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Zero Carbon Homes scrapped – What does it mean for you?

July 2015

Hot on the heels of a progress report from the Committee on Climate Change (CCC), tracking our progress towards reducing emissions and preparing for climate change, George Osborne has announced that the long-lauded plan for zero carbon homes has been scrapped:

“The government does not intend to proceed with the zero carbon Allowable Solutions carbon offsetting scheme, or the proposed 2016 increase in on-site energy efficiency standards, but will keep energy efficiency standards under review, recognising that existing measures to increase energy efficiency of new buildings should be allowed time to become established.”

This announcement came as part of Osborne’s productivity plan ‘Fixing the foundations: Creating a more prosperous nation‘, which seems to have missed one of the main points of the CCC’s progress report. It recommended the Government should “Implement the zero carbon homes standard without further weakening to ensure progress is made to 2030 and beyond.”

Following the release of the CCC report Lord Deben, chairman of the committee, said:

“This government has a unique opportunity to shape climate policy through the 2020s. It must act now to set out how it plans to keep the UK on track. Acting early will help to reduce costs to households, business and the Exchequer. It will improve people’s health and wellbeing and create opportunities for business in manufacturing and in the service sector.’

As with everything you read in the papers and on the internet, things are never quite as black and white as they seem. It’s no secret that the Zero Carbon Homes scheme was flawed by being based on design predictions rather than operational reality, the performance gap really can be a thorn in your side sometimes. Rather than allowing this to continue to be an issue the scheme would have encouraged the industry to learn and test new things to reduce that gap and improve overall performance. Allowable Solutions on the other hand offered an easy route through the scheme requiring you to pay a fee for not meeting the target. It would have been difficult to implement at first but everything is a learning process and by its very nature it could have been refined to be more effective. While it wasn’t going to be easy that’s no reason to scrap it altogether.

But the real answer you’re looking for is what does it mean for you?

If you’re a first time buyer this may seem like a speck of hope after news broke that the average cost of buying a house hit an all time high, breaking through the £200,000 ceiling for the first time (count yourself lucky if you can find anything bigger than a studio flat in London for that). However, with the additional cost of meeting Zero Carbon Homes estimated at £3,500 in 2020 this offers little comfort when you realise that the average house price has risen by £7,326 since January. This is a classic Kansas City Shuffle, distracting you with a short term, environmentally costly fix, while allowing the real reasons for skyrocketing house prices to pass you by.

With an economy where inflation, otherwise frowned upon, is desirable… even essential, in house prices, how likely do you think it is that Osborne will allow this to slow down?

If you’re a housebuilder or developer this may offer short term gains if you can translate that small reduction in costs during the planning process to slightly higher margins. But with such drastic and unplanned changes to policy this is quite a blow to industry confidence in government policy in an economic climate that desperately needs clarity and consistency to justify investment.

If you’re one of the 88% of Britons that think climate change is real, the news is also not so great. With housing making up almost 30% of our energy use, the scrapping of this policy makes it pretty difficult to meet our legally binding obligation to reducing carbon emissions 80% by 2050. Remember when you signed up to the gym in January with the aim to go every week and didn’t? Now is the time to use that membership, and the same is true for drastically reducing carbon emissions from homes: the longer you leave it the harder (and more expensive) it’s going to be.

Our existing buildings are poor in terms of energy efficiency and, short of a monumental increase in uptake of the Green Deal, Zero Carbon Homes and Allowable Solutions were our best chance at making a real step forward.

Scrapping the Zero Carbon Homes and Allowable Solutions scheme is a short-sighted way of ignoring a long term problem, in the hopes of building a few more houses whilst maintaining historically high house prices. While the Zero Carbon Homes scheme was by no means perfect, scrapping it was not the solution.

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