Select Committee on Communities and Local Government Committee Written Evidence


Memorandum submitted by the UK Green Building Council

  Our mission is to dramatically improve the sustainability of the built environment, by radically transforming the way it is planned, designed, constructed, maintained and operated.

  In 2004, the Government's Sustainable Building Task Group reported that no one body or organisation concerned with sustainability was providing clear direction for the sector as a whole. The UK Green Building Council (UK-GBC) was launched in February 2007 to fulfil this role, and to bring cohesion to the UK green building movement.

  We are a campaign for a sustainable built environment. Our members are in the main drawn from across industry, but are joined by NGOs, academic institutions and government agencies. We are committed to campaigning for action—by government, by the industry, by whoever has a role to play to deliver on our mission.

INTRODUCTION

  The UK-GBC congratulates the CLG Select Committee for initiating an inquiry into the existing housing stock and climate change. Huge and commendable progress has been made by Government, led by DCLG, on setting in place plans to reduce carbon dioxide emissions from new buildings, in particular homes, over the last year. It is understandable and sensible that Government wished to "stop the rot" in the new build sector before turning attention to the existing stock.

  However, while much work remains to be done on overcoming challenges to deliver on the commitment for all new homes to be zero carbon by 2016, and to set in place a route to zero carbon in the new non-domestic sector[48], there can be no further delay in getting to grips with emissions from existing stock. Often characterised as the Cinderella of the green buildings landscape, if the Government, together with business and other stakeholders, do not galvanise support and escalate the level of effort around tackling existing homes, there is no chance of the UK meeting its targets under the upcoming Climate Change Bill framework—let alone showing leadership on climate change mitigation on the international stage.

  The facts around emissions from the built environment, in particular existing homes, do not need rehearsing at length. 27% of the UK's emissions come from energy use in our homes. Of the UK's homes that will be standing in 2050, around two-thirds have already been built (if not more). And not only is the home an important direct source of emissions, but by engaging with home owners and occupiers on the importance of reducing energy use and carbon emissions, there is the added opportunity to indirectly affect other elements of lifestyle which are crucial to tackling climate change, such as transport use and consumption choices, which also revolve around the home.

  The chart below is an illustration of the importance of the existing housing stock to mitigating climate change (the largest area on the chart is the domestic sector). This chart also shows the level of emissions reductions that the UK-GBC is advocating from the built environment by 2050 (at least 80%).


CURRENT PROGRESS

  In late 2005, ODPM-as was launched a review of existing buildings, but its lack of profile has been disappointing. In addition, the Stock Take report by the Sustainable Development Commission, commissioned by ODPM in 2004 and submitted to CLG in July 2006, which recommended a holistic policy framework for tackling the efficiency of existing homes, appears to have had limited uptake.

  Although the SDC's recommendation that CLG develop a Code for Existing Buildings has not yet implemented, CLG is to be congratulated for bringing forward Energy Performance Certificates, phased in from August 2007. Despite suffering from a rocky introduction, related to controversy around HIPs, Energy Performance Certificates have strong support from the UK-GBC. We commend Government's wish to strengthen implementation of the EU Directive by ensuring that the information contained within the EPC is current. The UK-GBC will take part in the consultation on EPCs (on point of production and age of certificate) due shortly and will advocate EPCs being no more than 12 months old, together with mandatory display of the EPC at the point of home marketing.

  In summary, despite a number of related policy strands, there appears to be no coherent, holistic framework for tackling emissions from the existing housing stock. This is particularly disappointing given the ambitious, perhaps under-reported pledge made by Gordon Brown, when Chancellor, in a speech to Green Alliance in March 2007. He said:

    "Over the next decade my aim is that every home for which it is practically possible will become low carbon."

  However, the introduction of EPCs, together with the need to achieve significant, measurable reductions in order to balance future carbon budgets as part of the Climate Change Bill framework, offer the ideal opportunity to make the radical progress which is so urgently needed—and to make good on the Chancellor's target.

UK-GBC POLICY RECOMMENDATIONS

  The UK-GBC, together with the SDC and BRE, has recently been working with stakeholders to analyse the barriers to progress on energy efficiency improvements in existing homes.

  Essentially these barriers can be divided into:

  1.  Policy and fiscal barriers that deter action:

    a.  Full VAT on refurbishment.

    b.  Planning restrictions in conservation areas.

    c.  Energy regulation drives supply not energy efficiency.

    d.  Fragmented energy efficiency advice, guidance and assistance.

  2.  Behavioural inertia, based on the overwhelming perception that significant energy efficiency improvements are a low priority and not cost effective:

    a.  Relatively low cost of energy for middle income households.

    b.  The marketplace for energy efficiency is perceived as piecemeal.

    c.  A high level of confusion—about what is cost-effective, what grants or other incentives are available, and where to go for reliable advice and/or support from reliable installers of energy efficiency "kit".

    d.  Too much hassle for too little benefit.

