A new entrant to the UK Housing Sector

You would need to have been living under a rock to have missed the arrival of Legal & General on the UK Housing scene. From a position of no involvement in housing, L & G are now set to become one of its biggest players. How has this come about? Because of the housing crisis.

L & G (and others) see the current UK housing market as an opportunity. With a backdrop of strong demand, rising prices and an existing set of housebuilders which are unwilling or unable to ramp up production to meet the demand, this looks like a market that is ripe for disruption.

Instead of going down the normal route for a new entrant to the market, and playing the same game as the uincumbents, L & G are going for broke. They have invested in the largest factory in the UK, bought a Cross-Laminated Timber production line, and just in case you missed the point, are setting up a plant to manufacture CLT to guarantee their source of supply. They are doing nothing by halves.

The plan is to produce and supply 5,000 homes per year, or more from the factory, and to supply all of it using CLT. Thereby adding the same output to the industry as ten additional Barratt divisions, or a Redrow to the housing industry.

They don’t intend to compete directly with the housebuilders, because they are not going to be selling a comparable product at a comparable price. Mostly they will be developing to own and rent their own housing stock.

The interesting elements of this is because much it will remain in their ownership, it is open to investment. The U.K. Housing industry has not been open to investment since we decided that we had to own our own properties. Now that we have accepted that this is both unwise at some stages of our lives, and impossible for many people, there is a clear and undeniable need for long term home rental. A pension fund looks at long term home rental and sees something that it can invest in.

The housebuilders have shareholders too, but their focus is on paying out dividends each year rather than owning assets thta appreciate. Although housebuilders do won assets in the form of land, and it does appreciate, it doesn’t have nearly as much value when traded as it does when it has homes built on it. This makes the housebuilders a poor investment risk compared to rental property. Rental property accrues value and brings in an income every year, so there are two opportunities to make a profit, both in the short term and in the long term.

In Germany, a large proportion of housing supply has pension fund backing. In the UK it is almost non-existent due to our historical distaste for renting. This is all going to change and there is a lot of headroom to grow into for investors.

Another impact from the pension fund is that they care about the long term, their business model means that they have to. If you are paying out pensions to thousands of people every year, you have to be confident that the money will be there for them. This means that they care about what homes are built from, how well it will last, and how sustainable they are, because it matters a great deal to them and to the people who are paying into their pension funds. Who would invest in an oil company now? Or a coal mine? But housing in the UK, with strong demand set to continue into the foreseeable future? That looks like a safe bet.

Zero Carbon London

At a time when ambition in environmental legislation is sadly lacking, this week saw two announcements that are going in the right direction. Both of them were about ‘zero carbon’.

Firstly the Govt announced through energy minister Andrea Leadsom that the UK would commit to net zero carbon emissions as there is consensus that an 80% reduction doesn not go far enough. Time will tell what that means, but the signalling of the ambition is positive.

This week also saw an important milestone on the path towards a low carbon housting sector with the release of the London Plan update requiring new homes in London to be ‘zero carbon’ from October 2016. This definition of ‘zero carbon’ is different from all of the others that have gone before, so it’s important to be clear about what it means.

From October 1st all new major applications put before the GLA are required to demonstrate that they meet the London Plan targets as they are currently identified. The main target being a 35% improvement on Building Regulations Part L 2013 predicted regulated CO2 emissions.

The new element is a requirement that the remaining CO2 emissions arising from the development are to be offset in an ‘Allowable Solutions’ style payment of £60 per tonne. This payment is then multiplied by a 30 year period, which is considered a reasonable lifetime for energy producing systems such as boilers or CHP, and the total is paid as part of a s106 agreement.

When I was involved in a pilot project for the original proposed 2016 legislation, the result was a payment of around £1500 per dwelling, but because that was testing the Zero Carbon Hub’s (ZCH) definition (confused?) there are subtle differences and I expect the London Plan payment to be slightly higher. The reason is that the ZCH definition included a high rate of Fabric Energy Efficiency (FEES) which was set as a minimum target for dwellings. This target was reached after analysis carried out by the Hub concluded that a level of 39-46kwh/Sqm/year was a good level of energy efficiency that didn’t necessarily require the use of very expensive fabric. Since then the Building Regulations has introduced a similar Design Fabric Energy Efficiency (DFEE) target, which aimed to be a bridging target between the 2010 regulations and the 2016 regulations, a stepping stone between the two. This current DFEE target aims for a 15% improvement in the base building fabric performance above the previous 2010 Part L Regulations target.

Now that the Government has halted the progress of transition to zero carbon buildings, the 2013 Part L Regulations that are in place are likely to stay in place for some time. Instead of using the ZCH definition of FEES the GLA are using the current Building Regulations instead. This is why this definition of ‘zero carbon’ is different from all other definitions that have gone before.

