Is the UK Government living up to its Paris rhetoric?
The UK Government is committed to the Paris climate accord, yet last year’s General Election illustrates the difficulties that lie ahead. Will UK deliver on climate change? Fabrice Leveque, Energy & Climate Specialist and Imke Lübbeke, Head of Unit, Climate & Energy, WWF European Policy Office analyse the energy-efficiency improvements undertaken by the UK Government so far and discuss how it has been moving in “the opposite direction.”
The outcome of the UN climate summit in Paris last December surprised many by the ambition of the agreed long term goal: moving global ambition to limiting climate change to ‘well below’ two degrees of warming and keeping in sight the target of 1.5 degrees. However, with no enforceable mechanism to hold countries to account over their emission reduction pledges, the success of the agreement will depend on Governments around the world turning lofty rhetoric into action.
Despite playing a constructive role at the talks, the UK Government’s track record since last year’s General Election illustrates the difficulties ahead, as the desire to cut spending has often taken priority over the chronic impacts (and related costs) of climate change. This is particularly apparent in its approach to energy efficiency, which has suffered repeated cut-backs to policy.
Using energy efficiently should be the first step in reducing carbon emissions, and it is often the most economic. Buildings, responsible for around a third of the UK’s carbon emissions, are a particularly pressing priority, as the UK has one of the least efficient building stocks in Europe. As a result, and despite having some of the lowest consumer energy prices in Europe, the UK suffers some of the highest rates of fuel poverty, ranking 13th in a recent assessment of fuel poverty in 16 major EU economies.
Improving the energy efficiency of buildings, for example through improved insulation to roofs and walls, has been a priority of successive Governments, with good results: a combination of regulations and incentives achieved a 25% reduction in domestic energy use between 2004 and 2011. Yet the Committee on Climate Change, the official adviser to Government on climate targets, has advised that the UK’s homes and buildings must continue to be significantly improved to meet both near and long term climate targets. As well as providing low cost emissions reductions and tackling fuel poverty, energy efficiency will reduce the estimated £1.3 billion spent every year by the NHS on illnesses caused by cold homes, and can boost economic productivity by freeing capital and energy system capacity for more productive uses.
Unfortunately the number of energy efficiency improvements delivered to UK households fell by approximately 80% over the course of the last Parliament, reflecting successive cuts to support from Government. Little of the remaining support has survived the first ten months of this Government: several hundred million pounds of annual funding was cut in the Spending Review, followed by the cancellation of a building code for new-build homes, the Zero Carbon Homes standard. The Energy Company Obligation scheme, one of two flagship policies, has recently been extended by five years, but its annual budget has been reduced to £650 million, down from £1.3 billion in 2012. The other flagship policy, the Green Deal, a finance mechanism intended to stimulate uptake across all households, was cancelled after disappointing uptake caused by poor policy design and high interest rates, which failed to interest consumers.
As a result, activity to improve the UK’s homes is now well below levels recommended by the Committee on Climate Change to meet the UK’s carbon targets. Although the Conservatives are likely to meet their election pledge to insulate one million homes over this Parliament, advice from the Committee suggests that approximately five million homes will need to be insulated over the same period to ensure that the UK’s climate targets are met cost effectively, at the minimum level of ambition required to avoid the worst economic impacts of climate change.
This puts delivery of future carbon budgets at risk. Government estimates suggest that emissions will exceed the fourth carbon budget period (covering 2023 to 2027) by around 10%; this gap will increase as new homes continue to be built at today’s inadequate efficiency standards, and improvements to existing buildings continue to slow.
The UK needs a long-term programme that recognises the need to decarbonise its buildings by 2050. This could be achieved with an annual investment of around £4 billion per year, for the next twenty years. The value for money of such expenditure should be compared to the £15 billion that UK households spend every year on gas for heating, and the £100 billion of infrastructure projects to be invested in by Government over the course of this Parliament, before the manifest economic benefits of such investment are even counted.
This programme would provide similar value for money to the HS2 rail link and new roads, reducing gas imports in 2030 by 26% and creating an additional 100,000 jobs. Government has a key role in making this happen, by using its powers to address the market failures that hold back investment in efficiency.
This UK slowdown also runs contrary to activity at EU level. While the current EU proposal is for an unambitious and non-binding 27% efficiency target by 2030, the European Parliament has repeatedly voted in support of a 40% target, which would bring Europe in line with the international climate deal reached in Paris in December. The European Parliament’s stance has resonated within the walls of the European Commission, which will now look into what higher energy efficiency targets for the EU would mean, as it plans revisions to directives on the subject later this year. Indeed EU Climate Action & Energy Commissioner Miguel Arias Cañete has publicly voiced his support for greater ambition, aware that a low, 27% target could undermine the environmental integrity of European climate ambition as a whole. With support from Member States in the European Council, the Commission and Parliament may succeed in increasing this ambition.
The UK Government has been moving in the opposite direction, although there is still time to arrest the decline in efficiency policy. It is currently exploring options to replace one of the flagship policies, the Green Deal. Doing this effectively will ensure that the UK is not left behind as the rest of Europe wakes up to the economic, energy security and climate benefits of energy efficiency.