Australian Commercial Building Sector Greenhouse Gas ... · Australian Commercial Building Sector...

Australian Commercial Building Sector Greenhouse Gas Emissions 1990–2010

report1999

T h e A u s t r a l i a n G r e e n h o u s e O f f i c e i s t h e l e a d C o m m o n w e a l t h a g e n c y o n g r e e n h o u s e m a t t e r s

executive summary

ii

ISBN 18 76536 195

© Commonwealth of Australia 1999

This work is copyright. Permission is given for fair dealing

with this material as permitted under copyright legislation,

including for the purposes of private study and research.

Apart from those uses, no part may be reproduced without

prior written permission from the Commonwealth.

Requests and inquiries concerning reproduction rights

should be directed to the:

Manager, Communications

Australian Greenhouse Office

GPO Box 621, Canberra ACT 2601

For additional copies of this document, the complete

study or further information please contact the

Australian Greenhouse Office,

GPO Box 621, Canberra ACT 2601

This summary is available online at the

Australian Greenhouse Office website

www.greenhouse.gov.au/energyefficiency/building

Design Wingrove Wingrove Design

Photos Michael Shaw

Austra l ian Commercia l Bui ld ing Sector Greenhouse Gas Emissions 1990 – 2010 Executive Summary Report 1999

FOREWORD

Climate scientists now generally agree that human activity

has influenced, and will continue to influence our planet’s

climate. Wide acceptance of their work has driven the

need for the global strategy of the Kyoto Protocol that

Australia signed on 29 April 1998.

Over the next decade the commercial building sector will

need to recognise and address greenhouse concerns. This

expanding sector with fast-growing emissions can

significantly contribute to meeting Australia’s greenhouse

gas reduction target and simultaneously improve the

comfort and health of all Australians in their built

environments. FO

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The Australian Greenhouse Office is pleased to offer this

sectoral report which will contribute to the wider

understanding of greenhouse issues in Australia. The study

provides a baseline within the commercial building sector

for greenhouse gas emissions from 1990 and projects the

expected growth of emissions to 2010.

Along with a similar study on the residential building sector, iii the report is designed to foster knowledge and debate on

limiting greenhouse gas emissions related to the built

environment. The Australian Greenhouse Office believes

that significant greenhouse gas abatement can be

achieved within this sector. I hope that all members of the

building industry will play an active role in meeting the

challenge to slow global warming.

I would like to thank the authors of this report, EMET

Consultants Pty Ltd and Solarch Group, and recognise the

input of the Steering Committee representing industry and

government organisations.

Gwen Andrews

Chief Executive

Australian Greenhouse Office

December 1999

iv

Acknowledgements

The study was produced for the Australian

Greenhouse Office by EMET Consultants Pty Ltd

& Solarch Group.


CONTENTS

Australian Commercial Buildings Sector Greenhouse Gas Emissions 1990-2010 1

Study Objectives 3

Projection Scenarios 3

Key Project Findings 4

Greenhouse gas emissions 1990-2010 4

Emissions by energy source 4

Emissions by end use application 5

Emissions by sub-sector 6

Emissions by building type 6

Emissions due to embodied energy 6

Greenhouse abatement options 7

Impact of existing initiatives 8

Quantitative assessment of an equitable commitment for the building sector 8

Quantification of the emission gap 9

Potential of voluntary measures 9

Project Conclusions 10

Operating energy related emissions to 2010 10

Greenhouse abatement options 10

Priority areas for abatement 10

Embodied energy 10

Recommendations 11

The way forward for reducing emissions 11

Further research 11

References 11

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AUSTRALIAN COMMERCIAL BUILDINGS SECTOR GREENHOUSE GAS EMISSIONS 1990 – 2010

This study estimates energy consumption and greenhouse

gas emissions in the commercial buildings sector over the

period 1990 to 2010. The primary aim is to provide a basis

for the determination of an equitable contribution by the

building sector to greenhouse gas emission reductions.

The analysis uses existing databases from previous work

within the industry by such bodies as ABARE, DPIE, and

the Property Council of Australia. EMET’s own databases

and models are used heavily in the analysis.

