.
There is also small increase in gas consumption, which gains share from both coal and oil in space heating and cooking.
In the ET scenario, the growth of energy used in both industry and buildings slows relative to the past, as gains in energy efficiency accelerate. The ‘Lower-carbon industry and buildings’ (LCIB) scenario considers an even more marked slowing in energy:
Energy use in industry and buildings increases by only 0.3% p.a. in the LCIB scenario, compared with 1.0% p.a. in the ET scenario and 1.8% p.a. over the past 20 years.
In addition, a rise in carbon prices in line with that assumed in the Lower-carbon power scenario (pp 58-61) prompts a shift in the fuel mix, particularly in industry, away from coal towards gas and power and increases the use of carbon capture use and storage (CCUS) in the industrial sector.
In the LCIB scenario, CO2 emissions from industry and buildings scenario fall by 15% (3.9 Gt by 2040), compared with an increase of 6% (1.7 Gt) in the ET scenario.
The majority of these reductions relative to the ET scenario are concentrated in the industrial sector. These gains are driven by the accelerated efficiency gains and the increase use of CCUS which, in the industrial sector, reaches around 2 Gt by 2040. The reduced demand for new materials and products associated with the increased adoption of circular economy activities also adds to carbon savings in industry.
The reduction in carbon emissions from buildings are more limited, and all stem from the efficiency measures applied to retrofitting existing buildings and tighter efficiency regulations for new buildings and appliances.
The contribution of fuel switching to the fall in carbon emissions is relatively small in both sectors. This partly stems from the difficulty of switching fuels for some activities, especially high-temperature processes in industry. It also reflects that the benefits of switching from existing fuels into electricity are mitigated without a significant decarbonization of the power sector.