Transition to a 'Green Economy'

The UK Government has recently published a series of documents that set out its vision for a transition to a green economy Greeneconomy

I have provided evidence to an Environmental Audit Committee (EAC) Inquiry on what I consider to be the barriers to achieving this transition and issues surrounding Government policy, actions and inactions in this area. My report can be found at PHAevidence and is summarised as follows:



This memorandum provides my view on the preparedness of the UK for the transition to a ‘green economy’ by addressing each of the themes set out in the EAC Select Committee Announcement of 7 July 2011. In summary this memorandum suggests that:
• The Government’s own Sustainable Development Indicators could be used as a basis for establishing a scheme to monitor progress of the transition towards a green economy.
• More research is required on measuring the key metrics that define a green economy and these should be used to assess and compare the performance of the main developed world economies.
• The Government will need to develop a strategy to persuade the public, industry and investors that proposed measures are both risk free and the only alternative for preserving the future of the planet.
• The Green Deal is a central plank of the green economy, but there remain uncertainties about its likely uptake and funding, particularly in the light of the 30 to 35% of British homes that fall below decency standards and are likely to require considerably more than the £10,000 upper limit mooted for the Green Deal.
• Apart from funding, the attitude and behaviour of the public is the biggest challenge to the success of the transition to a green economy. For example resistance to disruption from energy efficiency works and inefficient operation of buildings. Incentives such as free loft clearance should be included in the Green deal, whilst smart metering should be rolled out in conjunction with the Green Deal.
• Businesses should be encouraged to measure and monitor their sustainability performance through such measures as the Green Building Management Toolkit, BREEAM In Use and the Ska
• Funding for the Energy Company Obligation may exceed Government tax and spend limits set for 2014 in the 2010 Spending Review.
• Government’s willingness to dilute feed-in tariffs and zero carbon has eroded confidence that it will not meddle with poorly designed schemes that are found to have unintended consequences
• Manufacturers of green products will have to contend with both increases in energy and fuel prices and competition from countries such as China and India.
• Reducing the carbon targets in future Building Regulations could threaten the assumptions made in the 2050 Pathways Analysis that require carbon emissions associated with building energy consumption to remain constant between now and 2050, despite an additional 10 million new homes.
• The major programme of improving energy efficiency of the existing building stock requires a massive increase in the number of professionals and contractors with the necessary skills. The Government has ask the Green Deal Skills Alliance to develop the framework to address the skills gap, however it is not clear where the people will come from, particularly with cuts in the education maintenance allowance and inactive benefits.
• There is real concern about the trend for a reduction in ‘ecosystem services’ exacerbated in both the intensification of agriculture and 10 million new homes projected over the next 40 years. The draft National Planning Policy Framework (NPPF) allows development that significantly harms biodiversity ‘as a last resort’.
• Government needs to support the development of anaerobic digestion, gasification and pyrolysis of waste as an alternative to landfill and incineration, but not reducing the amount of sustainable recycling.
• Government transport policy should focus on both reducing the need to travel and encourage the transition to lower carbon transport modes. However the increase in rail fares by a potential 30% by 2015 mitigates against this.
• In my view there is an inherent dichotomy between growth and a green economy, but this can be overcome by a reorientation of the types of products and services that support GDP from consumer orientated to ones that support sustainable development and climate change mitigation, or what the UNEP calls a ‘Green New Deal’.
• Government should prepare a spreadsheet that sets out the costs for the transition to a green economy, including what will be spent in each Department’s sector, how much is expected to be leveraged from the private sector, what will be the GIB involvement and what areas of the economy are expected to grow and by how much?
• Enabling the Transition to a Green Economy is a useful summary of key Government initiatives, although there are a number of important gaps, particularly with regard to local communities and enterprise zones.
• Priorities should be informed by the investment sectors proposed for the Green Investment Bank, with decarbonising the electricity grid representing the largest initiative in need of finance.
• The dilemma for the Rio+20 conference to address is how to achieve the Millennium Goal of halving extreme poverty by 2015 and subsequently creating a world where the prospect of economic prosperity is available to the hundreds of millions of people currently living below the poverty line, whilst reducing global carbon emissions and conserving threatened non-renewable resources.
I would conclude that although Government policy appears to tick most of the right boxes in enabling a green economy, it is questionable whether the various measures will have the teeth to instil sufficient confidence to leverage the vast amounts of money required at a time when recession and cost cutting permeate every aspect of the economy.

The Committee will be publishing its full report in due course and it will be interesting to see what conclusions it comes to and recommendations it makes to Government.

Green Deal or No Deal: Can the Government’s Flagship Scheme Work?

York Way, Kings Cross - Prime candidates for the Green Deal?

I’ve talked much about the Green Deal in earlier postings and, indeed, it is widely recognised as the flagship environmental policy of this Government, which anticipates that some 14 million houses will have been improved through Green Deal finance by 2020, leveraging £7 billion investment annually and creating 250,000 jobs.

It is currently proposed that a loan of up to £10,000 will be available for each household, but with repayments attached to the energy meter not the householder. Applications will be assessed by competent Green Deal Advisors, based on their ability to meet the “Golden Rule”. This will require that the value of work be recoverable within 25 years or within the predicted lifespan of the products involved, whichever is the least. Finance will be organised through the Green Deal Provider, who would normally be responsible for the installation. Repayments on the other hand will be via the Energy Company and be transferred to a new owner on sale of the property. It is unclear what will happen if properties remain empty for many years after, for example, the death of the householder.

