Climate Changes In Australia's Construction Industry

Introduction

The 21st century has seen rapid technological developments and the growth in the global population, according to the Malthusian theory of population, the population grows geometrically rather than arithmetically (Malthus, n.d.). In order to accommodate those populations, the construction industry has rapidly grown in the recent decades; although such a growth in this industry is dependable upon demands from the rising population it has also considered the rapid technological developments in its architectures, infrastructure and real estate. A recent global issue raised in society which concerns industries like construction industry are the climate changes.

Many countries and leaders around the globe consider climate changes as

Climate changes include the variations in the climatic factors such as flooding, rainfall and high temperatures, the mechanism of the construction industry very much depends on such factors, it affects the construction business in two dimensions. One, the governments around the world have raised the standards of the product such as new buildings require to withstand higher temperatures, colder winters, rainfalls, winds and floods. The other way the industry is affected by its construction processes, since the projects have a longer completion time and are vulnerable during the construction process, same factors can affect their productivity and profitability by delays in the completion caused by climatic factors such as rainfall, floods and heavy winds (Pravin, Murali, & Shanmugapriyan, 2017). Since the lifetime of the buildings is very high (30-70 years), climate changes if not considered will affect the quality of those buildings, as once the building is constructed and is fully operational it is quite difficult to address any impacts of the climatic changes. The impact is not only limited to the construction of buildings, it is extended towards the construction of houses and public infrastructure. A report by National Climate change Adaptation Research facility NCCARF (2013) highlighted some important climatic

The basic economic theory that supports the concept of carbon taxation is based on the welfare economics, according to welfare economics, socially optimal equilibrium quantity is where marginal costs and marginal benefits are equal.

Figure 1

Effect of carbon Tax

As seen in the graph above when carbon tax is implemented the equilibrium point changes from A to B, the price increases from P1 to P2 and quantity reduces from Q1 to Q2, the new equilibrium is the socially optimal market equilibrium. The theoretical problem with such model is that demand is relatively inelastic as compared to the renewable resources and this inelasticity causes few problems.

Figure 3

Tax burden of carbon tax imposition

As seen in the graph above, the imposition of carbon tax reduces the supply and demand but increases the price, the amount of reduction in the quantity demanded is low and the tax burden is mostly tolerated by the consumer.The short-term goal of reducing emissions by 2020 might not be able to reach due to the tax burden and the economic