The government is on track to deliver its planning policy statement (PPS) on climate change before Christmas. This reflects the DCLG's focus on achieving zero carbon new homes by 2016 without threatening building targets.
Responses to the consultation draft (Planning, 15 December 2006, p1) show widespread support for the 2016 goal, but there are differing views on how to meet it. These tensions are shown by the mayor of London winning support for 20 per cent on-site renewables through the London Plan (Planning, 12 October, p3).
Many developers are sceptical about their prospective role as electricity generators, preferring to contribute cash to off-site schemes. But they are aware that the government intends to use the code for sustainable homes to ramp up building regulation standards in stages to achieve the zero carbon code level 6 for all new homes by 2016. They are also aware that many councils will use the code to specify higher than minimum standards for new housing in the run-up to 2016.
The consultation deadline on proposals to make the code mandatory has just passed. Such a code would make the variable environmental standard of new homes more visible to buyers, thus boosting demand for higher standards. The abolition of stamp duty on zero carbon homes costing less than £500,000 will do likewise.
Meanwhile, Barratt Homes has begun building a prototype "green house" at the BRE Innovation Park in Hertfordshire, with a view to mainstreaming supply of eco-friendly houses by 2010. There is a long way to go, but the route to zero carbon new housing by 2016 is now opening up.
Existing housing causes ongoing concern
But existing inefficient homes are the elephant in the room when it comes to reducing emissions. By 2016, hundreds of thousands more will inevitably be built below code level 6, even if councils pursue higher building regulation standards.
The biggest concern about the draft PPS appears to be that it fails to recognise the significant reductions in emissions that can be achieved by refurbishing and reusing older buildings. There is a feeling that existing stock represents a critical opportunity for achieving national carbon reduction targets in parallel with new housing.
The drive for "decent homes" is a platform from which to launch further energy efficiency investment and spearhead eco-retrofitting of social housing estates. There are grounds for cautious optimism that Communities England will build on the work of the Housing Corporation and English Partnerships to enable social landlords to deliver carbon-neutral neighbourhoods.
But millions of individual home owners will have to be given an incentive to invest in reducing carbon emissions. September's Commons environment, food and rural affairs committee report Climate Change: The Citizen's Agenda calls for a beefing up of government programmes to reduce carbon savings and tackle fuel poverty.
As well as endorsing the energy performance certificate system, the MPs have urged the government to offer a stamp duty rebate to home buyers who improve energy performance within a year of purchase. The energy efficiency commitment also requires suppliers to achieve targets for installing domestic energy efficiency measures. The 2008-11 phase, renamed the carbon emission reduction target, aims to double the level of activity. With other government programmes, this is expected to lead to completion of lowest-cost insulation measures by 2020.
But this will do little about the need for more efficient systems such as heat pumps and solar water heating or about insulating solid wall properties. There is no realistic prospect that current policies and programmes will fully realise the potential for emissions reduction from existing housing by 2016. So there is scope for innovative policy instruments to produce additional funds and deliver additional reductions.
The Sustainable Development Commission pointed the way forward last year when it recommended action to offset any rise in carbon dioxide emissions in the growth areas with a commensurate reduction in existing homes in the same regions. This principle of linking the resources going into the house building programme and reducing emissions from existing housing stock is being explored by eaga, a firm that has delivered energy efficiency improvements to some 250,000 households.
The firm is carrying out research to develop "balanced trading". This will enable net carbon emissions from new housing schemes to be offset by using section 106 or tariff proceeds to fund investment in energy installations and renewable technologies to retrofit nearby neighbourhoods.
System enables carbon balance measures
Under this system, the volume of carbon emitted by a housing development will be calculated. An allowance will be made for the amount of energy generated on site by the maximum feasible application of renewables. The outstanding "balance" of carbon will be saved off site by improving existing homes in the area, funded by part of the developer contribution. This will particularly suit smaller sites with limited scope for renewables.
Such investment will deliver carbon emission reductions equal to the gap between the standard achieved in the new development and code level 6. In principle, balanced trading is simple, robust, cost-effective and can deliver carbon-neutral new homes now and accelerate environmental improvements in existing housing.
Eaga's pilot project suggests that for each new home it will be possible to use the balance to fully insulate three homes, saving each household £160 a year in energy bills. Alternatively, the balance could be used to subsidise installation of renewables in conjunction with grant-aided insulation for low-income families.
The legitimacy of balanced trading as an option will have to be established in local development frameworks. Lawyers commissioned by eaga are preparing model clauses to be included in development plan documents (DPDs) or individual planning applications. Extensive discussions with developers have established their willingness to engage in balanced trading, suggesting that it is unlikely that local policies which require carbon neutrality will be challenged.
Planning authorities will have to adjust their planning gain policies to give some priority allocation to a low-carbon offset fund. Balanced trading schemes will have to be integrated into councils' low-carbon strategies so that the resulting funds can be invested in a co-ordinated programme. In many areas, balanced trading projects could be dovetailed into renewal programmes.
New housing standards must be ramped up to code level 6 as quickly as possible so developers are in no doubt about the reality of staged increases in minimum standards to achieve zero carbon development by 2016. The diminishing difference between new-build standards and zero carbon should be dealt with through balanced trading.
But irrespective of whether balanced trading is introduced, a binding trajectory for increased minimum standards will drive delivery of zero carbon homes. Securing carbon neutrality will not undermine the progress to zero carbon. The use of low-carbon consultants at scheme approval stage will encourage developers to see balanced trading as a real option.
Its application will deliver carbon neutrality in the expanding house building programme to accelerate the improvement rate in the environmental performance of existing housing. The consultation draft PPS indicates that topics for guidance on DPDs will include "dealing with small sites and levering up performance of the existing stock".
This is the peg on which the DCLG can hang its support for local planning authorities that want to use balanced trading as a policy instrument. For now, the issue of whether we can press hard on this accelerator hangs in the balance.
- Mike Gibson is managing consultant with the South East Centre for the Built Environment, associate director of JVM Consultants and emeritus professor of urban planning at London South Bank University.
SURREY SETS EXAMPLE
Policy and delivery issues around energy efficiency are being more fully investigated in a project commissioned by energy efficiency company eaga from the South East Centre for the Built Environment.
This project is establishing a dialogue with planning authorities in areas where significant growth is expected to assess the feasibility of applying balanced trading. The first case study has been set up with Reigate and Banstead Borough Council, which is developing its sustainable energy policy with the aim of becoming an exemplar for Surrey.
The council has been allocated growth point funding and has a regeneration programme that embraces town centres and areas of relative social deprivation. A carbon neutrality requirement en route to zero carbon is included in its draft core strategy sustainable construction policy. This process includes establishing a low-carbon offset fund and delivery mechanisms.
A parallel review of the council's planning obligations policy will lead to a supplementary planning document (SPD) outlining a local tariff policy. A robust evidence base and policy is being developed so that a carbon offset contribution can be incorporated into the SPD, thus furthering the borough's sustainable energy and construction agenda.