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Sustainability and the built environment
Taxation
Taxation and other fiscal incentives can have great influence in the marketplace.
However, here as elsewhere, there is resistance to change. There have been
movements towards achieving more sustainable behaviour, involving tax on both
travel and waste and incentives for renewable energy. However, there is still significant
further scope for bringing current policies and practices into line with sustainable
targets. Substantial tax changes may be necessary in order to achieve the levels of
behaviour change required for truly sustainable development.
Ecological taxation reform (ETR) is one proposed revision of current policy aimed
at redressing the balance so that sustainable practices take precedence over
unsustainable ones. Significant incentives are afforded to the exploration and
mining of resources and the enormous capital investment required for power
generation infrastructure. Additionally, the clean-up costs of facilities which have
become redundant are funded almost exclusively by revenue from taxpayers, rarely
by energy companies, keeping the cost of generated fossil fuel energy artificially
low. In most countries energy generated from renewable sources does not benefit
from a comparable level of financial assistance, making the use of such sources
uncompetitive by comparison.
ETR proposes to shift the tax burden from labour, which is highly paid and highly
taxed, to raw materials and energy, which are taxed lightly. In doing so, labour
becomes more competitive and unemployment can be reduced. It is suggested that
this could be carried out in incremental shifts so as to avoid sudden economic shock.
But taxation, whilst it operates as an effective mechanism for behaviour change, is
perceived by many as a blunt instrument of reform.
5.3 Market
Many believe the free market to be perfectly geared towards resolving the issues
relating to sustainability. However, there is little in its past record to suggest that this
is the case. In reality, markets are rarely ‘free’. Other forces are constantly at work on
them – uneven subsidy levels, international trade restrictions and cultural limitations,
to name but a few. Even so, the market plays a pivotal role in satisfying economic
sustainability.
Voluntary market-driven responses are more common in the USA and Australia, where
governments have historically been reluctant to impose policy reform. However,
markets have responded to some extent in most countries; and such responses
are realised as increases in the resale or rental value of the end-product sustainable
buildings.
The primary voluntary market response to sustainability in the construction sector
has been the voluntary rating schemes. These provide independent verification or
benchmarking of sustainable and environmental performance. The result is that
products acquire ‘brands’ allowing a cost premium to be attached, which covers
any extra construction costs associated with being more sustainable. Despite such
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