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The Warsaw Voice » Other » December 3, 2008
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Energy Efficient Practices: Not Only The Right Thing To Do, But The Smart Thing To Do
December 3, 2008   
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The use of renewable energy sources and a focus on energy-efficient methods are critical to the preservation of our environment and a better management of our carbon footprint. Buildings make a significant contribution to global greenhouse gas emissions (40 percent of global emissions and up to 85 percent of emissions from our cities), and they present enormous potential for quick and cost-effective abatement through improved energy efficiency. In fact, there is little argument that more efficient buildings are the cheapest abatement solution available, with benefits such as improved health and productivity of the occupants, as well as skills and technology growth.

So while buildings are a significant part of the climate change problem, they could also be an important part of the solution. Governments around the world have recognized the scale of the opportunity in building efficiency and sought to address it, most commonly through regulation or Tradable White Certificate schemes. Regulations like EU Directive 91/2002 with its energy focused rating application scheme can be effective for new buildings, but the much bigger challenge is addressing the performance of existing buildings which comprise 98 percent of annual building stock, and for which regulation is ill-suited.

In the last decade, we have some examples that show the market heading in the right direction, such as the Green Building Councils formed around the world. Thirteen countries have or are in process of forming GBCs, and thousands of buildings have been rated using rating tools; there is an international movement with programs such as the United Nations Sustainable Building and Construction Initiative, many commitments by governments related to green building commitments and a more aware population.

We've also heard the arguments that buildings will be affected by energy price signals that will flow from the overall Emissions Trading Scheme, and that "the market will determine where least cost abatement occurs". Both arguments show no understanding of how the property sector works. Energy costs are a very minor component of the commercial sector's costs and there will be a lot of "collateral damage" before energy prices bite in the big commercial building players.

And the argument that the market will determine where least cost abatement occurs overlooks the basic nature of the industry, commonly referred to as split incentives or principal agent. That is, it is almost always the case that the entity responsible for developing the building is not the long-term owner, let alone the tenant. The Emissions Trading Scheme is uniquely placed to drive through these split incentives and stimulate emissions cuts of 60 to 100 percent from all new and existing buildings by enabling developers and owners to make competitive financial returns on their investments in clever design and technology solutions. Existing incentives can be used to reduce the risk associated with financing immediate greenhouse gas reductions. This is because, where incentives already exist, reductions are more likely to occur.

Dr. Nadia Boschi, Bovis Lend Lease Sustainability Manager CEMEA
BLL is a partner of the EU Sustainable Energy Europe Campaign
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