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24 PROPOSAL TO REVISE ENERGY EFFICIENCY REQUIREMENTS OF THE BUILDING CODE OF AUSTRALIA FOR COMMERCIAL BUILDINGS electricity). 2 Emissions from this sector are often accounted for against suppliers such as electricity producers (or generators) and those that transport or transmit electricity. Clearly producers would not supply energy unless there was demand for it. Emissions from the building sector are indirect, but as shown below, they are still substantial and still have an important part to play in reducing our GHG emissions. <strong>Building</strong>s have other characteristics that raise issues for GHG emissions. Many have an effective lifespan that spans several decades — throughout which they house activities that consume energy. Much of the energy consumed in buildings is embedded in the systems used to support and operate that building. The design of buildings also has profound effects on the need for services such as lighting, heating and cooling. Decisions made now about buildings will shape energy demand for many years to come (CIE 2009b). Despite the fact that the commercial buildings sector is a major source of energy demand, there are few official statistics about the amount of GHG emissions that can be attributed to the sector. As such, it is necessary to approximate the likely amount of emissions based on some official indicators and a few informed estimates. Based on data from the most recent National Greenhouse Accounts (DCC 2009), data published by ABARE (2008) and CIE estimates, energy consumption in the commercial buildings sector is estimated to be responsible for GHG emissions of around 49 Mt CO2-e in 2007. 3 This estimate reflects the carbon intensity of fuels (eg electricity and gas) consumed by buildings occupants. GHG emissions from the energy demand of the commercial buildings sector are expected to rise at a relatively fast rate under BAU. Indeed, based on official parameters, the CIE estimates that emissions from the commercial buildings sector would grow above 115 Mt CO2-e by 2050 without the CPRS in place. This reflects an average annual growth rate of 2 per cent (see chart 2.3). 2 Approximately 61 per cent of the energy consumed by the buildings sector in 2009 was from electricity. Nonetheless, the sector also produces direct emissions through burning of natural gas, wood and other petroleum products. 3 Measured including scope 1 and scope 2 emissions for electricity consumption. www.TheCIE.com.au
PROPOSAL TO REVISE ENERGY EFFICIENCY REQUIREMENTS OF THE BUILDING CODE OF AUSTRALIA FOR COMMERCIAL BUILDINGS 25 2.3 Commercial building sector emissions projections 140 120 136% Mt CO2-e 100 80 60 2.0% p.a. 40 20 0 2007 2010 2020 2030 2050 a Estimates reflect the commercial building sector’s emissions in the absence of the CPRS. Data source: CIE (2007), ABARE (2008) and Treasury (2008) The CPRS will impact on the commercial buildings sector emissions in two ways. First, and most significantly, the CPRS will reduce the emissions intensity of purchased electricity upon its introduction. From 2030 on — when renewable energy and carbon capture and storage technologies are expected to become available — this impact will be very dramatic. The Treasury’s modelling of the CPRS 4 estimates that the intensity of electricity emissions will fall to less than one fifth of its 2006 level (<strong>Australian</strong> Government 2008). Second, the price signal sent through the economy by the CPRS will encourage the commercial buildings sector to consume less energy. Energy demand however, is relatively unresponsive to changes in price (NIEIR 2007). As a consequence, this will mean that the effects of any price signal will be relatively mute. The CIE has estimated that on average, the commercial buildings sector will reduce energy consumption by about 16 per cent by 2050 as a result of this signal. The two effects described above can be expected to reduce the commercial buildings sector’s emissions by around 16 Mt CO2-e in 2030, and by approximately 87 Mt CO2-e in 2050 (see chart 2.4). 4 Specifically, the CPRS-5 scenario. www.TheCIE.com.au
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