Recent British study shows potential impact with new priority given to improving the energy performance of buildings

Ever since the Green Deal collapsed in Britain, there has been concern about how the government will replace it in order to meet its climate and energy savings targets. Michael Holder writes on the Business Green website about a new study by the Association for the Conservation of Energy and the Regulatory Assistance Project about what new policies could do for meeting those targets and for giving a boost to the economy as a whole. What are your views?


Could building energy efficiency policy focus deliver a £45bn boost to UK?

The Association for Conservation of Energy and Regulatory Assistance Project say UK in danger of missing Fifth Carbon Budget without urgent green building policy action

Setting a requirement for homes and businesses to meet minimum energy efficiency standards before they can be sold could deliver a £45bn boost to the UK economy while delivering significant emissions reductions, according to Britain’s energy efficiency sector.

The Association for the Conservation of Energy (ACE) is today calling for the government to create a new scheme to provide property owners with appropriate financial and technical assistance in order to meet the proposed efficiency standards.

The calls come in a report released today by ACE in which the group warns that due to “successive government failure” to enhance energy efficiency in UK buildings the UK is in danger of missing emissions targets set out in the Fifth Carbon Budget.

Approved by the government in July, the Fifth Carbon Budget places a legally-binding limit on greenhouse gas emissions between 2028 and 2032. It commits the UK to delivering an overall 57 per cent reduction in emissions between 1990 and 2032, in support of the UK’s long-term climate goal of an 80 per cent cut by 2050.

However, government projections suggest emissions from buildings are one of the main reasons the UK is on track to exceed the emissions limit placed on them by the Fifth Carbon Budget by 18 per cent. Today’s report suggests uncertainty surrounding UK policy could in fact see the emissions goal being exceeded by as much as 30 per cent.

The emissions shortfall, the report states, “must be made up for, and efforts to do so must begin soon, in order to ensure that buildings make their necessary contribution”.

With emissions from the use of fuels and electricity in buildings making up 40 per cent of the UK’s total, ACE argues cutting decarbonisation in this area will be “crucial” to meeting the Fifth Carbon Budget, as well as cheaper than focusing on decarbonisation in other sectors.

“The alternative of making up the shortfall with additional abatement in other sectors may not be technically possible and would certainly be less economical,” it adds.

The report – which was carried out in partnership with environmental organisation the Regulatory Assistance Project (RAP) – calls for new government policies to focus on improving energy efficiency in buildings, which it says could also deliver benefits in terms of air quality, home comfort, health, jobs, and economic growth to the tune of £45bn.

Dr Jan Rosenow, senior associate at RAP, said cutting emissions from buildings would be “hugely beneficial to UK plc” and that “unlike many environmental necessities, efficient buildings more than pay for themselves”.

“On top of this, there is the value of skilled employment needed across the country to transform buildings into low carbon assets, the value of avoided gas imports and improved energy security, the boost to GDP it would deliver, and the additional revenue this economic activity would generate for the Exchequer,” said Rosenow.

In addition to minimum efficiency standards, he said “better enforcement of existing rules, high quality advice for renovation, finance that costs less to repay than the energy savings, and tax incentives are all needed too, and needed first”.

Other recommendations set out in the report include tightening new building rules towards zero or nearly zero carbon standards, and introducing long term incentives for low carbon building retrofits.

The remit of the Heat Networks Delivery Unit should be expanded to support project planning, while both the Renewable Heat Incentive and the Supplier Obligation should be extended to 2032, the report adds.

The government is yet to set out any new initiatives aimed at financing building energy efficiency improvements since it scrapped the flagship Green Deal policy last year, although it has come under renewed pressure to publish its review into domestic energy efficiency and renewable energy standards.

A spokeswoman for the Department for Business, Energy and Industrial Strategy (BEIS) said the UK was making “good progress” towards its 2050 emissions reduction target, and that it plans to invest £295m in funding for public sector energy efficiency improvements over the course of the next parliament.

The BEIS spokeswoman also highlighted the government’s legislative target to bring fuel-poor homes up to energy efficiency Band C by 2030 and the ECO energy efficiency scheme, which she said had delivered billpayers more than £6bn in potential lifetime savings.

Yet the calls for greater policy focus on decarbonising buildings appear to be increasing. Conservative think tank Bright Blue has recently called for green loans and minimum energy performance standards for properties at the point of sale, while a Europe-wide initiative aimed at offering better borrowing rates for those buying the most energy efficient homes was launched last month.

Pedro Guertler, research director at ACE, conceded setting down minimum energy efficiency requirements for buildings before they can be sold would be politically challenging, but stressed it was nevertheless achievable and also necessary for meeting the UK’s climate targets.

Guertler suggested such a policy would need to be trailed far in advance of its introduction, and that support for achieving it – such as free advice about insulation, efficient appliances and low carbon heating systems, attractive finance deals and financial incentives – would also need to be implemented.

Nevertheless, landlords already have to follow similar rules for rental properties, he added, and he argued the proposed rules would have a “transformative effect on our buildings – making the places we live and work in cheaper to run, more comfortable, and healthier, more productive spaces to be in”.

“I’ll be the first to acknowledge that such a requirement is perceived as challenging to introduce, but successive governments have seen through far greater challenges in other policy areas,” said Guertler. “But make no mistake, without such a requirement, the vibrant retrofit market needed to deliver emissions reductions from buildings at the scale we need will not materialise. And we will not be serious about fixing our climate and abiding by greenhouse gas limits the government has only just put into law. It would be all talk and no walk.”

With a plan to meet the Fifth Carbon Budget now unlikely to appear until the new year, the green buildings sector will be hoping the government recognises this autumn as the perfect opportunity to set in motion the more ambitious energy efficiency policies called for by the sector.

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