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‘We just haven’t seen innovation’: Dartmouth’s engineering dean on why buildings are the frontier for tackling climate change

February 16, 2021, 10:02 AM UTC

This article is part of Fortune‘s Blueprint for a climate breakthrough package, guest edited by Bill Gates.

For Alexis Abramson, the innocuous buildings that make up our standard urban landscape—the office buildings, houses, and convenience stores—are an enduring riddle.

These buildings consume about 39% of energy annually in the U.S. and are responsible for 12% of the country’s emissions, largely owing to the strains of heating and cooling them. We have the technology to dramatically reduce their energy consumption, she says—and yet, so often, we don’t put those solutions into place.

Abramson is the dean of Dartmouth College’s Thayer School of Engineering, a former technical adviser to Bill Gates’ Breakthrough Energy Ventures, and the cofounder and COO of Edifice Analytics, a startup that tracks and analyzes where buildings can save energy. She spoke to Fortune about what it takes to get us to buy a better refrigerator; the perils of “dumb” buildings; and why, to tackle big problems—like climate change—engineers need to embrace the liberal arts.

Buildings are “one of the only sectors where, really, over the last several decades, we just haven’t seen innovation,“ says Alexis Abramson, dean of Dartmouth College’s Thayer School of Engineering, former technical adviser to Bill Gates’ Breakthrough Energy Ventures, and cofounder and COO of Edifice Analytics.
Photo Illustration by Fortune. Background by Getty Images; Portrait by Robert C Strong II/Courtesy of Alexis Abramson

This interview has been condensed and edited for clarity and brevity.

What first piqued your interest in this topic?

You know, I am an engineer at heart. I have been since I was a very young child, taking apart toasters in my parents’ house and things like that. So I see buildings as a true engineering challenge. In many ways, we have the innovations, but we’re just not quite there with some tweaking to get cost down, or manufacturing prices right, or improve this valve or this compressor. It’s a very engineering piece of the puzzle. And so I was very attracted to that. Really saying, “Gosh, we should be able to tackle this.” This isn’t something where we’ve got to have a scientific breakthrough that takes 30 years; we don’t have 30 years. We should be able to tackle this as engineers and make a dent rather quickly—as a low-hanging fruit option—to really see solutions for climate change. 

Is there a certain area or element of buildings, and climate change, that you find particularly tricky?

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Interestingly, if you look at technology, innovation, even just economic productivity over a variety of sectors—technology-related, IT-related, computers, how many transistors we’ve packed on a microchip over the last several decades—we’ve been able to make such great gains in so many different sectors. Except for buildings. It’s one of the only sectors where, really, over the last several decades, we just haven’t seen innovation. We haven’t seen productivity enhancements. Personally, I’m interested a little more on the operations side of buildings. There’s construction, and then there’s building operations. Both play a role in affecting emissions, with operations playing a larger role over the lifetime of the building. And I think that in particular continues to be an attractive area for me, because it’s where I think we can have the greatest impact.

Is there a reason that we’ve seen these great advancements in all these other areas in terms of decarbonization, and we haven’t been paying attention to buildings?

I think two reasons. One, there’s a lot of human behavior that is integrated into making the changes in buildings. And the second one is policy. There are certain industries—if we take the tech industry as an example, in hardware and software—where policies matter, but they don’t matter nearly as much. But with the building industry, they do. Who wants to spend three [times as much] on the insulation for their home, unless they’re told they have to, right? So policies matter. Human behavior—that piece, too, matters more, and that is incredibly complicated. In many ways, it’s a lot easier to solve a technical challenge than it is to get somebody to make the decision when they walk into Home Depot to pick the Energy Star refrigerator. That’s a lot harder to affect.

In many ways, it’s a lot easier to solve a technical challenge than it is to get somebody to make the decision when they walk into Home Depot to pick the Energy Star refrigerator.

Alexis Abramson

So it’s a lot about the personal decisions that a homeowner would make, or a building manager? 

That’s right—and the incentives, or lack thereof, [for] those homeowners or building managers or even builders. Oftentimes there’s a lack of incentive for them to spend the extra upfront capital, even if it has a payoff in the end. There’s a lack of incentives, and there’s a lack of policy in most parts of the world, even in the U.S.; Europe’s doing better.

