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What are the potential costs to New Zealand taxpayers of a policy that favours one material over others, regardless of how it performs across cost-efficiency, durability, sustainability and other measures? 

Wood-first and wellbeing – By Nick Collins

The purpose of public policy is to improve lives now and into the future, and Treasury’s newly released discussion papers on human, social and natural capital set us up to do that, measuring progress across prosperity, sustainability and inclusiveness.

The metals-related industry certainly supports broader economic assessment that includes consideration of these ‘capitals’. On that basis, we should all support the NZ government’s policy to plant one billion trees, which will create much-needed jobs in our regions, increase New Zealand’s (depleted) carbon sink, reduce soil erosion and improve our water quality. This is good public policy that has potential to deliver on long-term collective wellbeing.

However, Labour’s pro-wood government procurement policy raises several questions as to how it might enhance our human, social, natural and financial/physical capital to improve lives now and in the future.

The policy stipulates that “all government-funded project proposals for new buildings up to four storeys high shall require a build-in-wood option at the initial concept/request-for-proposals stage (with indicative sketches and price estimates)”.

Consideration needs to be given to the potential major cost consequences of imposing this on the construction sector at a time when it is already constrained and facing unaffordable costs – and how that might also jeopardise the government’s goal to deliver 100,000 affordable homes.

Further, what are the potential costs to New Zealand taxpayers of a policy that favours one material over others, regardless of how it performs across cost-efficiency, durability, sustainability and other measures?

The right materials for the job

New Zealand’s technical expertise of structural engineers, architects and quantity surveyors are the best people to determine the right building materials for the job, based on the desired performance and commercial outcomes.

Wood does have its advantages, and certainly new laminated timber technology is emerging as a force in the construction sector with ‘ply scrapers’ increasingly appearing on the world stage. But it’s not a panacea for our regional economies and housing needs.

It may also struggle to score well in terms of Treasury’s human, social, natural and physical/financial capitals. In human capital terms, whilst the forestry industry is working hard to address safety issues, it has the highest number of deaths per 100,000 employees of any sector: 37.2 compared with 16.3 for agriculture and 1.9 for construction.

Nor does it perform well in natural terms, based on Statistics New Zealand’s new environment report, developed in response to Treasury’s plan to include natural capital plans in its next investment statement. The report shows primary industries – defined as forestry, agriculture, fishing and mining – contribute nearly two-thirds of the country’s greenhouse gases, but account for less than 8% of economic production.

Further, with timber in short supply due to record export of raw logs, an uptick in demand for wooden housing could see the construction sector have to import timber, moving jobs and value offshore at the expense of regional growth.

At loggerheads

We need to work together as a sector to address these constraints and encourage investment, not be at loggerheads and favouring one material over others. We also need to work together to advance our construction technologies to ensure the best and most sustainable solution for New Zealand.

Historically, our multi-storeyed buildings have been constructed from steel and concrete. Post-quake Christchurch construction above three storeys is almost entirely structural steel.

Now, we are seeing glimmers of change – without regulation. In Wellington, Robert Jones Investments has the first 12-storey, 52 m high office block being built in Wellington from laminated timber – which incidentally has a structural concrete core.

New Zealand multi-storeyed timber construction above four floors is leading-edge technology – though cost comparisons with traditional fabricated steel and concrete are unknown. Likewise, we don’t know the environmental, emissions, engineering and other credentials of using wood versus materials such as steel and concrete.

That said, New Zealand’s highest-rated green apartment building, ‘Daisy’ in Auckland, which has a NZ Green Building Council 9 Homestar rating, features a combination of steel-reinforced concrete piles and ground beams as well as solid and masonry concrete.

And globally, metals manufacturing has enabled new, innovative processes and businesses that are effective at lowering greenhouse gas emissions to be nurtured and thrive – for example, Lanzatech’s pioneering technology which converts steel-making emissions into ethanol, in the process reducing steel emissions from steel making.

No single solution

A pro-wood procurement policy neglects the skills, innovation and benefits to local economies and wider wellbeing of value-add in these other industries.

Ultimately, we need an industry-wide response, underpinned by research-based analysis, ensuring we can work together with the government on the best way forward.

Timber isn’t the single solution to more sustainable, affordable and durable buildings. We do not want this policy to be just a veneer for the wood industry that covers over the real challenges facing building and construction in New Zealand.

Nick Collins is the CEO of Metals New Zealand (Metals NZ), the pan-industry sector organisation serving the needs of New Zealand’s 
metals-related industry

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