Getting the Balance back in 1.5C Climate Action
Today, I have the luxury of taking a step back from active practice and it got me reflecting on the past and what I would hope to see for our future.
Twenty-five years ago, working in collaboration with CSIRO, I completed a research project investigating the whole of life carbon impact of the newly minted “house energy rating” scheme introduced by the ACT Government, a world first regulation.
The findings were, however disturbing – showing that, for “heavy” residential housing (i.e. double brick and brick veneer on slab), the mandatory “5 star operating energy” rating, had a perverse outcome of accelerating carbon emissions (thus climate change), rather than reducing it. That is, more upfront carbon is added to houses to achieve the 5 Star operating rating, than was ever paid back over the theoretical life of the house or its elements[1].?
This research was extended to commercial office buildings in Australia, where we observed the same phenomena [5]. Both policies accelerating (i.e., bring carbon emissions forward) climate change and adding to the overall cost of building (thus, reducing the economic productivity of the property sector overall). In the subsequent twenty years I’ve advocating and worked with Clients consistently to apply “whole life / life cycle” carbon and cost payback analysis to validate the real life “sustainability” of project design and investment choices. Often with strong opposition of rating agencies and sustainability professionals.? It was great to see my IEA colleagues Lutzkendorf and Rock[2] recently published a well-regarded paper, observing the same phenomena in a wide range of countries. It’s now time for action by governments to roll back regulation and address the evidence.
The world has enough operating energy efficiency for now. Global grids have already locked in further 20-50% operating emissions reduction at current energy use intensity for most building types without another dollar of investment. Certainly no need to throw away gas infrastructure before the end of its life. Moreover, the cost of an average project home is now more than $10,000 more expensive, due to outmoded “sustainability” features, which have been tested and shown to have no payback benefit to homeowners[3]. With our critical housing shortage and affordability gap, this needs urgent review by all governments. The same problem exists with most “high tech” services solutions, also observed in my work, and now mercifully, having the spotlight on it from incoming researchers[4].
With global electricity grids so rapidly decarbonising, and the urgency on carbon mitigation today, not tomorrow or in 40- or 60-years’ time. Materials production is stubbornly inefficient. So the world needs a big sanity check on further tightening or pursuit of more operating energy efficiency and more on Upfront Carbon mitigation. At the very least we need to have intervention by Treasury and Finance departments, globally, to inject formal whole life financial impact validation with carbon validation and a heavy emphasis on upfront carbon mitigation – given its urgent proximity to a “runaway” >2C global reality.
“Sustainability” after all is a 3-legged stool that sits evenly to affect its functional purpose.
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Having noted all this, we do have a very different world than we had twenty-five years ago across all aspects of property from the Boardrooms to the site as well as regulation. Progress has been surprising in many ways. But just like the “pink batts” debacle and “embedded cogeneration” investments lost – the rush to back eco-winners, so as to be “seen” as green at the expense of good evidenced backed, impact tested policy which delivers sustainable financial and climate outcomes is the cliff-edge that we find ourselves standing on at present.
To avoid missing our shared mutual interest in 1.5C planet, I hope to see in the next 3-5 years:
1.???? A pivot to Carbon Product Footprint (CFP) labels in the near term over full EPD to accelerate uptake by all scales of manufacture’s – after all, its “Carbon” which is the present urgent problem; (EPD's can follow, once we have suitable cost effective sector capacity)
2.???? Leveraging climate tech / AI to eliminate the cost, time and people supply barriers associated with current EPD system (the more 5,000,000 new products each year can’t be serviced by the current frameworks);
3.???? Whole life (limited to Stage A and B only) financial and emissions analysis required for all development and existing assets, based on carbon intensity as an effective measure like FSR and ROI’s that evidence productivity improvement;
4.???? IFRS-2 climate disclosure elevating carbon management to Board, CEO/CFO and Finance and less by ESG and Sustainability, ensuring the elevation of carbon and investment management to the level needs to solve the “acceleration” phenomena for property, materials and construction sectors.
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5.???? Finally, seeing a big advance in the governance of carbon across the property sector. The prevailing environment is grossly short on independent oversight and corporate governance of institutional quality. ESG and Sustainability teams have been largely left to drive their agendas owing to the relatively small absolute cost and obscure and complex frameworks by environment practitioners. This environment is not fit-for-purpose as we move to integrated carbon and finance reporting where the carbon impact and liability of physical assets, materials and buildings has a quantifiable and market value. Seeing the ACCC, AICD as well as IASB step in to lead the development of governance for things such as national carbon databases, label schemes and carbon neutral / net zero schemes and regulation and the like will be crucial to meet with our shared global wish of a 1.5C world.
We have progressed hugely in twenty-five years. But population and materials consumption have outpaced our efforts. Its taken half as long (20 years) to add 2 billion people to the planet than the last 2 billion. Australian's still have the largest houses in the world by a factor of 2, why? We all share a mutual imperative to get back on track to achieve 1.5C and avoid 2C world. I hope the next twenty years sees mainstreaming carbon management - transformational change will occur once the Boardrooms of the world have the burden of liability and shareholders and markets with transparent metrics and disclosure that they can make equitable decisions about.
Lets double down on evidence led action, get balance into our "sustainability" stool and sense check whether we are in it for environment, or employment.
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[1] Tucker, S. N., Ambrose, M. D., and Mackley, C. (1998).? A 3D CAD model of embodied energy for assessment of sustainable construction. CIB World Building Congress Construction and the environment. Gavle, Sweden, 7-12 June. (pp. 1919-1926.)
[2] Rock, M, et. Al (2020), Embodied GHG emissions of buildings, the hidden challenge for effective climate change mitigation. Applied Energy, 258 (114107).
[3] ACIL Allen, (2021) Proposed requirements for BASIX in 2022, Cost Benefit Analysis. Report to NSW DPIE.
[5] Noller, C (nee Mackley) (2005) Economic Impact Assessment of Embodied GHG for Office Construction. UNSW, PhD Thesis.