Fiscal Instruments

THE USE OF FISCAL INSTRUMENTS IN SUSTAINABLE BUILDING POLICIES
M.M. Sunikka1

Abstract
Although progressive government guidelines and knowledge about sustainable building exist, sustainability measures are not adopted in large scale. Several barriers have been identified, especially the perceived costs of implementing environmental management and the lack of market demand. The choice of fiscal instruments is an important issue in sustainable building policies. This paper presents an analysis of economic measures that are currently used to support sustainable building in the European Union and accession countries, indicating the areas where policy instruments are either focussed or lacking. The research is based on the national progress reports of the 3rd European Ministers conference on sustainable housing in 2002. The results indicate that environmental taxes and subsidies are used in the EU and the accession countries, but that they have had a low impact on the building sector. An examination of the developments since 1996 shows that apart from energy initiatives resulting from the Kyoto Protocol, the lack of a strong driving force has kept progress slow. Conclusions are based on the analysis findings – the low impact of taxation on building and the narrow focus of subsidies. Finally, possibilities to benefit European experiences in the Australian context are discussed.

Keywords: sustainable building, policy instruments, fiscal measure, environmental tax, subsidy programme, energy efficiency.

1. Introduction
The building sector accounts for 25-40% of the final energy consumption in OECD countries, space heating being the largest proportion of energy consumption in both residential and commercial buildings [1]. The Kyoto Protocol has increased pressure on governments to establish strategies aimed at reducing CO2 emissions. Policies to regulate and promote sustainable housing have been developed across Europe, using instruments ranging from mandatory

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