Memorandum submitted by Consumer Focus
Consumer Focus welcomes the Committee's inquiry
into adapting to climate change, and asks that it considers the
impacts of these changes on consumers' needs.
This response sets out:
— the impact of projected climate changes
on consumers, which are set to affect their homes and access to
products and services;
— consumers' increased understanding of
the threats;
— concerns about the lack of reference
in Government policy to the needs of individuals; and
— some ideas on how to quantify and measure
consumer resilience to the changing climate.
CONSUMER CONTEXT
These concerns are based on the findings of
UKCP09. We have not stated definitive impacts within Britain as
these are subject to location, scenario probability and Government
and business decision-making.
1. Risk to consumers. Consumers are making investments
today that may be affected by changes in the climate. There will
also be pressure on shorter-term demands.
(a) Homes may be affected by:
— Risk of subsidence due to lower soil
moisture levels. This can severely damage the fabric of houses,
and can lead to higher insurance costs and/or requirements for
consumers to pay significant amounts towards remedying subsidence
before the insurance policy pays out.
— Competition for water resources, may
mean higher bills, lower water pressure or restrictions on use.
— Sea level rise, increased storm surge
heights, coastal, river and surface water flooding:
— Causes psychological distress, decrease
in property value, reduction in the desirability of an area and
a major impact on personal finance.
— Risk of flooding means higher insurance
premiums, which may deter homeowners and tenants from getting
insurance.
(b) Health may be affected by:
— Average temperature rise and increased
risk of heat waves.
— Higher temperatures pose considerable
health risks for more vulnerable population groups, such as the
elderly, the very young or those with pre-existing medical conditions.
In the worst case, increased temperatures and heat waves lasting
for several days may prove fatal, as occurred during 2003, which
caused more than 2,000 deaths in southern England, 60% of which
occurred in people aged 75 and older.
— Problems may be compounded, for example,
by the urban heat island effect which exacerbates thermal discomfort
in cities, or by water restrictions limiting the use of water
for consumers' domestic and recreational use. These increase stress
on the healthcare system, which may delay access to appropriate
care.
— Causes psychological distress and has
the potential to carry diseases.
— Climate change presents either direct
or indirect risks on investments:
— Direct risks through deterioration of
the physical environment resulting from climate change impacts.
— Indirect risks through changes in policy
directed at reducing greenhouse gas emissions or for adaptation.
— A recent survey of the 30 largest UK
fund managers reveals that climate change is considered by a minority
of pension schemes: only five schemes state that they will assess
a fund manager's ability to manage climate change related risks
and opportunities, and seven schemes require that their fund managers
actively consider climate change related risks and opportunities
as part of their ongoing investment mandate.[1]
— Insurers have made it clear to the Government
that providing insurance cover to home owners is conditional upon
Government increasing expenditure on flood protection.[2]
Without insurance cover, securing a mortgage and selling a home
becomes more difficult.
— Climate change has the potential to affect
continuity of energy supply, for example:
1. Flood risk to energy facilities.
2.Sustained high temperatures on equipment ratings
and reliability.
3.Disruption to the transport of fuel to power
stations or to homes.
— Climate change will significantly affect
the availability of food for import.
— Changes in the British climate may affect:
2.Availability of agricultural land, particularly
in the East of England.
— Changes in the climate are expected to
affect:
1.Water availability due to changes in rainfall,
and higher demand as a result of warmer temperatures.
2.Water quality due to changes in temperature
and rainfall patterns, treatment will need to change as a result.
3.Infrastructure such as water mains or sewers,
as a result of changing soil moisture content or high volumes
of waste water resulting from frequent intense precipitation.
4.The ability of sewerage systems to cope with
surface water drainage resulting from intense rainfall.
(g) Other infrastructure: communication, transport
— The Pitt Review of the 2007 floods showed
that communication is key during climate events. For example,
the emergency response needs to include support consumers through
both the media (to signpost consumers to the latest information)
and the mobile phone networks.
— Increased temperatures and surface water
can disrupt road and rail transport, which has a direct impact
on consumers' own ability to travel and also on the supply of
products and services.
2. Changes in consumer awareness. Consumer
Focus surveyed British consumers in July 2009. The survey indicates
that, compared to 2007 (when a similar survey was conducted by
the Association of British Insurers) there is an increased feeling
of risk among consumers: 43% now feel they are at risk from heat
waves, up from 27% in 2007; and 31% of consumers feel that they
are risk from flooding, up from 16%. This shows an increase in
awareness and concern among consumers about these issues.
