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48 PROPOSAL TO REVISE ENERGY EFFICIENCY REQUIREMENTS OF THE BUILDING CODE OF AUSTRALIA FOR COMMERCIAL BUILDINGS for example, a background level of voluntary adoption and technological innovation that occurs without changes in the BCA. Major policies, such as CPRS, could be implemented that fundamentally shift key parameters, such as electricity prices and GHG intensity of energy mixes. In essence, the baseline should portray the ‘best’ depiction of the foreseeable counterfactual (that is, what would happen in the absence of amendments to the BCA). The baseline therefore, needs to consider similar factors used for aggregating to an economywide level, such as changes in energy prices; growth of the commercial building stock; changes in the structure of the commercial building stock; population movements; changes in the GHG intensity of energy; and other relevant ‘background’ variables. All of these parameters are explicitly incorporated in the BAU for this impact analysis. Importantly, the BAU is constructed using the <strong>Australian</strong> Government’s projections of the impacts of implementation of the CPRS. By using these inputs, the BAU incorporates several other key policies, such as increased mandatory renewable energy targets. It also excludes the implications of other policies such as financial incentives for energy efficiency investments and the national roll out of smart meters. Cost pass through In many cases, the costs of complying with the amended BCA will be incurred by different entities. For example, capital costs will be initially incurred by the builder. A building occupier (not necessarily the owner) may be responsible for operating costs, while the asset owner will incur maintenance and disposal costs. Following the recommendation in CIE (2009a p. 32), this report models compliance costs as being incurred by the user of the asset (that is, the owner–occupier). Market adaptation Although the proposed BCA amendments are indeed likely to induce a market response — in say, the design, orientation and construction of new dwellings — the impact analysis in this report has deliberately assessed the amendments as if there is no market response whatsoever. The intent of the assessment is to reflect on the change in the cost and benefits of current choices and practices. www.TheCIE.com.au
PROPOSAL TO REVISE ENERGY EFFICIENCY REQUIREMENTS OF THE BUILDING CODE OF AUSTRALIA FOR COMMERCIAL BUILDINGS 49 Refurbishments The BCA applies to all new building work, including refurbishments of any scale. The extent to which BCA provisions are applied to refurbishments varies between each of the States and Territories. However, the BCA is generally applied where the refurbishment is sufficiently extensive to require approval from the relevant regulatory authority. Under the proposed BCA 2010, refurbishment processes will generate some additional energy and GHG savings at some additional cost. However, at this stage, it is not feasible to accurately assess the impacts that the measures will have on such projects as the information required to undertake this analysis is not available. Omitting refurbishments from the impact analysis altogether however, can understate both costs and benefits. Moreover, the directional bias — that is, to bias the net impact assessment — is unclear. To account for this then, and consistent with ABCB (2006a), the analysis here has scaled the new building stock by 10 per cent to account for refurbishments. This will have implications for both the costs and benefits of the amendments. (The sensitivity analysis of the central case tests the impact of this variable explicitly.) The information gaps and the key practical difficulties for analysing the issue of refurbishment of existing buildings are summarised below. • Variability in the application of the BCA across jurisdictions. The application of the BCA to existing buildings being altered, extended or undergoing a change of use or Classification is covered in the relevant building legislation in each State and Territory (ABCB 2007). As such, individual jurisdictions or approval authorities (usually the local council or private certifiers) can apply the BCA to existing buildings undergoing refurbishment as rigorously as they see fit. • Unknown refurbishment rates and variability in the scale and scope of the refurbishments. Additional information that is not currently available is required to understand refurbishment rates by building Class in each State, and the extent of the work. Many refurbishments, such as tenancy and cosmetic upgrades, offer few opportunities to improve the energy efficiency of the fabric, with improvements possible only with lighting, heating, ventilation and air conditioning (HVAC), and hot water supply. In contrast, there would also be a certain proportion of major upgrades and conversions that offer significant opportunities to improve energy efficiency. However, it is difficult to derive sound quantitative estimates of these impacts since these matters tend to be project specific. www.TheCIE.com.au
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