On firecrackers and wet blankets
7 August 2014 — The Sustainable Business Australia forum on Monday at the KPMG offices in Sydney was among the most exciting we’ve seen for a while.
Speaking first was NSW Environment Minister and Assistant Planning Minister Rob Stokes. Other speakers were Nathan Fabian, chief executive of the Investor Group on Climate Change Australia/New Zealand, John Connor, chief executive of the Climate Institute, and Ben Waters from Sungevity and a former long term senior executive with GE.
Stokes was gob-smacking enough: a conservative politician saying, no, there’s nothing wrong with your hearing – we want NSW to be the solar behemoth of the nation and we’re committing the NSW state government to a strong sustainability agenda. In particular the new Resource Efficiency program.
- See our article A Conflict Worth Having
Stokes also thinks environmental protection should be prerequisite of business, not an optional extra. He leans heavily for his environmental cues on Benjamin Franklin who said the foundation of wealth were industry and thrift.
Already Stokes has copped a massive and very nasty backlash from Maurice Newman, the 76-year-old defender of the anti-climate ideology for the Abbott government (but published only in The Australian).
John Connor said there were some significant trends under way that would make current government policies irrelevant.
First, climate impacts were being experienced now, they were already costing “multibillions of dollars” and already making businesses nervous.
Another big trend was the emergence of institutional investors who were now “massive players in the global sphere”. In 1995 they owned 15 per cent of the world’s capital. Now it was 50 per cent and what was really interesting is that they were starting to throw their weight around, evidenced by the scuttling of the Woodside Shell deal recently.
A third big global force underway was that stagnant global growth “is not just fiscal”, Connor said. “We’re slamming up limits of our natural resources.”
The big challenge was that this stagnant growth was coming into direct conflict with sovereign authority that rests on the notion of abundance. In the absence of the ability of governments to deliver on those expectations on climate change, things could get interesting.
Meanwhile the debate was also now starting to shift from 25 per cent reduction of greenhouse gas emissions by 2020 to something much more intense.
“The ratbags are talking about decarbonising our economy. We’ve got to strip the stuff out.”
Not everyone supported the carbon removal technologies that the Climate Institute supported but there was little choice, Connor suggested.
Put all these trends together and you get a picture that “activism is already fanning out and will continue to do so”.
Ben Waters thought a carbon price would be back by the end of the decade.
Big business was planning on a carbon price, “even if it’s not necessarily what their association will say,” Waters said.
So far we’ve had “cheap and dirty energy”. That was an era that was now over.
What’s interesting is that as a nation, we’ve never been richer and emissions have been declining.
Instead business is “working on a variety of thing that governments can’t kill”. Such as solar electric cars, consulting on how to be more efficient and other innovations.
The carbon “furniture” was likely to be retained. It would all come back. Right now. He said, “We need new generation of leaders. The big challenge is to not be embittered.”
Nathan Fabian agreed carbon pricing would be back; it was only a question of time.
“It’s a question of how it take and how much of a disruption it will be.”
Right now it was a case of “investors and government going in opposite directions”.
“If you believe capital allocation matters, you need government to get with the program.
“Other options can become become highly interventionist.”
He also said the Climate Change Authority’s role was critical. It needed to play a role similar to that of the Reserve Bank of Australia, to set the frameworks for “what capital wants and government needs”.
The big issue for Australia is that “we are an emission intensive economy [and] need to shift more than most.”
Victorian government out on a limb on Fishermans Bend
The Victorian government looks like it’s gone right out on a limb in its attitude to the massive Fishermans Bend precinct on the edge of Melbourne’s CBD.
Already some observers in the property industry are alarmed at early speculative buying of sites on the back of a strategic framework released by the government, but in the absence of a master plan for infrastructure.
This means no one knows where major services such as schools or hospitals will be located.
On sustainability, the government has made some feel-good statements but they are qualified by assertions that outcomes won’t be mandated. There are plenty of “shoulds” but not many “musts”.
Yet given the right vision, the site, 250 hectares, capable of doubling the size of inner Melbourne, has the potential to set new world standards in sustainable and innovative precinct development.
Comments have come from a huge range of stakeholders that cross many of the usual divides.
The only stakeholder not commenting is the Victorian government. Several phone calls and written questions from The Fifth Estate have gone unanswered.
The Property Council, Green Building Council of Australia, BioRegional, green groups and leading property industry sources all say the Victorian government is missing a major opportunity for leadership to build on Melbourne’s reputation for quality and liveability.
But that’s only the comments on the record.
In private, the comments are far more intense.
In a submission made to the Victorian state government, the Property Council made some key recommendations including to:
- Revise the design guidelines to allow more flexibility to accommodate greater opportunity for innovation
- Develop an employment creation strategy that will attract investment to the precinct
- Research the potential of implementing cluster strategies to attract innovative industries to the area
- Research the viability of precinct wide sustainability initiatives
- Establish sustainable stakeholder partnerships to deliver sustainability outcomes more effectively
On Wednesday executive of the Property Council’s Victorian division, Jennifer Cunich, said the Property Council wanted the government to develop a masterplan for infrastructure first. It hasn’t happened.
Now the speculators had moved in. The government had moved too early, before the right planning could get hammered out.
“I think they jumped the gun,” Ms Cunich said.
It would be “a missed opportunity” if Fishermans Bend did not strive to the highest outcomes, Ms Cunich said.
