The Economics of Sustainability

A look at the business of sustainability and how the encompassing technologies underpin the economy as we know it.

By Markus Eckersley, Director, Cundall

 

Our daily business news reports many successes to us, but there are also many stories revolving around debt, deflation, recession, boom and bust. One subject matter that seems to take a backseat in business news is environmental sustainability. Yet, in the future, it could be the economics of sustainability and the encompassing technologies that actually underpin our economies. The sustainable technologies could be either those currently established or emerging. So it would be foolish to turn a blind eye to the subject of sustainability and business, especially if it replaces any negative news.

 

Sustainability is an enormous and complex subject. However, it can be simplified. As an analogy, we could consider that, if we put livestock into a field where the grass is lush, this grass will support and nourish the livestock; in turn, this also supports human existence. Get greedy and put too many animals in the field, and the lush grass soon turns to mud, the system collapses. Our planet works on the same principle, although there are many complex layers that sustain one another. We wouldn’t want to bite the hand that feeds us, right?

 

So where are we going with all this? Property & Construction is one sector that has a lot to answer for in terms of sustainability. For instance, concrete is a major contributor to the planet’s greenhouse gas emissions, which leads us to global warming and further impacts to the complex layers of environmental sustainability. Science and engineering have assisted to reduce emissions arising from concrete production, an improvement that makes it more environmentally friendly, but not necessarily sustainable. With the sheer increase in the volume of future construction, the total emissions once again will match the reduced emission benchmark, so we remain in a status quo, having only managed to offset one issue. There are many examples of sustainability, but the fact is that there is a colossal challenge ahead of us. Currently, the rate of positive change in the world of sustainability isn’t enough to stop our field from turning to mud, or even rectifying the accumulated damage.

 

The technology required to stop damaging the planet permanently doesn’t actually exist. We do not know what it is that needs to be invented or who is going to invent it, if it will be within our lifetime, or whether it will be too little, too late. What we do know is that it will be a complete shift in technology. And so the race is on.

 

The economics for sustainability and what drives motive are complex. We can say that engineers like to design efficient buildings—they always have. But when cost increases to support the efficiencies, they are removed. This then passes the problem over to operating cost. Ultimately, the owners or tenants then foot the bill for what has now become an inefficient and unenvironmentally friendly building. It takes governments to step up to the challenge of sustainability and turn efficiency into legislation, where compliance is statutory. From these benchmarks, efficiencies stay in at design, along with the potential technologies that we require to support sustainability.

 

Efficient and sustainable technologies now become stimulated under statute. As such, they are becoming an ever greater part of our economics, fuelling science, new design and competition to develop new technologies and be first in their ‘field’. Singapore is in the race—it has to be—and it is good to see this at an ever increasing pace. In March this year, the Building and Construction Authority released details of a $20 million Building Energy Efficiency Demonstrations Scheme. The purpose of the scheme is to allow large-scale opportunity for business and researchers to test new energy efficient technologies in the existing built environment. The scheme will help owners and developers reduce risk in having engineers test new innovative technology in their buildings.

 

The hope here is that new technology demonstrates its place in the built environment and will spur wider replication and commercialisation of sustainable design rather than just statute alone. Hopefully, we will be seeing positive and interesting business news on the development of this technology with Singapore at the forefront.

 

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