RE: NSW CLIMATE CHANGE POLICY

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1 Climate Change and Resource Efficiency Policy Branch NSW Office of Environment and Heritage PO Box A290 Sydney South NSW 1232 Australia Via 16 December 2016 Dear Sir/ Madam, RE: NSW CLIMATE CHANGE POLICY The Green Building Council of Australia (GBCA) commends the NSW Government (Government) on its NSW Climate Change Policy (Policy). The Policy demonstrates a reinvigorated approach towards reducing carbon emissions and adapting to the impacts of climate change, meanwhile representing a significant step change in ensuring that NSW s commitments are broadly aligned with national and international efforts. Since its inception in 2002, the GBCA has worked towards inspiring, influencing and empowering the property and construction industry by driving the adoption of sustainable building and community practices. Today the role of the GBCA has evolved beyond green buildings to also address the broader challenge of catalysing a sustainable cities movement to more effectively respond to the rapid challenges facing our cities and towns in the context of globalisation, resilience, technological advances and shifting social demands. In addition to our specific response to the questions posed as part of the consultation process as attached in the Consultation Form, we are pleased to provide the following general comments on each of the following: 1. NSW Climate Change Policy Framework (Policy Framework) 2. Draft Climate Change Fund Strategic Plan (Strategic Plan) 3. A Draft Plan to Save NSW Energy and Money (Draft Plan) 1. NSW Climate Change Policy Framework The GBCA applauds the Government s leadership on climate change and welcomes the two aspirational long-term objectives set in the Policy Framework: (1) Achieving net-zero emissions by 2050 (2) Ensuring that NSW is more resilient to a changing climate. In respect to objective (1), the GBCA encourages Government to set interim targets for emissions reduction. By setting interim targets, Government is able to demonstrate greater transparency, to better track and evaluate progress and to adjust policy directions as needed, to pave a clear pathway to realising stated aspirations.

2 The GBCA supports the Policy Framework as it acknowledges the importance of leading by example; delivering policy certainty; effective collaboration across all levels of government; and developing a value for emissions savings. Strong leadership from the NSW Government and its strategic stance on emissions savings, alongside resilience, will be vital to coordinating policy direction amongst all levels of government and bolstering market investment towards a low carbon and resilient future. The GBCA looks forward to working with Government to assist with its three key roles: (1) Drive change through Government Policy (2) Lead by example to save emissions through Government Operations (3) Support collaboration through Government Advocacy The objectives, principles and actions outlined within the Policy Framework complements the GBCA s strategic priorities, which include: driving a carbon positive industry; fostering liveable and sustainable communities and cities; broadening market transformation and increasing regional influence. The GBCA broadly supports the Policy Framework and welcomes a constructive partnership with Government. 2. Draft Climate Change Fund Strategic Plan The GBCA welcomes the Strategic Plan as it is firmly grounded by program principles that helpfully reference competition; partnerships and co-design; tools and structures for market delivery; impact investment; capacity building and key performance indicators. Furthermore, we applaud Government s leadership through its establishment of the Climate Change Fund, which has proven to be a unique and effective funding model. Since 2007, the Climate Change Fund has facilitated initiatives and programs that have enabled NSW residents to access huge savings in energy and electricity bills, expanded the use of renewable energy and improved our preparedness for the effects of climate change. The Strategic Plan sets a clear policy direction for expanding the use of renewable energy in NSW. The GBCA supports Government as it provides a clear message to industry that NSW is on track towards a low carbon future, where clean, renewable energy will be predominant. Further to this effect, while the Strategic Plan sets out policies that promote renewable energy sources, the GBCA encourages Government to identify and include policies that target emissions-intensive activities such as land clearing, the creation of new coal mines, and the continued use of power stations. By including policies that promote renewable energy and policies that target emissions-intensive activities, the Government can better coordinate efforts as its leads and steers NSW towards a low carbon, more resilient future. 3. A Draft Plan to Save NSW Energy and Money The GBCA welcomes the Draft Plan as it provides detailed and practical guidance towards meeting the Government s energy savings target and saving money for NSW households and businesses. The Energy Efficiency Action Plan comes at a critical time where the need to reduce energy costs for households, low socio-economic groups and businesses has become more imperative. As is reflected in our response to the specific issues raised, the primary objectives specified in the Draft Plan encompassing the advancement of energy efficient homes, businesses, government, infrastructure, markets and appliances complements the holistic approach advocated by the GBCA through our own advocacy and Green Star rating tools. 2

