Energy efficiency features are not common in Australia’s commercial buildings. A new study by the Productivity Commission released today found that while many input-saving technologies and processes (ISTPs) are feasible, most are not commercially viable at present.

This latest PC report dealing with environmental issues – The Environmental Performance of Commercial Buildings – was commissioned by the Assistant Treasurer on behalf of the Department of Industry, Science and Resources. It examines the factors influencing the adoption of environment-friendly features in commercial buildings, and in particular, their use of energy.

The report found that the reasons why ISTPs are not adopted include: hidden costs in incorporating them into existing buildings such as training costs or disruption to the workplace; the greater risks involved with unproven ISTPs; and more generally, that achieving higher energy efficiency is not a priority for building owners or company management at times when energy prices are low.

Many have suggested that broader environmental concerns and in particular, Australia’s commitment to reducing the growth of its greenhouse gas emissions, justify mandatory environmental standards for buildings. However the Commission argues that if there are significant environmental impacts, the preferred approach is to deal with them at source.

“Market based approaches are the best way for accounting for externalities, because the effects will be economywide, flexible and transparent. In contrast, mandating technical performance standards for commercial buildings is likely to be distortionary, inefficient and inflexible,” said Dr Neil Byron, the Commissioner overseeing the study.