The Pears Report: Houses are public assets, too


Why can’t we support long-term investments in energy-efficient buildings for the benefit of all in the community, the way we’re prepared to invest in infrastructure like roads, asks Alan Pears?

I have had a long-standing involvement in building energy rating, regulation and building energy assessment. There are encouraging signs that the next round of building energy regulation for non-residential buildings will drive significant improvement— if it is enforced.

But progress in the residential sector is painfully slow. New homes should be assets that help deliver a healthy, zero (or beyond zero) emission future. This will require a dramatic increase in thermal performance (both summer and winter) of new homes and strong enforcement of standards. I am very concerned about the long-term costs and impacts of failure to act faster.

Incentives, finance, accountability
The situation seems pretty clear to me. We need long-term low-interest finance combined with incentives and mandatory measures for new buildings and existing ones, especially where the decision-maker doesn’t pay the ongoing energy bills. We need accountability through checking actual performance. High-profile rating and benchmarking of performance (with promotion and education so people use it) must be built into information given to home buyers and potential tenants.

Over 30% of households are rentals. Many more have limited financial resources. Houses last 75 years or so on average: they are a form of public infrastructure that private decision-makers create and operate. We finance power stations, roads and buildings over 25 years or more, so why not the cost of upgrading building performance to be future assets in a zero-carbon world?

The energy efficiency of homes is a major influence on health, comfort, energy costs and how much energy supply infrastructure we need. Renewable energy, like efficient heating and cooling equipment, is important. But efficient buildings need a lot less energy supply infrastructure. They are less vulnerable to supply interruptions and appliance failure. They are nicer to live in.

The widely used CBA/HIA housing affordability index ignores the ongoing costs of running a house. It focuses attention on the ‘sticker’ price—yet very few people pay cash for a house. The rest of us are more interested in the net cashflow: can we afford to pay the loan off while paying the running costs and health care bills? Yet few talk about that as an affordability indicator.

The present National Construction Code largely ignores the costs of peak energy demand, health and amenity costs, as well as carbon emission costs and the adequacy of performance in a changing climate.

A package of high building efficiency, high equipment and appliance efficiency, on-site renewable energy and storage can now be cashflow-positive if financed through a mortgage. Reduced health care costs, improved amenity and reduced energy infrastructure costs add value. And we need to ensure the value of long-term benefits is not discounted away by economic analysts. Of course, including a realistic carbon price would make this look even better.

Tenants and financially stressed households, especially those in existing poor-performing homes, suffer most. When we as a society recognise the broader social benefit of helping people to look after themselves, we act. Owning a home, no matter how inefficient and uncomfortable, has long been seen as a socially beneficial outcome, so governments have encouraged banks to loan money. The financial sector is happy to loan money to businesses that claim they will deliver a social benefit by growing the economy—although the reality often falls short. So why don’t we provide appropriate finance for low-carbon housing?

We need to recognise that the emerging reality in energy and climate is a shift from governments and big business making big long-term investments to individuals and small businesses investing in on-site energy efficiency (appliances and buildings), renewables, storage and smarts. So we need structures that support such action—for tenants, vulnerable households, financially stressed households, small businesses and communities.

Supporting great causes is one way to manage guilt and frustration about climate change. The ATA’s project to install solar-powered lighting units in remote East Timorese villages involves and educates the whole community. Give the Gift of Light: Photo: Susanna Rossi.

Managing guilt and distress on climate change
It’s coming up to Christmas and summer. It’s a time of reflection and celebration, and guilt and frustration for many who are working towards a better world. It’s also the beginning of what could be a nasty bushfire season, driven by ongoing climate change.

How much responsibility should I take for action to cut climate impacts?

This question exercises my mind quite a bit. I’m lucky, in that I can (at least occasionally) point to policies, programs or actions I’ve helped to implement that have shifted national, state or local governments. More often, I can see action I’ve taken that has simply helped to reduce the back-sliding as anti-climate action groups, powerful interests and captive policy makers push their agendas.

