The voluntary program series, Part 1: The value and limits of voluntary programs for low-carbon buildings

First published on the Fifth Estate:

Voluntary programs have become increasingly popular in the transition towards a low-carbon economy. They are particularly dominant in the area of low-carbon building development and transformation. Australian examples are Green Star and CitySwitch, both applied throughout Australia, 1200 Buildings in Melbourne, and the Better Building Partnership in Sydney.

These programs set requirements to low-carbon building development and transformation that reach well beyond mandatory requirements as laid down in the in the National Construction Code. In committing to these programs property developers, owners, and users have access to exclusive rewards. For instance, Green Star provides exclusive branding opportunities through its certificates and CitySwitch allows its participants to engage closely with the City of Sydney Government.

Over the last four years I have studied more than 60 voluntary programs for low-carbon buildings in Australia, India, Malaysia, the Netherlands, Singapore, and the United States. Earlier this year I have brought together my research findings in a book manuscript that is due for publication later in 2016. In this blogpost and a series of weekly post that follows on it I will present an exclusive preview of the main findings of this research project.

An exclusive preview the forthcoming book

In short, today I address why it is so difficult to regulate and achieve low-carbon buildings and why governments, firms, and other organisations and individuals have moved to voluntary programs. Next week I will address the larger turn to such programs in areas such as forestry, organic food, and environmental management, and the lessons the buildings sector may draw from it. Then I will write three individual blog posts that each present findings on ‘popular’ types of voluntary programs for sustainable buildings: certification and classification (like Green Star), knowledge generation and sharing programs (like CitySwitch and the Better Buildings Partnership), and funding programs (like 1200 Buildings).

The second group of blog posts will first draw conclusions from the programs I’ve studied in Australia, the Netherlands, and the United States. These are not hopeful: in general these programs have a marginal impact on decarbonising the built environment—marginal at best. I will then open up to the programs studied in India, Malaysia, and Singapore. This will highlight why in the Global South it is even more complicated and risky to rely on voluntary programs for low-carbon buildings than it is in the Global North.

Throughout the blogposts it will become clear that I am not too hopeful about voluntary programs for low-carbon buildings, but I still see promise in them. I will argue, however, that we need to rethink their position in the larger regulatory and governance framework for decarbonising the built environment. This will be the topic of the last post in this series.

Why is it so complicated to regulate low-carbon buildings?

That is a tough question and does not allow for an easy answer—I answer it in an earlier book[1]—but three main problems stand out.

First, regulating low-carbon buildings is a battle on two fronts and this is not often well understood. Buildings are a key-source of resource consumption (energy, raw materials, water) and waste production (construction waste, carbon emissions). Technology is available to considerably reduce resource consumption and waste production of buildings. For governments it is however difficult to mandate the use of such technology. The democratic process of policymaking requires many checks and balances, and thus a long time, before a new requirement makes it from the drawing table into the National Construction Code.

But not only is the slow development process problematic. A main problem with building and construction regulation is that new requirements often only apply to new construction work and major renovations. Existing buildings are normally exempted from new mandatory requirement. Yet, the high level of building related resource consumption and waste production come from today’s buildings. However sustainable and low-carbon intensive our future buildings may be, if we don’t improve the current building stock it will be of little avail.

Second, the construction and property sectors are highly fragmented and characterised by a very ‘long tail’. Many other sectors are characterised by ‘winner takes all’ markets, but not the property and construction sectors. Think for instance of supermarkets in Australia. There are two dominant players that have a market share of more that 80 percent—Coles and Woolworths. If a government can convince these two players to change their behaviour, it will see change in 80 percent of the supermarket market.

Now think of the construction and property sectors: There are thousands and thousands of developers, contractors, sub-contractors, architects, engineers, and so on. And there are millions and millions of buildings owners, landlords, and tenants. In these sectors it is of limited help to focus on a small number of ‘large bad guys’ to solve the lion share of the problem.

Third, building regulation and construction codes traditionally focus on objects and not behaviour. It is, however, the inefficient way we use our buildings that requires high levels of resource consumption and results in much waste. With a slight change of behaviour households can easily reduce up to 20 percent of their energy consumption and office tenants up to 50 per cent.

We find it perfectly normal to have our behaviour regulated when it comes to speed limits or even (not) smoking in public premises. But we do not want governments to interfere in how we use and behave in our homes, offices, and other buildings. Imagine the public outcry that would result from a government restriction on heating in winter (say, 19 degrees centigrade as you can wear an extra jumper when you’re cold) and cooling in summer. Such a mandate would, also, be impossible to enforce.