The Energy Company Obligation (ECO) will replace previous subsidies, such as the Carbon Emissions Reduction Target (CERT) and Warm Front, that focus on low-income and vulnerable households, but share a common front-end and process to the Green Deal. Importantly it will also provide funding for measures that do not meet the Golden Rule, but represent the only feasible energy saving measure, such as solid wall insulation.

In a recent briefing note from the UK Green Building Council (UKGBC) to its members a number of questions were raised:

Will the cost of finance be low enough? It is hoped that this will be addressed by the promised involvement of the Green Investment Bank in funding the scheme, at least in the early years.
Will the proposition for consumers be compelling enough? This is yet to be addressed, but seems likely to be left in the hands of the Providers.
Will consumers be properly safeguarded? In a briefing note published in May of this year DECC stated that “The overall requirements for Green Deal Providers and Installers will be brought together in a Green Deal Code of Practice which is being developed by DECC with the assistance of industry experts.” Green_Deal_briefing

A Publicly Available Standard (PAS 2030) is being developed titled ‘Improving the energy efficiency of existing buildings: Specification of installation procedures, process management and service provision’. As the title implies this will be crucial in providing a framework and standard for works commissioned under the Green Deal. PAS_2030

The UKGBC expresses concern that the Government has failed to commit to setting targets for the Green Deal within the 2011 Energy Bill:
“This has led a large coalition of NGOs and businesses, including the UK Green Building Council and many of our members, to ‘Demand a Better Bill’ – a campaign pushing for the Energy Bill to include a commitment to “deliver policies that cut carbon by at least 42% (by 2020) and eliminate fuel poverty (by 2016)” Energy_Bill. This would be achieved through a “Warm Homes Amendment” to the Bill, which would place obligations on the Secretary of State for Energy and Climate Change to publish a plan for achieving energy savings from the UK building stock and report progress in delivering against that plan. At the time of writing, Government amendments have been made to tackle these issues, but these are some way short of those proposed under the campaign.” This Amendment was debated on 7 July, leading to a delay in the implementation of the Bill, and potentially more time to make the necessary amendments.

The Committee on Climate Change 3rd Progress Report on Meeting Carbon Targets published at the end of June stated that “the Green Deal and the new Energy Company Obligation (ECO) should be aligned with the ambition to insulate all lofts and cavity walls by 2015, as well as 2.3 million solid walls by 2022.” It pointed out that the take-up of solid wall insulation (SWI) in particular has been very low, with only 13,000 walls treated in 2010 under CERT, whilst the take-up of Community Energy Saving Programme (CESP), which was intended to drive the installation of SWI, had only 7 schemes approved in 2010. CCC_Report_3

The CCC report considers that the way the Green Deal and ECO are currently configured encourages neither whole-house nor area-based approaches. The CCC’s analysis indicates that the £10,000 limit placed on the Green Deal will preclude a comprehensive approach to carbon reduction. For example the German CO2 Refurbishment Programme offers up to 50,000 euro per property. The area-based approach “...applies the whole-house approach on a street by street basis. It strengthens incentives for uptake of measures, based on evidence that suggests people are likely to be more willing to act when they can see others acting. It also offers scope for cost reduction through scale economies.” This is unlikely to fit with Green Deal Providers such as B&Q and M&S who will most likely deal with individual householders.

The CCC also warns that “ECO funding may be restricted under limits on DECC spending, given that this may be classed as tax and spend, limits for which were set to 2014 in the 2010 Spending Review.”

Clearly there are massive opportunities for those who position themselves correctly to service the Green Deal and ECO. However uncertainties over uptake mean that many companies will hesitate before investing in the staff, training, equipment and premises required. The willingness of Government to dilute Feed-in tariffs and zero carbon has eroded confidence that it will not in future meddle with poorly designed schemes that are found to have unintended consequences. As the Green Deal and ECO schemes evolve in coming months it is critical that industry uses the opportunity to consult on the legislation, codes of practice and standards to ensure that the risk of failure is minimised.

UK Low Carbon Construction Action Plan: The Government's Response to the IGT Report

The Innovation & Growth team (IGT) Final report (summarised in my posting dated 20 February 2011) was a clarion call to Government for urgent action to drive the construction sector towards a low carbon future. Paul Morrell, chair of the IGT Steering Group states in his introduction that “the scale of the challenge, and the degree of market failure, is such that only Government can set the framework for action.”

Published about the same time the Public Accounts Committee issued a report on funding the development of renewable energy technologies that, with equal vehemence, concluded that “the Department (DECC) needs a greater sense of urgency and purpose to drive the dramatic increase in renewable energy supplies needed to meet the 2020 target (15% of energy from renewables by 2020) and secure the new technology innovation to help meet the 2050 target” (80% reduction of carbon emissions compared to 1990 levels). PAC_renewables_report

Since the publication of these reports the Government has, amongst other things, published its Carbon Plan, the 2011 Budget and associated ‘Plan for Growth’, ditched their commitment to truly zero carbon buildings, excluded large PV installations from the Feed-in Tariff (FIT), legislated for the Renewable Heat Incentive (RHI) RHI, updated its 2050 Pathways Analysis and responded to the IGT report. It is also in the process of drafting a new Energy Bill and developing its landmark Green Deal and Energy Company Obligation mechanisms.

