If you had any doubts that there’s a green business boom on the way, our interview with Frankie Muskovic will be a wake up call. Amazing opportunities are opening up and they’re deeper and wider than ever before.
Frankie, who is national policy director for the Property Council of Australia, was clear as a bell about what’s on the way. So we decided to share her thoughts in this lightly edited version of what she flagged.
Don’t miss the live interview next Tuesdays with Frankie and three other great leaders in the green business space. Book your tickets now forShow Me the Green Money leaders forum on 3 June.
We’ve got this huge potential over the next year, particularly the next six months to bed down really high level ambition across the economy.
Australia has to submit a 2035, target. The eyes of the world are on us in that process. Because if we’ve got a hope of hosting COP 31 (in Adelaide) and I think we’ve got pretty good chance of doing that, we can’t be co-hosting with Pacific partners who are experiencing extremes of climate change today, and not have a credible, ambitious, 2035 target.
The election result in particular lends itself to the government really leaning into that potential ambition. You’ve got an opposition that is going to take a while to have a coherent message on climate. And in my view, that leaves the field open a little bit.
Of course, we’re waiting with bated breath on the advice from the Climate Change Authority to the government on this, but they’ve previously given advice [late last year] suggesting a 65 to 75 per cent emissions reduction on 2005 levels.
[The advice included sector pathways work]. I think in the main we know what the window looks like. And I think we should have hope. And certainly looking at some of the state governments where they’ve set their own targets [the target] could very well could focus on the higher level of that bracket and be shooting for 70 per cent to 75 per cent.
The result of setting that kind of net overarching ambition means, how the hell are we going to get there? And if you think about where we’re going to mostly achieve those emissions reductions out to 2030 that’s in the decarbonisation of the energy sector and more renewables coming online.
So in a sense, from 2030 onwards, given the grid will be maybe up to 82 per cent [decarbonised] the job will mostly be done in the electricity sector.
So there’s no more low hanging fruit to be got from the energy sector.
After that, we’ve got to deal with other key economic sectors. So sectors like the built environment, like industry beyond the safeguard reporting entities, transport, the resource sector, will come into sharper focus.
[But it’s a big job, we had 20 years to get to the 43 per cent target] and we’re talking about going from 43 per cent to 70 per cent or 75 per cent in five years. That is a huge amount of heavy lifting. And there aren’t so many big, chunky levers to be pulled to get us there.
So we should look at how we review and ratchet the safeguard mechanism and potentially expand the coverage of that.
There’s work on vehicle efficiency standards. So bedding down reforms that have already been put in place.
But then you have to look a lot more broadly across the economy on where to get those wins.
The building sector is ripe
And I think the building sector is ripe for focus there. We’ve said for a really long time that some of the least cost abatement opportunities exist in the built environment.
It’s just about spooling up the policy.
What does that mean? That means upgrades of pretty poorly performing housing across the board.
Housing a leading target
There’s a potential benefit here as well, in focusing on the cost of living perspective associated with that.
The best analysis I’ve seen is that the built environment would comprise almost a quarter of Australia’s emissions in its operations. That’s roughly split, split half, half between residential and commercial.
And a lot of that will have been constructed prior to 2004 when we had minimum energy efficiency requirements in the building codes.
We are talking about leaky, uninsulated, poor performing housing with a lot of scope for improvement.
And some of the policy foundations that we’ve been waiting on for a long time are almost with us, right.
We’re seeing the trial of NatHERS [energy rating scheme for housing] for existing homes that I really hope, will underpin a national home energy rating scheme that could and should be made mandatory at the point of sale or lease, when we’re confident that that’s working well.
We need the ecosystem to build up the capacity for the transformation
But you can’t go from zero to mandatory and rate millions of Australian homes overnight. We need to build up the ecosystem that’s going to support that work, and that needs to start right now.
This is the workforce of professionals, the builders, the insulation installers, the people who will do blower door tests and draft proof these homes and install heat pumps and get households off gas.
There’s a little army of people that we need to do this work at scale.
That’s a huge area of opportunity.
The commercial sector too
There’s similar work that in a similar vein needs to be done in the commercial building sector.
We’ve got a lot of the fundamentals right there already – NABERS is very good; it’s trusted. We’ve got a commercial building disclosure scheme. The task there is to make sure that NABERS ratings are fit for purpose and cover every major commercial building type, and that there’s support for the uptake of NABERS across the board.
Europe already imposes minimum energy performance requirements for existing buildings.
If there’s a hope to introduce that in Australia, it needs to be flagged now.
Major reform for commercial buildings
The scale of that reform is a big one, and a lot of this is about creating that longer-term certainty for industry
What do we need to unlock these opportunities?
Muskovic delves into some of the potential answers and points to the Productivity Commission indicating in its recently flagged priority list of reforms that Australia needs to focus on to raise its productivity: climate resilience and the fast tracking of renewable energy and removal of barriers for private finance of resilience, something that could unlock lower insurance premiums.
There’s more, a lot more but come to the event and ask this powerhouse for her views in person.
