A New Narrative for the Building Products Industry 2

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Monday, July 20th, 2015
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Significant changes in the ways we think and act will be required if we are to reduce emissions in a way that will limit climate change to less than a two degree Celsius increase, the level at which many say our economy will be adversely affected.

The building products industry, design and construction sectors have a huge role to play in meeting these challenges to produce the kind of products, buildings and infrastructure we need to develop resilient communities. But recent see-sawing in policy and the current uncertainty over Australia’s energy and climate change policies going forward are not conducive to encouraging business investment in Australia. And this puts our industries at risk in terms of global competitiveness.

Despite a lack of clear direction from the Federal Government, many local businesses see that helping society adapt and mitigate climate change risks presents commercial opportunities and makes good business sense. At the very least, improving the energy productivity of our manufacturing sector and built environment is a no-brainer. It is estimated that around one third of necessary emission reductions can be achieved through improved energy efficiency alone.

The vital role industry can play in achieving global sustainability goals is well recognised by the United Nations. The UN sees industry as essential for development and improving well-being, and that mobilising industry is key for environment and climate preservation.

As the UN Industrial Development Organization’s head of the UNIDO Representational Office to the European Union, Christophe Yvetot, speaking at a recent vinyl industry conference in Europe said, “Industry can actively contribute to the global sustainability agenda through its continuous efforts to reduce its environmental and climate footprint and to develop new green products, services and jobs that will support a more sustainable world.”

There will be a new narrative for industry post-2015: sharing prosperity and respecting the environment, Yvetot told the industry.

To remain globally competitive, a climate change focused business strategy makes sense for Australian manufacturers. But how can the local industry make long-term strategic decisions when the political climate here is as uncertain as it is, with strategies and approaches being as short-lived as a government’s term?

The 2015 Paris Climate Conference (COP21), taking place this December, aims to achieve a legally binding and universal agreement on climate. The overarching goal of the negotiations is to agree a pathway to keep global warming below two degrees Celsius. Yet in the lead up to the meeting, Australia is being questioned over its unambitious target – a five per cent reduction in greenhouse gas emissions from 2000.

As a country, we’ve also been questioned by other participating nations about whether the Federal Government’s $2.55 billion Emissions Reduction Fund (ERF) would get close to meeting even this low target. In preparation for negotiations in Paris, the Government is now in the process of setting its targets for beyond 2020 and the French government has urged Australia to take a strong and ambitious position to the Paris meeting.

A failure to be strongly committed and to provide the policy certainty needed for business investment will be detrimental to Australia’s global competitiveness. We may already be seeing signs of this, for example, in the solar industry, where steady, consistent strategy and support to transition the economy in other nations puts them in a better position to grasp the opportunities and provide the products our future built environments and infrastructure need.

At April’s vinyl conference, United Nations Environment Programme (UNEP) chief of sustainable lifestyles, cities and industry Arab Hoballah, noted that the market is being driven by the same trends that are driving the planet.

“The private sector can see this as a new set of regulations, restrictions and red tape; or as a historic, immediate opportunity to innovate, grow new markets, and build new relationships with customers and other stakeholders to help society meet the challenge of change,” Hoballah said.

It is perhaps no surprise then that a new coalition including key business and industry groups has called upon the government to implement decisive, fair and more strongly committed action on climate change. The Australian Climate Roundtable, which includes union, social, environmental, investment and industry groups has developed and released a set of principles to guide climate policy in Australia.

Australian Industry Group chief executive Innes Willox explained the principles would help end the “frustration and disruption” to ever-changing climate policy.

“The shared recognition that we need to maintain competitiveness while reducing emissions over time is a major advance and a solid platform for future policy stability,” he told the press.

Australian businesses have been progressive in developing and implementing sustainable building practices and products. Think of recent sustainability award winners and the range of locally produced products certified under ecolabels. However, government has a key role to play in setting the framework to meet climate change needs, particularly in terms of the energy source options, as well as in supporting the Australian industry in the required transition to maintain a globally competitive position.

UN Secretary General Ban Ki-Moon emphasised this in December of 2014 when he said, “Government has a vital role to create an enabling environment through appropriate mix of regulatory and policy measures; to develop and encourage transfer of environmentally sound technologies and innovation; facilitate information sharing and knowledge building.”

It’s crucial that those of us in the local building product manufacturing industry do not miss out on the opportunities that lie ahead. The government is to be encouraged to see the immense immediate and future benefits to Australian businesses that will result from a strong, fair, long term commitment to climate change policies. Not only will it enable a smooth transition for Australia’s energy matrix, it will ensure Australian manufacturers can lead and expand across the world from a home base.

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  1. David Chandler

    Sophie, thanks for a great article. Would like to know more about the Vinyl Conference papers? I think Hoballah's words are the challenge in a nutshell:“The private sector can see this as a new set of regulations, restrictions and red tape; or as a historic, immediate opportunity to innovate, grow new markets, and build new relationships with customers and other stakeholders to help society meet the challenge of change,” Unfortunately most in construction are so risk adverse, so busy draining todays swamp and so compliance disinterested there is a lot of turning around to do. But turn around we must.

    • Sophi MacMillan

      Yes, indeed David! Thanks for your comments. Please feel free to contact me through the Sourceable website so I can share the conference papers.