Role of carbon tax in the widespread integration of sustainable strategies in buildings

Abstract

The effect of carbon pricing on greenhouse gas emissions and economic development is nowadays of great interest. However, despite the growing use of sustainable approaches in buildings, no study has examined the influence of carbon taxation on their effectiveness in several regions worldwide. This paper investigates the impact of three carbon tax levels (high, low and zero) on the environmental and economic benefits of applying three strategies: photovoltaic, earth-to-air heat exchanger and thermal insulation. The performance of these techniques is evaluated for a typical residential building in nine regions worldwide with dissimilar climates (cold, temperate and semi-arid). The findings show that the greatest life cycle CO2 emissions benefits are obtained in locations with zero-carbon tax, which could be attributed to the elevated CO2 emission factors in these places. In contrast, the higher savings-to-investment ratios and the shortest discounted payback periods are exhibited in locations with high-carbon tax, followed by the ones with low-carbon tax for almost all investigated techniques. Overall, the savings-to-investment ratio and discounted payback period are, on average, 3.80/2.02 and 6.74/14.43 years in places with high/zero-carbon tax, respectively. Moreover, a $10/tCO2e rise in carbon tax increases the profitability from sustainable techniques by about 2%, 7% and 5% in cold, temperate and semi-arid climates, respectively. Therefore, levying carbon taxes could be essential in encouraging building owners to adopt sustainable strategies. The study's findings could be generalized to other regions worldwide characterized by similar energy, economic and environmental contexts, mainly carbon tax, energy prices, carbon emission factor and climate type.