Green building policies

👉🏽 This story is developed as part of the Doughnut Economics for Policymakers guide.

Governments around the world are taking action to reduce the ecological impact of built environments. Complementary measures include setting legally binding targets, mandating eco-standards, integrating ecological assessments into approval processes, providing financial incentives, offering zoning incentives and leveraging public procurement. 

Overview

The building and construction sector has significant ecological footprints, responsible for 34% of global emissions and 40-50% of global material extraction. Multiple governments are taking actions to reduce ecological harms of the sector, including:

• Setting legally binding industry-scale targets: Over 30 countries, including Colombia, Canada, and the EU, have implemented legally binding targets, requiring all buildings to achieve net-zero carbon emissions. Some governments set multiple ecological targets: Singapore aims to green at least 80% of its building stock by 2030 while setting clear energy efficiency targets. 
• Mandating eco-standards: Many countries and cities set standards for new builds to minimise ecological impacts. Some — such as Costa Rica, Denmark, France, India and the Netherlands — prioritise energy efficiency, while others mandate specific eco-design features: Copenhagen (Denmark) and Portland (USA) require green roofs, Tokyo and Kawasaki (Japan) require solar panels, and the EU mandates easily deconstructible design to ease future retrofitting. Others incentivise wider ecological considerations: the UK mandates positive biodiversity impact, Colombia requires energy and water efficiency, while both Singapore and China have developed certification schemes that consider issues such as energy efficiency, climate resilience, resource use, health, and biodiversity.
• Integrating ecological considerations in approval processes: Many governments require developers to conduct assessments as part of the development approval process. France requires using energy performance indexes to access new builds; Denmark requires life cycle carbon assessments; Sweden and Norway mandate pre-demolition audits to improve material recycling and hazardous material management. UK local governments require whole lifecycle carbon assessment for demolition, redevelopment and new development approval, comparing options and incentivising retrofitting. 
• Providing financial incentives: Some governments provide incentives for developers: Japan subsidises design and construction costs for large-scale sustainable building projects, and Shenzhen and Beijing (China) have established dedicated funds for energy efficiency renovations. There is widespread support for homeowners to improve energy efficiency: Italy provides tax reductions for renovations while Belgium does the same for heat pumps; Denmark, France, Mexico, Norway, the Netherlands and Sweden provide grants. Germany and the USA offer both. Canada specifically targets low-to medium-income citizens with grants. 
• Offering zoning incentives: Singapore allows infrastructure projects achieving the highest energy ratings to exceed floor area limits by 2-3%. Seattle (USA) and Hong Kong increase height and floor area limits for buildings that meet sustainability standards. Many cities in the USA increase floor area limits for new builds with green roofs. Chinese local governments embed green building requirements in land lease contracts with developers.  
• Leveraging public procurement: The Netherlands requires infrastructure tenders to include environmental impact assessments, and lowers comparison price for sustainable tenders. The USA requires federal agencies to prioritise low-carbon construction material for public buildings. Over 100 Chinese cities adhere to national green standards when procuring construction materials.

Implementation

Governments at all levels can deploy these policies, but targets, standards and financial incentives are most commonly set nationally and are most effective when they have broad geographic reach. 

All policy measures are highly complementary. Governments that set legally binding industry-wide targets often develop strategies combining multiple measures; standards are developed that assess delivery against targets, and are integrated into approval processes to incentivise uptake.

Multi-stakeholder collaboration helps ensure better policy design and implementation. For example, Colombia's net-zero strategy includes diverse stakeholders, while France used large-scale consultations and expert groups with construction stakeholders to inform its environmental regulation.

These policies are most effective as part of wider national sustainability or energy transition strategies. For example, Sweden's "carbon tax” results in inefficient buildings becoming economically unattractive, while France ensures producers are responsible for end-of-life of building materials through their Extended Producer Responsibility. China sets renewable energy targets for cement and steel production based on regional contexts, incentivising innovation and affordable supply of green construction materials. Both China and Singapore’s green building efforts are part of wider sustainable development strategies at the national level. 

Impacts

Green building policies can deliver both ecological and social benefits. 

Through ambitious targets and complementary measures, countries have reduced carbon emissions and material footprints of the built environment. For example, in Europe, recycled construction material use rose to 18% in 2024;  in Singapore, 20% of buildings are now certified for lower ecological impacts. 

Mandating eco-standards can help deliver significant public health benefits and combat climate change. Eco-design such as green roofs can capture carbon, reduce energy consumption and air pollution, manage water run-off, and improve biodiversity and wellbeing.

Eco-standards combined with financial incentives reduce energy bills. For example, Canadian households, supported to retrofit homes, can save around $400 on annual energy bills. German households can receive up to €90,000 to install sustainable heating. Policies targeting low-income households, like in Canada, can reduce energy poverty.

Buildings with lower ecological impacts can deliver long-term financial benefits: for example, in the UK, the USA and Singapore, certified energy-efficient buildings have up to 12% better property values and 20% lower maintenance costs. Green roofs and other eco-design elements can reduce insurance premiums. 

Challenges

• Inconsistent definitions: Terms like net-zero, low-carbon, green or sustainable can be defined and assessed differently, making cross-country comparisons difficult and increasing the risk of greenwashing. 
• Need for local adaptation: While countries can learn from forerunners, policies can be ineffective if they do not consider local ecological context and established building practices.
• Insufficient monitoring and coverage: Globally, over 50% of construction is not yet covered by building energy codes or compliance systems. Many countries also struggle to effectively monitor and ensure compliance with building standards. 

Reference and further reading

• The Global Status Report for Buildings and Construction, published by the UN Environment Programme (UNEP) and the Global Alliance for Buildings and Construction (2024/5).
• The Global Sustainable Buildings Guide published by BakerMcKenzie (2023).
• The Guarini Center's Review of Green Roof Laws & Policies (2019).
• Building stock observatory of the EU with factsheets.
• An Overview of retrofitting practices and frameworks in Europe by Trustmark (2024).

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