3 Supporting your next steps We would be delighted to provide further detail on any of the specific case studies or examples highlighted in this submission. Many of our responses to the recommendations and actions note our existing work across a range of areas that you have prioritised. We invite the Government to work with us collaboratively, to leverage our deep networks through industry, to share our expertise and work with you to achieve your objectives. In what is a relatively short initial consultation period for such a broad range of policy objectives, this ongoing dialogue is particularly important. Please do not hesitate to contact me on or via at jonathan.cartledge@gbca.org.au for further information. Yours sincerely Jonathan Cartledge Senior Manager - Government and Industry 3

4 GBCA COMMENTS ON CLIMATE CHANGE FUND DRAFT STRATEGIC PLAN Potential Action under the Three Priority Investment Areas Accelerating advanced energy GBCA Response Action 2.1: Unlock investment under the Renewable Energy Target The GBCA welcomes collaboration with the Office of Environment and Heritage (OEH) to explore ways to reduce policy and market barriers to sustainable energy infrastructure. A review of the Carbon Neutral Program is relevant to unlocking investment and opportunities that promote the Renewable Energy Target. Under the Carbon Neutral Program, Renewable Energy Certificates (RECs) are deemed a carbon neutral product purchase and are ineligible for use under a carbon neutral claim. Developers committed to delivering low carbon or carbon neutral projects would welcome the opportunity to use RECs to offset carbon emissions through the purchase and voluntary retirement of RECS. RECs are considered by many to be a very high form of carbon offset in that it achieves a dual aim of carbon neutrality and investment in renewable energy. A review of current rules could unlock investment opportunities and provide greater flexibility, for example, enabling RECs to be used in the offset of gas emissions, which is not possible now. Action 2.2: Accelerate advanced energy demonstration projects The GBCA strongly advocates that governments lead the adoption of Green Star through their own procurement and planning policies and in so doing support world-class innovation in advanced energy demonstration projects characteristic of these projects. For example, Alkimos Beach in Western Australia (WA), is an exemplar case study of innovative Green Star projects, representing Australia s first community energy storage trial, that will see more than 100 homes in the Escarpment Village connected virtually to innovative solar energy storage as part of a development-wide initiative to reduce peak electricity demand. I have attached a copy of the Alkimos Beach case study for further information. Action 2.5: Empower local communities to adopt renewable energy Green Star Communities provides government with a useful resource and/or mechanism through which it can empower local communities to adopt renewable energy. The GBCA invites the NSW Government to collaborate with us and help support local government capacity to adopt and deliver Green Star Communities through their own urban renewal projects. Local government is both highly constrained for resources, but uniquely positioned to pilot and drive better outcomes for their communities. As previously mentioned, Alkimos Beach in WA which was awarded a 6 Star Green Star Communities rating, is setting a precedent for this. The combination of mandatory solar panels, gas boosted solar hot water systems, energy efficient appliances supported by a financial incentive package, provides the community with a reduction of home energy bills by up to 50%. Effectively, Green Star Communities is a market-based incentive tool, under which community ownership of renewable energy can be encouraged, awarded and recognised.