3. Consumers have an opinion. It is also
noticeable that, in the 2009 survey, despite this widespread rise
in awareness and concern, there is also a rise in people who think
they won't be affected by any of these (13% in 2007 up to 25%
in 2009). This could be explained by the fact that the number
of consumers having no opinion on climate change impacts has dropped
significantly from 28% in 2007 to 8% in 2009. Far more people
now have an opinion about the impacts of climate change.
4. Climate change is not a middle class
issue. Our survey showed little difference between social grades.
There was a great deal of similarity in the responses, with around
5% difference between ABC1 respondents (where the head of the
household has a managerial or supervisory role) and C2DE respondents
(skilled and unskilled workers). However, the Pitt Review of the
summer floods in 2007 found that low-income households are the
least able to recover.[3]
A third of residents of social housing have no insurance and half
do not have home contents insurance, as opposed to one in five
of households on average incomes.[4]
5. Greater awareness of mitigation than
adaptation measures. A lot of attention has been given to improving
energy efficiency and reducing greenhouse gas emissions (to mitigate
climate change) in the past decade, but consumers are as yet unaware
of some of the main ways in which their lifestyles will be impacted
by climate change and how they will have to adapt. Our survey
asked consumers which methods they had heard of in terms of preventing
(mitigating) and protecting themselves (adapting) from the effects
of climate change. The responses showed that consumers had a much
higher awareness of mitigation-related measures than adaptation
measures.
GOVERNMENT POLICY
6. Recognition of consumer needs. Consumer
Focus welcomes the review of government policy on adapting to
climate change, as it shows that work is underway across Government
to prepare for changes. However, it also shows that plans lack
relevance to individuals as they are focussed on large-scale systems
with some reference to existing interfaces with consumers, with
no consideration of the needs of the individual. For example,
management of the housing stock is limited to adapting planning
policies and building regulations (NAO, p59), which will not affect
the majority of homes. The following two sections consider the
gaps and how they can be filled through adaptation of existing
policy approaches.
ADAPTATION REPORTING
POWER
7. Homes are a strategic issue. We are concerned
that the consultation on the Adaptation Reporting Power did not
reflect the importance of individuals' homes to wider society.
Defra recognised that the impact of climate events can be devastating
for individual householders, but states in the consultation (4.73)
that "they are unlikely to have nationally significant repercussions".
Consumer Focus disagrees. We have seen in the past year the effect
of activity in the property market on the nation's economy and
consumer confidence. A failure to reflect the needs of the individual
may also, in time, undermine the public's perception of the Government's
wider approach to climate change adaptation.
8. 70% of the existing housing stock will still
be standing in 2050 but current plans only affect new homes. Defra
should use the Reporting Power to manage the risks facing the
existing housing stock. The current plans, as documented by the
NAO, do not reflect the risks listed above. The intention to update
the Code for Sustainable Homes only affects new homes, and a minimum
standard is not set for private developers in England until 2016.
Building regulations do not affect existing buildings, for example
this summer we have seen CLG step back from its commitment to
consult on embedding energy efficiency measures in regulations
for changes to existing buildings (known as consequential improvements)
into Part L of the building regulations.
9. Financial services are essential providers
of products and of information. Her Majesty's Treasury (HMT) is
reported by the NAO to be waiting for the UK Climate Change Risk
Assessment and Economic Analysis in order to inform further consideration
of climate change risks and policy development, but in the meantime
considers that the impact could either be positive or negative
dependent on the scale of the change and cost of adaptation measures
(p87). It is therefore vital that financial services are included
under the reporting power, potentially through the Financial Services
Authority, and therefore in the risk assessment.
— The insurance sector has a key role in
reporting the financial costs of more extreme weather on a macro
scale, and is an essential service for consumers who are vulnerable
to or have suffered from extreme climate events.
— Mortgage providers should consider the
risks posed by climate change to the value of homes, not only
to flag up those risks to buyers but also to manage the risks
to their business and therefore the economy.
10. Think Small First, but include the consumer
in that thinking. Consumer Focus considers Defra's approach to
reporting from the energy sector, focussing on generators and
distributors, to be proportionate. However, these companies are
not necessarily visible to the consumer, who can feel very vulnerable
and isolated in the case of disruption to energy supplies. We
would like these reports to include specific references to communication
plans in the case of emergencies, plans which are likely to involve
the energy supplier.
11. A voluntary invitation to report (as
proposed in Defra's consultation) does not reflect the necessity
of food supplies and the level of risk they face from both gradual
climatic changes and severe climate events. Consumer Focus wants
the upcoming Food Strategy for the Future to provide a more coherent
reporting mechanism for that sector. Whether a report is co-ordinated
by industry, by the Food Standards Agency or the Government Office
for Science (which is exploring the policy framework for the food
system and climate change) the resultant information needs to
be open to public scrutiny as with reports under the adaptation
reporting power.