With that out of the way, what does it mean for construction in the capital?

It will become more expensive to develop new buildings, but by a predictable amount that I estimate to be between £1500-£2000 per dwelling. The GLA are confident that any viability test will demonstrate that this imposition has little or no impact on viability.

In many ways this is exactly what should be happening, using our most valuable market to test new approaches where we can afford to do so, then rolling those approaches out to the wider market as these new approaches become cost effective or even cost neutral.

This is effectively a carbon tax, and it will help to encourage development to produce less of it. Something that is needed in all industries if we are going to avoid extensive climate change. I expect to see some innovation in new buildings to improve the efficiency of services, fabric and ventilation.

There are a couple of caveats, however. Much of the planned development in London is in taller buildings or more dense development, and it is likely that the solutions to help those types of development to meet this new target are going to be quite different to the solutions for the rest of the UK where development is normally less dense. However I expect some benefits to be relevant in the field of building fabric detailing, air tightness techniques and prefabrication.

The second caveat is around district heating. The current SAP assessment of this technology is so poor that it is likely that we are overestimating the efficiency of them by some margin. In turn this affects the amount of CO2 remaining emissions and thus the amount of tonnes paid for by the new regulation. Work needs to be done to assess the performance of recently installed systems to check that their performance is in line with SAP to confirm that the amounts of CO2 being emitted are close to the predicted amount. We can’t afford to fool ourselves that we are achieving greater CO2 savings than we are in reality.

I welcome this development, given the paucity of environmental legislation being introduced compared to the huge amount of it being scrapped in this Parliament, we should cheer the determination of the GLA to maintain environmental leadership at a time when this commodity is sadly lacking from our governing politicians.

Why we need to stay in the EU

The prospect of the UK Leaving the EU fills me with dismay. I listen to the rhetoric from politicians and wonder about their motivations in proposing an exit. Do any of those proposing to leave have any real understanding of what it would mean? What would a future for the UK be like outside of the EU. Sitting like an unwelcome houseguest at the fringes of the party, furtively stealing beers from the fridge?

When I survey the landscape I am most familiar with, particularly around sustainable buildings, I reflect that much of the impetus for environmental legislation in the UK has come about through pressure from the EU through the Energy Performance in Buildings Directive (EPBD). I suspect that, left to its own devices, due to the UK Housing sector being dominated by a small number of housebuilders, the industry would have fought off all attempts to implement energy efficiency improvements.  Without the gentle but firm push in the small of the back from the EU, our homes would probably be much less efficient. We wouldn’t have an EPC, and whatever it’s faults, at least it is a step in the right direction.

Now that the Govt has scrapped the planned 2016 zero carbon legislation, the next push for improving our buildings will come from Europe, the EPBD requires that all EU states enact legislation leading to Nearly Zero Energy Buildings from 2020. Again, that gentle but firm push. This is something that will be good for consumers who buy homes, good for the businesses that build them and help to push down our CO2 emissions.

I imagine that the same goes for the car industry, and even though the image of the EU industry has been seriously damaged by the recent emissions scandals, at least the intention to reduce emissions is there in legislation. Given that the UK’s default position on improving emissions regulations has been to vote against them, and given that London in particular has been failing to meet EU emission standards for some time, and will continue to do so for some time to come, our record of standing alone on this issue is not a particularly proud one.

On renewable energy we are again struggling to meet EU targets, and thanks to recent Govt cuts, are not even sure how we plan to meet them. There has been no suggestion that these targets are unwelcome, or that we are unable to meet them, in fact the minister stated that the Govt has every intention of meeting its obligations. While the arrival of wind turbines have been unwelcome in some areas, they  enable us to reduce our imports of coal and oil and help us to reduce pollution levels and CO2 emissions. Again, without a push from the EU, would we have adopted these targets? On the evidence of the current Government, probably not. Or if we had, they would be voted out again with every change in the political landscape.

While our politicians vacillate every five years or so, whether they like wind farms or don’t, whether they like nuclear or don’t, and whether they think fracking is a good idea or they don’t, in the background there sits the EU,with a long term plan to reform the energy markets, to reduce emissions, to introduce more renewable energy and to make our buildings more efficient. Politicians come and go, but the EU remains as a stable influence on our policies and standards. This stability helps business to invest, and gives purpose and direction to research and development, as EU strategies tend to remain in place longer than national or local government cycles.

The exitmongers complain that this is interference in our democratically elected system of government, I say it’s a good thing. Without it we would be worse off. The EU acts as a brake on occasional foolishness, a calm voice in times of crisis and a firm guide on environmental matters. It’s a bit like a parent, the interference is unwelcome at times, but it’s reassuring that someone is there for guidance when you need it.

