We are only four weeks away from the start of the carbon tax. Are we ready for the challenge?
The built environment contributes a significant amount of national carbon emissions to our environment through embodied energy emissions and the ongoing operation of buildings. The rationale behind the carbon tax is to include the cost of carbon emissions, and its associated environmental impact, in the cost of construction and operation of buildings and other energy consuming activities.
This price signal will filter through the economy and, according to economists, will result in the development and implementation of low-cost carbon abatement solutions. These new solutions will emerge not as a result of the government picking the winners but by virtue of market mechanisms.
The carbon tax will result in increases to the costs of electricity, construction materials, transport and more. However, the sharp increase in electricity costs over the past few years was driven not by the carbon tax but by increasing energy demand and the resulting cost of upgrading and building new generation and distribution infrastructure.
In the “business as usual” scenario, increasing energy costs inevitably leads to an increase in the construction and operating cost of buildings. This also provides an opportunity for businesses to further differentiate in the market place. More efficient use of existing and new materials, construction technologies and smarter engineering solutions lead to lower overall costs for construction and higher energy efficiency of buildings, leading to lower overall cost despite the higher energy prices.
Regardless of what happens to the current version of the carbon tax or emissions trading in the near future, there is nothing that can remove increasing of energy costs. Businesses embracing change and innovation will become more profitable than their status-quo peers. Reducing reliance on fossil fuels and resource efficiency is inevitable if we are to continue to enjoy our current standard of living and improved standard of living in less developed countries.
Consumer sentiment also favours efficiency and sustainability. As an industry, we play a significant role in how to turn the challenge of the rising costs of construction and operation into an opportunity to win more projects and become more profitable. We can see this opportunity through closer collaboration between developers, architects, engineers and contractors focused on the efficient built environment outcome.
End users also examine their operations to identify energy inefficiencies and carbon emissions in an effort to reduce their carbon tax and energy cost exposure. At Meinhardt, we have launched a carbon and integrated engineering consultancy to offer a full spectrum of resource efficiency and design services. At the macro level our engineering capabilities are harnessed to evaluate and develop enterprise wide sustainability and resource efficiency strategies. At the micro level we offer engineering design services, emissions auditing, inventory, measurement and verification and reporting services.
While rising energy costs and carbon tax exposure may create significant challenges to some businesses in the short term, avoiding them is not a good strategy. Decisive action and strategic partnerships may transform a headache into new business opportunities and improved profitability.