A report from Davis Langdon has found that the impact of Australia’s carbon pricing on construction costs is less than 0.5 per cent, after considering industry compensation in the first year of the scheme.

The report looked into how each aspect of the clean energy legislative package will impact the construction of buildings and infrastructure using Davis Langdon’s purpose built Embodied Carbon Metric (ECM) to analyse building materials for their embodied carbon content.

The carbon price impact on road and rail projects is notably higher than on the buildings sector.

Although the materials associated with infrastructure project are less emissions-intensive they are typically sourced from carbon price liable organisations.

Image courtesy the 2012 Davis Langdon Carbon Price Report The carbon price and the property and construction market

A survey of Australia’s material manufacturers was also conducted to find out how the carbon price will impact the manufacturing of commonly used construction materials such as cement, steel, aluminum and glass, among others.

Post construction operational factors such as electricity costs will also be affected by the carbon price. According to Federal Treasury forecasts, energy prices will increase by an average of 10 per cent in 2012-2013, a rise contributed to in part by the carbon price.

“The Davis Langdon carbon report shows that while construction cost impacts will be relatively minimal at the construction stage, the lifecycle implications are significant and will require long term thinking to manage risks effectively,” said report author and global manager of business intelligence, Michael Skelton.

“The built environment is one of the largest users of energy in Australia, and responsible for up to 23 percent of Australia’s greenhouse gas emissions during operational phase. The report shows that actions taken during construction to reduce energy use will have long term benefits over the life of the asset.”

Future proofing measures such as using materials with lower embodied carbon, passive design improvements, and high efficiency heating and cooling systems have the potential to act as a hedge against future operational cost increases, and higher asset values during the asset’s lifecycle.

“By adopting smart, energy efficient passive design principles and other measures during the construction phase, operational efficiencies can be achieved over the whole lifecycle of the asset that will provide long term benefit and reduce risk,” Skelton said.

The full 2012 Davis Langdon Carbon Price Report has now been released by Aecom.