The homes we live in are by far the world’s biggest asset class, representing worth €150 trillion, or 20 times the amount of gold ever mined. As such, they are too big to fail, writes Brook Riley.
Brook Riley is head of EU affairs at the Rockwool Group, a world leader in building insulation.
27 European heads of state are discussing the Commission’s proposal for a €1.85 trillion COVID-19 recovery budget. It is a huge sum: €1.1 trillion from the member states themselves and €750 billion to be borrowed on the capital markets. But it is dwarfed by something which is all around us and which we take for granted: buildings.
The homes we live in are by far the world’s biggest asset class. Altogether they are worth €150 trillion, more than 20 times all the gold ever mined. They are fundamental for our wellbeing. With or without COVID-19, we spend most of our time indoors.
But the buildings where we live and work are also the largest contributor to climate change. In the EU, over a third of greenhouse gas emissions come from buildings, mostly from heating. Taken together, this makes buildings Europe’s most valuable financial asset and at the same time its biggest environmental liability.
This is the sort of mega-challenge which the new EU budget is supposed to address. ‘There is no vaccine for climate change’ said President von der Leyen, when making the case for a green recovery. And to its credit, the Commission includes a pledge in its budget proposal to at least double building renovation rates. This is vital to delivering the EU goal of becoming climate neutral by 2050.
But so far there is no matching financial commitment – no specific funding line for renovation.
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