The process used in generating this cost research can be applied to any form of construction including buildings and infrastructure projects to optimise material sourcing and selection.

The analysis reveals that the impact on the base supply cost of materials with high embodied carbon values, such as concrete and steel could be as high as 5 percent and 2 percent respectively without factoring in industry assistance for domestically refined and manufactured materials based on a starting price of $23 per tonne CO2-e.

However, given the presumed extent of industry assistance the impact reduces to less than 0.5 percent on the individual material costs of these high carbon intensive materials.

When the cost impact associated with all high carbon intensive materials is translated to overall build cost (excluding design and consultant fees), the proportional impact is far less. The dilution of this cost through the construction supply chain results in a negligible cost impact during the earlier phases of the industry assistance period. However, when industry assistance is completely removed the total cost impact is approximately 0.5 percent. This would indicate that despite many observations to the contrary, the opportunities exceed the cost implications for the property and construction industry.

Given that the overall cost impact to the construction industry is extremely low, will this scheme provide sufficient incentive for alternative designs and materials selection?

This report is based on available information regarding the proposed scheme at the time of publishing. In some instances logical and researched decisions have been used in lieu of a completed policy. In the lead up to the start of the proposed scheme on the 1 July 2012, Davis Langdon will continue to review the impact of any significant changes to the proposed scheme.

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