“Let’s do it” announced the PM, Theresa May in her recent announcement on the Government’s 2050 net zero commitment – a welcome but not unexpected announcement but most recently set within the context of unprecedented public attention on the urgency of tackling climate change. Despite this surprising announcement, the debate has already swiftly moved decisively towards the how to implement and how to deliver with urgency. We must be mindful that net zero may have been announced by the PM but it will be the new leader of the Conservative party, the new PM, given the polls perhaps Boris Johnson, who will need to run with it, to own it and to ensure we can deliver.
Our homes and buildings contribute to over a third of the UK’s carbon emissions and Improving the energy efficiency and safety of our homes must be an integral part of any action (alongside other government commitments such as clean growth, Hackitt and the Future Homes Standard). It is simply a central pillar of decarbonising the UK as well as reducing energy bills, improving comfort and health. Investing in energy efficiency is simply a no-regrets but necessary infrastructure investment choice – a smart allocation of capital that reduces energy and carbon waste and wasteful spending, helps to meet statutory targets and ensures no household is left behind in the transition to a zero-carbon economy.
Appraised purely as climate policy, there is wide consensus amongst experts that a buildings energy efficiency infrastructure programme could deliver a net benefit of £7.5bn, could save energy output the equivalent of six Hinkley Points, and save UK consumers £270 a year until 2035 on their energy bills. This would take into account generous subsidies to allow people to de-carbonise their homes cost effectively. Appraised as an infrastructure investment, the financial benefits – to the economy, reduced power system investment needs and from improved health – amounts to £47bn.
Without it, we will unnecessarily require additional power generation capacity, and need larger and more costly heating systems while paying higher energy bills. Fuel poverty would persist, while continuing to require vast sums of wasteful welfare spending to treat, rather than prevent, its worst effects. If the Government does not take swift and decisive action on energy efficiency, the ability to realise a net zero UK while at the same time benefitting the economy and society could be seriously undermined.
Before you ask, the track record of energy efficiency in delivering energy and carbon savings at a net benefit to consumers, while supporting jobs and the economy is thoroughly proven. Its contribution to meeting wider housing policy objectives for affordability, health and safety is clear. Yet in recent years, governments have consistently failed to drive a step-change in energy efficiency investment, instead cutting back and overseeing a 95% fall in the rate of home insulation since 2012. At the same time, public investment in transport infrastructure has increased and spending on roads having risen to the highest level in a generation.
In 2017, the Energy Efficiency Infrastructure Group (EEIG) published its vision for a Buildings Energy Infrastructure Programme: an action plan consisting of clear steps and milestones for driving a step-change in home energy efficiency investment. The approach it proposed – which makes plain that public infrastructure capital will be required to unlock energy efficiency investment at scale – has since then been promoted and echoed by countless stakeholders across industry, finance, the public sector, academia and civil society.
With the political acceptance that we face a climate emergency, and clarity on how to deliver energy efficiency, there is no more time for Government procrastination. The Energy Efficiency Action Plan, Green Finance Strategy, Energy White Paper, England Fuel Poverty Strategy Review and the National Infrastructure Plan are all key but given the gap is clearly a lack of government investment, the forthcoming Spending Review is simply the largest of the upcoming opportunities. It is critical that BEIS puts forward a coherent and ambitious case for greater public investment in the Spending Review process. This will only be strengthened by the support of other government departments – MHCLG, DEFRA, DWP, DHSC and of course HMT – who will all gain by an energy efficiency infrastructure programme. As the Spending Review is conducted, every effort must be made to ensure it is compatible with achieving net zero emissions in the UK.
The Treasury should be aware that not investing now on tackling climate change will significantly increase the costs for governments and households in later years. It is time to heed the call to make energy efficiency an infrastructure priority and significantly boost public capital investment for our housing to be energy efficient and fit for the future in the Spending Review. If the Treasury does not stimulate the most cost-effective investment in clean growth then we will face higher energy bills, rising fuel poverty and increasing NHS costs while foregoing more affordable, healthier, safer and more comfortable homes.
Climate change is an emergency and tackling it is an opportunity –– it is time the Treasury started treating it as such. We hope it will be the lasting legacy of Theresa May – averting climate change disaster may even distract attention from being possibly the worst PM ever in the history books. Whilst we can understand the panic of Chancellor Hammond in his prediction that tackling climate change will cost a trillion, it actually feels like Treasury has just woken up to the fact that they are actually going to have to do this and go the whole hog. This net zero commitment provides the basis on which to act and act now. The proposals for creating a Buildings Energy Infrastructure Programme are ready to go. So let’s do it TBC Prime Minister (Johnson?) and TBC Chancellor (Truss?)!
Sarah Kostense-Winterton is Executive Director of MIMA, the Mineral Wool Insulation Manufacturers Association and co-founder and Chair of the Energy Efficiency Infrastructure Group (EEIG).
MIMA represents four of the leading mineral wool insulation companies in the UK – Isover Saint-Gobain, Knauf Insulation, ROCKWOOL and Superglass, the industry trade body for non-combustible, breathable glass and stone wool insulation.