For a country capable of producing such architectural masterpieces as St. Paul's Cathedral and, more recently, the Gherkin, it should come as a shock that the UK also has some of the most decrepit and aging housing stock in Europe, with only 12.2% of the housing stock in England, for example, built after 1990, despite the property boom leading up to 2007.
House building has been at record lows in the past decade -there are over 22million properties in England, yet only 104,970 new home builds were started in the 12 months to March 2012. It is way short of the 240,000 new homes the National Housing and Planning Advice Unit (NHPU) said in 2008 would need to be built in England each year by 2016. The Government's aim of building 3million new homes by 2020 seems hopelessly unrealistic at current construction rates.
The shortage of new housing not only has social implications but also has huge ramifications for the energy efficiency of the UK housing stock. The Government's 2008 English Housing Condition Survey estimated that 83% of homes using boilers required system upgrades and 46% of dwellings required insulation improvements. In an indication of how decrepit the UK housing stock has become, the Survey estimated that 20.6 million homes out of the 22 million housing stock would benefit from improvement measures.
As domestic housing is responsible for 27% of UK carbon emissions, modernisation is essential if the country is to meet its international carbon reduction obligations.
The Climate Change Act 2008 establishes a long-term framework to tackle climate change, seeking a reduction of at least 34% in greenhouse gas emissions by 2020 and at least 80% by 2050. However, the DCLG estimates that 87% of existing buildings will still be here in 2050, highlighting the scale of the challenge facing the UK.
Whilst it is technically possible to build new homes to exceptional standards, including zero carbon, the number of new homes being built each year will be a very small percentage of housing stock, even if the Government's unrealistic target is met. Although new build will be important in pushing the boundaries of sustainable design, the main effort in the short to medium term will have to focus on improving the existing stock of millions of substandard houses. Therefore the future of housing in the UK will be largely defined by refurbished housing stock. How will this huge refurbishment programme be achieved?
The Green Deal
The Energy Act 2011 includes provisions for the new 'Green Deal', which intends to reduce carbon emissions cost effectively by revolutionising the energy efficiency of British properties.
The existing housing stock is blighted by poor levels of insulation, draughts and inefficient heating systems. Having been spoilt with cheap North Sea oil and gas for decades, there was no real imperative for UK consumers to conserve energy. Therefore part of the impetus for change has to involve a cultural change in attitudes towards domestic energy efficiency.
In a recession, it may be hard to persuade people to spend thousands of pounds upgrading their property, particularly at a time of falling house prices - yet this is precisely the right time for homeowners to think about improving their properties. Energy saving measures will improve a property and reap long-term energy savings, which will surely enhance the appeal of any property as energy prices continue rising and more people are pushed into fuel poverty.
But the problem remains of how to pay for all these improvements.
The Green Deal helps bridge the gap between sustainable aspirations and homeowners' constrained budgets. The principle is simple, yet revolutionary - a government-backed financial mechanism which eliminates the need to pay upfront for energy efficiency measures and instead recoups the cost of the improvements from savings on the electricity bill, thus reassuring homeowners worried about extra financial commitments.
What will the Green Deal achieve?
Although available to all, the Green Deal will focus on those householders who cannot achieve significant energy savings without an additional or different measure of support. This includes vulnerable and low-income households and those living in harder to treat properties, such as solid walled properties.
Households will be able to choose from an array of products that will not only reduce the energy consumed in their building and save money, but will also enhance quality of life by being easier to use and creating a more comfortable living environment:
Instead of a blast of heat twice a day, typical of conventional high temperature boilers, heat pumps and integrated heating systems can deliver a constant temperature to the building at a lower temperature, through underfloor heating and efficient radiators, whilst improved insulation means that less heat is required in the first place.
Mechanical Ventilation with Heat Recovery delivers more fresh air to the building than trickle vents, eliminating dampness yet retaining heat inside. Filters can also remove odours and allergens, making for a healthier and more comfortable atmosphere.
Solar thermal and solar PV harness the free energy of the sun to provide warmth, electricity - and an income.
These are only a few of the improvements to building fabric and heating systems that will be available under the Green Deal - a whole host of exciting possibilities are opened up by the scheme!
Can the Green Deal deliver?
Despite all the noble ambitions of the scheme, it is already highly bureaucratic and centralised. Administering the finances through electricity and gas bills effectively hands control to the 'Big 6' energy companies, who could squeeze high quality innovators out of the market. Homeowners will need convincing that the energy savings will cover the cost of any improvement measures. Affluent homeowners are able to access mortgage finance at low rates of interest, far less than the proposed commercial interest rate being suggested for the Green Deal. Besides, the Green Deal is targeting lower income households, but this effectively means they are paying more for energy efficiency improvements to their properties, the capital cost of which are also disproportionately more than for affluent homeowners. As with the ill-conceived Community Infrastructure Levy, which acts as a major disincentive to self-builders, it seems that the Government has not considered the practicalities.
RICS Research has discovered that homeowners are far more likely to adopt green measures on financial rather than environmental grounds - although people are supportive of green technologies in principle, their decision to adopt them is ultimately determined by finances.
Therefore, the cost-benefit calculation needs to be clearly in favour of adopting green measures, which is why the Feed in Tariff worked so well for Solar PV - yet it came under criticism for rewarding the affluent whilst punishing less affluent consumers with higher electricity bills. Does the Green Deal risk falling into the same trap and should the Government be considering other mechanisms? The long-term benefits of investing in renewable energy are clear, so access to these technologies needs to be extended to those lower down the income scale.
Is it time for Carbon Pricing?
A carbon pricing mechanism uses economic signals to promote changes in behaviour, encouraging less carbon consumption - arguably high taxes on petrol have inadvertently achieved this, with the average family car becoming ever more fuel-efficient. This may create accusations of regressive taxation: less affluent people may consume less carbon but they are more likely to be in fuel poverty, spending more than 10% of income on energy - there is a moral, economic and environmental imperative to ensure they are removed from fuel poverty by making their homes as energy efficient as possible.
Such measures could be funded by a carbon pricing mechanism, making the system progressive rather than regressive, with heavy carbon consumers footing the bill, in the same way that wealthy owners of petrol-swigging SUV's pay far more fuel duty than drivers of smaller, more efficient cars. Higher electricity and gas costs would be offset by energy savings - if the cost of carbon was set high enough, the economic case for implementing energy saving would be unanswerable. Or so the Australians hope...
The future lies Down Under
Australia is leading the way with its new Carbon Price, announced this Summer. The principle is simple - transforming the economy by pricing carbon so high that businesses and consumers have no choice but to adopt cleaner technologies. The cost would be borne by the biggest consumers, with half the funds being raised used to soften the transition for domestic consumers and small businesses, the other half being invested in developing renewable industries.
Such a model could revolutionise the UK's housing stock and, as the Australians claim, 'a price on carbon is the most environmentally effective and economically efficient way to reduce pollution. This means our economy can continue to prosper - without our pollution continuing to grow'.
- A brave and green new world indeed.