Drones for Deliveries (Part 2)

Following from my first article on drones and how they might be used for making deliveries and how they could be organised I wanted to follow up with a closer look at how they would work when they reached their destination. Google and Amazon are both testing drones for this purpose, so it is a case of when, not if they will be used for this purpose, and I wanted to look at the potential impact on buildings for designers. I am interested in this in the first instance because I see that from their widespread use could lead to the removal of a large percentage of delivery vans off the streets of cities, a reduction in delivery cost, energy saving and lower pollution. This will bring attendant benefits to the attractiveness of urban life, with lower noise from traffic and more convenience for sending and receiving deliveries.

The diagram below shows the path a drone will take to its destination by ‘hopping’ from location signals from each address. While in the ‘circle’ of the signal it picks up delivery codes matching its package, these delivery codes will be time stamped, so to find the destination it has to follow the time stamped codes to their point of origin.


Path of Delivery Drone to Destination

Another benefit arising from my ideas about how their distribution system would work is that a recipient of a package could have it delivered to wherever they were, in the office, at home, or in the park. That is covered in more detail in the first article.
I wanted to look at what happens when the drone arrives to your home or building. If you aren’t there, what happens to the delivery? How is it stored, and protected until you arrive to collect it.
I am assuming that there will be a horizontal separation of drone traffic above an urban zone. See Fig 1. Drones would be allowed to circulate freely in this area, with helicopters restricted to fly above them. Landing zones for helicopters would be created by geofenced openings in this layer.


Fig 1. Stratification of Drone Traffic

To begin with the drone has to be guided down to its destination. Fig 2 shows a diagram of a geofenced area which a drone could follow when it leaves the circulation zone above buildings.


Fig 2. Location Beacon cones used to ‘geofence’ drone arrival

Once the drone has followed this guidance down to its landing area and has safely landed, it can deliver the parcel. The parcel needs to be stored until it is collected, and this could be a delivery box that could sit in a garden, or on a balcony if one is available, or on your roof if it is flat and accessible. This is shown in Fig 3.


Fig 3. Delivery Box for a single address, plan section and elevations

The delivery box has a lid which opens when a drone arrives with a delivery, and the package is dropped by the drone into the box, which then closes up awaiting the owners to collect the package, or for another delivery. The box would be equipped with a system that recognises the delivery code of the package that the drone uses to match owner and package. The same code is used to open the delivery box by the package owner.


Fig 4. Delivery Box for multiple addresses.   I Drone arrives.   II Package is accepted.   III Package shunted to store.   IV Ready for new delivery

For people living in apartment buildings the problem is a bit more complex. If deliveries could be accepted on a balcony, the solution is similar to that for a garden or flat roof. A delivery box with a hatch and a door would work. If this can’t work and deliveries have to be made to the roof, the storage box has to be big enough to anticipate a lot of deliveries and needs an arrival box and a storage box, the sequence of how it could work is shown is Fig4.
This arrangement assumes that a concierge would come and collect the deliveries and take them to their relevant destinations. This is a weak point in the security of the system, and assumes that the concierge is trustworthy. In all cases the delivery is electronically tagged with a unique identifier, enabling the recipient to track its movement from when it leaves the shop to when it arrives at the delivery box.

Ask not what Drones can do for you, but what can you do for a Drone.

Musing over the idea that drones (and by this I mean the little ones, usually small quadcopters, not multi-million pound aerial weapons flown by remote) will have a major role to play in modern urban societies, I concluded that it would be both fun and instructive to work through just what their role might be. 

Both Google and Amazon are experimenting with drone delivery systems and I can see the appeal of this immediately. Instead of having to wait a whole day for gratification, the lengthy gap between ordering online and when our newly purchased parcel arrives, we can have our gratification almost immediately if we can organise a drone to deliver the purchase instead. We see that thing online that will make our lives either complete or a bit less incomplete, we buy the thing, and a drone delivers it to our door a mere hour later. 

Lets just take it as read that this will happen in any case, because if for no other reason, there are a lot of pizzas that need delivering every day, and this would take a lot of maniacs on scooters off our roads, and thats the thin end of the wedge. With the growth of online shopping I have heard a TFL* representative say that 30% of Londons traffic is delivery vehicles. Even if we took 50% of the vans off the road, we would reduce congestion a lot, reduce emissions a lot as most vans are diesel powered, and the streets would be quieter and safer. Apart from the hum of drones that is. Perhaps the pigeons would disappear too, perhaps there would be too much aerial traffic for them to feel comfortable, one can hope.

But there are a lot of problems to be solved and barriers to that future. 


They’re illegal, and cannot be flown near to people, which is a bit of a problem when you want them to get close to people to deliver goods to them. I think this will go away presently as the software systems running on the drones enables them to be more or less autonomous and able to avoid crashing into things or people. If cars can be considered safe as driverless objects, then drones shouldn’t present much of a challenge, being much smaller and lighter, and posing much less risk to human life. Lets assume that that challenge is surmountable.