In my personal life I, like many others, do what I can to cut my impacts and support positive local action. But it’s difficult for many people to feel they have done enough. One lesson from life cycle analysis is that we depend on many complex systems to deliver the services and products we rely on. While the final buyer could, in theory, select low-carbon, ethical options, there are serious practical barriers.

Information is scarce, and the indirect influence of financiers, governments and decision-makers within the supply chain has effects on environmental and social impacts that can’t be easily unravelled. In particular, most people depend upon governments to provide infrastructure to allow them to travel to work with minimum impact, design cities to deliver equitable outcomes, and set and enforce rules for industry and business to behave responsibly and report on their impacts.

Australian governments have, on the whole, failed to support people who want to deliver a low-carbon, equitable and successful society and economy. What can I do if the only realistic way I can get to work involves driving a car a long distance on a congested road?

Governments have a serious governance problem: even if an individual government does good work, there is no guarantee that this will not be unravelled by a future government. And they seem to be prepared to facilitate projects that add to our problems, providing finance, regulating to support and turning a ‘blind eye’ to failures. Just look at the chronic failures in energy markets, housing, transport and climate policy!

So where does this leave those of us who want to make a difference on climate issues?

We can do lots within our own lives, using less fossil fuel, buying less ‘stuff’ and buying less of the ‘stuff’ that we are confident has a high impact. Some things matter a lot more than others: the steel and cement in building construction is emissions-intensive. While beef and lamb are emissions-intensive, so are highly processed foods and visits to energy inefficient restaurants. Driving to shops and inefficient old fridges can also be significant contributors to a household’s emissions. We need much better consumer guidance. But we also need to look beyond this: a modern, sustainable society should not involve wearing hair shirts and freezing in the dark!

Those of us who have some capital could help others to afford clean energy solutions by investing in funds that finance rooftop solar and energy efficiency measures for vulnerable households (e.g. Corena and ClearSky Solar, or look for local community groups investing in solar projects). These investments can deliver a good, reliable return while helping others to be part of the solution instead of victims. Owners of rental properties can install low-emission equipment and upgrade performance while, in many cases, capturing tax deductions and depreciation allowances.

One of my favourite Christmas and birthday strategies is to buy friends and relatives carbon offsets instead of presents. The UN website ( allows you to choose projects that deliver useful economic and social outcomes as well as cutting emissions. While some people criticise the UN offset scheme (with some justification) because it lacks rigour, by choosing your projects, you can guarantee some benefit. And the pragmatic reality is that, if you and I don’t buy and surrender these offsets without emitting, big businesses and slow-moving governments (like ours) can buy and surrender them because they are ‘legal currency’ in the global abatement scheme. And we should buy them while they’re cheap!

Government priorities and actions matter. So harassing your representatives of local, state and national governments is important. Community action, both for advocacy and practical projects, is vitally important. The reality is that governments are mostly followers, not leaders, so community leadership is powerful.

Lastly, we should applaud people, communities, businesses and organisations, and even politicians, who take significant action on climate. They need all the support we can give them. And maybe we can celebrate a bit with the odd glass of Australian red wine from a cask—much lower carbon impact than white wine from a bottle!

The Energy Efficiency Council awards include a gong for Energy Efficiency Champion for “an individual who has advanced the energy efficiency sector through outstanding advocacy, research, education or projects.” That’s a neat summary of the efforts of regular ReNew contributor Alan Pears, who took out the award in November 2017, to a standing ovation.

Alan Pears, AM, is one of Australia’s best-regarded sustainability experts. He is a Senior Industry Fellow at RMIT University, advises a number of industry and community organisations and works as a consultant. He writes a column in each issue of ReNew: you can buy an e-book of Alan’s columns from 1997 to 2016 at

This article was first published in ReNew 142.