Over the last four years I have studied 60 voluntary programs for low-carbon buildings in Australia, India, Malaysia, the Netherlands, Singapore and the US. Earlier this year I brought together my research findings in a book manuscript due for publication in 2016. Over the last four weeks I have presented a brief summary of this book in a series of posts.
In this final post I will address the leadership delusion created by the administrators of and participants in these voluntary programs, as well as by media and civil-society organisations. And I will discuss how to get beyond this delusion.
The leadership delusion
Of the 60 programs I have studied only four have achieved promising performance. I have explained that I consider performance promising if a program attracts at least 15 per cent of individuals, firms or buildings it targets, and if these participants reduce their energy consumption or carbon emissions by 20 per cent.
Thus, 56 of the programs studied (or 93 per cent) do not show promising performance. Still, the administrators of these programs, their participants, media and civil society organisations laud them for successful performance.
In the previous posts I have already discussed why program administrators and participants sell us their narratives of success, and by doing so create this leadership delusion. They have clear personal and often financial interests in doing so.
I can see why the media replicates these narratives of success. People are fed up with negative stories on climate change. Contrary to the truism that “bad news sells better than good news”, it seems to be the other way around for climate change-related news. Thus, reporting on a “success” from the construction and property sectors will likely land better than yet another story about the problems caused and limited action taken by these sectors.
But why would civil society organisations tap into and strengthen this leadership illusion? This is still a puzzle for me. I do have some ideas, but better to keep those to myself for now.
And with that I end my doom and gloom story. Because, and this may surprise you, I see value in voluntary programs for low-carbon building development and transformation. These programs require, however, a different application than how they are used now.
Beyond the leadership delusion
Most of the programs I have studied focus on ambitious firms and individuals in the construction and property sectors – say, the leaders; the Lendleases, the 3Ms and the Mirvacs around the globe. “If you get the leaders on board the rest will follow,” roughly summarises how many program administrators support this focus on leadership.
At first glance this seems to make sense. After all, if the leaders in the industry set the tone the rest might follow, no? If you want to address obesity, then get McDonalds and Coca Cola involved. If you want to improve the environmental sustainability of the aviation industry, get Airbus and Boeing involved. Why? Because these organisations serve a disproportionally large part of the market.
In other words, many sectors and industries are characterised by what is known as the 20/80 rule. Twenty per cent of producers in those industries make 80 per cent of the products. Get this handful of large producers in your voluntary program, and you have change the market. Other producers then simply have to follow.
The problem with the construction and property sectors is that the 20/80 rule does not hold there. The largest 20 per cent of property developers or property owners does not develop or own 80 per cent of all property (not even 30 per cent, I think). Besides, the leading firms that these voluntary programs focus on are not an inspirational example to follow by many other firms. The guy around the corner who owns a pickup truck and a hammer, and who calls himself a builder, is unlikely inspired by the low-carbon buildings developed by the Lendleases and Mirvacs. And there are thousands of these guys in the construction and property sectors. The same holds for small- and medium-sized firms and households: The shiny examples presented by the voluntary program administrators do not speak to them.
One of the ways forward for voluntary programs in the construction and property sectors that I see, therefore, is to focus on different segments of the market. Aim to develop voluntary programs that are attractive for the absolute leaders, but also programs that are attractive for the guy with his pickup truck, for the small tenant outside the central business district, and for the mum-and-dads in the suburbs.
Towards hybrid mandatory-voluntary programs
Another flaw of voluntary programs is, ironically, that they are voluntary. Because the 20/80 rule does not hold, voluntary programs in the construction and property sectors are not good at changing norms. Thus, the only reason to join a voluntary program is if a firm or individual feels the effort of doing so is worth the reward.
It has become clear that many of the voluntary programs I have studied are not capable of attracting a meaningful number of participants, even if they provide guaranteed financial rewards. So we have to start thinking differently about the notion of voluntarism in voluntary programs. I can see a number of slight adjustments, which require us to think in terms of hybrid mandatory-voluntary programs – for example, combining mandatory participation and voluntary performance, such as with NABERS in Australia and Green Mark in Singapore. This may result in situations where property developers and owners realise that with a little extra effort considerable extra rewards can be achieved.
