Back in 2007, Australia had a broad consensus about dealing with climate change and establishing an emissions trading scheme and carbon price. Fast forward several years and this has all but collapsed.
Yet within the building sector, momentum toward sustainable construction has been growing. With Department of Environment data (2009) indicating that almost a quarter of Australia’s overall greenhouse gas emissions result from energy demand which is driven by the building sector, this is important.
This raises questions about what governments should be doing – and are doing – to promote sustainable construction.
At the recent Green Cities conference in Melbourne, Federal Minister for the Environment and Energy Josh Frydenberg, Shadow Minister for Climate Change and Energy Mark Butler and Victorian Minister for Energy, Environment and Climate Change Lily D’Ambrosio sat down with Macquarie Capital Australia and New Zealand co-head John Pichhaver and Stockland Managing Director and CEO Mark Steinert in a panel session moderated by ClimateWorks Australia chief executive officer Anna Skarbek to talk through these issues.
Whilst acknowledging that the government has been preoccupied with energy supply, Frydenberg says he recognises the importance of reducing energy demand through greater efficiency.
He says the government is acting on several fronts.
First, the National Energy Productivity Plan aims to improve energy productivity by 40 per cent between 2015 and 2030.
Next, energy efficiency standards for household appliances have been enacted across 22 categories and are under development in relation to a further six: air conditioning, lighting, pool pumps, fridges, freezers and fans.
Already, Frydenberg says, households have saved an average of $220 per year from the standards in place. Further savings are likely. Switching from a 2-star pool pump to an 8-star one can save up to $800 per year, Frydenberg says. Switching from halogen to LED lights can save thousands.
Next, there is commercial building disclosure – arrangements regarding which are under review as part of the National Energy Productivity Plan. Already, moving from a 2,000 square metre threshold to a 1,000 square metre threshold for requirements to include a Building Energy Efficiency Certificate and disclosure of the NABERS energy efficiency rating upon the sale, lease or sublease of commercial office buildings last year has delivered savings in the realm of $50 million and carbon emission reductions of 3.5 million tonnes, he says.
Next, the Clean Energy Finance Corporation is investing around $200 million into built environment energy efficiency programs, including a Queensland based portfolio of shopping centres and a six-star building in Geelong. Renewable energy subsidies for small solar under the Renewable Energy Target, meanwhile, are flowing through in record amounts. This has led to a record of more than 1GW of small scale solar energy being installed over the past year.
A further focus is the National Construction Code. Under the National Energy Productivity Plan, substantial increases to the stringency requirements in terms of energy efficiency for commercial buildings are expected to be included in the next upgrade to the National Construction Code in 2019. These have been incorporated into the NCC 2019 Public Comment Draft.
Improvements in stringency for residential buildings, however, are not envisaged under the plan until the next updating cycle in 2022. This decision was made back in 2016 on the basis that research at the time indicated that the case for a stringency increase was much greater for commercial than for residential. Accordingly, no increase in the stringency for residential buildings was included in the Public Comment Draft for NCC 2019, though some provisions were adopted relating to heating and cooling load limits as well as sealing.
With the last major increase in stringency having taken place in 2010, concerns have been growing that this means Australia will be constructing more than half a million homes over the next three years alone according to provisions which were set almost a decade ago.
Beyond this, many are concerned about the lack of any known long-term trajectory in regard to stringency requirement increases. This latter will be addressed, it is hoped, through research being conducted by ClimateWorks Australia and the Australian Sustainable Built Environment Council, which is hoping to establish a workable and sustainable trajectory for a long-term program of emissions reductions.
Frydenberg acknowledges these concerns but defends the delay. Issues surrounding roof insulation, prevention of air leakage, ceiling and wall insulation and better-quality windows still need to be worked through, he said.
At any rate, he says the improvements in commercial are substantial.
He says the government is serious about anything which can be done.
“Certainly, from the federal government’s perspective, the concept of driving changes on the demand side in order to get energy efficiency which helps lower power bills, reduce demand for new infrastructure and obviously lower our carbon footprint is obviously going to be a real focus,” he said.
Not surprisingly, Shadow Minister for Climate Change Mark Butler sees things differently.
Whereas Australia a decade ago had built consensus around an emissions trading scheme and a price on carbon, he says this all but evaporated following the subsequent ‘climate wars.’
The result, he says, is policy paralysis and uncertainty in sectors such as transport and manufacturing.
By contrast, the United Kingdom developed a consensus which became embedded in legislation under the Climate Change Act 2008. This sets out the basis for the UK’s strategy to address climate change and establishes goals of 61 and 80 per cent carbon reductions on 2005 levels by 2030 and 2050 respectively.
So strong is this consensus that the fifth ‘carbon budget’ under the Act passed despite being put only weeks after the divisive Brexit vote. The country is doing this, he says, whilst simultaneously maintaining a strong industrial base including an automotive sector which employs around 800,000.
As for policy paralysis in Australia, Butler says many industry members have simply moved on and are doing what they can to respond to climate change. Whilst the government talks about a new round of coal fired power stations, he says investors and producers apart from Clive Palmer are focused on renewables and have shown little interest.
Investors, he says, like renewables not only because they are cleaner and cheaper (and, according to research from the Minerals Council of Australia, will receive subsidies worth up to $2.8 billion per year up until 2030), but also because companies and investors are aware of climate change risks to their business.
As for the built environment, Butler says parts of the sector are moving to reduce emissions but adds that this is not ubiquitous.
Whilst he welcomes the greater stringency in commercial buildings proposed for NCC 2019, Butler shares concerns about the slow rate of improvement in residential and the lack of a forward trajectory for stringency improvements.
Moreover, he says that even after the greater stringency for commercial is adopted, commercial buildings constructed under the NCC which are simply built to Code will still be 20 per cent less efficient compared with those built to Code in the United States.
He says Labor is committed to a bipartisan approach to address climate change.
Action is also happening at a state level.
Speaking of her own state, D’Ambrosio said Victoria under its Climate Change Act 2017 set a long-term target for the state to have net zero carbon emissions by 2050.
This, she says, signals to the market that the state is serious about a low carbon economy.
On supply, the state is modernising its energy system and driving growth in renewable generation and technology. It has established renewable energy targets of 25 per cent by 2020 and 40 per cent by 2025 and is seeking to become a hub for renewable energy technology.
Regarding demand, D’Ambrosio says the state is acting through its Victorian Energy Upgrades program through which households and businesses can access discounts on energy-efficient products, its Victorian Residential Efficiency Scorecard which gives home owners an energy efficiency score or rating for their homes and the Better Commercial Buildings Program which provides matching grants of up to $30,000 to conduct energy audits, implement energy efficiency upgrades and measure and verify building energy improvement.
In 2018 alone, she says the Upgrades program will cut 6.1 million tonnes worth of emissions – equivalent to taking 1.3 million cars off the road.
One area which has concerned some is the absence of a carbon price. Acting Melbourne City Mayor Aaron Wood, for example, told the conference that a price on carbon would be one of the best ways for Australia to deliver real environmental gains.
There is also concern about the discord between the more ambitious renewable targets of several Labor state and the more modest goals at a federal level.
Australia must work to reach its Paris climate commitments.
Whilst some policy initiatives are happening in the building sector, more can yet be done.