The use of electricity is responsible for 89% of commercial

buildings’ greenhouse gas emissions. Specific operational

energy applications principally responsible for greenhouse

gas emissions are cooling (28%), air handling (22%),

lighting (21%) and heating (13%). Heating, ventilation and

air conditioning (HVAC) and lighting thus account for 84%

of commercial building sector greenhouse emissions.

Building shell performance has a large impact on the

heating, cooling and illumination requirements for

commercial buildings. Improvements in the thermal,

daylighting and natural ventilation performance of

commercial building shells will reduce greenhouse gas

emissions. Increasing the efficiency of artificial lighting will

reduce emissions directly by lower energy consumption,

and indirectly through lower cooling requirements.

A number of government and industry bodies have taken

considerable steps to abate emissions emanating from

commercial buildings. Various government organisations

have imposed measures that influence the level of

greenhouse gas emissions released by new and newly

refurbished buildings. Some prominent companies have

implemented voluntary greenhouse and energy

management programs, and peak industry bodies have

embarked on promotional and support programs to assist

in the achievement of such improvements. The current

combination of existing and proposed abatement

measures will provide an improvement over the business-

as-usual (BAU) scenario for the sector.

In his Statement of 20 November 1997, “Safeguarding the

Future: Australia’s Response to Climate Change”, the Prime

Minister announced a package of measures to reduce

Australia’s greenhouse gas emissions. He noted that this

package of measures was designed both to ensure that

Australia plays its part in the global effort required to reduce

greenhouse gas emissions and to protect Australian jobs

and industry. The Government is therefore seeking “realistic,

cost-effective reductions in key sectors where emissions are

high or growing strongly, while also fairly spreading the

burden of action across the economy”. The Prime Minister

also noted that “[The Government is] prepared to ask

industry to do more than they may otherwise be prepared

to do, that is, to go beyond a ‘no regrets’, minimal cost

approach where this is sensible in order to achieve effective

and meaningful outcomes.”

Subsequent negotiations resulted in an international

agreement to the Kyoto Protocol to the Framework

Convention on Climate Change, under which Australia

will have an obligation, inter alia, to reduce its rate of

greenhouse gas emissions to 108% of their 1990 level

by 2008-2012. This compares with a BAU scenario

prior to the Prime Minister’s Statement of 28% emissions

growth for the economy as a whole, and around 40% for

energy-related emissions.


For the building sector, the Prime Minister’s

Statement specified:

“The Commonwealth will work with the States, Territories

and key industry stakeholders to develop voluntary

minimum energy performance standards for new and

substantially refurbished commercial buildings on the basis

of energy efficiency benchmarks. If after 12 months, the

Government assesses that the voluntary approach is not

achieving acceptable progress towards higher standards

of energy efficiency for housing and commercial buildings,

we will work with the States and industry to implement

mandatory standards through amendment of the

Building Code of Australia.”

This project has been commissioned by the Australian

Greenhouse Office (in consultation with the building

industry) to determine the baseline of 1990 greenhouse

gas emissions attributable to the commercial building

sector of the economy. The estimate provides a firm,

quantitative basis for the subsequent development of

specific greenhouse response measures by industry

and government.

By quantifying the impacts of a range of building sector

influenced possibilities, this study provides a basis for

establishing an equitable contribution that the commercial

building sector can make to the national objective of

reducing greenhouse gas emissions, in line with

Australia’s obligations.

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STUDY OBJECTIVES

The study was designed to achieve the

following key objectives:

1. Assess the 1990 greenhouse gas emissions

attributable to the non-residential building sector;

2. Quantify the BAU emission growth projections,

1990-2010, with and without emission-reduction

measures implemented or announced to date;

3. Assess an equitable gas emission reduction

commitment for the commercial building sector,

taking into account baseline and projected

emissions growth to 2010 and the Kyoto Protocol

commitment for Australia as a whole;

4. Quantify any gap between the proposed emission

reduction commitment to 2010 for the building

sector and the projected emissions growth with

measures implemented or announced to date.