5 Action 2.6: Support heavy industry to plan for a low-emissions industry The GBCA welcomes collaboration with OEH to explore ways to facilitate emissions reduction within the building supply chain. The work of the GBCA is supporting the transition of heavy industry towards a low-emissions pathway. Under a current review of the Green Star rating tools, the GBCA is proposing the introduction of a new pathway for engineered timber within the Materials category, as has been done for concrete and steel. Timber as a renewable resource, which combined with local sourcing, will help to incentivise a new industry for engineered timber in Australia. Action 2.7: Save emissions and maximise the benefits in NSW Action 2.8: Find cost-effective pathways to reduce greenhouse gas emissions The GBCA welcomes the opportunity to work with Government to help develop Sydney s role as a primary carbon market hub in the Asia-Pacific. The GBCA is a testament to Australia s world-leading role in driving emissions reduction particularly within the built environment. This unique position is reinforced by Australia s leadership in global sustainability indices such as the Global Real Estate Sustainability Benchmark (GRESB). GRESB has ranked Australia s real estate market as the global green leader for six years straight. These indices recognise Green Star ratings as the best measure of sustainability outcomes in our property industry. Government should leverage their market power to drive better outcomes through procurement and planning processes. The specification of rating tools like Green Star as a reference point for government procurement and planning requirements throughout the supply of goods and services will have a multiplier effect in supporting those industries and advanced services that will see Sydney become the Asia-Pacific carbon market hub. The GBCA invites the Government to work with us across agencies to help deliver best practice procurement in the delivery of sustainability across the built environment. GBCA s leadership and the collaboration that characterises our approach with Government is most recently evident in our work with the federal Department of Environment and Energy and NABERS to develop the Carbon Neutral Standard for Buildings and Precincts. The Carbon Neutral Standard provides clear definitions and voluntary standards for carbon neutrality or net zero emissions for buildings and precincts. Finding cost-effective pathways to reduce greenhouse gas emissions is integral to the plan as it imperative to enabling the transition of industry to a low-carbon economy. The GBCA strongly supports the recommendations of the Australian Sustainable Built Environment Council s Low Carbon High Performance report, is pleased to see many of those recommendations reflected in this Review, and is working with its members and ASBEC to develop a low carbon roadmap for the built environment towards Zero Carbon The GBCA welcomes opportunities for collaborative work to advance this shared goal. Furthermore, the GBCA welcomes discussion on potential collaborative funding opportunities for specialist research to define science-based targets and develop innovative tools to further enable industry to achieve such targets. As noted previously, the GBCA has worked with OEH (NABERS) and the Department of Environment and Energy to develop the Carbon Neutral Standard for buildings and communities. Defining a carbon neutral building forms part of the overarching low carbon roadmap. The GBCA welcomes collaboration and potential funding to support the implementation of the Standard. 5

6 National leadership in energy efficiency Action 3.1: Government to lead by example to lower energy costs Government should lead and future proof its own assets by targeting Green Star certification for commercial buildings, hospitals and schools. The GBCA operates Australia s only national voluntary and holistic rating system for sustainable buildings and communities Green Star. The GBCA advocates for all levels of government to demonstrate a commitment to this transformation and to lead by example by setting contemporary benchmarks and rigorous standards. Third party certification, such as that offered by Green Star, not only provides the utmost level of transparency and accountability, but also signals to the private sector the importance of such rigour. Action 3.2: Reduce energy costs for households and businesses Action 3.4: Make homes more liveable and affordable for renters The use of Green Star rating tools is helping reduce energy costs for households and businesses. Under a current review of Green Star rating tools, the GBCA is proposing minimum requirements to achieve a 5 and 6 Star rating for Greenhouse Gas Emissions associated with the use of energy in building operations. This will affect how buildings and fitouts are delivered and and continue to drive reductions in energy costs for businesses and households. Green Star is contributing to the liveability and affordability of the built environment. This is evident in the Value of Green Star 2013 report which measured the savings generated by 428 Green Star-certified buildings certified from 2003 to 2012, in terms of greenhouse gas emissions, energy usage, water consumption and waste compared with standard or minimum practice benchmarks. This report found that Green Star buildings: o Have cumulative GHG emissions savings that equates to 172,000 cars removed from roads (625,000 tonnes CO2) per year. o Save enough potable water to fill 1,320 Olympic swimming pools each year more than 3.3m kl. o o Recycled 96% of their construction and demolition waste equating to 37,600 truckloads diverted from landfill. Use 66% less electricity than average Australian buildings the equivalent of 76,000 average households' electricity use annually. The GBCA would be pleased to continue discussions with the Government as they consider the development of ratings programs to drive implementation of energy efficiency and grow the market for energy efficient homes and upgrades. The GBCA has long recognised the potential within the residential sector to deliver new efficiencies and help meet our energy and emission reduction targets. We are committed to working collaboratively across industry and government to support effective market interventions that deliver more informed consumer choice, reduce split incentives and information asymmetries to deliver positive change across the residential sector. Action 3.7: Reduce peak demand through battery storage and energy efficiency Green Star Communities provides incentive for projects to reduce peak demand through battery storage and energy efficiency. As previously mentioned, Alkimos Beach in WA is an exemplar case study. Awarded a 6 Star Green Star Communities rating, Alkimos Beach represents Australia s first community energy storage trial, which will see more than 100 homes in the Escarpment Village connected virtually to innovative solar energy storage as part of a development-wide initiative to reduce peak electricity demand. 6

