Select Committee on Environment, Food and Rural Affairs Minutes of Evidence


Supplementary memorandum submitted by the Department for Environment, Food and Rural Affairs (Cit 30a)

OVERVIEW—KEY POLICIES SUPPORTING ENERGY EFFICIENCY AND CARBON REDUCTIONS


Policy or Programme
Sector—individuals, businesses, public sector or communities

Nature of incentive or support


Uptake and/or carbon savings


Comments
1.Energy Efficiency Commitment (EEC) and the Supplier Obligation after 2011 Individuals (via Energy Suppliers)A range of offers and incentives for consumers, including installation and full or part subsidy of energy saving measures, Council Tax discounts, information and advice. EEC1 (2002--05) 0.37 MtC by 2010;
EEC2 (2005-08) 0.62 MtC by 2010.
Preparation for EEC3 (2008-11) currently underway. Target savings will be in the range 0.9-1.2 MtC. A supplier obligation in some form will be extended to at least 2020, saving 3-4 MtC by 2020.
2.Fiscal Incentives—reduced VAT on energy-saving products Individuals5% VAT on a range of professionally-installed insulation and micro-generation products. Small reduction of carbon emissions.
3.Landlord's Energy Saving Allowance (LESA) IndividualsRelief of up to £1,500 against tax for capital expenditure on insulation. Small reduction of carbon emissions.
4.Low Carbon Buildings Programme Individuals, communities, public and private sector Capital Grants—£80 million between 2006-09. So far main uptake has been by householders (the streams of funding for other projects have not been open for as long). £80 million is split into 2 phases—Phase 1 has £30 million for all projects, Phase 2 has £50 million for public/third sector projects only.
5.Warm Front programme IndividualGrant-funded installation of heating systems and insulation for households in receipt of qualifying benefits. Total fuel poverty funding over the 2005-08 period will be over £800 million. Carbon savings from Warm Front and other fuel poverty programmes are expected to be 0.4 MtC by 2010.
6.Energy Saving Trust Individuals, businesses, local authorities and communities Information, advice and support, delivered through national programmes, EST's website and publications, the "Energy Efficiency Recommended" label, training and accreditation schemes and a network of 52 energy efficiency advice centres. Total budget for EST in FY2006-07is £68 million.[50] EST have been successfully trialling Sustainable Energy Networks, which will offer more holistic advice covering energy efficiency, microgeneration and transport.
7.Information through billing, metering and energy displays Individuals and businessesInformation on energy use is proven to help consumers avoid wasting energy and reduce consumption. 2006 Climate Change Programme Review included 0.2 MtC savings by 2010. Proposals to take forward these Energy Services Directive commitments will be set out in the Energy White Paper. Government is sponsoring field trials of smart meters and associated equipment (see below)
8.Carbon Trust Business and public sector (1) Carbon Trust Solutions—a range of advisory services for businesses, as well as financial assistance to SMEs and the public sector, to encourage and support low carbon investments;
(2) Administration of the Enhanced Capital Allowance scheme for energy-saving technologies (see 21 below).
(3) Encouraging the transition to a low carbon economy by supporting the development of new low-carbon technologies, financing low carbon business ventures and creating new low carbon enterprises.
Total Defra grant funding of £78.6 million in FY2006-07. Solutions programme (1) aiming to identify 3.7 MtCO2 and implement 1.1 to 1.3 MtCO2 savings in 2006-07. Funded in part through the CCL package, with separate funds from Defra, the landfill tax-funded BREW programme and from the Pre-Budget Report 2005 for work with SMEs and public sector. Further Defra funding in 2007-08 & 2008-09 for "Partnerships for Renewables" scheme to work with public sector on mid-scale renewable projects.
9.Differential Vehicle Excise Duty Businesses and individualsGraduated VED for all cars registered after March 2001, based primarily on CO2 emissions introduced in 2001 and subsequently reformed to strengthen environmental incentives. Mandatory tax. Expect some reductions in carbon dioxide.
10.Differential Company Car Tax Businesses and individualsReformed in 2002 to base the charge on the vehicle's list price, graduated according to its CO2 emissions. CO2 emissions from the reformed CCT system estimated to be 0.2 to 0.3 MtC in 2005, estimated to rise to between 0.4 MtC and 0.9 MtC per year.
11.Vehicle Labelling (A-G fuel economy and emissions) Businesses and individualsInformation Carbon impacts are difficult to quantify. Labels now in the majority of showrooms.
12.Product policy, including labelling (European A-G label and EST's Energy Efficiency Recommended), industry voluntary agreements, retailers initiatives. All sectorsRemoving worst performing products and promoting the best through minimum standards, public procurement standards and engagement with retailers and manufacturers. Providing information on energy performance of products, endorsement of best appliances and fiscal incentives for certain products—see 2 and 21. Raising standards for all priority products sold in the UK has the potential to save up to 5 MtC by 2020, but delivery depends critically on action at EU level, and these savings overlap with other policies.
13."Every Action Counts" CommunitiesEvery Action Counts aims to catalyse changes in behaviour by working through local community and voluntary organisations. These behaviours are brigaded under five action topics. Carbon-saving behaviours appear in all five: Save Energy, Save our Resources, Travel Wisely, Shop ethically and Care for your area. Every Action Counts provides ideas, advice and information through a website, community packs, organisational support and face to face "community champions"—all of which focus on behaviours which could result in individuals saving up to 300 kg of carbon per year but also includes some behaviours on microgeneration and renewables which could save 500 to 1,000 kg per year. This runs from 2006-07 to 2008-09. This scheme is delivered by and for the third sector in England. Every Action Counts is working directly with 25 to 30 national third sector bodies who each have regional and local networks involving thousands of community groups. Defra providing up to £4 million grant funding spread over the three years.
