UPDATED 21 Dec 19: News from the front desk, issue 462: If 2020 signifies perfect vision then it could be a brilliant irony that in the most populated capital of Australia the air’s been thick with smoke and pollutants and visibility ultra low.
On the other hand it could be a last loud warning.
After all 2020 was climate D Day for years. Now it’s days away.
So hello, 2020, we were hoping you’d be delayed, but since you’re here let’s take a look at what you might have in store.
Le’s stick to the non-apocalyptic stuff; there’ s plenty of that in the dailies. In fact it’d be great if we could skip summer altogether and look forward to the new peak season of winter when we can expect elections and weddnings to be held and the property market to limp back to whatever life is left in the locations that still remain vaguely liveable.
So other than Australia’s biggest city ringed by fire, volunteer firefighters killed or injured, 90 towns and communities in NSW running out of water and subject to a massive war (or wa-ter) mobilisation effort that includes massive rearrangement of the landscape, there’s some good news for property.
Let’s start with the big picture first.
On the global stage it’s interesting to note that even Vladamir Putin is signalling a shift on climate. The man from Russia this week took a bet each way on global warming – maybe a slight tilt of the earth could bring it on, maybe not, he said – either way we must do everything we can to slow it. Besides loads of Russian cities and towns are built on permafrost, which could be disastrous if it melted. There’s nothing like direct impact, it seems, to make climate change a visceral thing.
John Connor, just back from two years working for Baker McKenzie on retainer with the Fijian Government, and now heading up The Carbon Market Institute brings another big picture perspective. He’s just returned from COP25 in Madrid and thinks there is a move or be moved feeling underway within leading corporates.
While governments prevaricate and countries like the US and China perform distracting trade wars that take us backwards on climate the more visionary thinking business leaders see they had better take stronger action to decarbonise before it’s thrust upon them, even nationalisation, potentially.
Connor says Madrid was peppered with new allegiances. There were “a bunch of corporates signing off on net zero by 2050 “regardless of government”.
“The emissions intensives companies are getting strongly focused; they know their trajectory is in the wrong direction,” Connor says.
“If they’re way off track by 2030 they’re worried about what the backlash of inaction will look like, potentially nationalisation of industries.”
Already there’s investor pressure, directors’ fiduciary pressure, consumer pressure and in a vindication of the hardline activists, the Extinction Rebellion is starting to penetrate to the boardroom.
The proposed European Green Deals is another, acute, example of what he’s talking about.
This is around plans set out by the European Commission to affect everything from the “the air we breathe to how food is grown, from how we travel to the buildings we inhabit”.
Notably this is couched in an underlying assumption this can lead to growth and prosperity, growth that “gives back more than it takes away” as new commission president, Ursula von der Leyen said.
Key targets include net zero carbon by 2050 and 50 per cent cut in emissions by 2030, with targets for recycling rates, standards in manufacturing to build a circular economy and the phase out unnecessary plastic.
However, despite the ambition, critics say the plans don’t go far enough to stop climate warming. And that’s Connor’s point.
Dissenters and hard line activists are really starting to worry corporates, he says. They can see it’s not only children involved but the “David Attenboroughs” as well.
“They’re worried about what the backlash might be.”
The corporate leaders see beyond the current distractions to the “inevitability of net zero”.
“Any company worth its salt is doing long term planning.”
Property might be a late arrival as a carbon star
In Australia, despite the narrative from political leaders that, despite the devastating consequences we now feel, climate is something we needn’t bother trying to mitigate, Connor reckons there’s movement behind the televised political banality.
“I think there is a path to redemption for Morrison,” he says. And it could be through property, which would be a nice “ordained” kind of thing since the PM’s early days were spent at the foot of the real estate industry. With buildings responsible for 25 per cent of emissions that’s not a bad place to start. Also, the fact that slashing emissions in buildings is the cheapest quickest cuts we can get, according to too many experts to cite again.