7 Preparing for a changing climate Action 4.2: Support industry sectors and local communities to respond The GBCA is helping to build capacity in local councils to understand and coordinate local responses to climate change impacts. We are currently working with over 40 local councils nationwide, who are future proofing their assets through Green Star certification. Going beyond providing technical advice on Green Star, the GBCA is building capacity through educational courses and events and the provision of advice on policy and best practice benchmarks. Further collaboration with government to expand this work and provide additional resources could realise multiplier benefits in the increased adoption of Green Star across local governments in NSW. 7

8 Action 4.3: Build the adaptation services market in NSW Green Star can inform building standards and planning requirements to take into account the impacts of climate change. Green Star contains Adaptation and Resilience credits, which incentivise projects to develop Climate Adaptation Plans and integrate building design and construction solutions in accordance to these Plans. Furthermore, Green Star incentivises projects to minimise impacts on environmentally sensitive sites, to reduce environmental impacts of construction materials, to reduce and effectively manage storm-water runoff and to encourage water sensitive design. Stockland Wetherill Park in New South Wales and Aura in Caloundra South in Queensland are prime examples of how Green Star promotes climate resilience. o Stockland achieved a 5 Star Green Star - Retail Centre Design rating for the shopping centre redevelopment at Wetherill Park. Climate resilience is integrated into the design of the shopping centre, featuring mixed-mode air conditioning, low-energy light fittings and climate responsive ventilation systems to provide efficient air conditioning. o Stockland also tackled the issue of climate resilience at a community scale, having achieved a 6 Star Green Star Communities rating for Aura in Caloundra South. Stockland prepared climate adaptation and resilience plans for Aura, helping to inform project teams on how to create resilient communities throughout the life of the development. o Barangaroo South in NSW by Lendlease achieved a 6 Star Green Star Communities rating representing World Leadership. Barangaroo South is Sydney s largest urban renewal project since the 2000 Olympics and is targeted to become Australia s first large scale carbon neutral community. The GBCA advocates the use of Green Star rating tools to assess the climate resilience of residential and commercial properties and infrastructure. The GBCA is uniquely positioned in Australia to assist with the development of any tools to help increase resilience across the built environment. The GBCA is working across our members, including with the City of Sydney to tackle holistic resilience and is exploring the future introduction of more specific resilience credits within Green Star Operations. The GBCA invites the Government to collaborate with us to support the implementation and expansion of this important initiative in line with the Government s own objectives. Action 4.4: Unlock funds for local communities to respond to climate change Green Star can help to minimise climate change impacts on disadvantaged and low-socio-economic communities, by facilitating sustainability and resilience outcomes for infrastructure projects. Victoria s Regional Rail Link and Flinders Medical Centre in South Australia sets a precedent for sustainability and resilience benchmarks for infrastructure. The Rail Link was awarded a 4 Star Green Star Custom Design rating, boasting significant energy and water savings with 14,000 tonnes of GHG emissions saved annually. Similarly, Flinders Medical Centre was awarded a 5 Star Green Star Design and As Built rating, having been designed to deliver high quality patient care with a minimal environmental footprint. I have attached the abovementioned case studies for further information. 8