There have also been calls for action from other Government Committees. For example in May the Committee on Climate Change (CCC) published its Renewable Energy Report in which it stated that “...new policies are required to support technology innovation and to address barriers to uptake in order to suitably develop renewables as an option for future decarbonisation.” Whilst the Environmental Audit Committee report on the Budget 2011 and Environmental Taxes expresses disappointment in the fact “that there was very little in the Budget and Plan for Growth to help drive the low-carbon economy. The Government must focus on delivering growth that is genuinely sustainable, and that does not degrade the environment or entail increased consumption of resources.”

In this posting I would like to look at the gaps; i.e. what the Government is not doing (and is undoing) and the implications of this for the UK’s long term climate change commitments.
In its response to the IGT Final report the Government has produced an Action Plan, which although extensively referencing the IGT’s recommendations, only occasionally adopts them wholeheartedly. Mostly the Action Plan avoids committing to action from Government which wasn’t already in its Carbon Plan and was not undone in the 2011 Budget (see posting of 25 March 2011).

I think it is quite illuminating to examine the differences between the IGT report and the Government’s response. The headline component of the Action Plan is the establishment of the joint industry and Government Green Construction Board (GCB), which will be formed in consultation with the Strategic Construction Forum – a collaborative forum with representation from professionals, clients, contractors, product suppliers, site workers and Government. Although not a specific recommendation of the IGT this complies broadly with a 2050 Group recommendation (8.1) and it seems likely that the GCB will take on board some of the more difficult recommendations from the IGT Report that need a cross-industry effort.

The Government’s response gives no reasons for including some recommendations rather than others, which is a pity because we need to know, although it seems likely that in most cases either cost or impact on growth will be at the heart of the omission.

Incorporation of whole life carbon (embodied and operational) appraisals into the Treasury Green Book is neatly side-stepped by referring to providing continued support for the development of an embodied carbon measurement tool under the CEN TC350 Sustainability of construction works group of standards that are under development. There is no commitment to incorporating whole life carbon assessment into the decision making processes for public sector construction contracts, which is what the IGT were looking for.

There are a number of recommendations in the IGT report (3.13, 6.3, 6.4) that deal with the measurement of the energy performance of existing buildings and comparison with that predicted through the models used to assess compliance with Part L of the Building Regulations and the EPBD. Although referred to in the text of Chapter 3 the Action Plan does not deal with this directly other than mentioning the Technology Strategy Board’s ongoing £8m Building Performance Evaluation programme, which requires successful applicants to monitor performance of building fabric, energy and services; evaluate designs and the perception and satisfaction of building occupants, with no reference to predicted carbon performance.

This is an important omission since there is a widely recognised disparity between predicted and actual carbon emissions has already eroded confidence in building performance guarantees made by designers and that will significantly undermine commitments to zero carbon.

The Treasury has already withdrawn Enhanced Capital Allowance (ECA) from renewable technologies that benefit from FIT and RHI subsidy, so it is perhaps not surprising that the Action Plan ignores the IGT recommendation (6.16) that ECA’s be extended to cover low carbon whole building structures. This again is a pity because there is no doubt that for the foreseeable future low carbon buildings will cost more than those that achieve minimal compliance with Part L. A tax break that encourages developers to go beyond minimum compliance would encourage innovation and provide a basis for a gradual reduction in carbon emission targets.

Another overlooked recommendation by the IGT (4.2) required carbon reduction to be given greater prominence in Environmental Impact Assessments, with targets set by the proposed Major Project Review Group. Following the model established in the London Plan this could be used to encourage major projects to perform better than minimum Part L requirements.
The current draft of the Energy Bill requires that, where applicable, privately rented homes be enhanced to an EPC rating of E from 2018. This is an imported move, but only covers around 680,000 homes. The Action Plan states that the Part L 2013 review will have “to require additional energy efficiency improvements to existing buildings where work is already planned”. This does not go as far as the IGT recommendation (6.5) that all existing non-domestic buildings should have an EPC rating of F or better by 2020.

The above is not a comprehensive review of IGT recommendations that have been ignored or ‘interpreted’ by the Action Plan, but it is to be hoped that the Green Construction Board will revisit these when they come up with their “core work programme...based on key shared priorities from the IGT report, the Government’s response and the existing Sustainable Construction Strategy”. It is interesting that the Action Plan refers to this latter document which was published in 2008 by the previous administration, and which includes commitments that have already been reversed or forgotten by this Government. This includes the omission of non-regulated emissions from the definition of zero carbon buildings and the commitment for all Central Government Offices to be carbon neutral by 2012, for example.

The Government is committed to revising its National Infrastructure Plan in the autumn of this year. This will provide a “long term forward view of projects and programmes” in order to achieve the 2020 and 2050 targets, as well as the 5-yearly carbon budgets. It seems likely that much of the £3b initial capitalisation of the Green Investment Bank (GIB) will be used to fund major infrastructure projects. From the evidence so far however it seems likely that reaching carbon targets will be like one of those dreams where you are running as fast as you can to save a loved one from danger, but they just keep getting further and further away!

