New Economic Thinking - Enabling a just transition of the built environment in Europe

The resource titled "New Economic Thinking - Enabling a just transition of the built environment in Europe" is published by Dark Matter Labs and authored by Emily Harris, with contributions from a collaborative project team. This report explores the challenges and opportunities in achieving equitable decarbonization in Europe’s built environment, emphasizing the need for innovative strategies to address climate change and social inequality.

The report discusses the urgent need for a transition in Europe’s built environment due to the interconnected crises of inequality and climate change. It highlights that responding effectively requires not only technological advancements but also a rethinking of economic and social frameworks. The Laudes Foundation and Dark Matter Labs collaborated to conduct research that emphasizes the importance of social inclusion in the transition process.

The research identifies several systemic constraints affecting the transition, including labor shortages, energy crisis, material scarcity, and ecological dynamics. It is estimated that retrofitting Europe’s existing building stock requires an additional €275 billion annually to meet EU climate targets by 2030. This financial requirement underscores the critical nature of innovative funding strategies and collaborative models in addressing the built environment's challenges.

The report outlines deep trends and systemic constraints shaping Europe’s built environment, applying a new conceptual filter to understand these challenges. It identifies four bottlenecks—labor constraints, energy crises, material shortages, and ecological dynamics—that will significantly influence future strategies and options for decarbonization.

The report maps innovative actors driving a new economic framework within Europe’s built environment. It categorizes these actors into core organizations that address economic, ownership, and governance issues, as well as adjacent organizations that support the transition through policy advocacy, research, and civic engagement.

Several strategies are proposed to enable a just transition. These include embracing low-tech dematerialization, rethinking housing as a human right, and embedding a culture of care within the construction industry. The report also emphasizes the need for strong alternative economic narratives that respect contextual diversity and shift the cultural conversation around housing and resources.

The document concludes with recommendations for future research and strategic focus areas, such as fostering horizontal knowledge networks to enhance capabilities in reimagining the built environment. It calls for the development of new institutions and collaborative frameworks to support inclusive housing models and to address the pressing issues of climate change and social equity.

The report notes that around 700,000 people in Europe are reported homeless daily, while the EU aims to construct 400,000 new homes annually in Germany alone. Current estimates suggest that meeting climate targets could allow for the construction of only 176,000 new homes per year across Europe, revealing a stark contrast between the need for housing and the environmental limits imposed by carbon emissions.

In summary, the report from Dark Matter Labs highlights the complex relationship between social equity and environmental sustainability in Europe's built environment. It advocates for innovative, collaborative approaches and systemic change to create a more equitable and sustainable future for all citizens.