The study focused primarily on greenhouse gas emissions

associated with the operation of commercial buildings,

including emissions associated with the activities taking

place within all buildings (eg tenant energy consumption).

Emissions attributable to both building owners and

occupants were covered by the study.

Quantitative information was derived to enable the

identification of policy options for reducing sectoral

greenhouse gas emissions. The study was not intended to

identify and investigate such policy options.

PROJECTION SCENARIOS

The evaluation procedure quantified greenhouse gas

emissions for the following scenarios in relation to the BAU

forecasts:

■ the abatement expected to be produced through natural

improvement in technologies and systems, over and

above that allowed for in the ABARE forecasts;

■ the abatement expected to be achieved by policies and

measures announced or implemented since November

1997;

■ the abatement likely to be achieved through normal

market forces (ie. desirable payback period);

■ the gap between the level of emission abatement

predicted from the above, and the Kyoto target.

As an aid to future policy development, a summary

relationship between abatement level, implementation cost

and return on investment was produced in the full study

(available from the Australian Greenhouse Office; see inside

front cover for details).


Figure 1: Commercial buildings energy KEY PROJECT FINDINGS share by energy source 1990 (ABARE 1997)

Greenhouse gas emissions 1990-2010 70

The study found that the commercial buildings sector is 60

Kyoto target level

Emissionsexpected to increase its greenhouse gas emissions to

nearly twofold from 32 Mt of CO2 per annum to 63 Mt

between the years of 1990 and 2010 under the BAU

scenario. Refer to figure 1. Emissions other than those

directly related to energy consumption were negligible (less

than 2%). An improvement over the frozen efficiency case,

of approximately 3.8 Mt per annum was found. This has

Emiss

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(Mt o

f CO

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per a

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40

30

20

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been included in the BAU forecasts and is due to the

continued level of efficiency improvements achieved in the 10

sector since the middle 1980’s. 0

Emissions by energy source

1990

1995

2000

2005

2010

4

Figure 2: Commercial buildings energy Figures 2 and 3 depict the proportions of energy use share by energy source 1990 (ABARE 1997)

and greenhouse emissions respectively for each energy

source used by the commercial buildings sector in 1990.

Electricity was found to be the largest energy source (65%)

25% GAS

7% PETROLEUM PRODUCTS

65% ELECTRICITY

but was responsible for an even larger proportion (89%) of

the total greenhouse gas emissions due to its high average

greenhouse gas emission factor. Natural gas was the next

highest cause of greenhouse gas at 7% of total emissions.

Figure 4 (over page) shows the proportions of energy

source usage in the commercial buildings sector, and the

relative trends between the years of 1990 and 2010. It can

be seen that in the BAU scenario the relative proportions of

electricity and gas are not expected to change significantly

3% COAL

0% WOOD

but energy use, and therefore greenhouse emissions, are Figure 3: Commercial building greenhouse gas emission share by energy source 1990 (ABARE 1997, EMET 1999) expected to nearly double over these two decades.

7% GAS

3% PETROLEUM PRODUCTS

1% COAL

0% WOOD

89% ELECTRICITY


Figure 4: Commercial building trends in energy consumption by energy source for the BAU scenario (ABARE 1997)

350

300

Coal

Gas

Electricity

Petroleum

Wood

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Ener

gy co

nsum

ptio

n (P

J pe

r ann

um) 250

200

150

100

50

0

5

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

Emissions by end use application Figure 6: Commercial building greenhouse gas emission share by end use 1990 (EMET 1999)

Figures 5 and 6 show the proportions of energy use and

greenhouse gas emissions respectively caused by energy

applications within the commercial building sector in 1990.

22% VENTILATION

21% LIGHTING

28% COOLING

In energy terms, heating is the largest single end use in the

commercial buildings sector at 33%, but is the fourth

largest with respect to greenhouse gas emissions. Space

cooling, ventilation and lighting were found to be the three

most significant causes of emissions, together accounting

for 71% of the total. The actual proportion applicable to a

specific building type may vary substantially from this

commercial sector average.