9 GBCA COMMENTS ON A DRAFT PLAN TO SAVE NSW ENERGY AND MONEY Question Energy efficient homes GBCA Response Q1 and Q2: Ratings for homes Q6 and Q7: Tenanted homes The GBCA welcomes collaboration with Government regarding the development of a ratings program to drive the implementation of energy efficiency and increase the market for energy efficient homes and upgrades. The GBCA has long recognised the potential within the residential sector to deliver new efficiencies and help meet our energy and emission reduction targets. We are committed to working collaboratively across industry and government to support effective market interventions that deliver more informed consumer choice, reduce split incentives and information asymmetries to deliver positive change across the residential sector. Q8 and Q9: New homes and BASIX Reinforcing recent correspondence from ASBEC, the GBCA supports increased energy efficiency targets and thermal comfort stringency in the BASIX scheme. As the cornerstone planning initiative in NSW for emissions reduction in new and renovated homes, the minimum standards as defined by BASIX play a vital role in driving progress towards a low carbon future. Other jurisdictions have increased the stringency for design for thermal comfort (identified in the 2013 cost-benefit analysis for BASIX as being the notable component of new costs associated with the proposed stringency increase) with negligible impact on the residential development sector s business models or upon house prices. This experience aligns with Government s commitment to bolster the energy efficiency market and help households, businesses and government to use energy more efficiently. Q11: Common areas of residential buildings The Green Star Performance rating tool is able to certify common areas of residential buildings, delivering sustainable outcomes including significant energy savings. Green Star Performance assesses the operational performance of existing buildings and enables buildings owners and managers to identify pathways to improve the environmental and financial sustainability of assets over time. The GBCA, the federal government and the OEH, have worked together to improve technical consistency between NABERS and the Green Star rating systems. There is greater compatibility between the assessment of building attributes covered by Green Star and performance of key impact areas such as energy, water, indoor environment and waste which are assessed by NABERS. 9

10 Q12 and Q13: Precinct-scale energy savings The Green Star Communities rating tool could assist Government to achieve energy savings from precinct-scale developments. The Environment category in Green Star Communities aims to ensure development projects are less resource intensive. The benefits and impacts of encouraging precinct-scale energy savings are demonstrated through Green Star Communities, which rewards projects that: o Avoid or minimise impacts on environmentally sensitive sites and enhance the ecological value of site through improvements to ecological value and biodiversity o Reduce heat island effect o Minimise the adverse impacts of light pollution and stormwater on urban development and receiving water bodies o Minimise the greenhouse gas intensity of energy supplied to the community o o Provide green buildings in the development that lower operational costs Take measures to reduce the impact of transportation, reduce parking spaces and facilitate mass transport use by community inhabitants Energy efficient business Q20, Q21 and Q22: Commercial Buildings The GBCA encourages Government to preference Green Star as a holistic rating tool in its review of the NSW Government Resource Efficiency Policy. Green Star is a holistic rating tool that incentivises developers to adopt best practice, thus delivering broader benefits that will help drive NSW as a carbon-market hub and deliver more liveable, resilient and healthy buildings and communities. The GBCA welcomes the Government to support and collaborate to help implement the broader recommendations of ASBEC s Low Carbon, High Performance report. We are pleased to see that the Draft Plan addresses key recommendations of the report, in particular supporting changes to the Australian Building Code and increasing disclosure of the energy performance of commercial buildings. Notably, the GBCA is working with ASBEC to review and upgrade minimum energy performance standards in the National Construction Code and to develop a low carbon roadmap for the built environment towards Zero Carbon To increase energy efficiency of commercial buildings, the NSW Government should engage with and provide support for the implementation of the National Carbon Neutral Standard for Buildings and Precincts. As noted previously, the GBCA has worked closely with the federal Department of Environment and Energy and NABERS to develop clear definitions and voluntary standards for carbon neutrality or net zero emissions for buildings and precincts. The GBCA welcomes Government to engage with Green Star Updates, which will help to deliver significant and costeffective energy savings. Among the proposed evolutions to Green Star are: minimum energy efficiency for different star ratings; and measures to build industry capacity in air-tightness testing. 10