14.Climate Change Communications Initiative Communities and Individuals(1) Grant funding for communications projects focused on shifting attitudes towards tackling climate change.
(2) Provision of communication resources (eg short film, booklet, website (www.climatechallenge.
gov.uk), polling data).
(3) Competition and support for communication activities of 9 regional youth "Climate Change Champions".
(4) Provision of "information tools" to help individuals take action (web-based CO2 calculator, offsetting code of best practice, new short film).
(5) Public campaign activities aimed at increasing awareness of link between individual action, CO2 emissions and climate change including advice on car-purchasing and smarter driving (advertising and PR campaigns, new cross-departmental call-to-action brand "Act on CO2").
(1) Fund 100% committed (total of £8.5 million), with 83 funded projects. (507 project proposals were made).
(2) Film has received over £5.5 million free airtime. DVDs of the film and the brochure "Your Guide to Communicating Climate Change" have been downloaded ~40,000 times and distributed another 6,000 times. The website has received an average of 120,000 page views per month.
(3) Independent report on the regional print media coverage gained by the Champions during 2006 indicated 18% of adults reached by this form of communication (67% strongly favourable, 33% slightly favourable).
(4) and (5) To be launched in coming months.
Work of the CCCI initially focussed on shifting attitudes. Now moving into the area of behaviour change more directly, with the provision of tools giving individuals more information about the different actions they can take, and their relative impact in reducing CO2 emissions.
15.Building Regulations Businesses and IndividualsLegal requirement to comply with minimum standards for new buildings and certain elements in existing buildings (windows, boilers). Also applies to refurbishment of large (>1000m3) buildings. By 2010, 2002 and 2006 Building Regulations projected to save 0.6 MtC and 1.5 MtC in non-domestic and domestic sectors respectively. The transition to zero carbon homes by 2016 has the potential to save a total of 5-7 MtC between 2007 and 2020, and 6.5-7.0 MtC per annum by 2050. Building Regulations Part L were tightened in 2002 and 2006. CLG have announced their intention for further improvements in 2010, 2013 and 2016, with the aim of attaining zero-carbon standards by 2016.
16.Code for Sustainable Homes Businesses and IndividualsPerformance standards covering energy, water and other elements of new-build homes.
Assessment against the Code will initially be voluntary. From April 2008, Govt. currently minded to propose that all new homes should be required to have a mandatory Code rating. Govt. also requiring that all new homes built by Registered Social Landlords (RSLs), or others with Housing Corporation funding, will comply with Level 3 of the Code, together with homes developed by English Partnerships or with the direct funding support from the Department's housing growth programmes.
Savings will depend on level of uptake. Each home built to Code level 3 will save 0.09-0.16 tonnes of carbon per year. Code level 4 will additionally save between 0.09-0.26 tonnes of carbon. Code level 6 will save 0.4-0.8 tC.
All compared to 2006 Building Regulations.
There are six levels of the Code, with mandatory minimum standards for energy efficiency and water efficiency at each level of the Code. For energy these range from Code Level 1, representing a 10% improvement over 2006 Building Regulations, through to Code Level 6, which would be a completely zero carbon home (heating, lighting, hot water, and all appliances). Minimum standard for publicly[en rule]supported homes is level 3.
17.Reduced Stamp Duty on zero carbon new homes Businesses and IndividualsTime-limited stamp duty exemption for first purchase of zero carbon homes to incentivise construction and demand from homebuyers. Further details to be announced at Budget.
18.Energy Performance Certificates Individuals (and businesses and public sector from 2009) EPCs will provide an energy rating and information on measures to improve energy performance. Estimated savings 0.6 MtC per yearEPCs will be mandatory for all homes sold or let from June 2007, and for other building types from 2009.
19.Climate Change Levy (CCL) BusinessesLevy to encourage business and the public sector to use energy more efficiently. Estimated to save over 3.5 MtC a year by 2010. Reduced emissions by a cumulative 16.5 MtC up to 2005.
20.Climate Change Agreements BusinessesCCAs provide an 80% discount from the CCL for energy-intensive sectors, provided they enter into agreements to meet energy efficiency targets. Estimated that CCAs will save 2.8 MtC per year by 2010. Part of the CCL package
21.Fiscal Incentives—Enhanced Capital Allowances BusinessesAllows the whole cost of investment in energy-saving technologies to qualify for tax relief against a business's profits for the period during which the investment is made. 15 qualifying classes of energy-saving technologies and over 14,000 energy-saving products are on the qualifying Energy Technology List. Part of the CCL package
22.EU Emissions Trading Scheme Large direct emitters—principally businesses but catches some large public sector. A market-based mechanism which combines emission reduction targets with flexibility to trade emissions on the carbon market. Phase I (2005-07) is set to deliver carbon savings of around 18 million tonnes (roughly 8%) below the projected baseline emissions. Phase II set to deliver 8 MtC savings. Over 1,000 UK installations covered by the Scheme in the first phase, covering around 45% of the UK's CO2 emissions in 2002.
23.DTI Technology Programme Businesses, AcademiaGrants to support research and development in specific technology areas. £31.8 million committed to renewable energy research projects since 2004.
24.Renewables Obligation Individuals, communities, public and private sector An obligation on electricity suppliers to provide a specified and annually increasing proportion of sales from electricity sources. Suppliers meet their obligation by presenting Renewables Obligation Certificates. Generators of any size, providing they are accredited, can obtain ROCs and sell them to electricity supply companies. Combined with CCL exemptions will provide £1 billion pa support for renewable electricity installations by 2010.