Sense and Sustainability (or joined-up Government part 2)

Abbotsford Road, Oldham – Some of the 8 million houses in Britain that have fallen below decency standards


Anyone who has even glanced at my book Integrated Sustainable Design of Buildings will be aware that I am passionate about the power of collaboration. I am firmly of the belief that most challenges can be more effectively met by a holistic approach that involves people from many different disciplines actually talking to each other.

Unfortunately a lot of people feel threatened by those outside their own discipline. They build walls of jargon and take comfort from the camaraderie amongst their peers that comes from a continuous state of conflict with ‘the opposition’. This enables them to blame anyone but themselves when things go wrong.

Of course we see this in the construction industry between architects and engineers, builders and sub-contractors; and in Government with the internecine strife between Departments and of course between opposing politicians.

In this posting I would like to focus on one particular issue where this lack of joined-up thinking could have a major impact on our futures. There are 26 million homes in the UK in some need of improvement. According to a BRE Information Paper from February 2010: ‘The real cost of poor housing’ (IP 16/10) some 4.8 million homes in England alone came within the Government's definition of ‘poor housing’ in the 2006 English Housing Condition Survey. BRE_paper

This rates hazards arising from deficiencies in housing under the Housing Health & Safety Rating System (HHSRS). The potential hazards range from excess cold, damp and mould, falling on stairs through to asbestos exposure. A similar number of homes in Britain come within the definition of fuel poverty, which, with the recent announcement by Scottish Power of a 19% increase in gas tariffs and 10% increase in electricity tariffs from 1 August, is set to increase significantly.

BRE estimates that the total ‘cost to society of poor housing’, that is housing that has a Category 1 hazard under the HHSRS (see list below) is around £1.5 billion per annum in England alone, including at least £600m cost to the NHS.

Cost to Society:

Loss of asset value
Poor physical and mental health
Social isolation
Higher home fuel bills
Higher insurance premiums
Uninsured content losses
Underachievement at school
Loss of future earnings
Personal insecurity
More accidents
Poor hygiene
Cost of moving
Adopting self-harming habits

Unfortunately Lady Thatcher’s notorious statement that ‘there is no such thing as society’ does apply when one is attempting to come up with one coherent body that will foot the bill for these costs. ‘Society’ neither has a bank account nor a cost centre. BRE estimates that some £17.6bn is required to bring the 4.8m houses in England up to standard, representing a simple payback period of some 12 years. The problem is that multiple agencies would benefit from the resultant cost savings; for example the NHS, police, local authorities, education authorities and of course the occupants themselves, where they pay their own utility bills, home insurance etc.

The Decent Homes Programme, introduced by the previous administration, aimed to refurbish all social sector homes to a minimum standard between 2000 and 2010. By 2008 the percentage of council housing that had reached the decency standard was 69%. This compared with 49% of private rented and 65% of owner-occupied, although housing association social housing had reached 77%. The most common reason for non-decency is the presence of at least one Category 1 hazard under HHSRS. Housing_report

The Coalition allocated £3.7bn in the Spending Review for Decent Homes funding, £1.6bn of which has been awarded to 46 Councils to refurbish 150,000 homes, the remainder being allocated to 28 large scale voluntary Housing Associations that manage Local Authority social housing.

In parallel with the Decent Homes Programme the New Deal for Communities scheme, run by the DCLG Neighbourhood Renewal Unit, was launched in 1998 and provided funding for improving 39 deprived neighbourhoods in England. One of the early projects in Newcastle upon Tyne’s West End has resulted in an impressive 21% fall in recorded crime between 2000 and 2010. Funding for Round 2 of this scheme comes to an end this year.

However the social sector constitutes only 18% of the total housing stock in England, with the owner-occupied sector taking the lion’s share at 70% and private-rented at 12%. These last two sectors are obviously difficult for public sector initiatives to reach, although under the Housing Act 2004 Local Authorities are expected to keep all housing under review, with initially a target for 70% of private housing with ‘financially vulnerable’ occupants to achieve the decency standard (approximately 5% of all homes in England).

Since the Coalition has come to power this target has been removed and specific funding for Private Sector Renewal is no longer available. With Local Authorities now being squeezed financially it seems unlikely that there will be funds available to divert to the private sector.
However in another part of the woods there are currently grants available through DECC and the Warm Front scheme for those on income-related benefits and who live in homes that are poorly insulated and/or that have inadequate heating. This will be replaced by the Energy Company Obligation in the autumn of 2012, whilst the Green Deal will provide loans to individual households for energy efficiency measures that meet the so-called ‘Golden Rule’ – i.e. that the annual saving in energy bill is equal to or greater than the annual repayment cost within a specified pay-back period or the lifetime of the product.

The Energy Saving Trust (EST) reported earlier this month that some 22.7% of homes in England fall within the two lowest energy efficiency bands (F & G) as reported under the Energy Performance Certificate (EPC) methodology. EST_report

This represents around 5m homes, which the EST has estimated would cost an average of £3,000 to bring each home up to an E rating, resulting in a reduction of 5 million tonnes of CO2 per annum , or just less than half a Drax power station.

A recent amendment to the Energy Bill will require landlords to improve the energy efficiency of private rented homes that fall within these bands before 2018 or be forced to remove them from the market. This represents some 680,000 homes, most of which are also likely to fall below the CIEH decency standard.

