Building to Improve Energy Effi ciency in England and Wales

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Keywords: Energy Performance of Buildings Directive, Climate Change Act 2008, Building Regulations 2010, Energy Bill 2010, CO2 emission reduction, climate change, energy efficiency, energy security zero carbon buildings, nearly zero-energy buildings, building standards, new buildings, major renovation, cost considerations, behavioural barrier, Energy Performance Certificates, Display Energy Certificates, mix of regulatory tools, education and information, leased premises

Abstract: Improving the energy efficiency of the building sector is regarded as a key mitigation response to climate change in the United Kingdom (UK) and the European Union (EU). The building sector represents the largest source of relatively quick and inexpensive CO2 emission reductions of any economic sector. Realising this potential also provides additional economic benefits, particularly in terms of increased energy security. This paper examines the implementation of the EU's Energy Performance of Buildings Directive (EPBD) in England and Wales. It questions the potential effectiveness of the EPBD to deliver substantial emission reductions based upon shortcomings of the two main regulatory tools within the EPBD framework. The paper also draws from literature on the 'behavioural barrier' to energy efficiency that suggests that emission reductions will be unlikely in the absence of widespread change in the way in which energy is currently used by building occupants. The analysis is timely because transitioning this sector to low to zero carbon is regarded as integral to meeting emission reduction targets set for 2020 and 2050, and protecting against the risk of severe shortages in energy supply. The potential effectiveness of the EPBD is also significant because it is representative of the forefront of regulatory techniques to address a problem of the magnitude of climate change.

INTRODUCTION

The EU's Energy Performance of Buildings Directive (EPBD) is internationally regarded as the leading regulatory framework to improve the energy efficiency of buildings.1 The two key regulatory tools within the EPBD framework are (1) building standards mandating minimum energy performance requirements for new buildings and 'major renovations', and (2) Energy Performance Certificates (EPCs).2 There is an important interrelationship between these two tools with limitations on the application of building standards potentially offset by the broad educative value of EPCs.

However, there is also a risk that building standards and EPCs will be insufficient to adequately curb energy consumption levels across England and Wales. This is because a building that incorporates greater energy efficiency and certification to this effect does not automatically reduce emissions of carbon dioxide (CO2). It is a recurring issue for all forms of environmental regulation, in terms of whether any environmental objective can ever be achieved in the absence of trying to bring about a better relationship between regulated parties and their environment.

The EU has sought to tighten this framework through a recast directive to be transposed by July 2012.3 The recast EPBD is a stronger framework but this paper argues there is further scope to realise the emission reduction potential of the building sector.
It must also be emphasised that other areas of regulation may ultimately have a bearing on the potential effectiveness of the EPBD. These include product efficiency standards, monetary and fiscal incentives for households and businesses to invest in energy efficiency, and pricing controls to raise the cost of fossil fuel based energy relative to renewable energy.4 These areas warrant separate analysis beyond the confines of this paper. In focusing specifically on the EPBD, the purpose of this paper is not to downgrade the significance of other regulatory developments, but to demonstrate problematic aspects of the EPBD.

The paper is divided into four parts. Part 1 provides a basic background. It defines energy efficiency and explains the significance of energy efficiency to reaching a solution to the problems of climate change and energy security. It then sets out the main elements of the EPBD framework as implemented in England and Wales. The separate implementation by Scotland, Northern Ireland and Gibraltar is beyond the scope of this paper. Part 2 analyses the advantages and disadvantages of building standards and EPCs as regulatory tools, and the combined potential effect of these tools. Part 3 examines further regulatory techniques to strengthen the overall framework. Part 4 concludes.

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