Carbon reduction in buildings is critical in responding to the climate emergency, and a new academic paper reflects on the success of the NABERS energy performance rating scheme and investigates whether or not it will find similar success overseas, especially in the UK, as it has in Australia.

The paper, titled A new energy efficiency policy for UK commercial buildings: an Australian case study, by Peter Mallaburn and Rayan Azhari of University College London Energy Institute and Tina Fawcett and Marina Topouzi, Environmental Change Institute, University of Oxford (and still subject to peer review) investigates how and why this policy mix works, combining insights and analysis of performance, market data and stakeholder reflections on policy design.

“Although there are gaps in the data, we demonstrate that NABERS has been instrumental in improving energy performance of the office market in Australia,” the paper’s authors said.

“The consensus was that this is due to two interconnected features – the establishment by the market of a connection between performance and value, and the importance of government in the design of a policy mix that reflects and exploits the needs and capabilities of the industry.

“The decarbonisation of commercial buildings is a difficult policy area because of the complexity of the stock and the barriers to action.”

So firstly, is NABERS successful in directly impacting carbon emissions and energy use?

Across the office sector, carbon intensity has reduced by 32 per cent from 136 to 92 kilograms of CO2 a square metre between 2009 and 2019.

The year-on-year energy use and carbon emissions reductions per square metre for office buildings with 13 consecutive NABERS ratings are 38 and 49 per cent respectively, with yearly average improvement of 2.6 and 3.3 per cent respectively.

Shopping centre data shows a sharp acceleration in take up and impact. In three years, the number of rated centres has risen by 25 per cent and over the same period of time, carbon emissions from the segment have fallen by 12.9 per cent.

So the short answer is yes. The paper states that in-use performance benchmarking policies, such as NABERS, are considered to be effective by promoting the benefits of energy efficiency, thus creating a “market pull”.

According to the paper, a pivotal feature in the success of the tool is the leadership of the NSW government under former premier Bob Carr, along with the technical work of the Sustainable Energy Development Authority.

“And key to its success has been an underlying set of benchmarks which are essentially fair, reasonably accurate and stable. Absolute accuracy is neither possible nor necessary for a successful rating system,” the paper states.

“Separating the base building rating from the ratings for the tenanted areas and the building as a whole important because it allowed prospective tenants to judge the underlying energy performance of their space irrespective of the activities of the existing tenant.

“A star-based approach is also useful because it focuses attention on the best performers.”

It wasn’t all smooth sailing though, as the scheme came under scrutiny in the period between 2002-06 when NSW began to introduce minimum procurement standards for government buildings.

In response, the federal government took over control of the program and tightened the governance process, giving industry more influence in the strategic direction of the scheme.

A five-year strategic plan emerged in 2014 and a set of key principles in 2014. The Strategic Plan was renewed in 2019.

Two other aspects of the approach were highlighted by the paper – firstly, the government putting in place a critical feedback loop that allowed it to react to industry criticism, adjust to changing market and engineering conditions, as well as evolving when the market changed.

“Secondly, focusing on the top of the market created an influential and vocal cohort of industry winners, allowing politicians to bask in their reflected glow,” the paper continued.

Globally, reducing emissions from buildings is an essential part of the response to the climate emergency because buildings account for around 28 per cent of energy-related carbon emissions.

“Policies that successfully deliver emission reductions is therefore of considerable practical value to policymakers and researchers,” the paper stated.

“This is particularly relevant to the UK, where past successes in reducing emissions have recently begun to falter. Emissions from commercial buildings have not reduced, and in recent years, may have begun to rise.

“As a result, policy to address the sector is at the centre of the government’s developing plans for new policies and programs.”

With all of that, and keeping the Australian experience in mind, the paper identifies three success factors to consider if a similar UK scheme is to work on the timescale needed.

These are:

  • A formal government/industry relationship to set targets and build capacity and experience
  • Stretching performance standards for the procurement of public sector buildings
  • Dedicated program management and technical support to ensure the scheme delivers

The paper states that although the UK market is around five-times larger than Australia, structurally and in energy use patterns, the two markets are broadly comparable.

The UK has significant advantages in the fact that the UK government is committed to setting up an energy performance policy with mandatory disclosure from the outset – a step that took several years in Australia.

It also has a strong track record in building energy performance policy, research and modelling, and strong technical underpinnings.

However, the UK does not start with a clean sheet of paper, as any new scheme would have to fit alongside several other certifications originally developed under the EU Energy Performance of Buildings Directive (EUBD).

Because of this, the separation between landlord and tenant energy use, which led to the NABERS base building rating, is not as clear in the UK due to the way sub-metering is organised and regulated.

Another issue highlighted in the paper has to do with the fact that policy responsibility in the UK is split between two departments, which means the interests of the demand-side businesses are separated from the supply-side of the industry.

So in conclusion, the paper finds that clearly, NABERS is seen as a success story in Australia, however, this doesn’t necessarily mean that a similar scheme will work in the UK.

“To answer this question, it is important to compare NABERS’ real-world impact to our understanding of what makes up a successful performance benchmarking approach,” the paper concluded.
“It is here that the case for NABERS as an exemplar becomes compelling. But benchmarking is not a set and forget policy, its transformative power relies on progressive government intervention to extend the scheme out of the premium office sector and create value for as many companies as possible.”

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