Drones don’t currently have much of a range from the signal that controls them, which means that if you are a kilometer away from their controller they aren’t much use. I think that this can be dealt with by allowing the drone to control itself and by having a distributed network of guidance, like cellular telephone masts, that provide locations to the drone as it comes close to the mast. We use these masts to locate ourselves with smartphones, so why not drones too? To get it to deliver to our houses we just need a way to broadcast a signal to it that it can recognise, perhaps like the one created by our WiFi routers?


Being battery powered the current quadcopter drone designs are limited in terms of the distance they can travel and the loads they can carry. Battery technology is getting better, so distance will grow over time. The location masts or beacons used above to tell them their location could also provide charging points, so a tired worn-out drone could stop off for a quick gulp of electrons on the way home after delivering your pizza, book, fresh coffee,..whatever. To take on heavier loads drones could cooperate. This video by ETH shows a group of drones constructing a rope bridge, and this one shows another team creating a structure using bricks. The relatively straightforward task of delivering a parcel looks rather easy in comparison.


One of the major problems with drones is privacy. People don’t like the idea of a machine equipped with a powerful camera flying over their heads on a daily basis. This seems a bit Luddish to me, after all, in our cities we are surrounded by cameras in the hands of everyone we pass as well as those on the streets and buildings. But lets address the problem anyway. Imagine a scenario where the drone is autonomous, and not under control by any external agent, as it winds its way from depot to you. It doesn’t even need to go to your house, if you are in the park having a coffee, it could deliver the pizza directly to you. What the drone needs is autonomy, and a way of getting an anonymous set of directions to you. It need never know who you are, or where you live, and even better, it need not know what it has delivered to you. This will help to avoid the problem of Amazon and Google knowing everything you ever bought so that they can try and sell you a duplicate of everything you own. (why don’t they try and sell you something you haven’t bought?)


Lets take a scenario where you order a pizza and its awaiting delivery at the ‘restaurant’. A signal is sent out that a delivery needs to be made, and the nearest drone accepts the job in the same way that a Uber car would. The shortest distance to pick up the pizza would offer the cheapest transaction cost. The drone collects the pizza, and is given an electronic token at the same time. This was created by you when you ordered the pizza. Half the token goes to you, and half to the drone. You broadcast the token from your location and the token is passed from one point on the network to the next, every time the token is passed on it gets a bit added by every node on the network. The network propagates the token from one node to the next indiscriminately. This enables the drone to follow the trail back to you by seeking a broadcast token that is shorter than the one it has picked up from the network and which matches the other half of the token it already has. It will find its way to you without knowing who you are, or where you are. 

Esch bubble represents a location beacon, such as a wi-fi router., the routers broadcast the destination to the drone, and the drone follows this to you, wherever you are. The box at the top left is the warehouse sending in the message, the box on the right is you waiting for the delivery. Drones already in the network pick up the message signal, follow it to the warehouse, pick up the package and deliver it to you.



In the same way that BitCoin has developed a security system that is distributed, and every bitcoin node knows how many bitcoins there are, and who owns them, without being controlled by a central source, drones could carry out the physical transactions managed by a similar system to the electronic transaction. In a nice parallel where BitCoins enable Payer A to use currency B to pay C, the drone can carry the package from C back to A using the network B. Read this article on blockchains and BitCoins and you will see what I mean. This method would prevent anyone knowing which drone was carrying which package, and who it was intended for. The only way someone could steal your pizza would be to follow you home and steal it from the drone as it delivered it to you. Of course there will always be people who will snare a drone for whatever it happens to be carrying, but at least they won’t be able to steal on demand. 

Physical Implications

A drone needs somewhere to land a drop off its parcel. It needs a flat surface to land, and if the person for whom the delivery is intended isn’t there, it needs an electronically linked drop box where it can leave your parcel. It could lock the box with its half of the electronic delivery token, and you can unlock it with your matching half when you get home from work. But the box needs to be big enough to accept your pizza, post, packages and needs to be somewhere that the drone can get at but where other people cannot. For apartment buildings this would ideally be the roof, where a landing platform and a set of drop boxes could be located without too much difficulty in many flat-roofed apartment buildings. 

Perhaps one day drones will be able to post letters through your letterbox, if you still get any, any that you actually want to read that is.
*Transport for London

Is London going to go Zero Carbon?

Business Green reported an interchange last week between the Mayor and Green Assembly Member Darren Johnson  in response to his question about the Mayors position on Zero Carbon homes. Boris’s reported response was

“What we are looking at is making sure that we can continue, through the London Plan, to ensure that Zero Carbon Homes are delivered in London and we will be issuing further guidance in due course to provide industry with the certainty it needs about how to do that.” 

