The Carbon Tax and the Challenges for the Construction Industry

Carbon Tax Carbon Tax

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.

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May 31, 2012

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1 comment

  • Reply Resistor Resistor May 5, 2012 at 8:04 am

    Hello.This article was extremely interesting, especially because I was looking for thoughts on this issue last Thursday.

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