The built environment will be crucial in achieving the transition to net zero – but businesses need a blueprint for the way forward and better incentives to undertake the necessary investments, argues Steve McGregor of DMA Group
This autumn, the government will publish its Heat & Buildings Strategy, a document that builds on its 10-Point Plan for a Green Industrial Revolution. The 10-point plan places homes, workplaces, schools and hospitals at the heart of the green recovery, prioritising a move away from fossil fuel boilers and the futureproofing of new builds. The Heat & Buildings Strategy is likely to propose more detailed plans to incentivise these changes.
Significant change will be needed across industries, as well as for residencies, if the national target is to be met; the built environment contributes as much as 40% of the UK’s total carbon footprint. Residential properties will continue to receive support through schemes such as the Energy Company Obligation (ECO), the expanded Warm Home Discount (WHD) and the Green Homes Grant.
Challenges for business
Consultations with industry leaders has found that the majority of businesses (90%) back a green recovery plan and 75% believe that the government’s target of net zero by 2050 is achievable.
However, many are expressing concern over the financial impacts of such a move and believe the government must provide greater incentives if they are to see this transition take place at the rate needed.
There is also division over where much of the funding for such changes should come from. For some businesses and landlords, expensive retrofitting will be necessary in the short term to achieve long-term energy savings. Businesses are concerned about committing to decarbonisation targets before the technology to reach those targets has been developed. Lack of resources and precedence for best practice are also significant challenges.
Paving the way
First and foremost, the government must provide clarity in its expectations and the opportunities available both to businesses and individuals. The Prime Minister’s 10-point plan outlines a £1bn Net Zero Innovation Portfolio to fund innovation in green energy development. But without action to make these innovations accessible and low risk to businesses looking to futureproof their sites, uptake will be lower than hoped. Only around £10bn of public and private investment in the UK went towards decarbonisation projects in 2020. This compares with the £50bn needed per year by 2030 predicted by the independent Climate Change Committee.
Organisations will benefit from clear recommendations on what changes are worth investing in and the expected ROI. Laying the groundwork for those in both the residential and commercial sectors will allow for clarity in investments. Healthy building standards already exist. Leading accreditations include the Building Research Establishment Environmental Assessment Method (BREEAM), the Leadership in Energy & Environmental Design (LEED) and SKA Rating. Such standards could be used to form a governmentally recognised benchmark, reaching which should be incentivised.
There can be a tendency, as we have seen, to introduce sweeping policy changes or funds that fail to account for the complexity of such challenges. Reaching net zero in the built environment will take a more considered approach and, with it, an array of policy changes and incentives.
The 2020 report Rethinking Decarbonisation Incentives for Net Zero Policy explores a more complex but comprehensive approach to policymaking to incentivise the move to net zero. Most notable, perhaps, in its recommendations is a call to improve the empirical basis for policy through measuring, monitoring and identification. The reality is that organisations are increasingly reliant on data-led solutions and empirical bases for decision-making. A failure to quantify opportunity and risk will hinder any effective change.
What is needed, then, for developers and landowners across the built environment is clarity before they can act. There is a great deal of work to be done in the built environment and a huge potential for improvement. But time spent understanding novel policy and developing means of quantifying ROI will be an unforgivable drain on resources. The sector needs to see a blueprint for net zero in the built environment. In such turbulent times and with technological development taking place at such a rate, a blueprint or roadmap doesn’t need to be perfect. Rather, it must begin to provide the stepping stones that those in the sector can build upon to create a greener, futureproofed built environment for everyone.
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