Building greener homes and offices could increase GDP over three decades by $147 billion, but advocates worry a programme to do just that is being slow rolled, Marc Daalder reports

Energy efficient buildings constructed from low-emissions materials could boost economic output, improve human health and free up electricity demand to power electric vehicles, a new report suggests.

Economic consultancy firm Business and Economic Research Limited (BERL) was commissioned by the New Zealand Green Building Council to estimate the impacts of three different scenarios in green construction. Two of the scenarios entertained low-emissions homes and offices being built from a certain date (2025 and 2030) and near zero emissions homes being built from a later date (2035 and 2040, respectively). The third was a business-as-usual scenario in which houses and offices are built just to current code compliance.

The most ambitious scenario detailed, with 2025 and 2035 phase-in dates for greener construction, aligns closely with the trajectory of the Government’s Building for Climate Change programme, the New Zealand Green Building Council’s CEO Andrew Eagles told Newsroom.

“That’s a programme that [the Ministry of Business, Innovation and Employment] has set out to align our Building Code with the Zero Carbon Act. It sets out to move our very poor performing Building Code to substantially reduce operational carbon and start to measure and reduce embodied carbon over the next 10 years,” he said.

“We are saying we should stick to that because there’s benefits to health, huge benefits for carbon, reducing the cost of living crisis, but also for our economy. We need to not delay.”

Despite the ambition in the programme, Eagles said it was taking too long to actually be implemented. The first details of the programme were shared in 2020 but nothing more about the regulations and timeline has been released since.

If officials aren’t able to get the programme out soon, the indicative start date of 2024 may have to be pushed back. A different set of regulations to beef up insulation requirements were delayed earlier this year due to building material constraints and a short lead-in time.

Climate Change Minister James Shaw also told Newsroom he thought the programme could go faster.

“It’s not moving as quickly as I would have liked it to. I think there was room in the last term to upgrade the Building Code and so on,” he said.

“Anything that we build that is below the standard that we want to be at, is in place for decades to come. You’ll have buildings that aren’t as energy efficient as we would like, that people face higher energy costs for occupying and so on.”

Amidst a house building boom, there’s a risk that high-emitting, energy-hungry houses will end up being stranded assets if new regulations don’t come in soon.

The benefits of regulating to require lower-emissions homes and offices (and eventually near zero emissions homes) are significant.

BERL found the direct benefits of the Building for Climate Change programme could include increasing GDP out to 2050 by a total of $43 billion and boosting employment with tens of thousands of jobs. Indirect impacts could triple the number of jobs and the GDP boost.

While green houses will cost about 14 percent more, they’ll save owners thousands of dollars a year in lower energy costs, particularly in colder climates like Wellington ($2002 per year in savings) and Christchurch ($2843 a year). 

Total electricity demand from housing would slow to a virtual halt from 2025 in the most ambitious scenario. While these houses would still use electricity, they’d be displacing enough older, less efficient houses to have an overall negligible impact on demand.

That could free up enough power to fuel nearly two million electric vehicles each year, as compared with the business-as-usual construction scenario, Eagles said.

When Transpower already estimates we need to as much as double our electricity generation to power transport, industry and more homes and offices, slashing demand could be a big deal.

BERL senior consultant Nick Robertson said there was relatively little research into the impact of efficient construction, so the results were initially surprising.

“This research is the first step towards realising the benefits better quality houses and buildings can have, and is just the start of what should be an ongoing conversation which will be helped with more research building on this report,” he said.

Marc Daalder is a senior political reporter based in Wellington who covers climate change, health, energy and violent extremism. Twitter/Bluesky: @marcdaalder

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