Fraser Wallace, Policy Advisor for the Sustainable Energy Association argues that the government needs to urgently recognise energy efficiency as part of its infrastructure commitment…
In the first full week of November, George Osborne, Chancellor of the Exchequer, attended the launch of a new National Infrastructure Commission. Its formation represents a significant coup for Osborne. It is headed by Lord Adonis, who is now working with the Conservative Government, despite being formerly Labour Transport Secretary. The Infrastructure Commission is the brain-child of Osborne, and at its launch he hoped it will, ‘invest in the things that make our economy more productive.’
George then cited upgrades of road and rail, flood defences and superfast broadband as key examples of where this investment should be directed.
In the second week of November, George Osborne spoke at Imperial College London, where he described his priorities for the Comprehensive Spending Review. This review will see significant cuts to government departments; Transport, Environment, and Communities and Local Government have already agreed to reduce their budgets – eight percent lower annually for the next four years.
Wherever government money is spent, the Chancellor argued it should deliver:
• Economic Growth;
• Improved Security;
• Wider Opportunity.
This is where the interests of the energy efficiency business community and the Chancellor collide. Indeed, they collide at a point where all concerned with public health, the environment and the economy can agree. It is possible to deliver policy of mutual benefit to these varied interest groups. Energy efficiency can improve the economy, reduce carbon emissions and improve social outcomes. It’s like knocking down three targets at a coconut shy with one throw.
George’s stated objectives are laudable – and energy efficiency businesses can assist in delivering them. However, the government’s plan for delivering these objectives is in danger of tripping over itself. Perhaps too much attention is being given to the urgent, and insufficient care is being focused on the important.
Government recently scrapped the implementation of the Zero Carbon Homes policy on the grounds that this would stimulate the housing industry, and increase productivity. Unfortunately, the evidence simply is not there when it comes to arguing reducing Building Standards and planning requirements promote that valuable and important goal – economic growth. The graph included in this article highlights that rates for grants of applications for both major and minor housing developments appeared to be unaffected by a previous drop in ambition when it came to reducing carbon emissions from our housing stock.
Conversely, work undertaken by Cambridge Econometrics (the economic and fiscal impacts of making homes energy efficient) reveals that every pound spent on energy efficiency schemes is likely to return £1.27 in tax revenue to the exchequer. This spend would also add to GDP – 0.6 percent by 2030. A national roll out of energy efficiency measures would also see increased employment by up to 108,000 net jobs per annum over the period 2020-2030.
That opportunity that exists for energy efficiency to assist the Chancellor to deliver his economic vision is clear. He should use his National Infrastructure Commission to deliver it. Frontier Economics have demonstrated the spend required of an infrastructure based approach and the benefits derived from that development would be similar to other large projects underway today. The government’s roll-out of Smart Meters is costing £11 billion in order to improve efficient use of energy and consequently, also reduce carbon emissions. The deployment of Smart Meters is one example of a scheme delivering such important, long term, entrenched improvements.
The total discounted investment in energy efficiency required from government is estimated to be £40,214 million to overhaul our outdated building stock. It seems incredible that as yet, energy efficiency is not a declared priority for the new National Infrastructure Commission.
As such, the Sustainable Energy Association is calling for – along with partners such as the Association for the Conservation of Energy, the UK Green Building Council and the Energy Bill Revolution – this opportunity to be taken up.
Join our call and contact your local elected representatives to let them know you agree.
Sustainable Energy Association
Tel: 0121 709 5587