MIMA comments on the Prime Minister’s announcement that the UK will ratify the Paris Agreement by the end of 2016
MIMA is encouraged to hear the Prime Minister’s announcement today that the UK will ratify the Paris Agreement by the end of this year, and must now focus on putting in place the national policy framework necessary to deliver on the agreement and the UK’s own climate objectives.
This should include a clear commitment to comprehensively improving the energy efficiency of the building stock, the leakiest in Western Europe. Historically, there has been a strong emphasis in the UK on securing the supply-side of the energy system i.e. in power production, with much more limited and piecemeal policy support and investment in energy demand management. There is now an opportunity to address this imbalance, seeing every unit of energy saved as one less to be supplied.
Energy demand management and energy efficiency has already offered huge benefit in terms of UK energy affordability and security. Between 2005 and 2013 UK homes saw a huge 30% drop in (weather adjusted) median gas consumption. At today’s prices this means that approximately £5 billion less per year will be spent on gas alone across the UK’s 27 million homes than if consumption had remained at 2005 levels. The former Department of Energy and Climate Change cited drivers for this drop in consumption; government energy efficiency programmes, efficient boiler regulation and some austerity-driven thermostat adjustment, although the downward trend started well before the 2008 recession. This is a great UK infrastructure success story, meaning we are already far more energy secure than we otherwise might have been.
However this progress has stalled as government support for energy efficiency policies has fallen away. Energy Secretary, Greg Clark must recapture these benefits and allow us to continue to drive down demand through a large-scale, long-term building energy efficiency programme.
There is huge value in terms of reduced household energy bills, energy security and job creation. In addition, GDP growth and tax-take benefits have been well-documented by Cambridge Econometrics and Verco, while Frontier Economics has shown such an infrastructure programme ticks all the boxes of the government’s eligibility criteria and matches up competitively against alternatives such as HS2 and road building.
Sarah Kostense-Winterton, MIMA’s Executive Director comments, “If the Government is to deliver on its carbon emissions reduction commitments in the Paris Agreement, then we can help the Prime Minister and the Energy Secretary, Greg Clark, however we need a long-term, workable and sustainable energy efficiency policy fit for purpose and fit for the consumer.
By making the energy efficiency of our homes a national infrastructure priority, the Government will secure clear economic and social benefits - from boosting the UK economy with increased productivity, investment and employment to improving our homes and communities. Within a UK with greater energy security, the Government will be in a position to protect UK consumers from energy price volatility in the long term whilst lifting those more vulnerable out of fuel poverty and ensuring the benefits of better health and wellbeing with warmer homes and lower fuel bills.
We hope that the Government will grab this opportunity with both hands and bring stability and confidence to our energy ecosystem as they prepare to fully commit to and ratify the Paris Agreement later this year."