It seems likely from the above that at this moment in time between 30 and 35% of households in Britain cannot be considered as decent by currently accepted standards. The collateral damage from this is not only socio-economic but runs into billions of pounds per year, much of which is a burden on the taxpayer. Although there has been a steady improvement in social housing, the private sector has been more difficult to reach, but even the limited funding that was made available through the Private Sector Renewal fund has been withdrawn. From 2012 householders will be able to take out long term loans to pay for energy efficiency improvements, but for those homes that remain below the decency threshold this will be like applying green wash to a mouldy wall.

The Department of Health also has funding available for ‘projects to prevent hospital admissions’ and support to Local Authorities and Primary Care Trusts to support social care. Perhaps DCLG, DECC and DH should pool their resources to tackle the outstanding decent homes problem.

Joined-up Government and Carbon Reduction

A solar farm in Germany - will we see the like in Britain?


OK, I can understand that incentives for carbon reduction should be focused on householders. After all there are some 26 million existing houses in Britain that need attention over the next forty years. However there is only so much that can be achieved by improving fabric insulation and installing solar panels. For a start the take-up of the Green Deal is far from certain, whilst many houses will be hard to improve, particularly those with solid walls or inaccessible loft spaces for example.

Despite extensive condemnation and compelling evidence from numerous parties who contributed to the consultation process, the Government is going ahead with their unscheduled modifications to the Feed-in Tariff for photovoltaics. 57% of 466 respondents disagreed with the change, whilst 81% of 442 disagreed with the new bands. The Government’s reason for ignoring this can be summarised by the following quote from its response: ‘the need for fiscal responsibility across all areas of Government spending is a key objective of the Coalition Government.’ FITS

This will effectively close the door on larger installations. The schemes that will be impacted include community installations and solar farms that could have contributed significantly to decarbonising the grid: an essential component of the Government’s legal mandate to an 80% reduction in carbon emissions by 2050.

Contrarily it now seems likely that there will be two opportunities for householders to benefit from Government funding for renewables. As well as the current FIT of 43.3p/kWh for electricity generated from small PV installations for example, along with 3.1p for each unit exported to the grid, householders should be able to obtain loans via the Green Deal. “the Energy Bill (2011) makes clear that the Green Deal may cover measures which generate energy as well as those termed “energy efficiency” measures. If a measure is capable of paying for itself because occupiers use less energy as result of the installation – then it can potentially qualify.” Greendeal

However the Treasury has proposed that subsidy through Enhanced Capital Allowances (ECA) be removed from renewable technologies. In their consultation, which closes 31 August 2011, they assert that ‘expenditure could not qualify for an ECA where it is incurred on plant or machinery that could qualify for a tariff payment under either of the FITs or RHI (Renewable Heat Incentive) schemes.’ ECA

The Government is about to commence a further review of Feed-in Tariffs and Renewable Obligations due for completion by the end of this year. With this in mind DECC have commissioned a report from Arup, which was published earlier this month. Renewables

It is interesting to note that this report anticipates a growth in PV in line with historical trajectories for PV installations in Germany. With precisely zero solar farms commissioned in the UK to date and the likelihood of new ones in the future seriously diminished this does seem unlikely. The burden is likely to fall primarily on the offshore windfarm sector to meet the Climate Change Committee (CCC) Renewable Energy Review target of reducing carbon emissions through electricity generation from the current 500 gCO2/kWh to 50 mg by 2030.
CCC

This is recognised in Table 1.1 of this important report, which lists PV under the heading of ‘Technologies that could play a major role in the future UK mix, with limited role for UK deployment in developing the option’ (my underlining). In other words the CCC considers that electricity from solar farms is likely to be imported from overseas suppliers in the longer term, provided the replacement regime for ROCs covers imported renewable electricity.

The critical role of Government in this complex situation is to ensure that the balance is correct between cost effective investment in decarbonising the grid and improving the efficiency of both new and existing homes, whilst ensuring subsidy and loans reach the parts they are intended for.

The Cambridge Programme for Sustainability Leadership (CPSL) has included my book Integrated Sustainable Design of Buildings as one of their 'Top 40 Sustainability Books of 2010'.

The list builds on their previous research which was published by Greenleaf in 2009 as The Top 50 Sustainability Books. The updated list appeared in their recent report A Journey of a Thousand Miles: The State of Sustainability Leadership, 2011, which highlights some of the most interesting practice and research in the sustainability field.

CPSL is a department of the University of Cambridge focused on working with business and government to build leaders’ capacity to meet the needs of society and address critical global challenges. They run a number of executive education programmes and also convene groups of business leaders to engage in the public policy process, for example through The Prince of Wales’s Corporate Leaders Group on Climate Change.

