The Senate has rejected the Efficient Building Scheme proposed by Lend Lease and WSP Lincolne Scott. The Property Council’s Peter Verwer has lambasted the scheme and has pinned the PCA strategy for sustainable building upgrades on accelerated depreciation, despite doubts that it will be effective.

The Senate’s rejection yesterday of the Greens’ Energy Efficient Non-Residential Building Scheme Bill is short sighted and cavalier according to Australian Greens Deputy Leader Christine Milne. She has vowed to continue to fight for the scheme which the Greens say would halve emissions from buildings by 2020.

By rejecting the bill the government has missed an opportunity to lower energy bills, increase productivity and dramatically reduce emissions, Senator Milne said.

The bill, which is based on the Efficient Building Scheme developed by Lend Lease, WSP Lincolne Scott and Built Ecology (previously Advanced Environmental), was introduced to the Senate last year. A decision was delayed pending a formal enquiry into the scheme.

It proposed the establishment of a cap and trade scheme for all non-residential buildings including offices, retail centres, hotels, hospitals and schools. This contrasts with the government’s mandatory energy disclosure program, which only applies to commercial office buildings.

Ms Milne said the Senate committee had not taken the bill seriously and had demonstrated a lack of understanding of the scheme’s key components. It had also disregarded widespread support of the scheme from international experts and organisations such as the World Business Council for Sustainable Development’s Energy Efficiency in Buildings Project; RAND Corporation, one of America’s oldest research institutes; and Dr David Vincent, Projects Director, Carbon Trust – an independent company set up by the UK Government to accelerate the  move to a low carbon economy.

“It is disappointing that the Economics Legislation Committee, dominated by the government, does not have a culture of trying to achieve a consensus and that the Chair failed to circulate comments on her draft that sought to achieve consensus,” Ms Milne said.

“As a result, in several areas the Committee’s report fails to represent the evidence received and fails to capture the essence of the arguments relating to the bill.

Christine Milne

“From the Greens point of view, a key outcome of the inquiry was that amongst all the submissions to the inquiry, there was no substantive rebuttal of the very simple method of assessing building energy intensity based on the reporting of electricity and gas bills,” Senator Milne said.

Under the proposed Scheme buildings owners would provide data on their buildings’ greenhouse gas emissions. This would include:

  • energy consumption (electricity and gas bills, including any on-site energy generation)
  • building type (office, hotel, retail, school, etc)
  • location (climatic zone and/or economic centre).

From this data the building’s energy intensity (kWh/m2/annum) and carbon intensity (tCO2e/m2/annum using official greenhouse gas emission coefficients for fuel sources) would be calculated.

In rejecting the bill the Senate committee argued that the Carbon Pollution Reduction Scheme will provide a clear signal to all sectors of the economy and must be the priority.

Maria Atkinson, global head of sustainability for Lend Lease, and Che Wall, managing director of WSP Lincolne Scott, said the Energy Efficient building Scheme was designed as a complementary measure to the CPRS, or as a stand-alone scheme if the CPRS was not introduced. It would provide an ”enabler” for the building sector to reduce its carbon footprint by offering building owners and developers an incentive to create energy efficient buildings.

Under the scheme, a cap is applied to carbon emissions from buildings and those that achieve lower emissions than the cap can sell the surplus to less efficient buildings.

Ms Atkinson and Mr Wall say that the CPRS will not stimulate emissions reductions in existing non-residential buildings.

“We know from international experience that the scale of energy efficiency improvements that are both possible and needed has not and cannot be achieved through voluntary incentive programs, building code reform or mandatory disclosure schemes,” Mr Wall said.

He pointed to Tokyo’s voluntary trading scheme, which, coupled with a mandatory disclosure scheme, delivered only a 2 per cent reduction in emissions over three years.

Property Council slams scheme as “big tax”

The Property Council of Australia opposes the scheme. Chief executive officer Peter Verwer instead supports accelerated depreciation, describing the Efficient Building Scheme as “a huge churning tax and transfer system”.

In a recent statement on the subject published in Property Australia magazine, Mr Verwer, said the proposed scheme was poorly conceived and enormously complex.

“It is utterly inequitable, as it makes owners responsible for energy loads and emissions caused by building occupants, over which they have no control, and fails to recognise why buildings perform in different ways,” Mr Verwer said.

The Property Council’s alternative is accelerated depreciation tied to environmental performance measures, which Mr Verwer believes will encourage property owners to refurbish early and green.

“It’s a simple plan –upgrade to improve your building’s energy performance by 60 to 80 per cent and write off the capital cost two to three times faster,” said Mr Verwer.

Maria Atkinson

Maria Atkinson told The Fifth Estate that it was opportunistic for the Property Council to describe the EBS as a big tax.

“It is scaremongering to use this language and it is not factual or informative. This is a massive opportunity for the sector to position itself and it is frustrating that an industry organisation is not providing leadership to help develop robust long term policy.

“I think the Property Council is very confused about how the scheme works. They are arguing for incentives and I would say to them why not work on a fair and affordable system to reduce emissions and then add incentives such as accelerated depreciation for those who really need them. They are not mutually exclusive, Ms Atkinson said.

She was positive that the EBS would eventually be adopted and that there would be an “aha” moment when the penny finally dropped for the government.

“What the government and the property industry needs is a register that shows a carbon footprint for every street address in Australia. This information is invaluable for government and for property developers and investors.,” Ms Atkinson said.

The Property Council, along with others who oppose the scheme, argue for retention of the National Australian Built Environment Rating System, or NABERS energy rating tool.

The Greens (and Che Wall and Maria Atkinson) argue that in its current form, the NABERS tool is an inaccurate rating tool as it distorts its reporting of CO2 intensity per square metre by correcting for externalities such as hours of use and numbers of computers in a workplace. The Efficient Building Scheme on the other hand looks at “raw” CO2 emissions and provides a carbon footprint average for industry and building types.

They also believe its reliance on the use of independent expert assessors makes NABERS very expensive to operate.

Senator Milne, in her response to the bill’s rejection, said the Property Council’s opposition to the Efficient Building Scheme was puzzling.

“With regards to accelerated depreciation, whether this would prove effective in the non-residential building sector was a contested point, but the Greens view is that either way it is compatible with and could be additional to the emissions trading scheme and/or white certificate trading or the proposed EBS.

“It is notable that the Property Council of Australia rejects a market mechanism to drive energy efficiency and prefers regulation and government largesse making it vulnerable to the whims of government in terms of both. Given that no government has this policy on the table why the PCA would take this approach is puzzling,” Senator Milne said.

“The Property Council had displayed both a poor understanding of the intent of the Bill and a determined effort to undermine a reasonable consideration of the pros and cons. This came as some surprise given that many members of the Property Council would presumably benefit from the EBS.”

lblundell@thefifthestate.com.au

See our article on why accelerated depreciation won’t work

and our article on the NABERS review under way

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