The COP26 climate change summit in Glasgow has finally run its course. After all the speculation, negotiation and consternation, what are the outcomes for Australia’s property industry?
The key takeout is that Australia now enjoys bi-partisan political support to achieve net zero emissions by 2050. While debate over 2030 targets will rightfully continue, and the next 29 years will see plenty of political disagreement, the end target is now clear.
What’s also clear is that momentum is building among the investment community to drive change. This is a factor the Australian property industry understands well and has been adept at responding to. We should be prepared for this to intensify.
Thirdly, there were no specific commitments for real estate out of COP26. This may come in 2022 when supplementary discussions are held between nations on revised 2030 targets, but for now, there is no international policy toolkit to inform action in Australia.
The Commonwealth Government’s newly released Long-Term Emissions Reduction Plan acknowledges that the property industry will need to nearly decarbonise for Australia to meet its economy-wide net zero goal. It also acknowledges that while there are some good policies in place already, there will be a need for further government action in several areas, including incentivising upgrades to existing stock and expanding disclosure frameworks.
Over the coming years Australia will need to find the right policy setting that accelerate the transition of the built environment through greater energy efficiency, decarbonisation of energy supply, and reductions in the embedded emissions present in the materials that make up our buildings.
This needs to recognise the highly complex range of actors within the broader property landscape, with stakeholders ranging from the world’s biggest property companies to mum and dad investors. There are also split incentives between owners and occupiers that will need to be contended with.
The basis of this work has been done by the Property Council and the Green Building Council, supported by our other allies, in our Every Building Counts practical plan for emissions reductions in the built environment.
The Australian property industry has achieved a lot already, a fact which should fill us with confidence as we look to the challenges ahead.