ADDITIONAL INFORMATION

  The Community Energy Programme was set up to make community heating more efficient by supporting a large number of small, innovative projects, using renewable fuels such as biomass and lead the way for developing even more innovative solutions to cutting carbon emissions in the future. The programme will close as planned on 31 March 2007. To date 59 schemes have been set up under the programme with a total spend of £28.7 million and a carbon saving of 27,700 tonnes of carbon per annum.

  The Community Renewables Initiative was put together in 2001 by the Countryside Agency (now Natural England) with funding from DTI. The Initiative involved the establishment of 10 Local Support Teams throughout England. Each Local Support Team provided advice and support for the development of community based renewable energy projects. So far, it has delivered over 120 projects across the country, often with more than one technology per site, providing electricity and heat. These projects improve community energy security, local skills, livelihoods, and education. It costs about £450,000 per annum. As an advice service it is difficult to demonstrate how much additional carbon was saved by its existence, but evaluation shows that 104 out of 238 Clear Skies community projects in CRI areas had CRI input, with CRI playing an instrumental role in over a quarter of projects. The Clear Skies programme has now been replaced by the Low Carbon Buildings Programme.

  After successful monitoring and evaluation of the process and outcomes, the CRI has secured further funding through to April 2007, and is now co-ordinated by the Severn Wye Energy Agency (SWEA), one of the existing Local Support Teams.

  Personal Carbon Allowances. Government is examining the concept of a personal carbon allowance as a potential way of reducing domestic greenhouse gas emissions. The idea is just one of a number of potential long term options being explored for making individuals better informed about, and involved in, tackling climate change. In such a scheme an overall emissions cap would be set, and emissions rights (in the form of carbon credits) then allocated across the population. The credits would be surrendered upon the purchase of, say, energy or fuel or transport. Those who need or want to emit more than their allowance would have to buy allowances from those who can emit less than their allowance. Over time, the overall emissions cap (and hence individual allocations) could be reduced in line with international, european or nationally adopted agreements.

  Field trials of smart meters. Government announced last year that it would co-fund with companies trials of smart meters and associated feedback devices. The Government is contributing nearly £10 million. Ofgem is managing this project on the Government's behalf. Final details are currently being negotiated with participating companies, following which the trials should commence very quickly. More than 18,000 households are expected to receive a smart meter or feedback device as part of the project.

Department for Environment, Food and Rural Affairs

March 2007






50   All EST's carbon savings support other climate change programmes such as EEC, so we are not able to provide a separate estimate of carbon savings achieved by EST. Back


 
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