11 Q23 and 24: Retail Buildings In addition to NABERS, Government should reference Green Star as a holistic rating tool for existing large retail buildings. Green Star certification facilitates the design and delivery of efficient, productive and sustainable retail centres. A prime example of this is The Ponds Shopping Centre in north-west Sydney which was awarded a 6 Star Green Star Retail Centre Design rating. It boasts a solar PV system, which generates power to the car park lights and fans, thus providing clean, renewable energy in addition to reduction of power costs. Q25: Commercial Building Disclosure The GBCA supports the NSW Government s advocacy efforts to expand the Commercial Building Disclosure program where appropriate. We support the proposal to require commercial buildings other than medium to large office buildings (such as retail buildings and data centres) to disclose their energy performance under the CBD program. Energy efficient government and infrastructure Q27: State significant developments and major infrastructure Using Green Star rating tools will enable Government to incorporate energy efficiency standards into major developments and infrastructure projects from the outset. Green Star will facilitate sustainable outcomes for state significant developments and major infrastructure projects, with energy efficiency standards forming part of an integrated, comprehensive set of outcomes targeted from the outset. This can be seen through the case study of Bayswater Level Crossing Removal Project (LCRP) in Victoria, which is targeting a 4 Star Green Star Design & As Built rating. LCRP has been awarded the Infrastructure Sustainability Project award in The Infrastructure Sustainability Council of Australia (ISCA) granted the award after assessing the sustainability performance of the project across key sustainability areas, including management and governance, resource use, emissions, pollution and waste, people and place, ecology and innovation. In particular, Green Star Communities will provide a useful resource for state significant developments and major infrastructure projects as it has been specifically developed to rate sustainable outcomes at a neighbourhood and precinctscale. For example, Renewal SA s Bowden Development situated on the Western edge of the Adelaide City Parklands, is redefining sustainable living in South Australia. Each and every building delivered on the 16.3 hectare site must achieve a 5 Star Green Star rating or above. Renewal SA has raised the bar even higher, by also committing to achieve a Green Star Communities rating for the entire precinct. Q29: Council Operations As previously noted, the GBCA encourages Government to reference Green Star as a holistic rating tool in its review of the NSW Government Resource Efficiency Policy. Wollongong Council s Administration Building, which achieved a 5 Star Green Star Performance rating is a good example of how Green Star is helping local government to improve their assets sustainability performance. Upgrades and altered practices have resulted in energy efficiency gains of 55 per cent and water efficiency gains of 85 per cent, yielding both environmental and financial sustainability for the asset. 11

12 Q30 and Q31: Hotels and other services used by the NSW Government Green Star provides best practice benchmarks that can inform government procurement. Through independent certification, Green Star is incentivising developers and tenants to pursue best practice, which in turn is raising the standards for others to follow. NSW Government could gauge the opportunity to intensify competition and raise benchmarks, by requiring hotels used by government, to meet minimum energy performance standards integrated in Green Star rating tools. The Abode Hotel Woden, which achieved Green Star certification, represented a successful adaptive reuse project, providing an inspiring example of how older buildings can be updated into modern, sustainable spaces. The review of the NSW Government Resource Efficiency Policy should include supply chain requirements for Green Star and NABERS. Green Star encourages developers to utilise renewable resources and energy efficient materials that are responsibly sourced. Welcoming Government support, the Policy should be expanded to include supply chain requirements to improve the sustainability of the building industry. Energy efficient markets and appliances Q32 and Q33: Energy efficient markets and appliances Green Star provides an effective and holistic pathway to grow and transform the market for energy efficiency products and services. Green Star rated projects are consistently making use of existing energy-efficient technologies and exploring the potential of future, innovative technologies. As noted previously, the Green Star Updates are exploring a new pathway for engineered timber within the Materials category and examining measures to build industry capacity in air-tightness testing. For the former, it will help to incentivise a new industry for engineered timber in Australia meanwhile for the latter; it will promote air-tightness testing services which in turn will reduce the need for energy-intensive heating, ventilation and cooling systems. 12