Housing in Australia must become part of the circular ­economy – here’s how it can begin | Housing

Transitioning to a circular economy model for the Australian housing sector is more pressing than ever. Recent AHURI research finds government and financial institutions have important roles to play as catalysts for the housing sector to make the shift.

Australian homes, through their entire life cycle, contribute significantly to our country’s carbon emissions. From the energy required to heat, cool, and maintain a building to the embodied carbon emissions within construction materials, the impact is substantial. The Australian construction industry, including housing, accounted for 18 per cent of the nation’s carbon footprint in 2013, with residential building construction contributing a quarter of total construction embodied emissions^[1].

With the number of Australian households projected to soar from 9 million in 2021 to around 13 million by 2041^[2], the urgency to mitigate household emissions is clear, especially if Australia is to achieve its target of reducing emissions to 43 per cent below 2005 levels by 2030.

In a circular economy, housing is viewed as a closed-loop system characterised by:

• construction with low-emission, durable materials, aiming to minimise environmental impacts associated with mining or manufacturing new materials
• design that enables carbon-neutral and energy-efficient living by the occupants
• end-of-life materials are reused or recycled rather than discarded as waste.

AHURI research^[3] reveals that to implement a circular economy for housing in Australia, all major processes in the housing production ecosystem, affecting a wide variety of scales and processes, will need to be transformed. Everyone involved in delivering housing has an essential role to play, from financial institutions, developers, designers, manufacturers, and educators, through to individual home buyers and, importantly governments at all levels.

Financial institutions can speed up implementation of circular economy

Financial institutions can have an important influence on the circular economy as most people – either developers or individuals – buying or building housing are reliant on getting a loan. Some developers of rental housing are already being steered towards more energy-efficient design specifications by finance providers who are using “green capital” that can offer better priced debt for projects delivering higher environmental standards.

Government leadership is needed for a functioning circular economy

Governments at all levels have an important part to play in creating and reinforcing the circular economy, as the housing industry cannot meet this challenge alone without purposeful public intervention. This includes:

• developing policies to deliver energy efficiency, carbon reduction, and zero-waste, with clear targets and performance standards enforced by monitoring
• designing better regulations and incentives on building material flows
• upscaling technological improvements
• writing circular economy conditions into contracts; favouring suppliers and contractors that prioritise circularity and sustainability
• targeting educational programs to building professionals, consumers and industry stakeholders about the benefits and practices of circular economy in housing.

In addition, building materials will need a form of “passport” to track and measure their embodied carbon footprint as they are used in different ways over their long lifespan.

As the details recorded on each passport will have an economic (and legal) function, governments will have to responsibly store these passports and make them available for viewing when a building product changes use from one form in a building to another form in a different building in the future.

While the shift to a circular economy for some other sectors is slightly more advanced, a circular economy for housing presents significant challenges; it also offers immense opportunities – not just for improving environmental sustainability, but also for boosting economic resilience and increasing social equity.

Further dialogue, leadership and action in the residential sector is needed urgently to harness these opportunities.

AHURI is convening a One Day Conference titled: ‘Circular Economy Housing – making the shift’ in Sydney on 9 May 2024. The conference will explore the findings from the AHURI inquiry, ‘Informing a strategy for circular economy housing in Australia’ and facilitate a broader discussion with diverse stakeholders about what it will take to make the shift to a more circular Australian housing economy. Learn more https://www.ahuri.edu.au/events/circular-economy-housing

[1] Dalton, T., Dorignon, L., Boehme, T., Kempton, L., Iyer-Raniga, U., Oswald, D., Amirghasemi, M. and Moore, T. (2023) Building materials in a circular economy, AHURI Final Report No. 402, Australian Housing and Urban Research Institute Limited, Melbourne, https://www.ahuri.edu.au/ research/final-reports/402, p3

[2] https://www.abs.gov.au/statistics/people/population/household-and-family-projections-australia/latest-release#households

[3] Horne, R., Dorignon, L., Lawson, J., Easthope, H., Dühr, S., Moore, T., Baker, E., Dalton, T., Pawson, H. and Fairbrother, P. (2023) Informing a strategy for circular economy housing in Australia, AHURI Final Report No. 403, Australian Housing and Urban Research Institute Limited, Melbourne, https://www.ahuri.edu.au/research/final-reports/403,