12. Communication services are vital in
times of extreme climate events. Defra's consultation considered
the need to report on the adaptability of standard functions,
but Consumer Focus would like the Reporting Power to drive improvements
to communications during events such as the floods of 2007. For
example, it appears there is a need for:
— better sign-posting from the media (print,
television, radio) and a local helpline; and
— development of an emergency response
by the phone sector in order to:
— provide mobile charging units, battery
swap facilities and internet access in periods of large-scale
power cuts; and
— share mobile networks to allow greater
access to those in need.
OPPORTUNITIES TO
EMBED ADAPTATION
IN GOVERNMENT
POLICY
13. Better information on past flooding,
and future flood risks, should be provided through a compulsory
flood report in Home Information Packs; complete with reference
to projected changes in climate. Consumers, particularly at the
point of purchasing a home, should have access to plans for existing
and proposed flood defences in areas that face an increased risk
of flooding.
14. As ambient air temperature increases, more
energy is required to cool a building. Cooling measures must be
included in domestic energy assessments to ensure cooling is referenced
in each property's Energy Performance Certificate. This measure
should be complemented by advice on low-carbon cooling measures.
15. Information on a home's climate resilience
should not only be provided when property changes hands; the proposed
smart meter and heat and energy saving programmes provide an opportunity
to undertake audits to assess the energy efficiency and climate
resilience of the housing stock; complemented by a social marketing
campaign to help consumers reduce their energy bills, and related
carbon emissions, and adapt to a changing climate.
16. Projected climate impacts must be taken
into account in the delivery of housing and regeneration, and
in the development of sustainable communities. Property should
be included in preparations for climate changes, initially through
the inclusion of homes and insurance cover alongside other elements
of the national infrastructure in the application of the Adaptation
Reporting Power in the Climate Change Act 2008.
17. Prepare consumers by including climate
resilience in the development and delivery of the community and
domestic aspects of the Heat and Energy Saving Strategy, to complement
the infrastructural measures undertaken by the Environment Agency,
the water industry and others.
18. In terms of reporting authorities responding
to the Adaptation Reporting Power, we would like the Financial
Services Authority (reporting on insurers and mortgage providers)
and the housing sector (potentially reported on in England by
the Homes and Communities Agency) included in the list of the
required reports.
QUANTIFYING CONSUMER
RESILIENCE
19. Measuring the impact of climate changes
on consumers could inform efforts to engage individuals in, as
carbon reduction measures, as well as helping them to adapt. However,
consideration must be given to how those impacts are communicated,
as people will react differently to warning messages.
20. Consumer Focus considers the following could
be useful high-level indicators of consumer resilience to climate
changes. Reports should reflect different climate scenarios over
time, with reference made to both the likelihood and impact of
the related risks which together will drive the proportionate
response.
— Number of homes at risk from:
— significant overheating.
— Number of homes protected by flood defences;
and number and proportion of homes at significant risk of flooding
that will be protected by planned defences (by year).
— Coverage of plans to assist consumers
in the event of flooding and heat waves, in support of their physical
and psychological health.
— Number and proportion of pension and
investment funds considering the risks of climate change.
— Number of homes at risk of flooding without
insurance cover.
— Cost of flood insurance in areas at significant
risk of flooding.
— Number and proportion of flood insurance
products that provide resilience measures in the event of flooding.
— Proportion of supply at risk from rising
temperatures, sea levels, or climate events.
— Proportion of imported food at risk from
changes to the climate.
— Proportion of British grown food at risk
from changes to the climate.
— Proportion of British agricultural land
at risk from flooding.
ABOUT CONSUMER
FOCUS
Consumer Focus is the independent champion for
consumers across England, Wales, Scotland and (for postal consumers)
in Northern Ireland. We operate across the whole of the economy,
persuading businesses and public services to put consumers at
the heart of what they do.
2 October 2009
1 FairPensions, 2009 http://www.fairpensions.org.uk/fairpensions_pdf/ResponsiblePensions_2009.pdf Back
2
ABI Flood Manifesto, http://www.climatewise.org.uk/storage/628/floodmanifesto.pdf Back
3
Pitt Review, http://archive.cabinetoffice.gov.uk/pittreview/_/media/assets/www.cabinetoffice.gov.uk/flooding_review/pitt_review_
full%20pdf.pdf Back
4
ibid. Back
|