Boris reported that London aims to achieve a 60% reduction in CO2 by 2025 and has achieved 14% to date. This represents a per capita reduction of 20% as London’s population has grown by 600k during the reporting period.

It is heartening to hear these words from the Mayor, and I hope that the candidates for the Mayoralty are listening. If devolution is to mean anything it should promote the ability of cities in the UK to sidestep the damaging and short-sighted environmental policies of central government.

Having recently completed a large zero carbon scheme at Hanham Hall with low-rise construction and learned what it means for most of the UK’s housing development, I thought that it would be useful to share below some analysis that we have done to assess how tall buildings can achieve the zero carbon standard. Given that many of the buildings that are proposed for the capital in future are going to be tall it is interesting to assess how the regulations might affect those building types.

The analysis has been done for a twenty five and a forty storey tower with six units per floor to demonstrate how different systems meet the targets. We tested gas boilers, CHP with gas backup, all-electric heating and hot water and finally Air Source Heat Pumps. Three of the four rely on a communal hot water distribution system, the all electric system being the exception.

Energy Options to meet the London Plan and Zero Carbon

Energy Options for a 25 Storey Tower to meet the London Plan and Zero Carbon



Energy Options fora 40 Storey Tower to meet the London Plan and Zero Carbon

What the research shows is that for taller towers there is no difficulty in meeting the current definition of zero carbon. In fact it shows that achieving it is technically easier than achieving the London Plan, as the London Plan has a lower emissions target than the Zero Carbon definition. This is assuming that there is no special treatment for electric heating or hot water, unlike the current version of SAP which is based on comparative performance rather than on a definite figure as set out in the Zero Carbon Hub’s definition.

Based on these figures I would say that towers should be forced to meet the lower emissions target of 10kg/CO2/sqm since in both gas-based options this target can be met. Perhaps an all-electric version could be left as it is at the higher 14kg/CO2/sqm.

It also shows that a very efficient 25-storey building can meet the targets irrespective of the energy system used, the top graphs shows that it can achieve the target in all four options, even an all-electric option. The 40-storey is not so easy. My assumption is that only the roof can be used to house renewable energy,  but for the 40-storey version it would be necessary in the electric options to put some pv panels on the facade to reach the target.

But of course the technical success is not the full picture. In addition to the Fabric Energy Efficiency target of 39kwh/sqm/yr that apartments have to hit, and towers have no difficulty doing so, there is the Carbon Compliance which is shown in the graphs above, and again there doesn’t appear to be much of a problem for towers, but finally there is the Allowable Solutions element which says that whatever CO2 emissions remain must be offset. This offset is achieved by multiplying the tonnes of CO2 emitted, by the figure of 30 years, and by an agreed sum for each tonne. Currently the GLA uses £60/tonne. This produces a figure of approximately £1,000 per apartment to offset the emissions elsewhere.

Sadly the all electric system is unwelcome in London as it it not seen as ‘futureproof’ according to the gas-led ideology preferred by the GLA. This is understandable as an all-electric system does not emit the lowest CO2 emissions possible, at current levels of grid CO2 intensity. What will be interesting to see is how long before the grid CO2 intensity drops to a low enough level to change that thinking. The Committee for Climate Change has suggested that we need to stop burning gas by 2035 to meet our carbon budgets. What is the point in investing in gas burning equipment and networks now if they have to be decommissioned in less than twenty years time?

Certainly an all-electric system is the cheapest to install, avoiding the central distribution system, and it could be argued that an all electric system is just as futureproof as a hot water led system as the Grid is inherently flexible. Interestingly our research also suggests that in the majority of cases an all-electric system is cheaper than a communal system for residents as the standing charges are lower, even if the energy bills are higher than gas. The standing charge is used to create a sinking fund to replace the communal system. If there is no communal system the sinking fund is either not needed or is much smaller, thus lowering residents total bill. The cheapest system of all to run is an individual gas boiler, but no-one would consider installing that into a tower, and it has a higher maintenance and replacement cost than an all-electric system.

A major hole in this analysis is that it is carried out using SAP, which is pretty poor at dealing with apartment buildings. The energy for pumping heat around the building is ignored, as is the energy for ventilating corridors, pumping hot water, lifts, communal lighting etc, etc. Since the communal spaces in these buildings are not heated, SBEM isn’t particularly useful either. As buildings get taller these additional energy uses and losses will become more a more significant part of their energy use, we need better tools to assess them, and more regulations to deal with their particular demands.


Five Ways to live sustainably.

How do we live sustainably? The holistic nature of the problem makes definition difficult, but that doesn’t prevent us from having a go at it. We must try and define the problem, as this is usually the first step towards finding a solution. 

