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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