My book is the only one in the list that includes 'building' in its title, the others primarily cover economics, politics, business, CSR, climate change and philosophy. Authors that feature in the list include such luminaries as Al Gore, Prince Charles, Lord Stern, Sara Parkin, Fred Pearce, Bjorn Lomborg and Mike Berners-Lee. A copy of the CPSL report can be downloaded from http://www.cpsl.cam.ac.uk/Resources/State-of-Sustainability-Leadership.aspx

A Rocky Road to 2050: The Coalition’s Budget 2011

This Government remains committed to a reduction in greenhouse gas emissions of 80% by 2050 compared with a 1990 baseline, but perhaps not on its watch. The 2008 Climate Change Act made this a legal requirement of course, as well as an interim target of a 26% reduction in CO2 emissions by 2020. More recently the Government’s 2050 Pathway Analysis has identified the need for massive investment in a combination of demand reduction and decarbonisation of the grid in order to meet carbon targets. The way forward for the construction sector has been eloquently signposted by the Low Carbon Construction Innovation and Growth Team (IGT) report, summarised in a previous posting.

New Homes
Recent policy developments from the Coalition have seriously undermined the likelihood of the 2050 carbon targets being met. Although there may be some good things in the 2011 Budget, it's not so good on the sustainable development front. Despite commitments in the recently published Carbon Plan and recommendations in the final report from the Zero Carbon Hub the Budget has removed the commitment to zero carbon homes being a requirement of Building Regulations from 2016. The requirement has been watered down to cover only those parts of the energy demand that depend on the design of the dwelling, and exclude the so-called 'unregulated emissions', such as white goods, TVs etc, which make up some 33% of carbon emissions. Combined with the recent row-back on the feed in tariff this is disastrous for an industry that has been gearing up for zero carbon for the last 4 years or so! Needless to say this will also impact on the proposals for zero carbon non-residential buildings, scheduled for 2019.
The reasons for this dramatic reversal in policy are clear. The Government is worried that the cost of achieving zero carbon will make homes unaffordable and hence inhibit growth. Unfortunately this results in a vicious circle since the demand for the materials and products required for zero carbon homes will be insufficient to bring the costs down to affordable levels. It also means that many of the manufacturers who have been gearing up for zero carbon will be left high and dry.
One side effect of the redefinition of zero carbon is that developers are less likely to be required to contribute to off-site community energy schemes, unless these are leveraged by Local Authorities through the Community Infrastructure Levy.
Only a few days before the Budget DECC came up with its unscheduled revisions to the feed in tariff (FIT). This dramatically reduces the FIT for PV installations of between 50 and 150 kW to 19p, between 150 and 250 kW to 15p and between 250 kW and 5 MW to 8.5p/kWh. These have been reduced from 32.9p for 10 to 100 kW installations and 30.7p for 100 kW to 5MW. The lowest rate also applies to any stand-alone installations, such as solar power stations. Ostensibly the reason for this is because there has been an excessive demand for FIT for large installations, although it could be argued that this is exactly what should be encouraged (see Germany), and the problem is one of under-funding. It will be interesting to see whether the Renewable Heat Incentive and the Green Deal suffer from the same under-funding problems. This seems highly likely for the latter since it will receive no funding from the Green Investment Bank and will rely instead on an extension of the existing Energy Company Obligation.
Last month the Zero Carbon Hub delivered its latest and final report on the path to zero carbon, which, in summary, recommends Carbon Compliance limits for built performance of various dwelling types. For example the maximum annual CO2 emissions, confirmed once constructed, were recommended to be 14 kg per square metre for a low rise apartment and 10 kg for a detached house. To get down to zero carbon an ‘Allowable Solution’ would have been required to offset the remaining carbon emissions. The aim was for Carbon Compliance to be achieved through some combination of building energy efficiency and on-site low or zero carbon energy generation. Allowable solutions include on-site energy and/or connection to zero carbon community energy. It seems likely that the Zero Carbon Hub will now have to revisit their recommendations since the requirement for 2016 will be, in simple terms, based on offsetting heat loss, hot water and lighting energy with zero carbon technologies.

Refurbishment/retrofit
It is clear from the IGT final report that the existing building stock represents the biggest challenge for the construction, property management and infrastructure sectors in meeting the 2050 carbon target. The majority of the 26 million existing homes and 2 million other buildings that need enhancing between now and 2050 will depend on a combination of a Green Deal type pay as you save arrangement to improve insulation and FIT/Renewable Heat Incentives or their successors to reduce connected demand. If these are not properly funded or the take-up is not adequate then they will remain ineffective.

Energy Infrastructure
Nobody can plan for the long term without an understanding of how the electricity supply is to be decarbonised over the next 40 years. The Government has recently responded to the evidence provided for its 2050 Pathway Analysis. The original report postulated a number of alternative pathways for achieving the 80% carbon reduction, including decarbonisation strategies based on some combination of renewable, nuclear power and fossil fuel with carbon capture and storage (CCS). Post-Japan it is interesting to examine the scenario in which no new nuclear plant is built. By 2050 all existing plants would be decommissioned and it is predicted that in excess of 500 TWh/year of electricity would be required from renewable sources and 220 from fossil fuels with CCS. The funding for this will be hundreds of billions of pounds, and presumably mostly have to be leveraged from the activities of the Green Investment Bank.
However if we are successful in decarbonising the grid there will be a corresponding drop in the carbon emissions associated with buildings, with a greater reduction in those buildings that rely primarily on electricity to meet their energy demands. This is the opposite of the current situation, which is why it is vital for those planning construction projects to be able to predict the carbon intensity of the electricity supply during the lifetime of their proposed buildings.