Problem: We are not living within our environmental means, we are exceeding our emissions budget. To put it another way, we are in environmental debt. To continue to get into environmental debt just leaves another problem for our descendants to solve. If that weren’t bad enough, this environmental debt is already causing the climate to change in unpredictable ways, affecting our oceans and the biosphere dramatically. So not only will we leave a mess behind, but it will be a dangerous and unpredictable mess!

Solution: To stop eating into our environmental capital, our rainforests, oceans, atmosphere and biosphere. 

That sounds simple enough, doesn’t it. But of course it isn’t that simple, mainly because we are either unaware of the cause of environmental debts or because our supposed happiness is predicated on a way of life that is inherently damaging, and we are unwilling to give up this way of life. Old habits die hard.

The change of habits and the introduction of cleaner systems does come at a price, change costs something, whether in time, materials or opportunity costs. But the cost of innovation is usually short-lived and then pricing tends to return to a level below where we started from. This is what pays for innovation and it doesn’t happen unless that promise of low costs is there.

Clean Energy: We need to replace our dirty grid with clean energy, which will take more than a generation as the lifespan of these systems is very long. But this has already started and there is widespread recognition that this needs to happen, so that battle is largely won. Sadly we have a government that doesn’t quite see this, but fortunately governments are temporary. Support a clean energy project near you today!

Get rid of the gas-guzzler: We need to stop using combustion for heating and transport. The Internal Combustion Engine has had its day, lets bury it with full honours and move on! Fortunately cars and domestic boilers have a relatively short lifespan and give us regular opportunities to change our habits. We will need to make a decision to take a risk by changing to a hybrid or fully electric vehicle when the opportunity offers, or to install a heat pump. We can’t rely on a push from government.

Buy Wisely: We need to stop importing goods from economies that aren’t moving in the direction of emission reductions, both to guarantee local jobs and to reduce the emissions of transporting goods half-way around the planet when we could easily make them on our doorstep. It would be nice if a carbon tax was added  to imports that highlighted their environmental costs, but we can add that cost in our mind when we think about pressing that button online. 

Waste: We need to reduce waste to a minimum, wasted materials, wasted energy, wasted heat. This is the most difficult one, as it is so closely related to behaviour. Persuading people that a walk to the shop is better for them and for the planet doesn’t sound difficult, but some people love their cars. There is an interesting shift in the use of health gadgetry to inform people about their health related behaviour that will help to achieve this. Insulating our homes will be a once in many generations cost. Consider whether you want your children to inherit an expensive home to inhabit, or a low energy home. If you only consider your own costs you won’t be motivated enough to spend the money.

Move into Town: We need to stop seeing a bucolic life in the country as the barometer of success. The country has nice views and fresh air, but it also has long travel distances to the doctors, the shops, the post office, the theatre and for every trip you have to make, the delivery van has to make one too. Move into town! Open a tea shop!

A lesson in Ministerial Defence or Defiance?

During this week The Rt Hon. A. Rudd Secretary of State for Energy & Climate Change gave a strong demonstration of why she has been appointed to her post, namely her ability to defend an indefensible position. A necessary attribute for all Tory ministers in the current Cabinet, it would appear. If this demonstration is anything to go by, she has a long career ahead of her, hopefully not defending the indefensible, but promoting the new direction that the Government will take to enable the UK to meet its obligations to reduce the risk of climate change and meet the aspirations of the electorate.

You can watch the full story unfold here, I recommend having a glass of something strong by your side.

She was called to give evidence to the Energy and Climate Change Select Committee to explain why she had claimed the following two opposing views in quick succession. The first to the House of Commons, to say that the UK was going to meet its renewable energy targets by 2020, and the second where she wrote to her counterparts in the ministries for Transport,the Cabinet Office and The Treasury to ask for their help as under current policies the UK will not meet its renewable energy targets by 2020.

I can’t help wondering whether the leak was a political move to assign blame for this mess on the shoulders of colleagues in the Cabinet Office and Treasury whose decisions have left DECC with no room for manoeuvre after a series of swingeing cuts to renewable energy subsidies which have left the industry in disarray and investors running in the opposite direction. Among the suggestions for solving the problem was the suggestion that the UK could buy in renewable energy from other countries through interconnectors. When pressed on this matter, she said that this was not her preferred approach!

The explanations that were given to the Committee for the confusion were as follows:

– due to shortfalls in progress with renewable heat and transport, the result of current policies will be 11.5% of renewable energy by 2020 instead of 15%, a shortfall of 4.5% of all UK energy or a shortfall of 23.3% of the 15% target. Not a small amount of energy.