Figure 5: Commercial building energy share

12% OFFICE EQUIPMENT & OTHER

4% COOKING & HOT WATER

13% HEATING

Figure 7: Commercial building greenhouse gas emission by end-use 1990 (EMET 1999) share by sub-sector 1990 (ABARE, EMET & NSW DoE data)

32% RETAIL/WHOLESALE

17% FINANCE & BUSINESS

11% RECREATION

4% COMMUNICATIONS

36% PUBLIC ADMIN & COMM SERVICES

16% VENTILATION

15% LIGHTING

9% OFFICE EQUIPMENT & OTHER

6% COOKING & HOT WATER

21% COOLING

33% HEATING


Emissions by sub-sector

Figure 7 (previous page) describes the proportions of

emissions emanating from each sub-sector of the

commercial buildings sector. The government buildings

sector (public administration and community services) was

found to be the most significant sub-sector, generating

approximately 12 Mt of CO2 per annum (36% of total

sector) in 1990. The retail/wholesale sector was a close

second at 32% of total emissions.

Emissions by building type

The commercial ‘office’ building was found to be the most

significant building type, responsible for an estimated 27%

of total sector emissions in 1990. Hospitals formed the

next largest group at 13%.

Figure 8 shows the 1990 breakdown of CO2 emissions

from the Commercial Buildings Sector, by building type.

Offices and hospitals together account for around 40%

of total emissions. Figure 9 (over page) shows the 1990

breakdown of CO2 emissions by sub-sector and energy

end use application. The combined public administration

and community services sector is shown to be the most

intensive emitter, at a total of 12 Mt of CO2 per annum.

The retail/wholesale sector is the next largest at

10 Mt per annum.

Emissions due to embodied energy

Greenhouse gas emissions related to embodied energy

(energy consumed in the production and placement of

building materials) were found to be of less significance

than those related to operating energy. Embodied energy

emissions were found to be approximately 8% to 10% of

buildings. This was the proportion found in studies of four

actual buildings (McArdle et al, 1993 and EMET, 1999)

assuming a 40 year lifespan. This proportion would vary

substantially for different building types, and for those

using far less operating energy (eg schools, warehouses,

non air-conditioned offices and accommodation) it

would be much higher.

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Figure 8: Commercial building greenhouse gas emissions by key building types 1990 (EMET 1999)

Food stores

Clothing & fabric stores

Department stores

Household appliance & hardware stores

Accommodation

Communications

Schools

Fast food restaurants

Registered clubs

Other retail & wholesale

Other public admin & comm services

Other recreation

Offices

Hospitals

0.0

1.0

2.0

3.0

4.0

5.0

6.0 7.0 8.0

9.0

CO 2 Emissions Mt per annum


Figure 9: Commercial building greenhouse gas emissions by sub-sector and end use (EMET 1999)

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A holistic understanding of energy consumption and the

associated greenhouse gas emissions must take into

account both the embodied energy and the operating

energy. Embodied energy is becoming of greater

significance as a proportion of whole-of-life energy

consumption due to several reasons:

■ more energy intensive materials are being used in

buildings than previously e.g. aluminium, stainless steel,

coated glasses and high strength concretes;

■ buildings are often bigger than previously requiring

greater quantities of materials;

■ buildings are being refurbished more frequently than

previously requiring more materials;

■ more machine intensive, rather than labour intensive,

techniques are used in construction, requiring energy

derived from fossil sources;

■ building materials are transported greater distances than

previously so transport energy is likely to be greater;

■ technologies reducing operating energy are

constantly being developed and implemented;

■ in the foreseeable future it is likely buildings will

generate some of their own operating energy,

by devices such as photovoltaics, which may be

integrated within the building fabric.

