Property and the Paris Climate Pact
With the historic Paris climate agreement including commitments from all nations, what does it mean for the property industry in Australia?
Almost 200 countries have signed up to reduce emissions according to their circumstances and their own targets – with five-year reviews starting in 2018. The agreement will restrict global temperature increases to “well below” 2 degrees celsius, with an emphasis on limiting increases to 1.5 degrees celsius.
Australia is one of the world’s highest per capita greenhouse gas emitters and the Coalition Government has committed to reducing emissions by 26-28 per cent on 2005 levels by 2030, while the Labor Opposition has announced a target of 45 per cent on 2005 levels by 2030. With the emissions target now set, at least for some years, the Government has also set the key elements of Australia’s policy framework to achieve these reductions.
This policy framework focuses on the Emissions Reduction Fund (ERF) and National Energy Productivity Plan (NEPP).
Currently the design of the of the Government’s $2.55 billion ERF does not promote participation from the property industry. Problems include:
- a very high minimum bid size of 2,000t CO2-e per year, which rules out single building scale retro-fit projects;
- funding only provided on completion of a project, despite abatement calculated upfront;
- ·not allowing long term contracts to ensure return on abatement as well as investment; and
- ·not allowing participation in complimentary schemes, such as the NSW Energy Savings Scheme (ESS) and Victorian Energy Efficiency Target (VEET) scheme.
The Property Council continues to raise these issues with the government to attempt to get a more useable model in place.
The NEPP released in December 2015 by COAG identifies a range of future policy reforms, a number of which impact property. This includes advancing the National Construction Code to achieve better energy efficiency outcomes in residential and commercial buildings as well as compliance; reviewing to expand the Commercial Building Disclosure Scheme and wider use of National Australian Built Environment Rating Scheme; and working with the newly established Cities Taskforce to ensure more liveable, accessible and productive cities.
The property industry is well placed to make a substantial contribution to the achievement of these targets.
We have the runs on the board. In the past five consecutive years, Australia and New Zealand has achieved the most sustainable real estate practices in the world, according to the GRESB annual survey.
We also represent a significant part of the country’s emissions footprint. According to the Emissions Reduction Fund Green Paper, commercial buildings in Australia alone account for approximately 9.4 per cent of national emissions and 7.2 per cent of energy consumption.
And some of the lowest cost emission reduction opportunities for the country are to be found in the built environment.
The Property Council is committed to working on solutions with our allies such as the Green Building Council of Australia, and is an active member of the Australian Sustainable Built Environment Council. Initiatives include a substantive research and advocacy paper on energy efficiency and emissions in Australia’s building sector towards 20, which will be released early next year.
Caption: UN Photo/Mark Garten