Three-quarters of the urban infrastructure that will exist in 2050 remains to be built. This architectural choice, made today in many cities in the Global South and North alike, will affect energy bills, air quality, and thermal resilience for large urban populations across several decades. Several regions have imposed strict energy standards starting in 2010, associated with variable initial cost increases depending on building type.
The Essentials
- According to the World Resources Institute, nearly three-quarters of the urban infrastructure that will exist in 2050 remains to be built: every poor choice made today will have lasting energy effects over several decades.
- In Norway, analyses have estimated savings linked to stricter requirements, with payback periods varying by building type.
- Las Vegas anticipates 300,000 new residents in an area of extreme water stress, illustrating tensions between urban growth and water resources that its official planning acknowledges.
- The window is short: the absence of efficiency features at the time of construction can increase the risk and cost of later renovation. For certain equipment and electrical preparations, planning the infrastructure during construction can cost far less than later adaptation; the differential depends on the measure in question.
- Financial instruments, minimal standard policies, and North-South technology transfers exist; their deployment remains far below the urgency of the task.
A Building Constructed Today Will Last Until 2080
An office building put into construction in 2026 in Nairobi, Hanoi, or Lagos will probably still be standing in 2090. Its structure, its walls, its windows, its ventilation systems: all of this will be fixed in the next five years. The owner can change the light bulbs, modify the partitions, install solar panels on the roof. But the thermal losses of the envelope will remain as they are, except through heavy rehabilitation that is costly and rarely complete.
The World Resources Institute describes the risk of carbon lock-in in urban infrastructure, by which today’s construction choices make future climate policies more difficult and more expensive. A poorly insulated building’s energy consumption depends heavily on climate, usage, and the reference standard applied. Multiplied by millions of constructions over the next twenty-five years, this gap creates a lock-in that makes future climate policies more difficult and more expensive, without rendering them intrinsically powerless.
According to the WRI, 75% of the urban infrastructure that will exist in 2050 remains to be built. Over the coming decades, the volume of new construction, particularly in rapidly growing urban regions, will be considerable. The standard applied, the materials used, and the energy usage of these constructions will determine emissions for decades to come.
The Scandinavian Experience in Fifteen Years
Norway, Sweden, and Denmark imposed strictly binding energy efficiency standards from the early 2010s onward. Passive and low-energy buildings ceased to be experimental prototypes and became the market norm.
The result, measured across constructions during that period, is clear. Norwegian requirements were tightened in 2007 and modified again in 2010; regulatory changes were associated with lower calculated energy needs. The initial construction cost premium varies by building type: residential apartments, offices, or schools.
A five to eight percent initial cost premium may seem significant for a developer or local authority under budget pressure. According to estimates cited for Norway, the payback period varied by building type. A building’s lifespan varies greatly, typically from at least 30 years to more than 100 years; the net savings over forty years must be calculated for each case, before even accounting for the carbon value of emissions avoided.
The Scandinavian experience teaches above all a mechanism. The standards applied were regulatory, progressive, and accompanied by training for skilled trades, updates to public procurement codes, and support for local industrial innovation. The results obtained came about because ordinary buildings, constructed by ordinary companies for ordinary clients, changed their reference standard.
Las Vegas, Lagos, and the Choice of Rapidly Growing Cities
Las Vegas plans to welcome 300,000 new residents over the next twenty years. The city is in an area of extreme water stress, in the Colorado River basin, a river whose Lake Mead reservoir level, its principal water source, has reached historically low levels in recent years. The new residential neighborhoods planned will consume water, require intensive cooling in summer, and rely on an electrical grid whose tension during heat waves is already documented.
The Las Vegas example is not an American curiosity. It illustrates a dynamic observed in several rapidly growing metropolises that struggle to integrate the physical constraints of their territory into the planning of their expansion. Developers minimize construction cost. Buyers, often financially constrained, do not have the means to choose in favor of the long term. Local governments encounter gaps in capacity and financing that affect the application of building standards, while regulatory responsibilities typically fall to states and provinces.
Mobility and affordable housing thus join the climate issue. Lower-income households generally live in the most poorly insulated housing, pay energy bills that are disproportionately high, and are least able to finance rehabilitation. A poorly constructed building today is an energy trap for its future occupants, often the most vulnerable.
Cities in the Global South concentrate the bulk of the problem. According to UN DESA, nearly 2.5 billion additional people will live in urban areas by 2050, with nearly 90% in Asia and Africa. Many countries in these regions encounter shortfalls in standards, affordable financing, and enforcement capacity, with heterogeneous national situations. Without technology transfer and without adapted financial mechanisms, the applicable building standards risk remaining unchanged.
Cities That Have Reversed the Equation
The Scandinavian model is not universal, but several cities outside Northern Europe have begun to create functional equivalents adapted to their climate and economic conditions.
