Building Sector Growth Outpaces Green Transition as Global Construction Boom Raises Climate Concerns: UNEP Report

In India, the construction sector recorded an annual growth rate of 11 per cent between 2024 and 2025, reaching an estimated valuation of around 210 billion dollars, driven by sustained public and private investment. The report identifies buildings as the largest material-intensive sector globally, accounting for nearly half of worldwide raw material extraction.

Despite its scale, decarbonisation in the buildings sector has slowed, leaving it as a significant source of greenhouse gas emissions while simultaneously increasing its vulnerability to climate impacts and energy price volatility. The 10th edition of the global status report on buildings evaluates progress using seven key indicators spanning policy frameworks, finance mechanisms, technological adoption, and investment alignment with the global 2050 net-zero emissions pathway.

Published amid a global housing and energy affordability crisis, the report emphasises that climate action in the construction sector can significantly reduce energy costs, improve living standards, and enhance resilience to climate-related disruptions while simultaneously lowering emissions. United Nations Environment Programme Executive Director Inger Andersen stated that buildings can either lock in climate risks or deliver safer, healthier, and more affordable living conditions, noting that governments face a critical opportunity to advance zero-emission and climate-resilient construction through improved policies, building codes, and investment strategies.

The report highlights the scale of ongoing construction activity, estimating that the world adds approximately 12.7 million square metres of floor space every day, equivalent to constructing the entire city of Paris in new built space nearly every week. Since 2015, global building energy intensity, which measures energy consumption relative to building size, has declined by 8.5 per cent. Green building certifications have nearly tripled, with India also recording a notable increase in certified projects.

However, in 2024, renewable energy accounted for only 17.3 per cent of total energy demand in buildings, significantly below levels required for a net-zero pathway. Investment in building energy efficiency reached 275 billion dollars in 2024, contributing to a cumulative investment of 2.3 trillion dollars since 2015. The report warns that progress has slowed since 2020, as the pace of the green transition has not matched rapid global construction growth.

To align the sector with net-zero objectives, the report calls for accelerated energy efficiency improvements and a faster phase-out of fossil fuel dependence. It estimates that investment in building energy efficiency must reach 5.9 trillion dollars by 2030, or approximately 592 billion dollars annually, to stay on track.

In India, the adoption of renewable energy in buildings is expanding, supported by rapid growth in rooftop solar installations. Government initiatives, including the PM Surya Ghar programme, are enabling households to install rooftop solar systems through targeted subsidies and loans, contributing to a gradual shift towards cleaner energy use in the residential sector.

The report concludes that while construction growth continues to surge globally, the failure to match it with adequate decarbonisation measures risks locking in long-term emissions and climate vulnerabilities across the built environment.