SC(3) CR-R4

Sustainability Committee

Inquiry into Carbon Reduction in Wales: Residential Carbon Reduction

Response from the Countryside Council for Wales

The Countryside Council for Wales is the Government's statutory advisor on sustaining natural beauty, wildlife and the opportunity for outdoor enjoyment in Wales and its inshore waters. We champion the environment and landscapes of Wales and our coastal waters as sources of natural and cultural riches, as a foundation for economic and social activity and as a place for leisure and learning opportunities. We aim to make the environment a valued part of everyone’s life in Wales.

1. Is the proposed 3 per cent annual reduction target by 2011 'in areas of devolved competence'1 sufficient to enable Wales to make its full contribution to meeting UK-wide targets? If not, what targets should be put in place?

Response:

Using 2004 data, Wales’ per capita CO2 emissions were the highest in the United Kingdom and the 12^th highest in the world out of 210 countries (source: US Energy Administration). The 2004 data indicated emissions were 15% greater than required to meet the UK targets to which the Assembly has signed up and were 2.5% greater than 1990. (Source: Carbon Dioxide Emissions in Wales, NAW, July 2007).

The 2005 dataset has just been published and indicates a 4% fall in CO2 emissions in Wales since 1990 and a 9% fall in total greenhouse gases over the same time period (Source: Greenhouse Gas Inventories for England, Scotland, Wales and Northern Ireland: 1990 - 2005). It follows that the 2005 emissions were 11% greater than required to meet the UK targets.

It should be noted that due to inter-annual variability in emissions, neither decreases are statistically significant (see attached Appendix I). Additionally, the means by which emissions are calculated by AEA plc have been overhauled since publication of the 2004 figures, making comparison difficult. There is also a +/- 2% uncertainty interval on the Welsh data (Source: Greenhouse Gas Inventories for England, Scotland, Wales and Northern Ireland: 1990 - 2005). Based on the 2005 data for carbon dioxide emissions only there is a statistically insignificant yearly decrease of 1% per annum.

A programme of emissions reductions is clearly needed to bring Wales on track with the rest of the UK.  One interpretation of WAG’s aim to contribute fully to meeting UK-wide targets would be to bring Welsh emissions 20% below 1990 levels by 2010 (Source: Carbon Dioxide Emissions in Wales, NAW, July 2007). According to the NAW’s own assessment, Wales needs to reduce emissions by 4% per annum between 2005 and 2010 to achieve this, but this recommendation is based on 2004 figures. Data is currently lacking for the last two years (including 2007), but assuming a flat line from 2005 to present, the proposed 3% per annum reduction for 2008 to 2011 suggested above would achieve only a 12% reduction on 1990 levels by 2010 - well short of the 20% target. (summary in Appendix II). By 2011, continued reduction at 3% would at least achieve the 15% reduction on 2004 figures required to bring Wales in line with the rest of the UK.

In the light of this, in order to attain the 20% self-imposed target, CCW recommends a target reduction of 6 % per annum until 2010 or 4.5% per annum until 2011.

Arriving at a 20% reduction on 1990 levels by 2010, would then require a more modest 1.8% reduction per annum to hit the UK Energy White paper target of 30% by 2020 and 60% by 2050.

An alternative to this scenario of drastic cuts followed by more modest cuts may be to maintain a 3.5% reduction target from present and commit to this beyond 2011. This would fail to reach the 20% reduction on 1990 levels by 2010 (managing 12 %), but the 20% target would be attained in 2013, the 30% target ahead of schedule in 2018 and at continued 3% reduction, 74% reduction on 1990 levels being attained by 2050 - actually above the 60% UK target set for this date.

Such projections must be considered in the context of the large inter-annual variation in emissions - variation that has amounted to +/- 15% in the recent past. Such variation that is likely to be even greater between emissions sectors. Only by careful integration of emissions targets for different sectors and regular updating of these targets in response to sectorial variation, can such a trajectory be approached and maintained. CCW’s accompanying document: "The Importance of an Integrative Approach to Climate Change Mitigation Measures” expands on how this might be achieved.

