16 July 2014 — As the chaos around the carbon tax repeal consumed Parliament House on Tuesday, in a corner theatre the built environment industry was quietly getting on with business at the annual Built Environment Meets Parliament conference.
Alongside business and academic luminaries, this year representatives from the federal parliament included Environment Minister Greg Hunt, Assistant Minister for Infrastructure and Regional Development Jamie Briggs, Social Services Minister Kevin Andrews and Greens Senator Scott Ludlam. There was also an entertaining keynote provided by former Howard government deputy Tim Fischer.
Not much enthusiasm for Direct Action
Listening to what Mr Hunt had to say regarding the built environment was always going to be interesting. This is the man tasked with dismantling the carbon price and replacing it with a scheme that has produced much scepticism among built environment professionals, and which still needs to navigate a highly unpredictable Senate. He is also part of a government that has set back the development of a cohesive national urban strategy by axing the Major Cities Unit.
After an introductory address to the audience, Mr Hunt joined Monash Sustainability Institute chair John Thwaites and Green Building Council of Australia board director Tanya Cox for a panel discussion on the sector’s opportunities to access the emissions reduction fund.
There weren’t many, it turned out. While energy efficiency projects paid off in the longterm, the huge upfront capital investment needed was a major barrier, both Thwaites and Cox said.
Cox, using her experience at DEXUS, gave an example of the limits of the ERF as it stood, even allowing for aggregation.
If there were a portfolio of 10 buildings that underwent a program to collectively reduce carbon emissions by 20,000 tonnes, that could be around a $10 million investment. Estimating ERF funding at $10 a tonne, that would cover only $200,000, a fraction of the upfront cost. Not very attractive.
Emissions reductions in buildings have some of the highest upfront costs so would not be particularly competitive in the ERF, and the minor amount of funding available in that environment would not encourage the smaller players in low-grade buildings, and sectors such as retail and hotels that desperately need to be targeted.
The big office players, in it for the long haul, were already doing energy efficiency upgrades, Thwaites noted. He expressed concern that these big players were the ones likely to get the ERF funding for work that may have been undertaken anyway.
CEFC looks set to stay
A positive note came after a question from the audience on the future of the bodies the government had been intent on abolishing but could not.
Hunt for the first time admitted that there was “a considerable future” for the Clean Energy Finance Corporation.
This could be great news for the property sector and its participation in the ERF, as highlighted by the CEFC itself in its submission to the government on Direct Action last year.
The involvement of the CEFC could help to reduce or remove the barriers relating to capital scarcity through “upfront crediting”.
“If a project is being developed to provide return, upon completion it may well generate capital return, but in the interim upfront capital is typically required to cover project development, construction and installation,” the submission stated.
By using the CEFC for upfront crediting, “successful auction participants would receive upfront project funding from the ERF and would be obliged to perform the project, achieve the promised abatement, and return the funds to the government within the abatement project timeframe”.
- See our article on CEFC and Direct Action
Hunt announces long-term plans for cities
On cities, Mr Hunt said it was his goal to broker “30- and 50-year blueprints” for major cities, which integrated all levels of government – local, state and federal – to guide a city’s development. Though, he noted, state governments would need to take the lead.
A long-term national strategy for cities has been on the built environment agenda for years, with the Australian Sustainable Built Environment Council releasing a policy position before the last election that included the elevation of the Major Cities Unit and the appointment of a Minister for Cities, which the previous Labor government had committed to.
Not happy Mr Hunt
The question from one disgruntled audience member was that if the current government was serious about a longterm partnership with cities, then why had it dismantled all of the machinery of government to facilitate this?
The lack of a substantive federal cities policy is something Sydney Lord Mayor Clover Moore will pick up on today (Wednesday) as she presents her Australian Institute of Architects’ Walter Burley Griffin Memorial Lecture at the National Press Club.
Cities, Ms Moore said, were the ones picking up the leadership slack globally, with Sydney just announced as co-chair the C40 Private Sector Buildings Energy Efficiency Network along with the Tokyo Metropolitan Government.
“The Abbott government is yet to articulate a cities policy and instead is funding roads that cripple city life by congestion, rather than investing in public transport,” she said.
All roads lead to… roads
Speaking of roads, Assistant Minister for Infrastructure and Regional Development Jamie Briggs didn’t win any friends with his contribution to the debate on infrastructure funding.
A previous session showed that 98 per cent of government spending on disasters went on rebuild costs while just two per cent went to mitigation or resilience efforts.
Asked how the government prioritised building new infrastructure versus investing in making existing infrastructure more resilient, Mr Briggs confirmed he had imbibed the same government Kool-Aid on the relationship between climate change and increasing intensity and frequency of extreme weather events.
Skirting the question, Mr Briggs said events like cyclones in the north were always going to occur and regardless of resilience strategies things were still going to be destroyed, as they always have been.
The government was, however, working on resilience – by investing $6 billion dollars to make the Bruce Highway resilient, which would provide economic benefits to Queensland, he said.
And on that note, it was inaccurate to suggest the federal government wasn’t investing in public transport, he said. Up to 50 per cent of public transport use in Australia was by bus, and buses travel on roads – roads being funded by the federal government.
Former Liberal deputy Tim Fischer gave the audience some hope in his keynote soon after, suggesting we shouldn’t rule out the government investing in high speed rail. It was still on the government’s cards, he said, but we needed to act soon.
Industry leads, government not so much
BEMP 2014 made clear industry was leading government on finding solutions to the challenges climate change poses to the built environment.
From the innovative “City Deals” urban development strategy revealed by the Property Council of Australia and KPMG to the research on funding sustainable infrastructure being done by SMART Infrastructure Facility at the University of Wollongong and revolutions occurring in building technology, it is clear industry is forging the path towards a resilient, sustainable built environment. Let’s hope the government follows.