Proponents of low-carbon transformation face an uphill battle to reconfigure incumbent energy systems against powerful interests protecting the status quo. Australia's electricity sector is an example of such a system, wedded to fossil fuels and backed by much of the country's political establishment. This paper addresses the potential for low-carbon transformation in Australia's electricity sector.
In developed economies a significant proportion of greenhouse gas emissions result from energy demand in the building sector. Many countries have recognized the need to mandate building energy performance standards as a key element of a national energy or climate change policy. The Commonwealth of Australia included energy efficiency provisions in the National Building Code early last decade. This initiative has not been without controversy or resistance from some industry stakeholders. Typically such opposition is predicated on the assertion that more stringent energy efficiency requirements, particularly in the residential sector, would detrimentally impact on housing affordability. The State of Victoria significantly upgraded its residential energy efficiency requirements in 2004. This study of the new standard [the 5-Star Standard] investigates its effectiveness as an instrument of energy policy, testing the assumption that more stringent regulatory requirements are at odds with housing affordability, used here in its commonly understood form of initial capital cost. The analysis concludes that the 5-Star Standard has delivered significant greenhouse abatement; and encouraged industry innovation in a way that embodies regulatory best practice; while at the same time not compromising housing affordability for consumers or impacting negatively on the local housing market overall.