Connor’s reasoning for this ray of hope is the secretive review headed by former Origin Energy boss Grant King of the Emissions Reduction Fund, part of the Climate Solutions Fund, to see how its recent injection of $2 billion should be best directed.
The thinking is that energy minister Angus Taylor, under pressure from a host of quarters, not the least from global leaders at Madrid who looked at him askance for “not mentioning the fires” knows he has to find additional carbon abatement to meet the Paris agreement so he’s looking at sectors such as buildings and industrial.
In recent weeks he released a discussion paper, strangely kept under wraps – no general announcement – giving industry sectors just a week to respond with submissions.
The property sector jumped to and has lobbied strongly with a real chance, it thinks, of success that buildings might become a central part of the carbon reduction plans.
Hopes for property
The case for the property sector to qualify for the emissions reduction fund (ERF) is “as strong as ever given that real estate is a quarter of all emissions and that the ERF is the centrepiece of the federal government’s carbon reduction strategy,” Morrison told The Fifth Estate.
“The sense of making it work for real estate is clear”.
Morrison’s submission is for property to qualify for a quarter of the fund, $500 million, which seems reasonable given the sector’s responsibility for a quarter of emissions.
“We’re heartened by the fact that the government has commissioned Grant King to review the ERF and the Carbon Solutions Fund and we had a really good hearing with the panel,” Morrison says. “It looks like the Every Building Counts struck a cord.” This is the Property Council’s plan for reducing emissions produced in collaboration with the Green Building Council.
“We don’t know what the framework is but if the government is looking for practical measures to reduce emissions across the economy it has to have solutions that work for real estate.
“The government does have a commitment to meet its Paris targets and these will have to be ratcheted up over time.”
“It means that everything, from the most sophisticated office building to the worse built house from a century ago all have a part to play,” Morrison says.
Francesca Muskovic, the Property Council’s national policy manager for sustainability and regulatory affairs, who attended the meeting with Morrison, says there is clear movement in the mechanisms of government.
“We had a really good hearing with the panel which Ken [Morrison] and I attended. There were a lot of good questions – pretty insightful.
“So the thrust of our submission is that the fund needs to work for buildings. There’s a case for leveraging improvement from NABERS [energy rating system] for instance.”
Housing also needs a single national rating scheme, which could pave the way for mandatory disclosure of energy consumption in residential property, and finally transform the sector much as the CBD energy disclosure regime did for offices. It would provide “a national approach for a langue of communicating”, Muskovic says.
The Grant King panel is due to report by the end of the year (so any day now, right?) but there is no firm commitment when results are to be made public. And it’s unknown, Muskovic said, “if this is more about COAG or about budget preparations”.
There’s a shifting mood about.
At the Green Building Council of Australia Davina Rooney who’s just notched up six months as chief executive says there are times when her work gets personal. The reality of sending off her eight year old to school in Sydney trying to explain why it’s hard for him to breathe is sobering and more than enough to focus her own efforts, she says.
“It used to be a very distant global problem and now in a very short time and the local challenge this summer for many people feels like a turning point to make a change.”
But there’s a strong contrast between the good news in the industry and what we can see out the window, she says.
On the one hand the many exciting things like GPT “so close to their net zero targets, Lendlease who’ve just signed up another 47 buildings [to net zero] and there’s never been more movement to the circular economy and more enhanced understanding of how the sustainable development goals works for buildings. And then this surreal weather.”
The pollies might be frustrating but behind the scenes, in various levels of government there is much work underway to achieve progress, Rooney says.
She’s particularly happy with the political consensus achieved in the Council of Australian Governments for better energy efficiency in the building code, the move to have commercial building disclosure (CBD) of energy consumption move from base buildings to tenancies and hotels and now on the table is the move to extend disclosure to the residential sector.
Rooney was glad to see NSW energy minister Matt Kean stand up for climate action and other encouraging signs from the political sphere.
“There’s a mood for change,” Rooney says.