A shift to voluntary programs for low-carbon buildings

Acknowledging these problems with mandatory building regulation and construction codes, governments around the world have begun to search for alternative and complementary instruments to govern the transition to a low-carbon built environment. Voluntary programs are a specific type of innovative governance instruments that has been implemented since the early 1990s. Voluntary programs are highly comparable to mandatory regulation. They introduce a set of standards for their participants to meet. They often have an enforcement mechanism in place to assess compliance with these standards. And they penalise non-compliance—and reward compliance.

There are, however, some important differences between voluntary programs and mandatory building regulation and construction codes. First is that they are non-mandatory. No-one is, in principle, required to participate in a program. People and firms participate in these because they expects specific benefits from doing so.

This then is the second important difference: The rewards from participating in a voluntary program are exclusive to program participants. The benefits of, say, Green Star (marketability of the sustainability credentials of a building) can only be obtained from having Green Star certification. These rewards come in different forms. Marketability under Green Star, direct interaction with government under the Better Buildings Partnership, information on how to reduce energy consumption in offices under City Switch, and access to funding for building retrofits under 1200 Buildings (I will discuss all these programs to more depth in the posts that follow).

The third important difference is that these instruments are often developed and implemented in collaboration with industry and civil society stakeholders—or are sometimes developed without all too much government involvement at all. They are, also, often developed to target a specific problem experienced by a specific group of people or firms.

Expectations of voluntary programs for low-carbon buildings

These differences are expected to come with a number of benefits of voluntary programs over mandatory building regulation and construction codes. Voluntary participation is expected to result in higher levels of compliance than compliance with mandatory regulation and codes. The assumption is that people seek the exclusive benefits that come with participating in a program, and will do what is required to achieve these benefits.[2]

The positive rewards that come from complying with a voluntary program are also expected to improve compliance. People and firms are not penalised for not-complying, but rewarded for compliance. The range of rewards is, further, expected to be attractive to a wide range of potential participants: Those that seek to market the credentials of their buildings, those that seek information, those that seek funding, and so on.[3]

The involvement of industry and civil society stakeholders ensures that their expertise and knowledge of the construction and property sectors is used in the development and implementation of these programs. They have much deeper knowledge of the sectors and built-environment than government bureaucrats. Including this knowledge may help to come to instruments that are effective and efficient in realising a transition to low-carbon buildings.[4]

Finally, voluntary programs are expected the problem of ‘one size fits all’ building regulation and construction codes. Mandatory building regulation and construction codes are often too blunt to deal with specific local issues. Voluntary programs are, however, often developed to address a local problem as experienced by local stakeholders—often by involving them in developing the program. This is expected to result in programs that are more effective in solving local problems than what mandatory and general requirements can achieve.

Too good to be true?

In light of the unsustainable amount of resources required to construct, maintain, and use buildings, as well as the wastes resulting from these activities a shift to a low-carbon built environment is necessary. Traditional building regulation and construction codes developed and implemented by governments have not been able to accelerate this transition. Voluntary programs come with high expectations on doing so.

One can, and I think, should, question whether such programs are perhaps too good to be true. The achievements of these programs are often lauded, but to date little systematic, international, and large-scale research has been carried out to understand their value and limitations for low-carbon building development and transformation. Over the next weeks I will publish a number of blog posts to do exactly that. Stay tuned.

UPDATE: The Fifth Estate will publish the full series of eight blogposts that summarise the book. They will likely appear between mid-November and mid-December 2015 over the course of four weeks (two posts per week). Once they have appeared on the Fifth Estate’s website I will republish the posts here.

[1] Van der Heijden, J. (2014). Governance for Urban Sustainability and Resilience: Responding to Climate Change and the Relevance of the Built Environment. Cheltenham, Edward Elgar.

[2] Potoski, M. and A. Prakash (2009). Voluntary Programs: a club theory perspective. Cambridge, MIT Press.

[3] Van der Heijden, J. (2012). “Voluntary Environmental Governance Arrangements.” Environmental Policies 21(3): 486-509.

[4] Ansell, C. and A. Gash (2008). “Collaborative Governance in Theory and Practice.” Journal of Public Administration Research and Theory 18(4): 543-571.

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