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Why the retrofit market is the key to green growth

Why the retrofit market is the key to green growth

There are any number of ways to stimulate the green job market, but the World Economic Forum reckons investing in energy efficient upgrades for existing commercial buildings is a sure fire approach. Its released a report on the subject entitled, A Profitable and Resource Efficient Future: Catalysing Retrofit Finance and Investing in Commercial Real Estate. 

The report says banks, insurance companies, institutional investors, utilities, energy service companies and real estate holders all have a critical role to play in unlocking the potential of the retrofit market, which is estimated to be worth US$ 400 (NZ$503) billion in the United States alone. 

The report studied six countries in-depth — China, Japan, the United States, Australia, the United Kingdom, and Germany. Australia was found to have the most mature retrofit market as a result of a long-standing reporting and rating system, coupled with additional government-led action, including tax deductions and a third party institution to take on demonstration projects. 

In total, over 100 interviews with experts, government leaders and business leaders from a cross-section of industries in these countries culminated in 20 practical, action-oriented recommendations for the public and private sector to undertake. 

The report has found favour locally with the Green Party, chiming in nicely with the party’s Green Job initiative launched in September this year. Commenting on the report, the party’s co-leader Russel Norman said the potential for green job creation in New Zealand through retrofitting commercial building stock as “huge”. But, he warned, if we don’t act quickly, Australian companies will “secure a lion’s share of the market here and abroad”. 

On a visit to New Zealand in March this year, “environment capitalist” Anthony Malkin, of New York City and Empire State Building fame, offered some advice to John Key. Malkin maintained that dollars spent on building retrofits have a payback that, when seen in terms of local employment and benefits, arguably outweigh investment in new energy creation projects. A $200 million wind farm, for example, requires technology to be imported and the taxpayer dollar goes offshore. 

Download A Profitable and Resource Efficient Future: Catalysing Retrofit Finance and Investing in Commercial Real Estate in full here.