Carbon Value in Commercial Real Estate - MIT Center for Real Estate
Climate and Real Estate Multi-PI Research Cluster

Carbon Value in Commercial Real Estate

Principal Investigators: Zhengzhen Tan (lead)
Year: 2022
Topics: Climate and Sustainable Real Estate, Real Estate Development and City-making, Real Estate Finance and Investment

The building sector’s decarbonization progress made to date and current trajectories are not enough to achieve the target of limiting global warming to 1.5°C. To avert a catastrophic climate disaster, mobilizing capital at the scale and speed is urgently needed.

As things stand, the financial sector is not likely to deliver the radical increase in investment required in the next few years to accelerate building decarbonization. Demand- and supply-side financing barriers will likely lead to significant investment gaps and a subsequent market failure to deliver net zero.

This project examines a new way of financing building decarbonization. Traditional building decarbonization investment decisions are based solely on electricity prices, while the new proposed method incorporates the monetary benefit associated with carbon offsets.

Carbon Value in Commercial Real Estate