Greenhouse abatement options

The analysis of greenhouse abatement options for the

sector (refer to Table 1) produced the following results:

■ using a payback criteria of 2.5 years, as the typical

cut-off level for private sector voluntary investment, a

reduction in greenhouse gas emissions of 12 Mt of CO2

per annum may be expected to be achieved under a

voluntary scenario (note that this includes the 3.8 Mt

related to the frozen efficiency improvement);

■ using a positive Net Present Value as criteria, the

expected level of reduction would increase to between

15 Mt and 20 Mt of CO2 per annum depending on the

applicable interest rates;

■ the most significant opportunity for greenhouse gas

emissions abatement initiatives is lighting, showing a

potential reduction average of approximately 70% of

total emissions;

■ no significant bias was found in the potential for

emission abatement between new buildings and

refurbishment of existing buildings with the average

being close to 50% for each type.


Table 1: Greenhouse gas abatement potential and cost effectiveness of alternative groupings of initiatives (EMET 1999)

Initiatives Grouping Criteria Greenhouse Gas Abatement Potential Mt of CO2 per annum Cost of Abatement $/t CO2 per annum

Ligh

ting

syst

ems

initi

ativ

es

HVAC

sys

tem

s in

itiat

ives

Proc

esse

s &

oth

er in

itiat

ives

Tota

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Aver

age

cost

for g

roup

Mar

gina

l cos

t of l

ast i

nitia

tive

Payback period

Immediate (no cost) 1.4 1.7 0.7 3.8 Nil Nil

Greater than immediate and less than 1 year 2.4 0.4 0.5 3.4 $89 $135

Between 1 and 2.5 years payback 4.2 0.5 0 4.7 $160 $235

Between 2.5 and 5 years payback 2.7 0.7 0.2 3.6 $332 $530

Positive net present value

4% discount rate 12.6 5.6 1.6 19.8 $297 $650

8% discount rate 10.7 5.6 1.6 17.9 $260 $575

15% discount rate 9.1 4.2 1.4 14.7 $171 $500

Specific target improvement

30% improvement over BAU 14.9 5.8 1.9 22.5 $406 $1,900

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Achievement of the Kyoto target Not cost-effectively achievable using conventional energy management techniques and technologies.

Impact of existing initiatives

Existing and announced greenhouse abatement and

energy management initiatives may be expected to

produce an impact of 1.4 Mt of CO2 per annum only, due

to their current low level of penetration or application. A full

application of these measures may be expected to achieve

a level of reduction of 8.5 Mt of CO2 per annum by the

year 2010. This level of reduction, is however lower than

the reduction available from a combination of voluntary

measures (cost-effectiveness) and improved level of

awareness in the marketplace (12 Mt at 2.5 year payback).

Quantitative assessment of an equitable commitment for the building sector

It was found that the Kyoto target of 108% of the 1990

emission level could not be achieved using conventional

energy management techniques. As a realistic target, a

30% emission reduction improvement in the commercial

building sector by the year 2010 has been proposed. This

involves a reduction of approximately 19 Mt of CO2 per

annum in 2010 from the BAU scenario, but would require

additional investment of $4.2 billion (1990 dollars). Given

the length of the marginal payback period involved, this is

an unlikely voluntary scenario for any component of the

Commercial sector.

Austra l ian Commercia l Bui ld ing Sector Greenhouse Gas Emissions 1990–2010 Executive Summary Report 1999

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Quantification of the emission gap

Figure 10 illustrates the impact of various policies/

measures over the BAU and Frozen Efficiency cases.

Shown on the figure are the following scenarios of

potential greenhouse gas abatement:

■ the abatement level expected from the existing

measures and policies for government buildings,

and new/refurbished private sector buildings

(segment [1]);

■ the additional abatement level estimated to be

voluntarily achieved due to economic justification

and better knowledge of emission saving options

(segment [2]);

■ the Kyoto target and the alternative 30% emissions

reduction target;

■ the gap between the level of reduction expected in 2010

based on the current status of policies/measures and

cost-effectiveness and the 30% target (GAP–1 of 8.8 Mt

of CO2 per annum) and the Kyoto target (GAP–2 of

18 Mt of CO2 per annum).

Potential of voluntary measures

The study found that voluntary measures have the potential

to produce higher levels of abatement than any of the

current policies/measures. However for greatest effect,

these would need to be reinforced by a program of

awareness and education and an expansion of mandatory

minimum performance standards for new building

developments and refurbishments. These minimum

standards would capture those buildings which currently

do not achieve even the basic, cost-effective levels of

improvement.

