Improving the energy efficiency of our buildings can kick start economic recovery, improve health outcomes for people and cut carbon emissions

As Australia focuses on its response to the COP26 climate negotiations while adapting to a world with COVID-19, improving the energy efficiency of our buildings can kick start economic recovery, improve health outcomes for people and cut carbon emissions.

Energy efficient solutions for buildings are mature and cost effective; what’s needed now is for these solutions to be deployed rapidly and at scale. A mass retrofitting program and a net zero trajectory for the National Construction Code are two actions governments can implement today to boost jobs and help deliver a healthier, net zero emissions built environment. 

Australia’s building stock is notoriously inefficient. Buildings are the source of around a fifth of Australia’s emissions and consume over half of Australia’s electricity. Much of the energy used to power our homes is lost due to poor energy efficiency, and we are falling behind our international peers.

Analysis by the International Energy Agency (IEA) found that, in the period 2000 to 2016, Australia had the fifth-worst improvement in energy efficiency out of the 28 countries reviewed. Energy efficiency standards for housing in the National Construction Code haven’t been strengthened for over a decade. 

Large scale implementation is needed urgently. Electrification and energy efficiency of buildings are key pillars of decarbonisation in line with the Paris Agreement, and energy efficiency must play a large role to curb emissions in the coming decade.

Reducing energy consumption makes the transition to 1.5 degree Celsius pathways easier and less costly than relying primarily on zero-carbon energy sources, as it decreases required investments in energy supply and distribution.

In ClimateWorks’ scenarios aligned to 1.5 degrees of warming, emissions from buildings need to decrease by 73 per cent by 2030 (compared to 2020), which is achievable with technology and design approaches that are mature and available today. This includes constructing new buildings above current minimum energy standards, and massively upscaling energy efficiency retrofits of existing buildings. For example, ClimateWorks’ estimates suggest Australia needs to retrofit roughly one million homes a year by 2030 to help meet these emissions reductions.

Healthier buildings

It’s not all about reducing emissions. Energy efficiency can improve mental and physical health. Australia has double the rate of cold-associated deaths as Sweden, and building quality has been implicated as a causal factor. Energy efficiency benefits have been found to improve comfort and improve health, reducing symptoms of respiratory and cardiovascular conditions, rheumatism, arthritis and allergies.

Many studies have found that improving the energy efficiency of low-income homes experiencing fuel poverty improves mental well-being. In New Zealand, studies show health improvements represent as much as 75 per cent of the total return on the investment in programmes for retrofitting low-income housing. 

Improving building energy efficiency has been found to reduce deaths in the face of extreme heat. A recent study demonstrates a 36 per cent increase in the severity of heat waves over the last 20 years. The effects have been well documented by recent studies, with results demonstrating increased ambulance demand, hospital admissions and mortality in Australia as a result of heatwaves . But improving the energy efficiency of our buildings can reduce the risk. A study into the 2009 Melbourne heatwave concluded that the mortality rate from the heatwave, as well as, future more intense heat waves, may reduce by 90 per cent if entire existing lower energy star rated houses can be upgraded to minimum 5.4 star energy rating. 

Cheaper buildings

Energy efficiency measures save households and businesses money on their energy bills. Over the last decade, retail electricity prices for households and small businesses have increased by 80 to 90 per cent. Research conducted by Australian Sustainable Built Environment Council and ClimateWorks Australia has shown that even conservative improvements in the energy efficiency requirements of the National Construction Code could reduce household bills by up to $900 per year for each household, adding up to more than  $20 billion in energy bill savings between now and 2050. Ensuring both new and existing homes are energy efficient means every Australian will benefit from these savings. Research has shown that low-income households are more likely to live in inefficient homes, and spend up to five times more (as a proportion of disposable income) on electricity than higher-income earners. 

Improving energy efficiency at scale will create new jobs and economic prosperity. The Energy Efficiency Council estimates that energy efficiency improvements increased global GDP by an estimated AU$2.8 trillion in 2017.

A recent study by the World Resources Institute found that for every million dollars invested, building efficiency creates 2.8 times as many jobs as fossil fuels, and almost double that created by solar PV.

In Australia, a large-scale retrofit program could create up to 100,000 jobs per year.  Large scale retrofit programs offer governments the opportunity to target disadvantaged workers and from sectors that have been profoundly affected by COVID-19. For example, California has recently released a plan to transition its workforce to a carbon-neutral economy, which highlights the requirement for specific and intentional labour policies to ensure prosperity is shared.

Now is the time to improve the energy efficiency of Australia’s building stock. Australian federal, state and territory governments have already committed to the transition to zero energy (and carbon) ready buildings. In light of stepped up global commitments to limit warming to 1.5 degrees, and as the economy recovers from COVID-19, Australia needs to massively scale up efforts retrofitting existing buildings and build new homes to the best standards available.

We call on Australian federal, state and territory governments to take immediate actions to set us on the path to healthy, resilient and zero carbon buildings with low energy bills.

There is no shortage of ways to get this done.

Governments should establish a mass retrofitting program with a focus on vulnerable households to improve the energy efficiency of existing homes and the health of households.

This needs to be supported by policies and regulations including mandatory disclosure of energy performance and stronger energy standards for appliances, which would enable energy efficient choices to become the norm and for those choices to be valued by the market.

States and territory governments should also adopt the proposed changes to the National Construction Code 2022 to improve the energy standards for new housing, and ensure future versions of the Code make zero energy buildings the new norm. 

John Thwaites is a professorial fellow at Monash University and chair of the Monash Sustainable Development Institute and ClimateWorks Australia. Michael Li is senior project manager (Cities) at ClimateWorks Australia. Margot Delafoulhouze is cities system lead at ClimateWorks Australia.

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  1. Is this it?
    “States and territory governments should also adopt the proposed changes to the National Construction Code 2022 to improve the energy standards for new housing, and ensure future versions of the Code make zero energy buildings the new norm.”
    FUTURE VERSIONS! Mind-boggling complacency!
    Did the authors not read the IPCC AR6 report and the Code Red for emissions reduction basically giving us 8years to get to net zero emissions? The code was last updated 11 years ago!!! Why delay?
    We already know from the NCCV2 update RIS section 7.2 on affordability that 7* homes are immediately more affordable for the homeowner and we know that this is even more true of net zero homes – the energy savings are greater than the increased mortgage payments on the day the new homeowner collects the keys. So why would there be any reason to delay from net zero NOW!
    If not net zero NOW, WHEN?
    What do we tell our kids and grandkids about this delay as the climate careers unstoppably from compounding feedback loops to an unsurvivable 4-6DegC of warming?