On 30 March I announced a new initiative to measure and improve the greenhouse performance of Government office buildings. The fastest growth in greenhouse emissions in Australia is from the commercial property sector. Greenhouse emissions from this sector are set to almost double over the next decade unless action is taken.

The NSW Government will demonstrate leadership by rating and improving the greenhouse performance of its office buildings and tenancies using the NSW-developed Australian Building Greenhouse Rating (ABGR) scheme.

Under the new policy agencies are required to obtain an accredited ABGR rating for their office buildings or for their tenancies by the 31 December 2004.

Where an existing building is owned by the agency, the agency must

• Achieve a 3-star building rating by 1 July 2006 and
• Commit to a minimum 4 star rating when undertaking major upgrades.

Agencies that build new government offices are to commit to a 4.5 star rating for the new building. Where an agency is a tenant, the agency must

• Achieve a minimum 4-star tenancy rating by 1 July 2006
• Commit to a 4.5-star tenancy rating for major fit outs and refurbishments
• Endeavour to occupy premises where the building is rated at least 3 stars (this will increase to 3.5 stars from 1 July 2006) and
• Require disclosure of the accredited rating for the building when seeking information about the building for leasing purposes.

A full description of the policy is attached. Note that agencies are only required to undertake energy efficiency improvements where that action will be cost effective. "Cost effective" is defined as having an internal rate of return of 12%, where the additional cost of achieving higher ratings is assessed against energy cost savings.

To implement cost-effective efficiency upgrades to improve building or tenancy ratings, agencies will be able to apply to Treasury for energy efficiency loan funding (information sheet attached).

Bob Carr
Premier

This memorandum partly supersedes memorandum M2003-02 High Environmental Performance for Buildings, with respect to energy consumption and greenhouse emissions only.