0

10

20

30

40

50

60

70

Emiss

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(Mt o

f CO

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er a

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)2

Kyoto target level

BAU forecast

GAP-2

GAP-1

[2]

[1]

30% target emission reduction level

Frozen efficiency emission level

Figure 10: Forecast commercial building greenhouse gas emission levels and comparison with alternative target scenarios (EMET 1999)

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

Frozen efficiency

Base emission level

Kyoto target

Cost-effective measures

30% target

New building policies (non govt.) Government sector


PROJECT CONCLUSIONS

Operating energy related emissions to 2010

The BAU scenario for the Commercial Buildings Sector

predicts an increase in energy related greenhouse gas

emissions from a level of 32 Mt per annum in the year

1990 to 63 Mt for the year 2010. Achieving the Kyoto

target level of 108% of the 1990 emissions would require a

net reduction for the sector of approximately 28 Mt of CO2.

The baseline study indicates that this level of reduction is

not likely to be achieved using conventional energy

management techniques alone.

Greenhouse abatement options

The following greenhouse gas saving initiatives

were identified:

■ voluntary measures may be expected to achieve a

reduction in emissions by 12 Mt of CO2 per annum

using a typical investment criteria of 2.5 years payback;

■ the level of reductions which may be expected to

be achieved using a positive NPV would be between

15 Mt and 20 Mt of CO2 per annum depending on

the applicable interest rates;

■ the most significant area of application for

greenhouse gas emissions abatement initiatives

is lighting, which shows a proportional emission

reduction potential of 70%;

■ no significant bias was found in the potential for

emission abatement between new and existing buildings

with the average being close to 50% for each type.

It should be noted that in an environment of carbon/

emissions trading, energy prices could rise. This would

facilitate the uptake of energy-saving technologies.

Priority areas for abatement

■ major component sectors – Public Administration

and Community Services and Retail

■ major building types – offices and hospitals

■ priority energy source – electricity

■ priority systems – lighting

■ equal priority to new and existing buildings

Embodied energy

Emissions related to embodied energy were found to

be of less significance for the more energy intensive

buildings such as offices, however a lack of substantive

data was identified.

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RECOMMENDATIONS

The way forward for reducing emissions

Sections of the commercial buildings sector which have

had a higher level of performance monitoring and

information dissemination have shown a sustained level of

improvement in efficiency. This fact, together with the other

trends identified in this study, indicate that a program of

voluntary measures reinforced by a program of awareness

and education and an expansion of mandatory minimum

performance standards for new building developments and

refurbishments would achieve the most cost-effective level

of emission reductions.

Further research

The study was conducted using existing databases and

available information. The breakdown of energy use by

building type and sub-sector was calculated by combining

several different sources with a heavy reliance on EMET’s

own databases. To improve the accuracy of the forecasts,

it is strongly recommended that a more comprehensive

study on the energy use within the sector be undertaken,

particularly in priority areas of energy application, and

emission reduction.

A lack of substantive data has been identified in the

area of embodied energy, and further research has

been recommended.

REFERENCES

Bush, Shane et al 1997, Australian Energy Consumption

and Production: Historical Trends and Projections to

2009-10, Australian Bureau of Agricultural and Resource

Economics (ABARE), Canberra.

EMET Consultants and Solarch Group 1999, Baseline

Study of Greenhouse Gas Emissions from the Commercial

Buildings Sector (study commissioned by the Australian

Greenhouse Office), Canberra.

McArdle, S. A. et al 1993, Embodied Energy

Thesis: Case Study Analysis of the Embodied Energy

of Office Construction, School of Architecture and

Building, Deakin University, Geelong.

NSW Department of Energy 1996, Energy Use in the NSW

Commercial Sector, NSW Department of Energy, Sydney.

NSW Department of Energy 1998, Analysis of Energy

Use in the New South Wales Manufacturing Sector,

NSW Department of Energy, Sydney.

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