When asked whether the shortfall was a result of the recent cuts to subsidies and support for renewable energy, she responded:

– ‘we are going to meet the planned target for electricity, so we don’t think that cutting the subsidies will make any difference’

– ‘electricity is on target to provide 30% of electricity by 2020’

– ‘we don’t think that the answer is to provide more (renewable) electricity’

-‘ there is a greater role for electricity in transport’

Bizarrely the Committe didn’t ask the obvious question here, which is: if transport is to make a greater use of electricity to achieve its renewable energy targets, then wouldn’t it be sensible to make sure that there is greater capacity in the generation market to provide that renewable electricity? If we can provide more renewable electricity and (God forbid) exceed our electricity target to compensate for the lack of progress with heat and transport, wouldn’t that be a good thing? Sadly , no such question was forthcoming.

The Minister should be writing to the Dept of Transport to tell them that they are going to make use of more renewable electricity, that DECC is going to provide it, and to propose that they to work together to ensure that there are fleets of electric cars  and other vehicles ready to use this electricity by 2020.

There was also an opportunity to point out to the Minster that the cheapest way of meeting the heat targets is to reduce energy use, and some concerted action, like a replacement for the Green Deal would be a good start, but again, sadly, no such question was posed.

When asked how much of a fine the UK could face if it doesn’t meet its targets, the Minster robustly claimed not to know how much, and explained this away by saying ‘I am commited to making sure that the UK meets its targets’,  which is very reassuring, but at the same time a bit unbelieveable. The Minister was asked what policies she planned to introduce to meet the shortfall and responded with this gem:

-‘I have some ideas that I would like to take forward’ which are curently being evaluated under the Current Spending Review. I take this as Ministerial speak for , ‘I have made my point, I have given the options to the Treasury, they will say no, and I will be absolved of responsiblity’.

Expecting to produce new policies, implement them and to convert 4.5% of the UK’s energy demand to renewable sources by 2020 is simply unrealistic. It would be unlikely to happen even in a sympathetic Government, but particularly in the current fiscal environment where cuts to tax credits are off the table which will mean that cuts to absolutely everything else will be on the table, and given the recent behaviour of this Government there is zero chance that renewable energy targets are going to be a priority.

And in Other News...

There were a couple of unrelated gems in the session that will draw hollow laughter from many in the energy sector. When asked about investment plans for nuclear she stated:

-‘the  last thing the energy sector needs is surprises’

and when asked about the options available for EDF if the Chinese were to pull out of the Hinkley deal, she stated without blinking, that

-if the Chinese pull out, EDF will find another investor’

Cue hollow laughter by every economist.

Where is the backbench opposition to Green cuts?

When the Tories won the election, I asked myself, and some colleagues, ‘who will keep them in check’? The answer from one particularly wise colleague was: ‘they will, they will keep themselves in check’. So it has proved to be. The response to the tax credit cuts from backbenchers and from Tories in the Lords has been decisive. (I was particularly surprised by the appearance of Lord Lawson voting against the Govt, I had long since dismissed him as a climate-change denying basket case, but it appears I might have been wrong about him, climate-change denier apart, he isn’t a basket case). Why then has there not been a similar response to the Tory dismantling of environmental legislation? In case you need a reminder of the damage, Here is a handy list, I suggest that you cut it out and keep it. Has there been any response from the Lords or the backbenches? No there hasn’t. Labour have been too busy deciding whether to elect Corbyn, and having elected him, whether they have consigned themselves to the opposition for a decade. [It is notable that the time when an opposition is most needed in modern politics is in the first year of a new term, so the policy of losing party leaders throwing themselves on their swords is exactly the wrong approach for an electorate that needs a strong opposition at the beginning of the new term. We don’t need a strong opposition leader to turn up when most of the policy changes have been made].

In the end, politicians across the spectrum don’t see these cuts to environmental legislation as a vote loser. The damage this is going to do to the renewables industry or to the climate is perceived to be either too small or too distant for them to worry about it. Whatever negative impact these cuts will have are too distant for politicians to worry about. What is startling about this is that the outcome is more similar to the impact of tax credits than they think. But since most of the people affected don’t have a vote in the UK they are not being considered in quite the same way.

The outcome of climate change on those affected will be much, much worse than any tax credit cuts. Instead of being a bit worse off, millions of people will be displaced. This article mentions some of the countries where a lot of people are likely to be displaced by sea level rises, picture the problems in East Africa if Ethiopia, Kenya and Somalia are strongly affected by climate change, as is predicted, and how an influx of refugees from those countries would affect Sudan, Uganda and the Congo? Given how much impact a mere two million refugees from Syria is having on the EU, how do we think the worlds politics, industries and economies would be affected by the movement of 150 million people?

Somehow we haven’t managed to couch the message about the dangers of runaway climate change in the right way. It is too much about energy, and too much about what needs to happen in the UK. We need to reinforce the message that the position of the UK on the world stage is at stake here, not as a Trident wielding superpower, but as a compassionate nation full of sympathy for those victimised by circumstances, through no fault of their own, impoverished by their history and at risk from our thoughtlessness.

