BEIS Committee releases damning report on UK energy efficiency policy, as MPs make the case for better building standards and retrofit funding
The UK "stands no chance" of slashing greenhouse gas emissions to net zero by 2050, nor meeting its interim carbon budgets, unless the government takes urgent action to improve the energy efficiency standards of buildings and households, a group of MPs has warned.
The latest report by the Business, Energy and Industrial Strategy (BEIS) Committee today argues improving the energy efficiency of buildings is crucial if the UK is to meet its climate change targets, eradicate fuel poverty, and reduce domestic energy bills, and yet investment has shrunk over the past decade.
After carrying out an inquiry into the issue, MPs on the Committee found the rate of efficiency measures - such as insulation and low energy lighting - installed in UK homes under government schemes has plummeted by 95 per cent since 2012.
At the same time, builders are currently able to exploit loopholes allowing them to construct new homes to outdated standards and sell homes that do not meet advertised energy standards, the report claims.
MPs on the Committee said energy efficiency should be treated as a national infrastructure priority. They argued that as such the government should deliver far more robust building regulations and fill the "substantial" gap in funding needed to bring existing homes up to scratch.
"Improving energy efficiency is by far the cheapest way of cutting our emissions and must be a key plank of any credible strategy to deliver net zero by 2050," said Labour MP Rachel Reeves, who chairs the BEIS Committee. "If the government lacks the political will to deliver energy efficiency improvements, how can we expect it to get on with the costlier actions needed to tackle climate change? More energy efficient buildings are not only crucial for tackling climate change but are vital for lowering customers' energy bills and lifting people out of fuel poverty."
MPs also found the UK's per capita investment in energy efficiency in England is lower than that in Scotland, Wales, and Northern Ireland.
The report additionally recommends the government "drastically" increases the £5m it has put towards the new Green Finance Innovation Fund, which was set up last month to encourage the private sector to develop financial products that encourage households to install efficiency measures. And it calls on Ministers to urgently set out how they intend to meet the government target for all homes to be at EPC efficiency rating C or above by 2035.
"Despite a consensus on what needs to be done, ministers have continued to sit on their hands and failed to deliver the policies needed to boost energy efficiency," Reeves argued.
In March the government announced plans for a new Future Homes Standard which would mean by 2025 all new homes must be built with low carbon heating. However, it previously scrapped plans for a zero carbon homes standard in 2015 and since ending the Green Deal loan scheme there has been no replacement to help finance home energy efficiency improvements.
The new analysis comes just days after a damning report from the UK's independent climate advisory body, which concluded the government is woefully unprepared for the impacts of climate change and is badly off track to meet its carbon targets. Chair of the Committee on Climate Change, Lord Deben, said the government's handling of preparations for climate change was "like Dad's Army". He also reserved particular criticism for house-builders, who he accused of not doing enough to enhance the energy efficiency and climate resilience of new build homes.
The government has repeatedly stresssed it is planning to take further action to improve energy efficiency across the economy and is expected to soon publish a National Infrastructure Strategy, in response to a report by the UK's National Infrastructure Commission last year which highlighted the importance of improving energy efficiency.
A BEIS spokesperson reiterated that its "clear ambition is for all homes to be at least EPC Band C by 2035 as part of our wider commitment to achieving net zero emissions, while also cutting home energy bills".
"To achieve this we have invested £5m to develop green mortgages to help homeowners improve the efficiency of their properties, offered support for businesses to take action, and our dedicated scheme is improving the energy performance of up to 17,000 public buildings - including schools and hospitals," the spokesperson added.
However, green business groups were quick to broadly support the BEIS committee's analysis. The CBI's chief economist, Rain Newton-Smith, backed calls to make energy efficiency an infrastructure priority alongisde a set of more ambitious policies.
"Homes, offices and buildings are the country's largest source of carbon emissions," she said. "A cross-departmental approach, working jointly with business, will improve the efficiency of our homes and buildings and develop the skills and funding needed to make them fit for the future."
And John Alker, director of policy and places at the UK Green Building Council (UKGBC). said both the CCC's report earlier in the week and today's findings from the BEIS Committee showed government policy was "still falling well short of the mark".
"The good news is that there are clear and immediate opportunities for government to address this failure," he added. "Most obviously by driving better energy performance in new housing in the imminent update to Building Regulations, and using the Comprehensive Spending Review to kick start much-needed investment in our inefficient existing stock. Without urgent policy action, achieving net zero for buildings will only become more difficult and far more expensive."
The committee's intervention follows a PwC report yesterday which pointed to a direct correlation between global energy efficiency and economic growth, with the world now requiring far less energy required to drive economic growth compared to 30 years ago.
The research found that the world needed 181kg of oil equivalent to produce $1,000 of global GDP in 1990, but by 2015 it only needed 123kg, meaning energy efficiency has improved by a third over the time period.
Moreover, PwC senior economist Mike Jakeman said the trend was set to continue so that by 2040 global energy intensity will fall by another third so that it takes just 78kg of oil equivalent to produce $1,000 of global GDP.
"Becoming more energy efficient is crucial in limiting climate change, while also ensuring that the global economy continues to grow and the world's population becomes prosperous," he said. "However, while improved energy efficiency is very encouraging, it's only part of the story and needs to be combined with a continual push to reduce emissions."
There are clear economic, health and societal benefits from improving energy efficiency, which remains one of the cheapest means of slashing emissions as investments in such measures deliver almost guaranteed paybacks over time. Yet, for the second time in less than a week, the government has faced fierce criticism for its failure on energy efficiency policy. The next PM will be under immediate pressure to plug the gap in leaky building policy as soon as possible.
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