It should be noted that effort made on curbing emissions now will pay great dividends later -  the Stern Report left little doubt that there is no time for delay. There is however a question mark over the validity of the 60% 2050 target. This target was derived from the Stern Report but more recent analysis has suggested that the 450-550ppm CO2e stabilization goal in the report may be too high (Source: Don’t Give Up on 2 Degrees C, Quality of Life Commission, 2007.) Based on a review of the latest scientific projections of emissions increases and climate impacts, the Quality of Life Commission suggest at least an 80% cut in emissions by 2050 is the required UK target.

CCW endorses this recommendation and therefore recommends that WAG adopt a steady 3.5% per annum reduction target to 2050 This would achieve 20% on 1990 by 2013, 39% by 2020 and hit 80% by 2050. WAG acting in this manner would help to turn the tables, from being the UK’s worst per capita carbon performer to being an emissions reduction world leader.

2. Should the emission reduction target be based on Welsh consumption, or production, or both (ie should it take into consideration the carbon dioxide generated in Wales (production), or the carbon dioxide emissions that Wales' residents are responsible for, regardless of their source (consumption))?

Response:

The difference between consumption and production figures depends on import and export of energy (primarily electricity and oil refining) to and from Wales. Currently Wales exports approximately 10% of electricity generated (Source: Wales Energy & Carbon Emissions Study BY2003, Carbon Trust Wales). From a global perspective, as long as those with whom Wales exchanges energy adopt a similar accounting system, it makes little difference as to whether the accounts are based on consumption or production.

Currently, most basic analyses are based on production (e.g. Carbon Dioxide Emissions in Wales, NAW, July 2007). Taking a national view, if accounts were based on consumption (such as the WECE initiative), the Welsh total would fall, but a similar consumption-based statistic for England would rise. This would help redress the imbalance in current Welsh figures, whereby our status as a net power exporter is contributing to our very poor per capita production emissions. It would not however assist in redressing the imbalance caused by a disproportionately large production of energy intensive materials in Wales, such as steel, that are exported to England and elsewhere. The accounting trail for encapsulated energy is likely to be too complex and instead CCW recommends that focus be made on end-user of energy only.

However, such a shift to consumption-based statistics should not be regarded as a real reduction or a replacement for real emissions reductions. If Wales is to act in concert with England and other member states on attainment of UK-wide targets, all member states will need to try as hard as possible.

In summary, CCW recommends the Carbon Trust Wales WECE consumption-based approach is adopted.

3. What particular challenges does Wales face in reducing carbon dioxide emissions from households, and how can these challenges be overcome?

Response:

A) Old housing stock - Wales has the highest percentage of pre 1919 housing stock in the UK - 36% versus 26% in England (Source: Domestic Energy Fact File: England, Scotland, Wales and Northern Ireland).  Older houses tend to be harder to insulate as they are often built with solid walls (40% of Welsh housing stock - Source: FoE). To tackle the issue of residential emissions in Wales is to tackle the particular issues that old housing stock poses. The SDC report "Stock Take - Delivering Improvements in Existing Housing” suggests a number of ways this might be achieved including an equalisation of VAT on refurbishment of houses compared with New Builds. If such tax relief were offered subject to installation of energy efficient measures such as dry-lining, insulation etc, it would pay builders and developers to make these improvements to older housing stock rather than wastefully demolish and rebuild or simply ignore older housing stock.

B) Probably for this reason, Wales lags behind other parts of the UK in uptake of cavity wall insulation. Only 25% of potential buildings have cavity wall insulations installed. Greater awareness of the large potential savings of cavity insulation installation would help.

C) Space heating is achieved with a greater proportion of solid and liquid fossil fuels in Wales than in England and Scotland (but less than Northern Ireland). These fuels are more carbon rich, as opposed to gas that makes up a greater proportion of the domestic energy supply in England & Scotland (Source: Domestic Energy Fact File: England, Scotland, Wales and Northern Ireland). Promotion of biomass solid fuels and mains gas where available would be appropriate. Wales, due to large amounts of forestry and a large rural population is ideally placed to become UK leaders in the use of domestic woodfuel.

D) On a positive note, Wales has a high proportion of Owner-Occupiers  - as high as England and greater than Scotland and Northern Ireland (70% Source: Domestic Energy Fact File: England, Scotland, Wales and Northern Ireland). Owner-occupier homes tend to show a greater uptake of energy efficiency measures than tenanted properties. Attention is still needed to address the 30% tenanted properties, where often energy efficiency is poor and significant improvements could be made at low cost.

