May 30, 2008

Global warming and construction industry / real estate

Global Warming Threat: Construction industry in Australia is wasteful and needs to change radically

Despite efforts to be more efficient, Australia’s emissions of carbon dioxide have risen at almost twice the world average rate over the last 20 years - to more than 100 million tons a year. That’s 5 tons for every person. With only 0.32% of world population, Australia produces 1.43% of global emissions.

While huge savings can be made by generating electricity from carbon more efficiently, or by using alternative power sources, there is also urgent need to cut energy use – and to reduce peak demand.

A key target for energy saving has to be the construction industry. 40% of Australia’s energy is used to heat, light or cool buildings, build them or knock them down. Most buildings in Australia were designed for a different era where electricity, coal, oil and water were cheap, and the greatest challenge is going to be refitting them for the third millennium.

Many of the most inefficient buildings are offices and factories. The lazy option is to pull them down and start again but this is really costly for the environment. If a building only survives 30 years before demolition, up to 40% of all the energy used in its lifetime will be spent building it, destroying it and carrying away the rubble.

That’s why we can expect huge efforts to retrofit older buildings - but we need to take great care to get it right, or more refits will be needed every decade as regulations and needs change. Compliance with today’s standards is a fast way to waste billions of dollars. You’ll have to upgrade again tomorrow, and the week after.

That’s why we need bold, radical, long term vision. We need to get ready for a future where energy is twice as expensive as today when carbon taxes are added. A world where energy saving has become a global obsession.

Retrofitting old commercial buildings can be an expensive nightmare – particularly as many of them are near the end of their original design life. It is a wasteful scandal that most office blocks built in the last 30 years were only intended to be lived in for three decades.

We need a radical change in mindset of architects, planners, developers, builders and property investors. New commercial buildings should be designed with at least 50 years in mind. That will require government action: big changes in building regulations and far stricter planning standards. Without these things there will always be a temptation to cut building costs and go for the short term.

You cannot imagine such short-sightedness when building private homes. Who wants to buy a new family house that is almost guaranteed to auto-destruct by 2040? Developers who try to build such trash for the domestic market will land up in prison – but in the commercial sector they are regarded as heroes: fast build, low cost and who cares about the future.

We have a moral duty to build for the longer term. Not just to save carbon emissions. There are huge numbers of other environmental benefits in terms of reduced demand for steel, copper, wood, reduced landfill and many manufactured items that can be conserved.

This is not just about more efficient air conditioning, better insulation, saving water or making buildings more intelligent. Such steps are only a small part of the answer. Expect nothing less than a total rethink about the kind of world we want future people to live in.

We are literally building the future: of communities, neighbourhoods, working places, leisure and home environments, places of learning and of healing. Great buildings pass on a legacy for many generations, and should last hundreds of years.

Building long term means it really matters what the construction looks like. Tomorrow’s world will expect many more landmarks of quality, which endure not only in their materials, but in the affections of those who use them. The Sydney Opera House is a wonderful example of design, harmony in location, and emotional attachment. We don’t build Opera Houses to knock them down a couple of decades later – so why do we tolerate such short-termism and poor quality elsewhere?

The technologies we need are already available for next generation buildings. Take geothermal heating and cooling. These systems use up to 50% less energy than alternative systems. 45% of new homes in New Zealand have them, 70% in Sweden and 30% in Switzerland. They work like refrigerator pumps, heating or cooling pipes laid a metre below ground. Systems pay for themselves in 15 years. The global market for geothermal installations could be more than US $40bn a year.

The gold standard will be zero emission buildings: where on-site power generation from solar, wind or other sources is more than enough to meet all heat, light and cooling needs. We are already seeing demands in Europe by governments that builders create carbon-neutral homes. It’s just the beginning. We can expect zero-emission new buildings to be forced on the industry in many parts of the world over the next decade. And as that happens, the gap will grow even wider between new and old building efficiencies.

Government regulations and subsidies can set up national industries to seize these new markets. Look what’s happened in Germany where government action has resulted in the country buying 70% of all solar cells made in the world every month – and German solar cell manufacturers are dominating globally.

So we can expect aggressive and radical changes in the way buildings run. But we can also expect a major rethink about how much energy is used in actually building them in the first place.

A key target for attack will be the concrete industry which is responsible for 5-7% of all global carbon emissions. Concrete is a bulky, low value, two-thousand-year-old commodity which uses massive amounts of energy in a wasteful way. We urgently need an alternative – and there is one.

Expect widespread use in future of geoplymers such as E-crete, a product using power station waste, developed by Jannie Van Deventer, a chemical engineer at the University of Melbourne, and founder of Zeobond. If we replaced half the world’s concrete production with e-crete it would save a billion tons of carbon dioxide in the next decade alone.

E-crete is just one of thousands of examples of new innovation we can expect over the next five to ten years.... representing tens of thousands of new business opportunities, and billions of dollars of new revenues.

But the transformations we need will only happen as the construction industry pulls in a younger generation of highly talented, innovative and creative business leaders, designers, architects, engineers, surveyors and developers. It is often hard for these sectors to compete with more glamorous and well paid careers in industries such as banking, marketing, computing or telecommunications. So how will it happen?

The best talent will only be drawn into the construction industry when a younger generation see huge, exciting opportunities for new highly-profitable business innovation and creative action, and a chance quite literally to help build a better future, driven not just by commercial pressures but also a mission to help save the world.

* Dr Patrick Dixon is a leading authority on global trends, author of 12 books including Futurewise and Building a Better Business. He works with many of the world’s largest multinationals. Over 10 million different people have used his website or watched his videos on the future.
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