Govt incentives needed to promote energy efficiency for non-residential buildings

The Government should conduct a comprehensive assessment of non-residential low-carbon policies to ensure they work effectively said the Committee on Climate Change (CCC) in its latest annual progress report to Parliament today. Progress in implementing some of the measures required to meet carbon budgets was limited in 2012, it warned, while the simplification of the CRC energy efficiency scheme beyond the CCC’s original recommendations has further eroded the incentives to improve energy efficiency it set out to provide. John Alker, Director of Policy and Communications at the UK Green Building Council, said: “Just one day before the release of official statistics on the Green Deal, the CCC’s report is a timely reminder that the Coalition’s flagship energy efficiency policy needs to be further incentivised to encourage take-up.”

The CCC, an independent body established under the Climate Change Act to advise the UK Government on reducing greenhouse gas emissions noted that although the non-residential Green Deal has been launched – uncertainty remains over minimum energy performance standards for the private rented sector, which will provide a crucial incentive for commercial landlords to engage in the Green Deal. The abolition of the performance league table means that there is now no reputational incentive, while the financial incentive provided by the scheme remains weak.

While central government made good progress to meet emissions reduction targets for its own estate, there was very limited improvement in commercial sector energy efficiency. Low-carbon heat deployment remained very low, with inadequate levels of investment in heat pumps, which are an important option for meeting carbon budgets. It advises that new approaches are taken to ensure increased uptake of these measures.

The report found that economy-wide emissions of greenhouse gases increased by 3.5 per cent in 2012, which was due to relatively cold winter months compared to 2011 and switching from gas to coal in power generation. After allowing for these temporary effects, emissions would have decreased by 1-1.5 per cent. This highlights the significant challenge in meeting future carbon budgets, which will require annual emissions reductions of 3 per cent. However, the challenge is more pronounced given that there was very limited GDP growth in 2012 and real increases in energy and fuel prices. The risk is that emissions may increase when the economy returns to higher growth, particularly if energy and fuel prices do not continue to increase at the rates in 2012.

David Kennedy, Chief Executive of the CCC said: “Although the first carbon budget has been comfortably achieved and the second budget is likely to be achieved, this is largely due to the impact of the economic downturn.

“There remains a very significant challenge delivering the 3 per cent annual emissions reduction required to meet the third and fourth carbon budgets, particularly as the economy returns to growth. Government action is required over the next two years to develop and implement new policies. A failure to do this would raise the costs and risks associated with moving to a low-carbon economy.”

To view the full report which includes an assessment at the level of the economy, the non-traded and traded sectors, the key emitting sectors and the devolved administrations, click here.

By Sara Bean