  To overcome these barriers, the UK-GBC advocates a range of policies, broken down here into three groups:

LONG-TERM GOAL: A CAP ON DOMESTIC ENERGY SUPPLY

  Despite Government interventions like EEC, which requires energy supply companies to promote and implement energy efficiency measures, the fact remains that energy suppliers make money by selling as much energy as they can to as many people as possible. Last year, the then Secretary of State for Trade and Industry, Alistair Darling, said:

    "We need to transform the energy market. We need to turn conventional wisdom on its head. Today companies have the incentive to sell as much as they can and our inefficiency unintentionally creates more demand for energy . . . We must look at how we can change from just selling units of electricity to providing energy services—heating and lighting homes—making it their business to increase energy efficiency and cut demand."

  UK-GBC believes the most efficient way of facilitating this is to introduce a cap on energy supply, with suppliers trading permits with each other for the right to supply energy. Suppliers would have a powerful incentive to proactively help all of their customers to reduce wasteful energy use. This could unlock a wide range of innovative approaches to tackle the many barriers to energy efficiency and behaviour change, with competition for the most efficient provision of energy to the highest number of consumers.

LOW-HANGING FRUIT

  A number of relatively easy to implement measures, although not without fiscal implications, could be brought forward immediately with significant benefit. Many were highlighted by the SDC in "Stock Take", and many use the EPC as a building block, on which to measure retrofitting improvements to energy efficiency.

    (1)  Stamp duty rebates for energy efficiency improvements.

    (2)  Council tax rebates for energy efficiency improvements.

    (3)  Temporary or permanent adjustments to Council Tax bands for properties with improvements.

    (4)  VAT exemption/reduction on refurbishment/retrofitting "kit".

    (5)  Equalization of refurbishment and new build (could be revenue neutral).

    (6)  Consequential improvements in energy efficiency when carrying out extension work.

  In addition, and related to the Housing Green Paper and Government's new target of three million new homes by 2020, including five new eco-towns, the UK-GBC support the principle of energy efficiency improvements in existing build to offset the emissions released in the construction of new homes. This would not only have the benefit of reducing emissions from the existing stock, but would help ensure the new eco-towns don't become "eco-islands", and smooth the introduction of new development in an area by ensuring there is tangible benefits to existing residents.

ACHIEVING A MARKET BREAKTHROUGH: ENERGY MORTGAGES

  Even if the low-hanging fruit were to be picked, the reality is that progress is far too slow, and having nothing like the required impact. What is needed is a fundamental break-through in terms of a new market that will deliver energy efficiency on a huge scale to existing homes throughout the UK. The UK-GBC believes it is possible to create the conditions for a market solution that will radically improve the energy efficiency of existing homes, making a major contribution to the UK's efforts to reduce its carbon footprint and help mitigate the worst effects of climate change.

  We believe energy efficiency improvements for existing homes need to be made a high priority and highly desirable. The potential drivers for this (based on the barrier analysis done in conjunction with the SDC and BRE cited above) are:

    1.  Rapidly increasing costs of domestic energy.

    2.  An increasing interest in the long-term asset value of energy-efficient homes (with EPCs becoming increasingly well-known and valued).

    3.  Wider social and environmental concerns linked to growing awareness of the threat of climate change.

  As a direct result of increased awareness and demand, refurbishment and energy efficiency improvements can be made easy and affordable, with user-friendly financial packages, and a wide choice of accredited and reliable installers due to major investment by new entrants to the energy efficiency market. The energy mortgage is outlined below:

    1.  Prospective home buyer receives EPC and approaches mortgage lender.

    2.  Mortgage lender interprets EPC and recommends that the buyer upgrades the home's EPC rating, explaining the benefits in terms of major reductions in energy bills and long-term asset value improvement.

    3.  Mortgage lender explains that the cost of improvements can be added to the loan over the life of the mortgage, and that any additional cost will be more than offset by savings in energy bills within a few years.

    4.  Mortgage lender recommends an installer who, using the EPC data, recommends the best package of improvements for the home buyer.

    5.  Energy efficiency installer works in partnership with energy supply companies who can exercise their EEC obligations by subsidizing the home improvements, and seek to enter into an energy services contract with the home owner, to ensure they meet all their energy needs in the most cost and energy efficient way, over time.

  The UK-GBC is in the process of bringing together the key stakeholders in this process to identify opportunities for collaboration on pilot projects and wider roll-out.






48   The UK-GBC is a member of DCLG's 2016 Task Group and the Steering Group for new non-domestic buildings. For the latter, the UK-GBC is leading a project on raising the energy performance standards in new non-domestic buildings above those currently set out in Building Regulations en route to zero carbon. Back


 
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