4. To what extent has the Welsh Assembly Government been successful in utilising the powers available to it in order to reduce household carbon dioxide emissions?

Response:

According to the previous Greenhouse Gas Inventory of England, Scotland, Wales, & Northern Ireland, published (2004 data), Wales has seen a 16.1% rise in residential emissions of C02 since 1990, to 11.3% of total. This compares with +14.7%, +1.2% and -16.2% over the same time period for England, Scotland and Northern Ireland respectively. A comparable break down for the 2005 data versus 1990 baseline is not currently available. In addition, the 2004 figures do not include emissions from domestic use of electricity: the power generation sector in Wales over the same period to 2004 saw an increase in emissions of 15.6%. Admittedly much of these increases occurred prior to devolution but in terms of actual reductions in household emissions it is difficult to find evidence of success at present.

The fall in overall emissions in 2005 is encouraging, but as stated in Response 1, it is statistically insignificant and it is not clear from the 2005 report from which sectors in Wales this fall derives. It should also be borne in mind that 2005 electricity generation emissions stand at nearly 25% above 1990 levels - of which 28% is used by the residential sector (2003 data from Carbon Trust).

5. Could alternative targeting of Welsh Assembly Government financial resources lead to greater household emissions reduction than is currently being achieved? If so, where could additional resources lead to greatest impact? (Please provide detail to support your evidence).

Response:

Transparent Ring-fencing of Green Tax Revenue - As a general principle, any revenue raised at a local or national level under the auspices of green taxation aiming to assist climate change mitigation needs to be clearly ring fenced and spent in a manner that aids sustainable alternatives to the option being taxed. For example, increase in city center parking charges are only likely to be acceptable to the public if there is a commensurate and transparently linked increase in funding of public transport alternatives, giving rise to genuine improvements in service. Failure to do this fosters a public perception of green taxation being used merely as a revenue-raising exercise (Source: EFRA committee report 2007)

Promoting the uptake of Smart Meters - The UK Government White Paper on energy, published earlier this year has announced that all new electricity meters will be fitted with real-time displays from 2008. These displays provide easy-to-interpret direct feedback on domestic electricity consumption for the consumer. The White Paper states that a UK-funded free retrofitting programme will be available for existing housing stock up to 2010. Many consultees on the White Paper feel that the UK Government has failed by stopping short of introducing across the board 'Smart Meters’ that provide for much more accurate management of domestic electricity usage. A scheme that a) subsidises the installation of full smart meters in existing housing stock and b) makes their installation in new-builds compulsory would mean that Wales could take the UK lead in this field. The cost of such a scheme in Wales would be approximately £80m, but this would yield £55m savings per year to consumers and suppliers (Based on Energy Watch Report - Smart Meters - Costs & Consumer Benefits). Installation would therefore pay for itself in less than two years. The summed carbon savings could amount to 0.08MtCO2 per annum , 0.2% of total Welsh emissions, or a valuable 5% of a total annual reduction target of 3.5%. Not bad for something that pays for itself in less than two years.

At the very least, the two year window for free fitting of the (admittedly more limited) real time meters needs to be very actively promoted across Wales, alongside initiatives to use the data from these meters to help bring about energy reductions by behavioural change in the residential sector

Increased funding for domestic woodfuel - The relatively high reliance on solid and liquid fossil fuels for domestic heating in Wales presents an opportunity for increased use of stand-alone biomass boilers and community CHP biomass schemes. There is great potential for expansion of the domestic woodfuel market in Wales. The development of a distinctive Welsh branding for woodfuel would be a highly visible response to the challenge of climate change mitigation. Forestry Commission Wales has stimulated growth in this area via its Wood Energy Business Scheme grants, but this initiative needs to be extended to residential buildings to encourage the replacement of conventional coal and oil fired domestic central heating boilers with modern highly efficient and convenient woodfuel boilers. Increasing numbers of residential users will assist the establishment of a thriving woodfuel industry in Wales. The Mid Wales Energy group estimate that with management the existing conifer forestry area in Wales could provide the domestic heating needs of 10-20% of the total Welsh housing stock (Source: Commons Select Committee on Welsh Affairs, Third Report). The actual potential is likely to be less due to existing contracts on current forestry stock. The UK currently produces 1.2% of its primary energy from wood, lagging far behind others EU states - France for example produces 9% of primary energy from wood.

