Richard Palmer, WSP PB

There’s a school of thought that looks at what the sustainable property industry has achieved in the past 15 years and says that while the top tier of the industry has benefited enormously, the movement has had next to no impact on anyone else.

According to Richard Palmer, WSP | Parsons Brinckerhoff’s associate director sustainability, the trickle down effect of sustainability has been about as successful as the economic trickle down effect. In other words, it’s been a failure.

Citing figures from ClimateWorks, Palmer said that since 2005 the industry as a whole had improved its energy intensity by just two per cent in the commercial sector and five per cent in residential.

Palmer was addressing an influential audience of executives from UrbanGrowth NSW, the Committee for Sydney, AGL and NSW Art Gallery expansion team, Lendlease and fellow engineers from his own team. They were attending a sustainability leaders private lunch at the Hilton in Sydney on Wednesday.


“This time frame,” Palmer said, “includes almost every single project certified under Green Star, the entirety of projects constructed since the Building Code of Australia introduced mandatory energy regulations and the vast majority of residential since NatHERS, and it includes almost all of the NABERS operationally rated buildings.

“So for every voluntary certification and statutory initiative that we’ve thrown at the industry, for all the conferences and for all the conversations, we have singularly failed to shift the entire industry.”

At the top of the market, Palmer said, the story was entirely different.

“We’ve seen 30-40-50 per cent reductions in energy intensity and it’s worth noting that’s intensity – so the trajectory still goes up, it just goes up at a slightly flatter rate.

“This leads to serious soul searching. We’ve earned a lot of fees on consulting on airconditioning and lighting and things that have moved a portion of the market.

“But … the best we’ve thrown at it today has achieved less than we might have hoped for.”

Yet this was the year that not only broke heat records but broke them by record amounts.

It’s also been the year that Australia saw devastating damage to two natural icons in Australia, the bleaching of much of the World Heritage-listed Great Barrier Reef and the damage to the magnificent Tarkine forest in Tasmania (that sustained bushfires for the first time and is therefore not adapted to deal with bushfire).

“Not that they have been obliterated, but it will take a millennia to recover,” Palmer said.

“That this has happened on my watch is a major event; it is not trivial.”

What was the answer?

Certainly the future was not around individual buildings and he was not advocating new swathes of mandated regulations to ensure change, he said.

What was imperative now was to move to a “compact city” model of development. Imperative in this was a transformed utilities market and even more important was to win a social licence to operate.

Key to utilities, he said, was to bring the conversation on utilities, distribution networks and the rules that govern cross-border sharing of renewable energy out to industry level forums and to the public.

This is what would shift the regulators, he said. While the debate was confined to energy generation and distribution professionals, the pace of change would be as painfully slow as it has been to date.

“It doesn’t come up at conferences and it doesn’t come up in the press.

“This is stuff that sits in the energy industry and distribution industry, but with professional services and developers there doesn’t seem to be a huge amount of engagement entering into the public domain.”

And yet it was a critical battleground that would give us compact, green, liveable cities.

“The space of urban utilities is an open book and blank canvass,” Palmer said.

On the supply side there are opportunities in group transformation – how we procure energy, models for thermal and electrical energy, and ideas about where we draw natural and statutory boundaries.

It’s clear there is a need for huge policy and regulatory reform, he said. Interesting advances were happening to make genuinely shared services a reality.

WWF had embarked on a power purchase agreements (See our latest ebook, Renewable Energy, joining the zero carbon revolution), private wire networks, and agreements to share energy between different sorts of users, such as between households and retail “because households can’t possibly use all the energy when it’s generated”.

Lighting upgrades might be important, he said, but what was even more important was for “wholesale responses from the industry that allows us to procure our resources in different ways and change the trajectory”.

Among other interesting moves such as smart metering and on-site generation, it was clear “none of this has fundamentally changed the way we price our network”.

Network charges could be 50-60 per cent of the bills.

“Generation of power is no longer the barrier, the key barrier is the distribution network.”

IMG_2185_2Watch the status quo

He warned that reforming the energy grid would be very difficult – there were substantial vested interests in the status quo, he said.

Some challenges were underway, such as from the City of Sydney with its proposed rule changes on how the “last mile of infrastructure” was priced.

“My understanding is it’s a fairly contentious rule change and it’s not certain it will get through,” Palmer said.

