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Only the Future is at Stake

A new report from Anirban Basu, chairman & CEO of Sage Policy Group and Chief Economist of the Modular Building Institute

Anirban Basu is chairman & CEO of Sage Policy Group and Chief Economist of the Modular Building Institute

Climate Debates Get Heated

As of this writing, many of the world’s leaders are engaged in discussions at the 28th meeting of the Conference of the Parties to the United Nations Framework Convention on Climate Change, known simply as COP28. This year, the President of COP28 is none other than Sultan Al Jaber of the United Arab Emirates (UAE), who got the festivities started by suggesting that there is “no science” indicating that a phase-out of fossil fuels is required to restrict global temperate increase to 1.5 Celsius or 2.7 degrees Fahrenheit.

Many disagreed, loudly. As indicated by The Guardian, more than 100 nations already support phasing out fossil fuels. Whether the final COP28 agreement will call for a phase-out or will adopt diluted language is one of the most contentious issues at the summit.

As with many economic matters, there is underlying the tension between social goals and perceived economic well-being. For oil producing nations, the move away from fossil fuels represents something approaching an existential threat. According to the US Energy Information Administration’s International Energy Statistics database, the UAE was the world’s seventh-largest total liquid fuels producer in 2022 and third largest among OPEC members.

Anirban Basu, CEO of Sage Policy Group and Chief Economist of the Modular Building Institute

Anirban Basu speaks at MBI's annual World of Modular conference and tradeshow.

The movement away from fossil fuels also represents a source of inconvenience and cost among many American households. Many Americans like the flexibility and associated range of their gasoline-fired V-6s and V-8s. They like their gas stoves, propane-powered grills, and the rumble of a lawnmowers. Electrification would require abandoning many of the appliances and vehicles to which Americans have become accustomed. The transition to electric appliances and vehicles also stands to be expensive, as does electricity as utilities also shift away from fossil fuels.

For many onlookers, the world is engaged in a race. If the movement toward cleaner, greener economic activity takes too long, the world will suffer. While there are climate change skeptics, many leading scientists have concluded that the world will be fundamentally altered if the world warms by 1.5 degrees Celsius or more. Some conclude that at 1.5 degrees Celsius, 70 to 90 percent of coral reefs will die globally. At 2 degrees, the figure rises to approximately 99 percent. About 500 million people depend on those reefs for both food and livelihoods according to information acquired by NPR climate correspondent Lauren Summer.

Still others warn that at 1.5 degrees Celsius, the Greenland Ice Sheet would collapse, altering ocean currents. Degradation of the Amazon rainforest would further elevate emissions. Flooding would become rampant, destroying waterfront communities and tax bases in the process. Some scientists believe that the world is destined to surpass 1.5 degrees Celsius of warming, and the question is really what can be done to get the globe back to workable temperatures.

How Modular Building Can Help

Construction is infamous among the pantheon of industries in terms of its resistance to change. It is associated with slow productivity growth and modest evolutions in the mechanisms by which construction services are delivered. The reluctance to change is evident in the, which suggests that modular’s market share is edging higher as opposed to ramping higher aggressively.

That may be about to change, and environmental conditions have much to do with that. The bad news is that building operations and construction account for nearly 40 percent of global energy-related CO2 emissions. The good news is that changes in how construction services are delivered can supply major benefits in the war on climate change.

Environmental implications extend beyond waste produced. Noise pollution from construction sites disrupts local ecosystems, including impacting wildlife communication and behavior. Moreover, the industry stands as a major global consumer of resources, a fact highlighted by European Union data indicating that building construction consumes 40 percent of materials and primary energy while generating 40 percent of waste. Traditional construction techniques also impact water quality by injecting diesel, fossil fuels, paints, solvents, and other toxic chemicals into the environment.

Enter modular construction. By prefabricating components in a controlled factory setting, modular building minimizes waste, reduces onsite construction activities, and, as a result, significantly lowers overall environmental impacts. A noteworthy study by Professor Mohammed Al-Hussein at the University of Alberta reveals that modular construction could cut CO2 emissions by 43 percent on standard projects. This reduction is attributable to efficient use of resources and reduced construction time associated with modular methods.