Microgeneration and introduction of Feed In Tariffs - Microgeneration offers the potential to generate 30-40% of UK energy needs by 2050 (Source: Energy Savings Trust). The UK lags far behind other nations such as Germany and Japan in the domestic uptake of this technology. This seems to be due to the combined effect of the cumbersome nature of the Renewables Obligation Certificate scheme when applied to small-scale generation and the lack of serious funding for the Low Carbon Buildings scheme, by which microgeneration technology is currently grant-aided (Source EFRA committee 2007). The result is very slow adoption of microgeneration in the UK. While the new Wales Microgeneration Strategy will facilitate the development of microrenewables, the introduction of feed-in tariffs for electricity thereby generated would provide a vital financial driver for widespread market adoption.

Lead by example - Sensible amounts of money spent ensuring that public bodies in Wales are acting as exemplars for emissions reductions will serve to inspire the public and dispel accusations of double standards. There is a general suspicion of public initiatives if not backed by visible and real reductions by government itself (Source: CRed - evidence to Environment, Farming & Rural Affairs Committee on "Climate Change - The Citizen’s Agenda”, 2007).

Restore Shortfall in Energy Savings Trust Wales Funding - Recent budget cuts and the imposition of VAT on EST grants has lead to a 20% reduction in available budget (Source: http://news.bbc.co.uk/1/hi/uk_politics/5226366.stm). The EST is in the frontline reducing emissions from residential property. As such, this flagship organization should be a recipient of priority funding from WAG to help continue to deliver and improve domestic emissions reductions.

Incentives for energy efficiency in existing housing stock. As stated above Wales has a high proportion of older properties. Many already have the basic energy efficiency measures installed - in many cases through the excellent work of the Home Energy Efficiency Scheme (HEES). The Sustainable Development Commission report "Stock Take - Delivering Improvements in Existing Housing” has looked at how further improvements can be made in this sector. They estimate that 9-19 million tonnes of carbon emissions per annum could be saved by 2020 if existing housing energy efficiency were taken to the next level by major refurbishment of existing housing stock. Several financial drivers that have been suggested to help achieve this - for example, an equalization of VAT between new builds and refurbishment, such that VAT is reduced on refurbs that incorporate sound energy efficiency measures throughout. The loss of revenue is paid for by the imposition of VAT on new builds. A level of VAT at 11% would be revenue neutral. Such measures are not within the scope of NAW devolved powers, but other similar financial incentives could be considered. Another suggestion has been the relaxation of stamp duty on house purchases if improvements are made to the energy footprint of the dwelling by the new occupants within the first year (Source: EFRA report). Clearly, our existing housing stock is perhaps the biggest challenge, but if surmounted will set us well on the way to attaining emissions targets.

Tenanted Property Energy Information - Wales has the joint lowest proportion of tenanted properties in the UK - traditionally the hardest housing sector in which to achieve energy efficiency improvements (Source: SDC, Domestic Energy Fact File: England, Scotland, Wales and Northern Ireland). Despite a smaller overall contribution to the Welsh housing stock, tenanted properties should be a priority for energy efficiency measures, not least as they tend to be occupied by lower income families for whom rising fuel prices may be associated with fuel poverty. Sound energy efficiency has social as well as environmental benefits, especially in this sector. Lack of ownership on behalf of the tenant creates a lack of motivation to install energy efficiency improvements. One means to alleviate this is to pass the onus back to landlords: requiring them to supply a full energy audit on the property prior to occupation, to enable tenants to appraise the running costs and comfort levels of different potential lettings. In this manner the stakes are upped for landlords to attract tenants by being able to offer favourable energy reports. Additionally, providing information to tenants on the merits of energy efficiency via local housing associations, local council housing departments, university accommodation centers etc. would foster an increased understanding of the importance of considering energy efficiency when choosing a property.

