In 2018 the European Union’s climate chief called for the bloc to take the lead and aim for net-zero greenhouse gas emissions by 2050 in its climate strategy. Reuters reported this year that under a climate legislation adopted since the 2015 Paris Agreement that addresses global warming, the EU is on track to overshoot its pledge to reduce emissions by 40 percent by 2030.
The same 2050 deadline has also been adopted by the World Green Building Council (WBGC) who are proposing that by this date, all buildings shall operate at net-zero carbon. No doubt Proptech will have a significant role to play in managing these challenges.
The goal of net-zero emissions may seem daunting, but full decarbonisation is feasible with technologies that exist already, and several others that just need further investment to reach commercial readiness. This all sounds like a lot of big investments, but it’s not as costly as you’d think.
A report by the Financial Times (2018) estimated total cost of the global economy would be less than 0.5% of GDP by mid-century and could be reduced even further by improving energy efficiency. So it’s undoubtedly possible that at a very small economic cost for renewable energy sources can provide more economic benefits.
The CSIRO have also estimated that achieving net-zero emissions before or soon after 2050 will deliver ‘higher economic growth’ than more moderate trends (Figure 1). If emissions in New South Wales continues to fall at the same rate they have for the past five years, we will almost reach our net-zero goal by the 2050 deadline.
As an example, it’s been estimated that achieving zero emissions in heavy industry and transport by 2050 would make the global economy at most, 0.5% smaller than it would otherwise have been. That figure could be reduced to less than 0.3% if recycling and reuse of industrial materials were increased. That means that there are no unmanageable technological resources, or even cost barriers to impede our path to a zero-carbon economy.
So why aren’t all Governments on board in support of the Paris Climate accord when their intervention policies are essential to achieving net-zero emissions? The debate in Government seems to be silent on the benefits to be gained.
As the world begins moving towards net zero emissions, the opportunities of getting a much-delayed start on ‘decarbonising’ Australia’s economy will reap many benefits including:
- Contributing to services, innovative technologies, business models, practices and services that attract employment and investment
- Improving economy productivity through energy efficiency actions
- Other benefits in areas such as environment, health, amenity and productivity
On the other hand, the risks of not working towards a net zero emissions target include:
- Being a ‘leftover’ economy that’s still relatively emissions-intensive will face challenges like reduced exports, reduced investment and regulatory constraints.
- Even if we delay, we would still have to make it up at a later date, when reduction time frames would be much tighter to work with.
- And if we do nothing, our economy will be affected by the mitigation efforts of other nations, through things like the risk of stranded assets for fossil fuel based infrastructure and reduced fossil fuel exports.
So it’s important for businesses and particularly the real estate sector to act now, start focusing on long-term planning and consider early adoption of zero carbon techniques to reduce the risk of ever-tightening controls on carbon-intensive operations and carbon liabilities. Competitive advantage can be achieved through risk reduction and zero emission technologies will create new opportunities.