Another example would be to start thinking in terms of voluntary opting out instead of voluntary opting in. What is the best time to carry out a home retrofit? Probably when the house is vacant. When is the house vacant? When new owners are about to move in. What have these new owners just organised? Right, a mortgage. So, why should the new owners not be given an extra mortgage that they have to use to retrofit their house? They are free to turn down this energy efficiency mortgage (opting out), but likely this change of opting in versus opting out means many will go with the default – that is, having their house retrofitted.
Towards rolling rule regimes
A related flaw of the voluntary programs I have studied is that they either set a very short time-frame to achieve their goals, or none at all. For example, Retrofit Chicago seeks to achieve a 20 per cent energy reduction of its major commercial buildings over a five-year period, whereas certification and classification programs such as Green Star and LEED have set no date to achieve their goals.
The risk of too short a time-frame is that the program will not be of interest to a large number of potential participants – by the time they hear about it the program is coming to an end. The risk of too long a time-frame, or none at all, is that anything goes. This is an ever bigger risk than the ones that come with a very short time-frame. After all, people would rather solve problems in some distant future than today. A voluntary program with a long or no time-frame then easily becomes wishful thinking of what can be achieved, not what will be achieved.
Is it not a little strange that the Melbourne Council House 2 building, which achieved the highest Green Star class of certification in 2005, is still considered a world leading example of low-carbon building development – at least in Australia? 2005 was also the year when Apple released its Video iPod, an MP3 player that could play videos (they released the iPad in 2010). When is last time you saw someone with a Video iPod and thought: “Wow, that guy is really ahead of the pack!”?
A solution for voluntary programs I see here is to move from too long-term or open-ended programs to rolling rule regimes. Such a regime would build around a voluntary program. It would stipulate that today’s leading practice in a voluntary program would be the mandatory bottom line in ten years from now. This gives the leaders in the sectors an incentive to innovate (after, they will be the ones who have the knowledge once their innovation becomes mandatory) and it would push the laggards to follow.
We have got to toughen up
Last but not least, and this is where I get normative, voluntary programs really have to move beyond merely correcting the unsustainable levels of resource consumption and carbon emissions in the construction and property sectors. If these programs seek to achieve leading practice, then why do most programs I have studied not stipulate that participants reduce their energy consumption or carbon emissions by more than a mere 20 per cent?
We have the knowledge and experience to go carbon neutral with our buildings, to go energy positive, and to construct buildings that are regenerative. Why then all the watered down ambitions in programs like Green Star, LEED, CitySwitch, Energy Efficient Mortgages, and the Amsterdam Investment Fund?
If we keep patting the big firms and leading individuals on the shoulders for achieving a slightly more sustainable building here and using a little less energy there, then how are we ever going to see change by the vast majority of much smaller property developers, owners and users? To cite my favourite quote from the more than 200 experts I have spoken, an administrator of CitySwitch: “If we [want to] make the changes in the timeline we need to make them, then we’ve got to toughen up here.”
A word of gratitude
Over the last four years I have been fortunate to be funded by the Netherlands Organisation of Scientific Research through a personal VENI research grant, allowing me to carry out the research discussed in these eight posts. I am also fortunate to be currently funded by the Australian Research Council through a personal DECRA research grant, allowing me to continue this research.
More importantly, I have been very fortunate to have met over 200 experts (policymakers, bureaucrats, program administrators, developers, architects, engineers, constructors and so on) who were very open in discussing their experiences with these programs. I am very grateful to my funders as well as to these more than 200 individuals for making this research possible.
In these posts I have stayed away (with a few exceptions) from referring to these experts directly. I let them speak much more in my forthcoming book. All insights shared in these posts, particularly regarding the poor performance of the voluntary programs, can be found on publicly accessible websites, in program year reports, and the like – it just takes some time to pull it all together. In these posts I also had to be rather brief in providing evidence for my findings. The book provides a much richer narrative. I expect it will be available mid-2016.
Dr Jeroen van der Heijden is senior research fellow at Australian National University and associate professor at the University of Amsterdam.