We use the term “split incentives” often. A builder who puts in a heat pump water heater—which if you’re going electric, you’ve got to put in a heat pump water heater. I just built a house and put in a heat pump water heater. And the builder has no incentive to ask the homeowner to spend two to, maybe even in some cases, three times the upfront capital costs, for that more efficient water heater. Because the building owner is not going to reap the benefits of the operational savings that the homeowner will get throughout the life of the water heater. In the end, if you think about the 10- to 15-year lifetime of a water heater, it will cost the homeowner less, [though they] will have to spend more upfront. But the builder’s not presenting that option to the homeowner, because the builder is not going to get much out of that selection.

I know one thing people are talking about a lot right now is how much your individual choices matter, or don’t matter, in terms of reducing emissions. But how much of a difference would it make to your personal carbon footprint if you do invest in those more efficient heat pumps upfront?

It depends which areas we’re talking about. Are you doing it across the board—heating and cooling and lighting and appliances and all of that? Versus, maybe you’re just replacing a heater in your home or your commercial building. I would say a choice about a particular appliance could save you about 10% of your energy cost annually, up to a deep retrofit, where you’re maybe gutting the walls and replacing insulation and windows and things like that. That could be up to 50% savings a year. So these are significant savings that can have a significant impact on your energy savings overall, in aggregate, when you add it all up.

Are there specific policies or strategies that would make it easier for people or businesses to bear that upfront cost?

There are a lot of ideas and strategies out there. The biggest one is building codes. If you look at the impact that building codes have had in the U.S. and in Europe, it’s quite large. So putting codes in place that require that when you’re building a house or retrofitting a commercial building, you are required to put in a certain level of insulation, or you’re required to put in a high-efficiency boiler or LED lights. Building codes have for decades now helped us, sort of forced us in many cases, to put more efficient equipment and materials into buildings. That’s great that building codes have been able to do that. But really, about half of countries around the world are using building codes. If you look at where China has come over the last decade or two, their buildings have exploded in terms of number and floor space. And so if we continue down this path, and these countries don’t have building codes in place, we’re going to see those cheaper selections of materials and equipment being made. And that’s going to continue to contribute to our climate problem.

There are other, more creative solutions. Sometimes partnerships with utilities have been used—bill financing or green financing. And what that allows is if I’m a homeowner and my furnace breaks, and I want to buy that more efficient furnace, but nobody’s forcing me to, there are some programs with utilities where they say, “If you buy the more efficient furnace, we’ll let you, no interest, pay it off over three years.” And by then you’ll be reaping the benefits of the 40% reduction in your heating bill. There’s a lot of creative strategies out there that are being implemented, but we need many more.

When you’re talking to people about climate change and emissions, how important is it to address the financial element of what these adaptations are going to require?

You have to. You can’t get away with not doing it. In Bill Gates’ book, he talks about “green premiums,” right? You have to understand that we can’t be righteous about this. We can’t say, “Well, everybody should just be spending the money.” It’s not easy for everybody to have that money upfront to be able to spend it on these technologies, equipment, materials that have these green premiums. But it absolutely has to be part of the discussion. And there have to be ways to make it attractive for that decision-maker. Where we’ve seen a lot of great progress is on solar installations, with PPAs, power purchase agreements—as long as you enter into a good PPA contract with a supplier. Essentially, the supplier says, “I will put solar panels on your roof, it will cost you zero dollars, and I’m going to charge you for your electricity use. I promise not to make that electricity cost any higher than you would have paid to your local utility.” And after 10 years, I own the solar panels. After that I’m not paying anybody for electricity—it’s free. We’ve seen in the solar industry some great progress made to encourage distributed solar—not to mention the tax incentives that you get for that, too.

I wrote on the Church of England last year, and they said, “We’re going to go net zero by 2030.” And then somebody said, “Well, we’ve got all these furnaces in all these drafty churches, all around England.” That’s a question of, you’ve got X many more years on the furnace to go before you could even justify replacing it. What are our options for retrofitting the infrastructure we already have? 