Suzanne Toumbourou, executive director of the Australian Sustainable Built Environment Council is another sustainability advocate to say the mood is shifting.
The feeling is that the big battles of the past are finally coming to a close and moving into the implementation phase, she says referring to the work on building energy and the residential sector.
We can hope.
But of course, implementation requires huge negotiations and considerable time frames to get consensus.
So patience, again. (We wish the climate, the drought and the fires would as patient and happy to wait for consensus.)
In Victoria Stan Krpan, CEO of Solar Victoria (formerly head of Sustainability Victoria) can see a sense of urgency emerge especially on health and equity around climate issues.
The heat and fires are “pushing the nexus between health and climate change”, he says.
“It’s an issue that’s not been as big in Australia as everywhere else but these tragic bushfires are making an impact and we’re having the conversation.”
In Victoria, he says, the Australian Council for Social Services, the Victorian Chamber of Commerce and Industry and Trades Hall Council recently came together to make a statement around the importance of a “just transition”, to understand how to better support workers, as climate stress takes hold.
On the solar front the outlook for 2020 is exciting, he says. “The biggest challenge is keeping up with demand. The latest release of 4000 solar rebates was snapped up in 42 minutes and in the past 18 months, 72,000 Victorians have benefited from the scheme.
There’s growing interest from apartment owners, in shared community solar and most promising is the interest of volume builders to make solar a standard inclusion.
Solar penetration currently is 20 per cent; it’s time to start planning for 100 per cent., he says and there’s a group of stakeholders and ministers working this out.
“You don’t stop that train, you leverage it,” Krpan says.
Jane Fitzgerald executive director the PCA in NSW names planning as a possibility for major reform. Again. But no, seriously, this time it will happen, Fitzgerald says. Noting the premier’s commitment a few weeks ago in front of more than 700 people at a CEDA event.
That might be so and we must always give every NSW planning minister and premier the benefit of the doubt when discussing planning reform but we wondered was it time to consider big environmental threats in planning? Such as the vulnerability of places to fire, drought and floods?
Maybe it is time, Fitzgerald said. The view from her car as we spoke she said was filled with smoke, people wearing masks and a man on a motorbike behind her covered in a “massive contraption of a face mask”.
“It’s a clear and present danger. I’m not sure what it means for the planning system. Resilience now is that we have to find ways to put it into practice.
“It’s slightly off-putting as a Sydneysider my whole life: this does not feel like any other beginning of summer I’ve ever experienced. There is a crisis element and long term planning issue.
“I’m super relieved to hear the state government and the truth-telling around this: this is not normal. I feel like the state government is up for the conversation as well.”
Fitzgerald knows there will be yowls of scepticism to hear once more that the state government will this time reform planning.
“I choose to end the year optimistically take up the premier’s challenge to work really collaboratively.”
On the building front, David Chandler was another big event in 2019, jumping from our pages to NSW Building Commissioner in what we like to think was a single bound.
In reality, he’s been plugging away at improving the construction sector for several decades and in 2020 he’s promising the good people will be rewarded and the poor performers will be left behind. Some of his work is still under wraps but the key message, he says, is “build it right or be responsible”.
Much, nearly all, of his reforms will hinge on design. So instead of getting designers to do 60 per cent of the drawings then transferring risk to the builder, developers will need to get full finished complete drawings.
These can then be checked off against the result.
“We have to ramp up the trustworthiness of the work.”
Dodgy certifiers are on notice, he says. Something he’s working on will guarantee this, he claims.
And here’s another thing to put some fire where it belongs, under the bellies of the building bullies that have damaged the building and construction brand: as of December 1 developers can no longer force purchasers to settle on properties that don’t have an occupation certificate. (Apparently, it’s been a legal thing to do so.)
Wishing you all well
From the team at The Fifth Estate, we wish all our readers the very best for Christmas and new year. Please stay safe, be kind and remember to bring back your mojo for the biggest decade ever.
We’ll be back mid-January 2020.