Buildings

The buildings sector is responsible for a large chunk of global emissions - around 6% annually. Heat pumps are efficient heating systems that provide space and water heating by extracting heat from a source, such as the surrounding air or geothermal energy stored in the ground, to amplify and transfer it to where it is needed. However, in most of the world, they struggle to compete economically with gas-fired boilers and furnaces or coal-based heating on an unsubsidized basis. While they are often more competitive than oil boilers on a lifetime cost basis, high upfront costs for heat pumps are a major barrier for households switching heating technologies. When subsidies are applied effectively, governments can help alleviate these expenses and reduce the lifetime costs of low-carbon heating technologies. Reaching net zero will require a significant increase in governmental efforts, likely a combined stick-and-carrot approach, to decarbonize heating and cooling in buildings.