Planning
Continuing its measures to kick start the construction sector “(Government will make) radical changes to the planning system to support job creation by introducing a powerful presumption in favour of sustainable development; opening up more land for development, while retaining existing controls on greenbelt land; introducing new land auctions starting with public sector land; consulting on the liberalisation of use classes; and ensuring all planning applications and appeals will be processed in 12 months and major infrastructure projects will be fast-tracked.” (See page 24 of supplementary document: Plan for Growth, BIS).
There appears to be no mention of the recommendations from the IGT that Environmental Impact Assessments should include carbon targets and that all large projects should be scrutinised by a Major Projects Review Group.

Low Carbon Construction - The Road to 2050

Crossbank House, Oldham – a model of energy efficient retrofit

The Government in Westminster, no matter what its colour, has recognised that there is much to be done to meet the programme of carbon reduction targets set out in the 2008 Climate Change Act, culminating in a reduction in CO2eq emissions of 80% by 2050 compared with a 1990 baseline.
Interim targets include a 22% reduction in the years 2008-2012. It is interesting to note that, compared with a 1990 baseline of 777.8 MtCO2eq it has been reported that UK emissions (or ‘carbon budget’) for 2008 were 606.7, allowing for 19.3 purchased by UK companies under the EU ETS; a reduction of exactly 22% (carbon) .
Arising from the Climate Change Act the Government published its Low Carbon Industrial Strategy in 2009 and the Low Carbon Construction Innovation & Growth Team (IGT) was established under the auspices of the Department for Business Innovation & Skills (BIS) in September of that year. Its comprehensive and visionary final report was published in November 2010, setting out a strategy that strikes a tone of some urgency, whilst also taking the long view (can be downloaded from IGT). This might be considered a good start in achieving one of the objectives in the report: ie that Government set a clear strategy, vision and leadership in order to overcome barriers to low carbon construction.
Although this report has ‘construction’ in its title much of its content and a third of its recommendations deal with existing buildings and infrastructure. This is because approximately 75% of the stock that will be standing in 2050 is likely to be already built today. In the case of homes it is estimated that of the 27 million currently standing, 26 million will still be with us in 2050 with potentially a further 10 million built between now and then.
The report draws from work carried out by six working groups under the headings of Major Projects, Housing, Non-domestic buildings, Infrastructure, Cross-cutting and the 2050 Group, overseen by a Steering Group chaired by Paul Morrell, Chief Construction Advisor at BIS.
There are 65 recommendations across the headings, requiring action from both Government and industry. The following is distilled from the report, its recommendations and some of the references therein:
• A flexible and adaptive framework is required for delivery and monitoring of a programme of works resulting in a reduction of at least 80% in CO2eq across all sectors – new and existing buildings, public and private sector and infrastructure (Pathways to 2050, DECC, 2010 - Pathways
Different sectors have different lead-in times: for example decisions on power generation made today will impact on carbon emissions for the next 100 years, whilst low carbon construction products may have development periods measured in decades.
• A Major Project Review Group (MPRG) should be established which would provide approval for large projects based on an assessment of sustainability performance and legitimacy, following a similar model to that established by the soon to be abolished CABE.
• Environmental impact assessments should incorporate a mandatory statement on carbon reduction strategy and a carbon target based on an MPRG assessment.
• The cost of zero carbon homes should be no more than meeting 2010 Part L requirements.
• Government and industry should agree a standard method of measuring embodied carbon as part of a whole life carbon appraisal for use in feasibility studies and establishing a realistic price for carbon.
• Skills gaps will require an integrated approach to fill. A report produced by the NHBC, House Builders Federation, ConstructionSkills and Zero Carbon Hub has set out a long term strategy to address this (Home Building Skills 2020 - cskills)
Knowing how far adrift newly constructed buildings are from that predicted by current models used to assess Building Regs compliance (SAP and SBEM) is essential. Hence measuring carbon emissions associated with existing buildings requires a consistent and standardised approach.
• Barriers to the uptake of energy saving measures need to be overcome. For housing this could include linking carbon rating to stamp duty, Council Tax, Building Regulation approval and VAT, for example. For non-domestic buildings the situation is more complex and the report suggests solutions for overcoming barriers in Government, the supply chain and, in the case of existing buildings, owners and occupiers. The supply chain needs confidence to invest in innovation and work with others to provide a fully integrated approach to project management and delivery. Owners and occupiers need to see value in low carbon refurbishment and retrofit. Financial incentives for reducing carbon emissions include linking emissions to Stamp Duty Land Tax, levying differential business rates, reinstating and increasing Industrial Buildings Allowances for low carbon buildings and products and widening the scope of Enhanced Capital Allowances to cover not only products but whole-building solutions, such as natural ventilation and exposed structures.