2 Billion Cars

2 Billion Cars, a book by Daniel Sperling and Deborah Gordon.

The VW Boardroom decides to cheat its emission tests

The VW Boardroom decides to cheat its emission tests

This book is a very interesting read, particularly at this moment, with the backdrop of the VW emissions scandal in the media. The book covers the recent history of both the oil industry and the car industry, in the context of regulation, efficiency and the drive to reduce emissions.

In particular, the part where the book describes how European and Japanese manufacturers made progress in the US market when they offered more fuel-efficient cars with lower exhaust emissions makes for painful reading. American manufacturers fought tooth and nail against higher efficiency and emission standards for decades, and watched with surprise when they were blindsided by foreign manufacturers who saw this demand coming. Those manufacturers must be feeling a little schadenfreude at the moment as they watch VW and other manufacturers admit that they were cheating on their emissions scores.

There are good chapters on the oil industry and how it works, on the growing demand for cars in Asian economies, and on the regulatory regime in California. The book is a really useful reference on the development of fuel-efficient cars including hybrids, the introductions of regulations worldwide and the resistance of the US-based car industry to improving fuel efficiency.  I expect that the book will appeal most to people interested in transport and sustainability problems (which ought to be most of us!)
Some of the points made in the book

1. Since growth in car usage in developed countries has flatlined, or started to decrease, all the growth in vehicles will come from developing countries, with annual growth rates in vehicles about 7-8 percent annually. Whatever India and China do will have the biggest effect on greenhouse gas emissions. The recent pictures of Beijing and Shanghai smog are testament to the growth in those cities of the number of cars but equally their failure to control emissions. (to be fair, not all of it is from cars)

2. There are large parts of the world where infrastructure costs mean that people will continue to use their cars and will not have public transport available to them in the foreseeable future.

3. The chapter on oil is particularly interesting, and how the oil ‘market’ is really not a market, but is in fact carefully managed supply by the oil producers, many of who are using oil to prop up their economies, and often they are among the few non-democracies (or failed democracies) on the planet. When you think of the success of the developed economies that based their success on ‘Guns Germs and Steel’ you wonder at the current level of success being enjoyed by places like Saudi Arabia, Nigeria and Venezuela and how they are going to make use of it. The signs so far is that they are going to waste the opportunity. Therefore, making the personal passenger vehicle more environmentally-friendly is key if the rest of us are to stop this haemorraging of wealth into corrupt nations that aren’t going to use it wisely.

4. The chapter on the oil industry also highlighted that we are nowhere near peak oil. The amount of unconventional sources such as fracked gas and tar sands is large enough to blow any chance of staying within the 2 Degrees target. So gas and oil usage will have to be further regulated if we have any chance of managing climate change risks to acceptable levels. (is there such a thing?)

5. The authors are very clear that the best way to promote energy independence and reduce emissions is to impose very high fuel performance standards. Government, they say, should never “bet on a technology winner”, but should instead make performance-based goals the only measure of success, both for fuel performance standards, and exhaust standards. (there are interesting parallels here between the support for nuclear energy by some governments and coal by others)

6. The chapter on California was particularly interesting, highlighting why it is in a unique position to influence national policy on sustainable transportation, and how it can therefore influence policy globally. There are parallels with the role of London in the UK, setting higher standards for buildings and cars, and trialling new technologies before other cities. Sadly, the book was published before Tesla really got going, and I hope that the authors do a revised edition soon to cover the meteoric rise of the electric car worldwide in the last five years.

7. The chapters on the history of the American car manufacturers are instructive for a number of reasons. It is an object lesson on how large corporations lose contact with their customers and focus on doing what they have always done instead of being innovative and market-facing. (The idea that markets are always alive to the demands of the market is an over-simplification of reality)I am reminded of the behaviour of UK housebuilders here as they avoid regulation by complaining that the market doesn’t demand energy efficient homes, and that that adding efficiency increases costs.

8. The way that the US manufacturers used perverse incentives to create gas-guzzling vehicles at the point where they should have been investing in R&D of more fuel efficient engines and vehicles tells you a lot about the behaviour of corporates. What well-run company would have bought Hummer? General Motors, thats who.

9. The authors felt that one of the best hopes to increase fuel efficiency when the book was written was to use plug-in hybrids, like the unexpectedly successful Prius. They rightly point out that hydrogen-powered fuel cells remain a laboratory project.

My only quibble with the book is that its already a little out of date, the authors failed to mention the potential for renewable energy and battery storage to play a major role in energy management and the use of smart grids, but since these ideas are relatively recent perhaps its forgivable. Another reason for a new edition.