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Low carbon success depends on finance

The ambitious targets for the low-carbon economy set out in the IGT report will only succeed with financial incentives in place,
according to leading contractors.

NG Bailey sustainability director Cal Bailey said the report clearly highlights the requirement for and the opportunities in a “fundamental reorientation” of the construction industry, but warned the biggest barrier to this was the absence of market incentive.

“There is much willingness to think and talk green, but little investment beyond the regulatory minimum because it doesn’t pay,” he said.
“The regulatory minimum is wholly inadequate to meet the goals of the Climate Change Act.”

Mr Bailey, who contributed to the report, said its recommendation to bring forward the mandatory requirement for the posting of Display Energy Certificates (DECs) in all non-domestic properties “as quickly as possible” was a simple way of meeting these targets without expensive legislation and increased taxes.

“This would raise awareness of building energy performance - which is currently invisible - to all staff and visitors,” he said. “Over time, it would create a demand, with premium value, for better performing buildings, just as the equivalent energy label has done for A-rated white goods. The premium would both fund the capital cost of better energy performance and demonstrate the reduced operating costs.”

Balfour Beatty group head of sustainability Jonathan Garrett said the report did not adequately answer how the move to a low-carbon economy would be funded.

“We know there is going to be a big opportunity with the transfer of this work from the public to the private sector,” he said. “But, in order to get more private money, the risk of that investment has to be reduced. That is the big fear - the money could go somewhere else.”

WSP group head of sustainability Paul Toyne praised the report’s comprehensive content, saying it could give the industry “the framework to take the right action”.

But he said it would not be successful unless the government developed an overarching plan and took the lead, warning that regulation was essential.

“If regulation is not there you could ask yourself the question: so what? I don’t think we can expect people to do it just because they think it matters.”

One source warned that competing government departments could potentially derail the plans, saying the Department for Business, Innovation and Skills’ wish to expand industry for economic success was at odds with the Department for Energy and Climate Change, which “does not want any industry”.