This gets to another topic that is near and dear to my heart, which is having intelligence, having data and information, in the analysis you need to make smart choices. My general opinion about replacement of equipment is, unless that furnace is on its last legs, just keep going. Because there is this embedded energy cost to ending some piece of equipment’s life too early. And then there’s the fact that you’re replacing it with a piece of equipment that took some energy to make. So it’s usually good to wait until you really have to replace that furnace before you do it.

But with that said, it depends how bad it is, right? If that furnace is just in horrible shape but still working—how do you know that? Who’s out there measuring that and providing you or the installer that piece of information? This touches on something that we don’t see touched on very much in discussions about buildings, which is we need that data, we need that information in order to make those decisions. And it’s really hard to get that information. So if you think, “Is somebody going to come along and actually measure that furnace’s efficiency?” It’s not a typical thing to do, and it’s kind of expensive. Is somebody going to come along and measure the draftiness of the church, or the insulation, the quality and quantity of that church wall, and the windows, and all of that? It’s not going to happen. It’s way too expensive to do that. And yet are there ways we can leverage technology, smart sensors, or some kind of approach to data analytics—and full disclosure, we do this in my startup company—some smart approach to taking the energy data for that building and getting some more real insight. I sort of think of it like, if you wanted to lose weight, but you never stepped on the scale, it’s really hard to do that without that information. So if you want to improve the efficiency of your building, but you’re not really sure…“Is it my furnace? Is it my lights? What should I do first? And it’s going to cost me so much money to figure that out.” We need to have more low-cost ways of getting at some of that information, so we can make those smart decisions about when to do that furnace replacement or retrofit of that church.

You talked about some big jumps that are needed in metrics and in policy. Are there any breakthrough technologies that we really need to lower emissions from buildings on a mass scale?

We have to make buildings smarter. That’s the first thing that we need to do. And I would call that relatively low-hanging fruit. There’s certain obvious things you do—a light bulb goes out, you replace it with an LED. Fine, we should all be doing that. But to make bigger decisions about what to do in a building, particularly an existing building, to reduce emissions, we have to make buildings smarter.

One example is the Empire State Building, which was somewhat recently redone. It’s an incredibly smart building. It has these fancy building management systems in it, and it pretty much knows what’s going on in the building, where something is about to break, even. Big buildings, to some extent, we’ve got that taken care of. Where buildings are incredibly dumb are on the small to medium-size. And most of the world are these more small to medium-size buildings. Think about your medium-size office building—I’m not talking skyscraper but a medium-size office building—or, you know, the 7-Elevens across the globe. Those small convenience store type buildings, which have refrigeration, they have heating and cooling, they have significant lighting load, they’re open 24 hours a day, in some cases. And yet they have no clue what to do to make their efficiency better in that building, how to save energy. And they’re—I hate to use this term—but they’re dumb buildings.

A comprehensive retrofitting of the Empire State Building in New York City has greatly reduced its emissions footprint.
Gary Hershorn—Getty Images

If we could go in and install a control system, a building management system, into those small to medium buildings, right off the bat, we would save 10% to 30% energy. Why don’t we do that today? It’s because it’s too expensive. Again, it has to do with what I was talking about before, the upfront costs of a control or building management system in the 7-Eleven.

There are companies out there like 75F, which is a [Breakthrough Energy Ventures] investment, which I was involved in, that basically is targeting how you make cheap, easy-to-install building management systems in these small to medium buildings, so that you have that insight.

I have one last question for you. You’ve mentioned in the past that the liberal arts are really important in engineering. But when we’re covering climate, we’re always told how important the science is, the engineering and project management. What’s the argument from the other side?

This is my soapbox of the day, or one of my soapboxes of the day. Traditionally, and certainly when I was in school as an undergrad, engineering is taught as problem sets that we do: very heavily focused on the math, science, and engineering.

Sure, there is some small fraction of our population—we want their heads to be down, and we want them to be solving really complex equations and helping us come up with the best technology opportunities in the world. But I would say, in large part, we want engineers who are technically minded, who have depth and breadth to some extent, but who also understand the human condition—so that they are thinking about not just developing some new cool technology, but really making sure that they’re addressing the needs of society. In particular, the needs of society that, if we don’t address them, are going to lead to these horrible outcomes—climate change being one of them. So I believe very strongly in making sure that as an undergrad engineering major, you’re really looking at the intersection of the human-made world and the human experience, and they go hand in hand.

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