Target Low Energy Building Scheme at lower income households- The uptake of the Low Energy Buildings scheme (LEBS, formerly Clear Skies) has been strongly biased towards well-educated families with disposable income (Source: Association for the Conservation of Energy). There has been some suggestion that this money would be better redistributed in the form of grants specifically targeted at homes that would not otherwise have the resources to consider microgeneration or energy efficiency technologies. Certainly in order to achieve the large country-wide cuts in emission required, engagement is needed from all income brackets in our society and lower income groups at the moment are being largely passed over by the LEBS. Another option may be to provide subsidized finance in the form of cheap loans for installation of these technologies, in a similar manner to student loans, or assisting / encouraging power companies operating in Wales to offer the option to pay for microgeneration equipement as a series of low or zero interest monthly payments added to the regular bill (Source: Ian Pearson MP)

Work with local and Internet Carbon Reduction Action Groups (CRAGS) to explore novel ways of reducing domestic emissions - There are now a number of CRAGs in the UK: groups of individuals who are highly motivated concerning climate change and are exchanging ideas, tips and techniques on how they are achieving a dramatic reduction in their own carbon footprints. These pioneers are testing out many initiatives that may have wider applicability in the future. This kind of practical, on the ground test-bed could be an invaluable focus group for government to work with - gaining new ideas and understanding why existing initiatives are failing or how they could be improved. As a starting point WAG might organize a CRAG Conference - inviting attendees from Wales, UK and beyond. This could be part of the late November community climate change event that WAG are currently organizing.

New Research and application of  existing research in the field of Behavioural Change to the topic of energy efficiency / carbon reductions - It is clearly recognized that a large-scale behavioural change is required to achieve the kind of emissions targets we are faced with (e.g. a recent speech by Jane Davidson at the Wales Biodiversity Partnership conference in Wrexham). Many current and planned policies to address emission reductions fail to adequately incorporate understanding of the psychology of behavioural change into their implementation plans (Source: SDC Stock Take report). Much is already known on how to address long-term public behavioural change issues - much of this knowledge from the primary healthcare sector. Diffusion of this knowledge into emission reduction policy is likely to ensure that strategies are more cost effective and achieve lasting positive benefits. There are several organisations that have undertaken research in this field from whom Government could gain insight, including the Sustainable Development Commission, Association for the Conservation of Energy and the Tyndall Centre.

6. What examples from other administrations (devolved, UK, and overseas), where other means have been used to achieve reductions in household carbon dioxide emissions, could be adopted in Wales under current powers?

Response:

Denmark, Germany - feed-in tariffs for microgeneration - have directly led to Germany hitting its renewables generation targets 3 years early. Similar performance in Denamark.

Germany - 20 year programme to refurbish all pre-1978 housing stock to modern energy efficiency standards (Source EFRA Report)

7. In the context of the Government of Wales Act 2006, which further means of reducing carbon dioxide emissions from households could only be achieved with the introduction of further legislative competence for the National Assembly for Wales.

No comment

8. If specific carbon dioxide emissions targets are to be set for Wales, should those targets be subdivided into shares by sector? If so, what share of the total should reductions by households comprise?

Response:

An overall target, if not considered sectorially runs the danger of being seen as everybody’s yet nobody’s responsibility. By sectorialising the targets, specific challenges are thrown down to individual sectors, which are more likely to be effective. There is less opportunity for saying " Well, I though they were doing it”. In order that this advantage is maximized there needs to be careful coordination at the Government level between sectors.

As CCW has stated in the attached overarching document, the importance of integration of effort between sectors is paramount if overall emissions targets are to be achieved. Different sectors may experience deviations from their target emission reduction trajectory. The ability to integrate these fluctuations across several sectors and on occasion use other sectors to buffer overall targets will be essential.

It is important at the outset to acknowledge the current contribution that different sectors make to Welsh emissions. Using 2003 data, direct residential emissions amount to 11.3% Welsh emissions and electricity generation 31.1% emissions, of which 28% is for residential consumption (Sources: Wales Energy & Carbon Emissions Study BY2003 Carbon Trust; Greenhouse Gas Inventories for England, Scotland, Wales and Northern Ireland: 1990 - 2004). Therefore the net residential emissions amount to roughly 20% of Welsh total, excluding personal transportation.

All sectors need to pull their weight in the effort to curb emissions, in proportion to their overall contribution to Welsh emissions. In this manner the system is perceived as fair. Therefore CCW recommends that domestic emissions targets follow the national targets which we suggest should be 3.75% per annum. Deviations from this target will need to be integrated into the wider picture of Welsh emissions, recognizing the 20% share that residential emissions currently account for.

Ends

Countryside Council for Wales
October 2007