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No White Christmas, but a Green Deal for all in 2012?

By Andrew Whitehead on Jan 3, 12 12:57 PM in Law

Well that's the Christmas and New Year hysteria over for another 12 months.

I can imagine Scrooge revelling in the job of carbon accounting for the aftermath. Countless bin bags of present wrapping and decorations heading for landfill, not to mention forests of fake Christmas trees (apparently 10 times the carbon footprint of a dead tree); endless plates of leftover sprouts and Christmas pudding....

And that's before the carbon emissions associated with the car journeys up and down the country's motorways to visit distant relatives.

Spending time with the family can also mean hours spent cooped up like battery hens in an over-heated living room watching back to back repeats of Only Fools and Horses or getting hot and bothered playing on the dreaded Wii.

Talking of battery hens, from this month this method of farming is now illegal under EU law (although visiting relatives at Christmas is still largely unregulated by Brussels - for now). Like caged chickens, another area of our lives that hasn't escaped the long arm of the EU lawmakers is energy usage, and it has to be said that the festive combination of TV, turkey dinners, home entertaining, short daylight hours and fairy lights is rarely conducive to a low energy lifestyle.

And that brings me to my (admittedly rather safe) prediction for 2012 - a greater focus on energy efficiency in the home and for businesses.

Lighting accounts for one fifth of all electricity generation in the UK. And with increasing energy prices, growing numbers of businesses are taking the plunge and installing the latest lighting technology. Last month the Carbon Trust launched a new guide, offering UK businesses advice on cost effective measures to save money, and carbon.

Heating accounts for a massive 50% of UK carbon emissions. And this is where energy efficiency measures in the home, such as cavity and loft insulation, can really make an impact and save money. And with one quarter of UK households now in fuel poverty (meaning they spend more than 10% of income on fuel), it's a big concern in Whitehall.

So are the policy tools in place to match government aspirations?

Well, we go into the New Year with the Renewable Heat Incentive up and running, providing subsidy for renewable heat technologies used in the industrial, business and public sectors. That scheme will be broadened out, and expanded to households, in the coming months.

And we have a Green Investment Bank ready to roll; the world's first investment bank dedicated to greening the economy. Although it had its wings temporarily clipped by Treasury, the bank is expected to start making investments this year, and last month announced its early areas of focus would include non-domestic energy efficiency and support for the Green Deal.

As an aside, last month the government also published the criteria for choosing a permanent home for the bank. With Birmingham's vibrant banking and professional services community, clean tech clusters around its world-class universities, and industrial heritage (local heroes Boulton and Watt are the new faces on the £50 note), our city could surely make a winning bid?

Coming into force in October, the Green Deal is the government's flagship policy to encourage energy efficiency in the home by making available capital funding for home energy efficiency improvements, with repayments funded out of savings on energy bills.

But just before Christmas, the independent Committee on Climate Change (CCC) caused feathers to fly with an open letter to Chris Huhne expressing serious doubt as to whether the Green Deal will actually deliver the scale of works required to meet our broader carbon reduction targets.

The concern arises because the Green Deal will operate alongside a system of subsidy delivered through energy suppliers. To date, suppliers have been required to promote domestic energy efficiency improvements through a scheme called the Carbon Emissions Reduction Target (CERT), and this has had some success in raising levels of investment in cavity and loft insulation.

But the CERT expires after this year, and energy suppliers will be placed under a new obligation, through a replacement scheme called the Energy Company Obligation (ECO) - introduced in last year's Energy Act alongside the Green Deal and, like CERT, to be funded by a levy on energy bills.

The crux of the issue is that the government intends that the ECO scheme will focus subsidy on alleviating fuel poverty and addressing so called "hard to treat" homes. That leaves the bulk of the housing stock reliant on the Green Deal for support. Without any legal obligation on energy suppliers to promote cavity and loft insulation, the government is essentially putting its free range eggs in one basket and backing the Green Deal to stimulate the market to do the job.

Of course, it's the CCC's job to make recommendations to government, and it has done so as part of DECC's consultation on the Green Deal and the ECO scheme, launched in November and closing later this month.

The CCC fears the Green Deal will only reach around 2 to 3 million households out of a potential 14 million, and is urging government to maintain the subsidy and bring cavity and loft insulation within the ECO scheme. Bafflingly, its projection of low take up is reflected in government's own impact assessment of Green Deal implementation.

This is a vital policy area, with many green jobs at stake, and one the government cannot afford to get wrong. But omens are inauspicious.

Last year, in its enthusiasm to drive forward renewable micro-generation with feed-in tariffs, the government completely misread what ultimately became an overheated solar PV market, and in a clumsy attempt to cool it down embarked on a messy consultation which came home to roost in the High Court. And now we have the CCC pointing out the apparent contradiction of an ambitious policy objective on the one hand and, on the other, the principal policy tool which, by the government's own admission, will fail to deliver.

We should take the CCC's concerns seriously. Life may be looking up for European poultry in 2012 (although I wouldn't advise French battery hens to hold their collective breath), but energy efficiency is much higher up the EU agenda, and offers a real stimulus to the emerging green economy across Europe.

Amidst laudable policy objectives, the government is quick to talk up its green credentials, but it needs to follow up with effective policy measures. Ones which strike the right balance between focused and affordable subsidies, and creating an environment which allows the private sector to take advantage of the many opportunities that the Green Deal has the potential to deliver.

2 Comments

Alex Morris said:

This is a very good post and highlights some important issues. Everyone is very keen to "go green" and it's a bit of a fad at the moment, but what does your average individual do to improve their carbon emission? The answer is not a lot - especially at Christmas.

Great Article

But are people really going to clear 10, 20 or even 30 years of junk out of the loft just for the insulation?

I hope they do but just cant see it myself.

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