Memorandum submitted by the Association
for the Conservation of Energy (ACE)
INTRODUCTION TO
THE VIEWS
OF ACE
The Association for the Conservation of Energy
is a lobbying, campaigning and policy research organisation, and
has worked in the field of energy efficiency since 1981. Our lobbying
and campaigning work represents the interests of our membership:
major manufacturers and distributors of energy saving equipment
in the United Kingdom. Our policy research is funded independently,
and is focused on three key themes: policies and programmes to
encourage increased energy efficiency; the environmental, social
and economic benefits of increased energy efficiency; and organisational
roles in the process of implementing energy efficiency policy.
We welcome this opportunity to respond to this consultation.
SUMMARY
— Investing in energy efficiency has the
potential to create hundreds of thousands of green jobs.
— Current Government investment in energy
efficiency and sustainable energy is too low and needs to be increased.
— ACE urges Government to support the Fuel
Poverty Bill which, if enacted, has the potential to create 37,000 direct
jobs. This is before considering the many thousands of indirect
jobs that would accrue.
— Government must set energy efficiency
and sustainable energy targets to provide industry with the certainty
it needs to start investing—thus creating jobs.
— Financial incentives for energy saving
measures will provide a much-needed boost to the energy saving
materials market.
1. Government has identified that energy
efficiency is the cheapest, cleanest and safest way of meeting
our energy needs.[80]
A focus on energy efficiency will also help boost employment and
has the potential to create hundreds of thousands of green jobs,
across a range of different skills.
2. A recent report commissioned by Greenpeace
has highlighted the benefits of an energy efficiency based fiscal
stimulus and shows that a £5 billion investment in energy
efficiency in the domestic sector alone over 10 years will
deliver around 55,000 jobs directly and hundreds of thousands
of jobs indirectly.[81]
3. It is not only environmental groups who
are calling for a green stimulus. Sir Nicholas Stern, world renowned
author of the Stern Review on the Economics of Climate Change,
has called for a green stimulus[82]
and the New Green Deal policy package, designed to maximise the
energy efficiency of homes, power a renewables revolution and
create thousands of green-collar jobs, and is supported by a growing
number of UK experts in finance, energy and climate.[83]
4. Yet a recent report by the New Economics
Foundation shows new and additional spending for the green stimulus
part of the Pre-Budget Report is incredibly low—at just
0.6% of the UK's £20 billion recovery plan. This is
just 0.0083% of UK GDP, an incredibly low amount when compared
to the fact that nearly 20% of UK GDP has been made available
to support the financial sector in recent months.[84]
5. The UK needs to shift away from our dependency
on fossil fuels and Government needs to target much-needed funds
towards energy efficiency and sustainable energy. Government has
an opportunity to invest in low carbon and sustainable industries
which will not only create green jobs but also help us to meet
our newly announced 2020 interim carbon emissions target,
putting the UK on a low carbon trajectory towards achieving our
2050 target. Setting the foundations for an early transition
to a low-carbon economy will create new jobs as well as encourage
new business and investment thus paving the way for a more stable,
sustainable future.
FUEL POVERTY
BILL
6. The Association for the Conservation
of Energy, as part of the End Fuel Poverty Coalition,[85]
is promoting the Fuel Poverty Bill which would require a national
energy efficiency programme to raise the energy efficiency standards
of homes in fuel poverty to those enjoyed by new homes. Our research
shows that the proposed improvement programme will have major
economic benefits, important at a time of economic recession,
and would provide 35,700 "green" jobs.[86]
This is an eight fold increase in direct jobs compared with current
"fuel poverty" programmes (Warm Front and the priority
group element of CERT).
7. This is before considering the jobs created
indirectly as householders spend some of the money they save on
additional goods and services. The Impetus report for Greenpeace
reviewed previous energy efficiency programmes and found that
over twice as many jobs were created indirectly than were created
directly—in some cases up to 7.5 times as many were
created. We would therefore expect hundreds of thousands of indirect
jobs to be created as a result of the adoption of the Fuel Poverty
Bill.
8. Our research also shows that the additional
benefits of this energy efficiency programme would lift over 80%
of fuel poor households out of fuel poverty, reduce energy bills
(with some of the financial savings being spent elsewhere in the
economy), cut carbon emissions and have considerable economic
benefits—putting around £6.6 billion back into
the economy. This programme represents a very cost effective way
of addressing the current recession and protecting the fuel pool
from any price increase linked to climate change initiatives.
9. ACE therefore strongly recommends that
Government support the Fuel Poverty Bill and ensure that it becomes
law in this Parliamentary session.
SECTORAL TARGETS
10. In order to protect existing jobs, create
opportunities and encourage investment the UK needs a mixture
of policies that will tackle the current global economic slowdown
as well as help us to meet our targets to reduce carbon emissions
and ensure that we achieve energy security.
11. To this end ACE is promoting the Climate
Change (Sectoral Targets) Bill which requires the Secretary
of State to set long term targets for energy efficiency in the
domestic and non domestic sectors, for renewable energy, microgeneration
and other low carbon sources of energy generation in order to
satisfy all of the UK's energy needs, provide for security of
supply and also help achieve carbon reduction targets. Setting
targets for these sectors will give industry the certainty it
needs to start investing and this in turn will create jobs and
help to regenerate the economy.
12. ACE therefore urges Government to support
this Bill and urges the early setting of energy efficiency and
sustainable energy targets in all sectors.
FINANCIAL INCENTIVES
13. One of the major barriers to installing
energy saving measures in homes is high upfront costs. Setting
up a comprehensive package of financial incentives to encourage
homeowners to install energy saving measures will create more
demand for energy saving materials and thus provide a much needed
stimulus to the energy saving materials market. This will expand
the market and create direct and indirect green jobs.
ACE therefore calls for a comprehensive package
of economic measures to encourage homeowners to upgrade the energy
efficiency of their homes. These could include Stamp Duty rebates
on the cost of energy efficiency improvements; Treasury funding
for a national scheme of Council Tax rebates; and cutting VAT
on many more energy-saving products.
26 May 2009
80 Energy White Paper, Our energy future-creating a
low carbon economy, DTI, February 2003 Back
81
The case for including energy efficiency investment in the fiscal
stimulus package, A report for Greenpeace by Impetus Consulting
Ltd, 30 March 2009 Back
82
An outline of the case for a "green" stimulus; Alex
Bowen, Nicholas Stern, Dimitri Zenghelis, Policy Brief February
2009 Back
83
A New Green Deal, New Green Deal Group, New Economics Foundation,
July 2008 Back
84
A Simms, V Johnson & S Nissan, Green Stimulus or Simulus?
New Economics Foundation, 2009 Back
85
The End Fuel Poverty Coalition consists of Age Concern and Help
the Aged, Association for Charity Officers, the Association for
the Conservation of Energy, Barnados, the Centre for Sustainable
Energy, Child Poverty Action Group, Compass, Consumer Focus, Counsel
and Care, Disability Alliance, Federation for Private Residents
Associations, Friends of the Earth, GMB, Macmillan Cancer, National
Childbirth Trust, National Pensioners Convention, National Federation
of Women's Institutes, National Right to Fuel Campaign, Royal
College of Nursing, the Sustainable Energy Partnership, Tenants
and Residents Organisations of England, UNISON, WWF. Back
86
Raising the SAP-tackling fuel poverty by investing in energy efficiency,
Report to Consumer Focus by the Association for the Conservation
of Energy (ACE) and the Centre for Sustainable Energy (CSE), May
2009 Back
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