Federal energy and emissions reduction minister Angus Taylor

It seems building energy efficiency is even palatable enough for federal energy and emissions reduction minister Angus Taylor as an emissions abatement opportunity.

Launching a new report developed by the Property Council of Australia and Green Building Council of Australia (GBCA) that compiles policy instruments needed to reduce emissions across the entire buildings stock, Taylor spruiked building energy efficiency as a low hanging fruit reduction opportunity.

“From my early days at McKinsey back in the 90s it’s been clear to me that energy efficiency is one of the opportunities to reduce carbon emissions cheaply,” he said at the launch in Sydney on Tuesday morning.

“And this is why it’s such a strong focus for us, and a real opportunity for us to reduce power bills, improve reliability in the process, and at the same time, reduce emissions.”

The new Every building counts policy toolkit includes 75 recommendations to federal, state and territory and local governments that will drive Australia’s built environment towards net zero emissions by 2050.

It recognises that although the biggest names in the Australian property sector are international leaders in emissions abatement, policy mechanisms are necessary for the bulk of the market to catch up.

Bringing residential up to scratch needs a single rating scheme and green mortgages

To bring the residential market in line with commercial on energy efficiency, GBCA chief executive officer Davina Rooney said that the sector needs a single rating scheme for homes coupled with financial mechanisms such as green mortgages.

“One of the key challenges has been it has not been rolled up national thinking in the residential space.”

A single rating scheme like New Zealand’s Homestar scheme would make it easier to compare the efficiency of homes and would also create an incentive for building upgrades, while providing added consumer protection for buyers and tenants.

The other piece of the puzzle is financial incentives such as green mortgages, which are home loans with discounted interest rates for projects that fulfil certain sustainability criteria.

Energy efficiency programs for homes also need to be as simple as possible for the consumer.

“When someone gets their energy bill at the moment, they can compare what they did last quarter versus and that quarter last year, and they don’t know if it’s good, bad or indifferent,” Ms Rooney said.

“That’s a paradigm that needs to change.”

Financial incentives to drive change

Both carrot and stick policies feature in the report. On the carrot side, the report recommends modernising the 10 per cent green building withholding tax regime, which includes expanding the regime to all buildings held for rental purposes.

Extending the instant asset write-off scheme to include energy efficiency upgrades in buildings up to $100,000 is also suggested.

Fast tracking green projects in planning

At the state and local level, the report supports initiatives such as green door policies that fast track development applications for sustainable projects.

Density bonuses are also flagged, which offer developers an increase in the permitted density of residential projects in exchange for more sustainable and higher performing buildings. 

Materials and embedded carbon 

Driving adoption and development of advanced materials and best practice technologies, such as high performance glazing and heat recovery ventilation systems, is also a priority.

“When we look at international markets lie Germany, it’s far more expensive to get single glazed rather than doubled glazed windows because of the market norms,” Davina Rooney from the GBCA said.

Addressing the supply side bias

Property Council Chief Executive Ken Morrison said Australia has been “stuck on the supply side of the equation” for about a decade.

To address this supply-side bias, the report encourages Australia to consider an “energy efficiency first” policy to help prop up investment on the demand side.

Government leadership

The industry groups want the federal government to embed sustainability into its City Deals program and leverage the Climate Solutions Fund for emissions abatement projects in property.

Other recommendation include mandatory NABERS rating for government buildings, and programs to address skill shortages in energy efficiency building and design.

Minister Angus Taylor welcomed all the recommendations but also pointed to the role of industry in meeting the Paris commitments.

“There is a notion that this is simply a job for government. And it’s true government must play an important role. But we firmly believe that this is also about partnering with industry.”

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