The nexus of value

It was also important to look at the intersection between property and infrastructure, pointing to the uplift in property value that occurred with densification and infrastructure.

Here the nexus between the two was very exciting, he said.

It was here that the biggest uplift in sustainability gains from distributed utilities was possible, demonstrated by companies such as Flow Systems at Central Park in Sydney.

This was a question of dealing with the entry of private businesses into areas of “natural monopolies”.

“This space has the most exciting opportunities.”

In his early days of working on Barangaroo, Palmer said one of the options of servicing the precinct conventionally was to dig up Oxford Street to augment the main sewage outfall at Bondi.

“Digging up Oxford Street was not an option.”

A more sustainable on-site solution made sense on environmental grounds and practical/economic grounds.

Compact cities and the licence to operate

Some barriers to a compact city were being dealt with, Palmer said, pointing to Sydney’s several transport projects underway, but while the technical barriers and even infrastructure barriers could be dealt with, the even bigger barrier to transformation was the social licence to operate.

“To win the social licence battle… engineers need to get their heads around the social infrastructure that would augment the physical infrastructure needed to create zero carbon compact cities”.

Right now, he said, this was not happening.

And these were things held together by planning and governance models.

Quoting Vancouver’s director of planning Larry Beasley at a Green Cities conference, Palmer said that in describing the desirable urban spaces in Vancouver, Beasley didn’t mention water or power or transport utilities, but social outcomes such as parks and childcare centres, primary health care, secondary health care, bars and markets, and “the stuff that makes life worth living”.

Right now there was serious opposition to density. Much was portrayed in a negative way instead of the positives that density could deliver.

We need to be inclusive of our original inhabitants

In moving forward Palmer also acknowledged the original inhabitants of this land and the need for the urban industries to include Indigenous people in steps to reconciliation.

“There is knowledge to be gained and perspective on what sustainability means by engaging with what reconciliation means beyond skills, that touches on place.

“We’ve been doing placemaking but this currently doesn’t capture that legacy.”

Opening our minds to the people who have survived on this land for 40,000 years was a good place to start, he said.

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  1. … I forgot to add that we should be asking the real estate investors, owners and developers (the guys who approve the work and write the checques) who are not convinced of the benefits of green buildings in order to trickle down to them effectively. If we talk with the leaders, like Richard said, the story is great at the top of the market.

  2. I like the article very much … and, contained a lot of issues and challenges. What remains clear is that despite all the great things happening … the “trickle down effect in green buildings is not working”. So, what can we do … of course, policy to require all buildings to be net zero, net positive is the best. And, in some jurisdictions, that is happening (near net zero in EU, net zero in Japan starting in 2020 and 2030, net zero in California in 2020, etc.) But, what can we do to have this “trickle down” even faster?!

    Have we ever asked the real estate investor, developer or Owner why he is not “greening” his real estate development or portfolio?? We should ask them why … And if we address their concerns effectively … we can accelerate the trickle down!

  3. Oh please. This is just an obvious case of minuscule tactical gains and massive strategic defeats, environmentally speaking. The political and economic status quo means this is inevitable. Take a look at the massive scale of high-rise apartment construction in Sydney (and no doubt this is reproduced in Melbourne and Brisbane) and you won’t find one building in 300 that has either solar power, or solar hot water, or rainwater collection … or indeed any other progressive environmental feature. One or two “iconic”, “groundbreaking”, “innovative” buildings do not a breakthrough make.

  4. We also need more government intervention setting timeframes for mandatory reporting on NABERS Energy, water, waste and IAQ.

    CBD made a huge difference when it was introduced and should apply to all buildings.

  5. Richard thanks for raising these issues, Fifth Estate, thanks for covering them. Fundamentally we HAVE to transition to renewable energy FAST and that means Mr Turnbull showing the leadership that he spoke so passionately about as lacking before he gained his high office. That means that we NEED a price on GHG emissions in order to gear the initiative and inventiveness of all industries to make the changes needed. Instead we have a Minister famous for making a “moral” case for the Adani/Carmichael coal mine taking the reigns of both the energy and environment ministries. Any guesses where this will lead? As the rest of the world moves ahead with this transition, Australia becomes more and more an embarrassing pariah and gets more and more left behind in the next industrial/renewable energy revolution with backward looking industry and jobs sacrificed to the past rather than prepared for the future.