• Government should set up an Existing Homes Hub on similar lines to the Zero Carbon Hub. Note that there already exists an Existing Homes Alliance (eha)supported by numerous commercial and public sector organisations and pressure groups. Their Finance working group produced a report in 2009 that compared various finance schemes that could be adopted by Government to support large scale retrofitting of existing housing stock, replacing the current Carbon Emission Reduction Target (CERT) and Community Energy Savings Programme (CESP) funding schemes that place obligations on utility companies, but which come to an end in 2012. The Government has launched its Green Deal funding package for home owners based on the ‘pay as you save’ concept which was one of the three packages favoured in this report. The Green Deal will become available in 2012 and is likely to fund insulation, double glazing and possibly renewable technologies, based on a loan repaid from savings in energy bills and attached to the property, not the occupier. This will be supplemented by the recently introduced feed-in-tariff (FiT) for renewable electricity and the similar Renewable Heat Incentive (RHI), both of which will pay householders for the energy that they generate in-house. The RHI is yet to be published in its final form following criticism during its consultation process for penalising solar hot water schemes by providing a lower investment return than for the likes of air source heat pumps and biomass boilers. The IGT report recommends that to cater for small organisations which are not covered by the Carbon Reduction Commitment Energy Efficiency (CRC-EE) scheme (approx 50% of emissions) a ‘pay as you save’ mechanism should be extended to cover non-domestic buildings as well as an energy efficiency obligation on energy suppliers to offer low cost measures such as BEMS and optimised controls.
• The Community Infrastructure Levy (CIL) came into force through regulation in April 2010 to provide a mechanism for Local Authorities to raise money from developers to fund local infrastructure projects. These funds may be used for energy projects, but also transport, flood defences, schools, hospitals, parks, green spaces and leisure centres. They differ from funds raised through planning obligations (Section 106 of Planning Act) and highways improvement (Section 278 of Highways Act) contributions in that they will be spent on general infrastructure, taking into account cumulative impacts of several developments and not subject to negotiation.
• In July 2010 the Coalition Government announced the foundation of a Community Energy Fund which will enable developers to contribute to a district energy scheme serving a community that includes their development as an ‘Allowable Solution’ within the proposed definition of zero carbon.
• Community Energy Online ceo is esource to support local authority and community groups to initiate and develop local low carbon and renewable energy projects.
• London is benefitting from the Joint European Support for Sustainable Investment in City Areas (JESSICA) initiative with is providing funds for the £100m London Green Fund, including the Energy Efficiency Urban Development Fund (UDF) enabling investment in climate change infrastructure projects. Initially UDF will prioritise public and voluntary sector projects along with social housing.
• London is also one of the cities chosen to benefit from the Clinton Climate Initiative through the Building Energy Efficiency Programme (BEEP), currently funding energy efficient retrofits to a number of public buildings, managed by energy services companies (ESCo’s) and based on a similar pay-as-you-save model to that which will be employed for the Green Deal.
• The ability of the construction industry to deliver the necessary refurbishment programme must be assessed; based on an approach that incorporates standardized retrofit solutions, improved warranties and a ‘Strategic Retrofit Research Agenda’, with the social housing sector taking the lead.
• Schemes for improving the energy management and sustainability of existing non-residential buildings, such as the Green Building Management Toolkit and Green Leases (Better Building Partnership, 2010) and BREEAM in Use, should be more widely disseminated.
• An improved and enhanced DEC scheme should be extended to all existing non-residential buildings in advance of the July 2013 date required by the EPBD, with a worst-case carbon performance equivalent to an EPC rating of F to be achieved by 2020.
• Building Regulations Part L2B should be extended to cover more types of refurbishment and building fit-out.
• Landlords and tenants to agree on an energy management plan to accompany the DEC, including improvements identified through the energy efficiency obligation measures. The British Property Federation has developed tools to assist landlords in developing an energy statement and tenants in producing corresponding energy reviews that can be downloaded from http://www.les-ter.co.uk/page/home
• There is inefficiency and waste in many forms in the construction industry, and modernisation through techniques such as (but not limited to) value-based procurement, lean processes, building information modelling (BIM), benchmarking and continuous improvement, offsite manufacture and supply chain integration will enable project teams to deliver low carbon refurbishment and new build packages at the higher quality required and for significantly lower cost. The construction industry is strongly recommended to adopt modern methods of construction (MMC) and in particular use the resources provided by Buildoffsite http://www.buildoffsite.com/introduction.htm which can be used to download a number of publications including a guide to MMC (NHBC Foundation, 2006), specifying modular buildings (CIRIA, 2009) and an Offsite Toolkit.
• The IGT report addresses the weaknesses in the UK construction industry in managing the risk associated with innovative projects. It recommends the use of suitable tools such as Building Information Management (BIM), with Government leading the way on all projects >£50m. BIM is widely used in the US and computer-based tools are available from companies such as Autodesk. In addition tools should be developed that not only provide life cycle/present value assessment but also evaluate risk associated with innovation.
• Greater use of standards such ISO BS EN for low carbon and renewable technologies.
• The Cabinet Office Efficiency & Reform Group (ERG) to mandate a requirement for post-occupancy evaluation for Government projects.
Although the Government’s strategy for decarbonising infrastructure has been set out in the Department of Transport’s 2009 Low Carbon Transport Strategy and the Treasury/Infrastructure UK National Infrastructure Plan 2010 the IGT report stresses the importance of engagement between the infrastructure owners, policy makers and regulators and the construction industry to produce optimal carbon efficiency. The IGT report recommends that this collaboration should focus on developing models and undertaking research to achieve carbon reduction through better engineering and associated training and professional development.
The Government is expected to respond to the IGT report in April 2011. It is to be hoped that they take up the majority of the recommendations. It is difficult to see how the 2050 carbon commitment and interim targets are to be achieved without the actions recommended in this important report being implemented.