“They should be looking at Green Star and Green Star Communities.”
Of course the GBCA agrees with this. Its media release on the issue was restrained, but also along the lines of missed opportunities.
Where are the metrics it asked?
“How will the 80,000 residents of Fishermans Bend, close to Melbourne’s CBD and currently being touted as ‘Australia’s most significant urban renewal project’, know that their community is efficient, healthy, productive or sustainable?
“Other significant urban renewal projects around Australia such as Barangaroo South and the Parramatta Square in Sydney, Caloundra South and Ecco Ripley in Queensland, Bowden and Tonsley in Adelaide, and Alkimos Beach and Waterbank in Perth, not to mention the University of Melbourne’s Parkland Campus in Melbourne, are applying the Green Star – Communities rating tool to ensure they meet best practice benchmarks for governance, design, environment, liveability, financial prosperity and innovation.
“Meeting these benchmarks does not need to cost more, but will deliver massive long-term benefits. How will the people of Victoria know that their community – one that will one day be home to 80,000 residents – meets Australian benchmarks for sustainability, leadership, transparency and efficiency?”
Designs on mining our urban fabric
There’s some angst right now among the most unlikely sources in the property industry – at the top end. It’s around the inflow of global apartment development money – mostly Chinese – aimed at a global investment market – also mostly Chinese – that is looking for short-term and long-term for profit respectively, not places to live.
The results are apartment towers where the lights are off and there’s nobody home.
There is also a growing chorus of concern about poor quality, low sustainability outcomes, including in some of the biggest towers, especially in Melbourne, where the Building Code applies but not much else and also Sydney where there are minimum design and environmental standards, but still big questions about the lack of aspiration in the results.
The big local developers are not at all impressed. They’ve spent massive resources to transition to more sustainable quality product and now their business model is under threat.
What empty apartment towers does to the age old cry for affordability is also not good. The development and residential lobby that calls for ever more supply as a way to make housing more affordable must be flummoxed. There’s more supply but if the housing is locked up unrented it does nothing for the demand side of the equation, while continuing to chew up scarce resources and keep the pressure on prices for development land.
Of course it doesn’t matter where development money comes from, what’s important is how we manage our cities and the design of our urban fabric. It’s up to the cities and governments to create the frameworks that capital can work within. You can hardly blame developers for not producing high environmental and design quality product if there are no drivers to do so.
And they wouldn’t care what the rules are. The evidence is that developers – local and global alike – might cry foul and yell blue murder when authorities introduce new standards and frameworks. But within a few weeks, they knuckle down and get on with the job of being competitive and efficient.
The thing is the residential sector needs much more love and attention from planning authorities than the commercial sector.
While the top end of the commercial sector is lauded for its high quality and high sustainability outcomes, thanks to corporate drivers, the residential sector is not at all the same. Developers are there short term, and the buyers tend to be unsophisticated consumers who know little about design, energy consumption, life cycle products, volatile organic compounds, and overall environmental impact of what they may own for many years to come.
This is why the Victorian Government Architect is considering some design standards for apartments. Strangely, it doesn’t have these already. A model seems to be NSW’s State Environmental Planning Policy 65.
Currently the Residential Development Council is reviewing SEPP 65 with concerns that parts of it “go too far” especially in relation to setbacks and other provisions that might make some sites unworkable.
And the Property Council is horrified at the possibility of minimum size apartments. To be fair the size – within reason – is not really the problem, it’s design that counts.
But there are factions in the property industry that don’t want any mandates at all to impinge on private property rights, preferring to subscribe to the free-market rule. Or no rules. And this is causing some conflict with those who want longer term responsible outcomes.
Market forces might work brilliantly in delivering widgets. But in property development a widget” is a massive agglomeration of resources that’s around for many decades. If it’s strata titled, it could be almost impossible to re-purpose, sell or even retrofit for energy efficiency.
We’ve already lost the Cities Unit at the federal level, we’ve lost any focus on public transport with infrastructure now code for roads, and there’s a huge urban regeneration precinct at Fishermans Bend in Melbourne where the sustainability agenda seems fluffy and optional with none of the strong targets or mandated standards that could make it a global leader. See Ed Cotter’s excellent article on this in Spinifex.
What’s going on is the ideology that’s driving the federal policy agenda is now marching into property-land. In terms of global money it’s done with the mining-free-for-all, with barely royalty as compensation, (blame both sides of the parliament for that) and now searching for nice above-the-ground wealth to mine, in our urban fabric.
Metrics with three Ms
There’s a surfeit of plans about right now. Including a new plan for Queensland and the Brisbane City Plan for 2014.
But you need to ask what the purpose of a plan is. And how it can be taken out of the realm of wishful thinking, something that sustainability folk know all about.
What’s needed and often missing is the three M’s – metrics, measures and mandates.
Metrics as in concrete goals for reducing waste, minimising carbon emissions or cutting cars in the CBD. It’s not actually a metric to say “aiming for zero waste”. That’s an aspiration. And without mechanisms for measurement, the metrics can evaporate pretty quickly.
And finally, there needs to be mandates. Not all this nonsense about preferring or encouraging. We need a direction and leadership. It’s why we pay governments loads of money.
What’s needed is for the leadership in our governments to be bold and brave, to insist on nothing less than genuine sustainability. This is no time for being weak-kneed.
As they say in FM circles, “If you can measure it you can manage it.”