On Friday, the Paris Agreement to fight climate change officially became international law, and it will have a huge impact on the way residential and commercial buildings are constructed around earththe world, now and in the future.

The goal of the accord, which has been signed by 96 countries, is to limit global warming to about 3.6 degrees Fahrenheit by 2050. To do that, governments are enacting many policy changes, and those include building codes for both residential and commercial structures.

Last week, an analysis by Climate Action Tracker (CAT), a collaboration between three research organizations tracking climate action, found that the building sector accounts for about 20 percent of greenhouse emissions. It also found that energy demand from buildings is likely to double by mid-century unless there are major changes.

CAT says significant reductions in greenhouse gases could be achieved if all new buildings constructed in developed nations were net-zero-energy by 2020, and by 2025 elsewhere, combined with renovation rates of 5 percent and 3 percent per year, respectively.

According to the report, the vast majority of buildings constructed today will still be in use in 2050. Because of this, nearly every new building that is not net-zero-energy will need to be renovated within the next 35 years. Renovations, such as replacing poor-functioning windows, are much less cost-effective than designing for efficiency in the first place, CAT says.

The report notes that the chief barrier to constructing more net-zero-energy homes and buildings is financial. High upfront costs, combined with long payback periods for improvements such as triple-pane windows, prevent many people or businesses from using highly energy-efficient building products.

Additionally, in most instances, businesses that invest in energy-efficient construction, such as real-estate developers, don’t benefit from the lower energy bill — the homeowner or tenant does. CAT says that can be remedied via innovative financing. For example, in Holland, social housing corporations have committed to much greater energy efficiency in their existing housing stock by 2020 through an innovative plan called Stroomversnelling ( “electricity acceleration”) that was developed by Energiesprong (“Energy Leap”), a non-profit market development team.

Stroomversnelling aims to remodel 111,000 rental houses into net-zero-energy houses by 2020. It achieves this with prefabricated building elements, which allows renovations to be completed within ten days.

Stroomversnelling funds the upfront construction expenses from a social bank. The costs will be paid for by the energy savings over a 30-year period, which should keep the housing costs (rent plus energy bills) for the tenants the same.

In Mexico, the government aims to improve the energy efficiency of millions of buildings with “green mortgages.” They have low interest rates and are available from state-owned banks for buildings that can prove compliance with energy efficiency standards. The green mortgage program targets both refurbishments of old buildings and the construction of new ones.

CAT’s study also notes that there are also non-financial barriers to greater energy-efficient construction, such as lack of information, low consumer awareness and poor public acceptance. However, the report says governments and other organizations should publicize the benefits, such as lower heating bills and a more comfortable indoor climate and better air quality.

Fatih Birol, executive director of the International Energy Agency, told The Guardian that government efforts in energy-efficient construction for both residential and commercial buildings should be the No. 1 priority in fighting climate change.

“This would be the single most important step I want governments to take, and they can take it tomorrow,” he said.

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