Singapore has imposed since 2008 an energy certification system for new buildings, the Green Mark, progressively toughened. Singapore’s plan targets an 80% improvement from 2005 for the most efficient buildings by 2030. The city-state accompanied this regulation with a targeted subsidy program covering design and certification costs, and a requirement for progressive greening of the existing building stock.
Medellín, in Colombia, has integrated green corridors and green roofs into its urban planning standards to reduce the heat island effect, a problem the city anticipated before heat waves made it inevitable. The approach did not solve all the problems of a city marked by very deep inequalities, but it showed that a municipality with limited resources can integrate climate standards into its ordinary regulatory tools.
These examples have in common an upstream political decision: to define the acceptable building standard before the market imposes or excludes it. In the absence of rules or incentives, some actors favor initial cost, but the market can also value greater energy efficiency. Regulation can ask it to optimize cost over forty years.
The World Bank and several development agencies today finance technical assistance programs to help governments of middle-income countries build or strengthen their building codes. The EDGE program (Excellence in Design for Greater Efficiencies) of the International Finance Corporation, a branch of the World Bank, certifies buildings in more than 150 countries with a protocol adapted to emerging markets. These tools exist. Their deployment remains far short of the scale of the global urban construction task.
Financing as the Gordian Knot
The obstacles to energy standards in developing countries are simultaneously technical, institutional, financial, and informational. The expertise exists, the materials exist, thermal simulation software is widely accessible. The obstacle is financial, and it is structural.
A private developer in Kenya or Bangladesh compares the cost of construction today with the selling price he can obtain today. In certain locations, the landlord does not directly recover the tenant’s energy savings, which can discourage investment, without excluding other benefits for him. This is what economists call a split incentive problem: the one who invests is not the one who saves.
Correcting this distortion requires either regulation that imposes the standard (and removes the low-end option from the market), or a financial mechanism that values energy performance in the price of the property, or both. Norway implemented strict minimum energy requirements and Germany mobilized KfW loans for high-performing buildings; similar approaches to financing cost premiums with full equivalence including Denmark are not uniformly established.
Many low-income countries face institutional and financial constraints, but can implement adapted models with appropriate support. International climate financing, notably the Green Climate Fund, World Bank mechanisms, and bilateral commitments, should concentrate a much larger share of their resources there. Financing thermal insulation can sustainably reduce energy demand and emissions, depending on the building’s lifespan and local energy mix, and relieves household energy burden. The climate calculation and the social calculation coincide.
Building for 2050 Without Freezing 2026’s Mistakes
The window is narrow. A building put into construction in 2026 and delivered in 2028 will be very difficult to fundamentally transform for several decades. Heavy thermal rehabilitation—exterior insulation, ventilation system replacement, window frame changes—entails a cost significantly higher than an initial construction cost premium. Failing to integrate certain electrical preparation provisions at the time of construction can make later adaptation much more expensive, though this does not apply automatically to all performance standards.
This life-cycle cost calculation is only partially integrated into public or private decisions. For a mayor of a secondary city in West Africa, immediate priorities—water connection, roads, schools—consume the entirety of budget capacity. The building’s energy standard appears a concern of wealthy countries, a luxury to be deferred. This hierarchy is understandable. It is also costly: the populations displaced by climate shocks will be overwhelmingly those who today live in cities least prepared for heat waves and droughts.
The challenge of the coming years is to make accessible, in contexts of genuine financial constraint, an initial construction cost premium with variable payback periods depending on building type. Three combined levers make it possible to respond. The first is regulatory: impose a minimum performance floor, progressively tightened, that removes the least efficient constructions from the market. The second is financial: create instruments—subsidized loans, guarantees, and revolving funds—that advance the initial cost premium to developers and municipalities that lack the liquidity to absorb it. The third is technical: train skilled trades, update public procurement codes, and distribute thermal simulation tools to local administrations.
The combination of all three levers, rather than just one, proves more effective. It is their combination—regulation, financing, training—that several countries have successfully implemented. And it is this combination that must be transferred, adapted, and financed at a scale that existing programs do not yet cover.
Tomorrow’s city is being built now, building by building, neighborhood by neighborhood. The good news is that many solutions are proven and can be profitable over their lifespan, depending on the building’s and energy’s context. The difficulty is in aligning 2026’s decisions with 2050’s interests, for actors whose planning horizon is often a term of office or a fiscal year. Aligning short-term decisions with long-term stakes depends largely on institutional capacities and financing mechanisms.
Sources
- World Resources Institute, How to Solve the World’s Housing Crisis: https://www.wri.org/insights/how-solve-worlds-housing-crisis
- UN-Habitat, Affordable Housing Forecasts (reports 2023-2024, no stable URL identified)
- World Bank, Urban Development Reports (Washington D.C., 2022-2024 editions)
- International Finance Corporation, EDGE Program (Excellence in Design for Greater Efficiencies), ifi.org/edge
- Norwegian Building Standards 2025, Direktoratet for byggkvalitet (DiBK), dibk.no
- Green Climate Fund, annual engagement reports (greenclimate.fund)
