A key attribute of the building sector is that it offers the best prospects of all sectors for greenhouse abatement in developed economies.
Improving the energy efficiency of buildings using conventional and proven technologies has been shown to deliver abatement at economy-wide cost savings.
This contrasts with the significant cost burdens arising from abatement in other energy domains such as advanced power generation systems; carbon capture and storage; or alternative energy supplies.
The World Business Council for Sustainable Development also argues for policy reform in the building sector, asserting that opportunities exist to reduce buildings’ energy use at lower costs and higher returns than other economic sectors.
Greenhouse gas emissions from residential and commercial buildings contribute around 23 per cent of Australia’s national total, according to estimates from the Centre for International Economics. Yet the State of Victoria contributes 40 per cent of total Australian residential emissions even though it accounts for some 25 per cent of the national population.
Despite this reality the contribution of emissions from the building sector to national greenhouse gas emissions is neither well-appreciated nor embedded in national energy policy according to the Australian Sustainable Built Environment Council. As a consequence national climate policy – such as it is – does not prioritise appropriate interventions in the building sector.
There is also a degree of controversy concerning the appropriate instruments to be deployed for policy interventions in the building sector to accelerate market uptake of energy efficient, low carbon buildings.
Since 2009 Australia has experienced an effective hiatus in the progressive reform of National Construction Code (NCC) energy efficiency provisions for residential and commercial buildings. Policy decisions have been predicated on questionable but dogmatic assumptions: the stifling effect of regulation on business dynamism; the negative economic impacts and affordability imposts of higher building energy efficiency standards.
Both these challengeable assumptions reflect a failure to appreciate and account for the dynamism inherent in the construction industry and its capacity for progressive, systemic socio-technical development.
So what action should be taken by an incoming Labor Government – determined to end the climate wars and manifestly reduce national greenhouse emissions – in order to capitalise on the outstanding but as yet untapped opportunities offered by the building sector?
Put simply: Labor must demonstrate leadership: in the form of a comprehensive change management program embracing all sectoral stakeholders to produce truly transformative change. This program should utilise the NCC as a primary catalyst for sectoral transformation.
For too long government “leadership” seems to have taken the form of sporadic publication by the Australian Building Codes Board of regulatory impact statements (RIS) proposing the latest tranche of upgrades to building energy standards. Each RIS has been met by a predictable pushback from industry on ostensible affordability grounds. This strategy is hardly an ideal model for major sectoral change (management).
In the HR realm a widely accepted and utilised approach to change management in business, government and society in general is expressed by the ADKAR model. The model’s key elements are: Awareness, Desire, Knowledge, Ability, Reinforcement.
It is clear that adoption of such a wide-ranging model by government (by which I mean both the Commonwealth and the States) will require carefully constructed and functionally integrated communications, training, and program evaluation. Precisely these elements have been lacking in the rather haphazard approach taken by the Commonwealth in recent decades; leaving an ill-equipped ABCB to do the heavy lifting; while industry exercises a de facto veto power over NCC energy reforms.
In taking a systematic, contemporary approach to industry transition initiatives, government should also draw upon the latest thinking in behavioural psychology. Doing this will maximise prospects for successful program implementation. This thinking is nicely captured within the emerging discipline of Behavioural Economics (BE); also termed Behavioural Science.
BE has its genesis in the work of Nobel Laureate Daniel Kahneman, supported by his equally gifted colleague the late Amos Tversky.
Application of BE principles to building policy implementation has the potential to impact on all stages of the building lifecycle; from design through construction to operation.
Further, a review of the literature reveals an abundance of evidence for the potential contribution of BE thinking to diverse subjects such as climate change policy; energy policy formulation; domestic energy conservation; sustainable infrastructure design; and regulatory development.
I would like to finish with a couple of examples.
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BE tells us that consumers struggle with excessive, complex, decision-making choices such as those facing home builders and renovators. This consideration of choice overload is also termed “bounded rationality”. Yet at present the NatHERS rating of residential buildings, although widely available now, is not required to be disclosed to homebuyers at point of sale. This is hardly a recipe for elevating the priority of energy efficiency in consumers’ minds at a time when they face complex decisions.
BE also points up the existence of confirmation bias, wherein people seek to evaluate information in a way that accords with prior beliefs. This characteristic, also described in BE as status quo bias, helps explain the relentless opposition of housing industry peak bodies to upgraded NCC energy efficiency provisions. Policy makers seeking to overcome this resistance might do well to utilise other BE characteristics such as anchoring, availability and framing.