There is more. A peer-reviewed study published in the Journal of Industrial Ecology and conducted by the University of Virginia indicates that modular homes typically use about 17 percent less material. If one extends that result to global housing requirements, the implications are mind-bending.

Looking Ahead

The Modular Building Institute along with other sources of leadership have been advocating for modular construction along several key dimensions, including cost containment, delivery speed, precision, appeal to emerging workforce members, and now the environment. As the race to reverse global warming intensifies, there is little doubt that modular techniques will be adopted with far greater frequency than has been the case to date. Meanwhile, modular building continues to offer its more traditional benefits to project owners, but the issues facing society are far more pressing these days than simply helping project owners make their pro-formas pencil out.

More from Modular Advantage

Inside the Construction of 355 Sango Court

This year’s winner for Best of Show for Permanent Structures is 355 Sango Court, a 105,818 square foot affordable housing development manufactured by Nampa, Idaho based Autovol. The project team also included Prefab Logic for module design, Nibbi Brothers as the general contractor, Acc U Set Construction as the modular installer, and the overall project design was by David Baker Architects and DCI and Fard.

Aster Place by ROC Modular

Aster Place, a supportive housing building in Richmond, British Columbia, Canada, won the Best of Show Award and Honorable Mention for relocatable structures in the social and supportive housing category at this year’s World of Modular conference.

Looking Back at the 2024 World of Modular

On March 18-21, the Modular Building Institute presented its 41st annual
convention and tradeshow, hosted again at the luxurious the Rosen Shingle Creek in Orlando, FL. Nearly 1,500 attendees from around the world gathered to learn, network, and find ways to expand both their businesses and the industry at-large.

Touring Japan’s Offsite Construction Industry: An Interview with James Haas, Offsite Construction Sales Manager for Nichiha

Nichiha USA, a premier provider of building envelope solutions and member of the Modular Building Institute (MBI), recently partnered with MBI for a trip to Japan to visit the Nichiha home office in Nagoya as well as several other offsite manufacturers around the country. Besides learning about different offsite building methodologies and systems, the trip was an excellent chance for both MBI and Nichiha to create closer ties with potential industry partners in Japan.

Modular Multi-family Construction: A Field Study of Energy Code Compliance and Performance through Offsite Prefabrication

Prefabrication in a factory setting may improve the performance of modular buildings compared to traditional site-built buildings. To validate this premise, the U.S. Department of Energy (DOE) funded a 3-year study from 2020-2023 comparing the energy performance of more than 50 modular and site-built multifamily buildings under construction in Los Angeles, San Francisco, Philadelphia and Seattle.

Inflation Comes in Hot to Begin ’24

Last year was a shockingly good one for the U.S. economy, at least relative to expectations. Coming into 2023, the conventional wisdom was that near-term recession was inevitable in America. In the face of belligerent excess inflation (above the Federal Reserve’s 2 percent mandate), monetary policymakers began ratcheting interest rates higher in March 2022. That process continued throughout the balance of the year and into 2023.

A Huge Win for the Modular Construction Industry in Massachusetts

In early February, 2024, the Massachusetts Board of Building Regulations and Standards (BBRS) released its proposed 10th Edition building codes. This draft included several amendments targeting modular construction that would have created an extremely difficult environment for the entire modular industry and could have eliminated the industry entirely in the state.

FEMA Announces Hawaii Housing Plan Using Modular Construction

Utah becomes the second state in the country, following Virginia, to fully adopt ICC/MBI standards 1200 and 1205. MBI will continue to work with leadership in Utah to implement the new program.

Supply and Demand: Solving Canada’s Housing Crisis One Relocatable Housing Unit at a Time

Not only do Moda Modular’s repurposed employee housing solutions cut the emissions related to construction down to nearly zero, but they also keep building materials that are often not biodegradable from slowly decaying in storage facilities.
It’s the classic environmental mantra of reduce, reuse, and recycle, scaled up and applied to building after building.

ICC/MBI Standards 1200 & 1205 Provide Foundation for Utah’s First-Ever State Modular Program

Utah becomes the second state in the country, following Virginia, to fully adopt ICC/MBI standards 1200 and 1205. MBI will continue to work with leadership in Utah to implement the new program.