The 195 signatories of the Paris Agreement on climate change have committed to reduce greenhouse gas (GHG) emissions so as to keep the global temperature rise from preindustrial levels to well below two degrees Celsius (2°C). While much of this international effort has focused on the economy’s two largest-emitting sectors, electricity and transportation, achieving net-zero emissions will require emissions reductions in all sectors of the economy. That includes construction.

Among the most difficult emissions to reduce are cement and steel, which are primarily used as building materials. One potential solution is to substitute for these materials with engineered wood products, which are less GHG-intensive and have seen rapid growth in the construction industry in recent decades. This study evaluates the economy-wide impacts of replacing carbon-intensive construction inputs, such as steel and cement, with lumber products in the U.S. under an emissions constraint. It’s one of the few studies to examine the emission and economic impacts of these products under a climate policy.

Drawing upon their U.S. economy database, the researchers determined that the carbon dioxide (CO₂) intensity of lumber production is about 20 percent less than that of fabricated metal products, under 50 percent that of iron and steel, and under 25 percent that of cement. They found that the ability to substitute lumber-based building materials increases production from the lumber and forestry sectors and decreases production from carbon-intensive sectors such as cement. Under a carbon cap-and-trade policy, the ability to substitute lumber products lowers the carbon price and the GDP cost of meeting the carbon cap, with more overall emissions abatement in the construction industry.