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Exploring the intersection of real estate carbon emissions and housing affordability

Published

August 2023

Authors
Andrew Teras
Client Strategy Lead, Sustainable Finance
John Sheffield
Senior Director, Product Architect
Lauren Patterson
Lead Climate & ESG Policy Scientist

The skyrocketing cost of housing affects people across the United States, particularly lower to middle income residents1. Many households also struggle to pay their energy bills, adding to their cost burden. Could better energy efficiency provide housing cost relief while also cutting emissions? In this paper, we explore the contribution of real estate to global carbon emissions, and tools that may lead to a better understanding of the intersection between the two.

Takeaways

  • ICE Sustainable Finance’s approach for carbon footprinting in U.S. real estate covers residential properties, mortgages (whole loans and serviced loans) and residential mortgage-backed securities.
  • ICE is planning enhancements to its emissions footprinting capabilities, include estimating footprints for most commercial properties, that account for ~15-20% of U.S. carbon emissions.
  • For residential real estate, ICE plans to incorporate more granular information to deliver detailed cost of living analysis for a pool of loans or mortgage portfolio.
  • ICE plans to expand its geospatial approach to real estate emissions footprinting worldwide. Globally, ~30% of greenhouse gas emissions are generated by the building and construction sectors.