The 13th Edge Debate: 7th November 2001

Action Points from the Thirteenth Debate

1. How to get the 60% reduction figure
2. Achievable on 50 year time scale? Emissions trading -- as scheme is built up, and covers more of the economy, tougher targets can be imposed on it. Key is not to focus on electricity. Heating is the largest demand.
3. Jury out whether emissions trading is a comprehensive solution. Small level of existing incentive. Needs bigger incentives, or a bigger stick.
4. Who do you want to own the carbon from the buildings construction industry produces/manages? Electricity generators are not part of the scheme. Emissions from electricity belong to the people who use it and not who produce it. Big difference with UK scheme and proposed EU scheme.
5. Can the purchaser get credits for going to a more efficient electricity generator?
6. Electricity tariff has been proposed on the basis of the greenness of the electricity. Existing system does not allow this to happen.
7. Will EU directive relate to actual energy use, but just design? - not actual energy consumption of buildings.
8. Problems of using benchmarking for carbon trading (easier to do year-on-year schemes). But project system is a benchmarking system. It argues for what would happen without additional measures. There are benchmarks in the climate change levy - reductions negotiated according to benchmarks.
9. UK reliance on commercial space and tradition where building owner does not have responsibility for utility bills. Makes for inflexible arrangement. Capital allowance position. Incentive for energy saving misses the target.
10. Management control - allows for two organisations to share (through outsourcing arrangements but practical difficulties). EU directive is there to inform tenants to give them some choice of the buildings they are moving into.
11. Verification - management consultants unlikely to have a grasp of the right issues
12. Global issues. How to decide the cap on the global market and prevent production being moved to areas where the scheme is not in operation. Many of the migration issues are red herrings. Opposite can also be true to get
13. Price of permits. Environmental reduction is a matter of targets and how they are achieved and the flexibility you have. Price depends on how easy it is to target. Low is loose. No trade no price. IN UK, initial trades (toe in water £5/t, then fall and then rise to £25/t? by 2010). Entirely driven by regulation.
14. How to reconcile high management consultant implementation costs with small-scale incentives. Big 5 not charging too much at the moment. They expect it to be mandatory and that is when they will put the bills up. Brokerage fees are large at the moment. This is because it is a small market with few trades. 8% at the moment. Would expect 1% in due course???
15. Has anyone worked out total cost for UK plc for putting the systems in place. Could the money be spent elsewhere more usefully.
16. If system remains as it is, it will not get off the ground. The assumption is that a larger, global market will emerge and that this is a way for the UK to engage with the global market. Scheme produced by ETG. Voluntary effort largely. Government has paid some lawyers. Amount paid £215m incentives is a good investment.
17. Global limits. Wide variation between companies.
18. Companies will change for 1. Will save them money 2.Make money, 3.shareholders will force them. What will force a change? Fiscal instruments on leaded fuel were effective. By same token, need a much bigger incentive, or the government should force the issue.
19. Importance of infrastructure, of people moving between buildings. Construction of bridges in reducing distance. Transport will be allowable for the emissions trading scheme. Draft rules soon to be produced for projects. Tremendous scope for emissions saving in this sphere.
20. Many schemes with financial carrots that engage small amount of people. This scheme does not apply to construction of buildings and none of the incentives will work on a national basis, let alone international unless government forces the issues. Building stock increases 1-3% a year and thus an addition to emissions, however efficient. Suspect 60% by 2050 is not possible unless big changes with non-fossil fuel energy.
21. How to convince one's client to use efficient materials. Where can full environmental information about products be found. CCL are forcing cement industry to become more efficient.
22. Can you impose change, do you run the risk of having the people doing the imposition voted out of power. What about the nuclear option. 8% of CO2 from man-made products?
23. Kyoto 20% target has been agreed and no one has lost an election on the issue.
24. Mandatory target on economy not on individual buildings. This should make it more affordable.
25. Why don't the public understand the issue of climate change. Public anti-nuclear because of the way it has been portrayed. No one has taken this on board to change this perception.
26. Disasters might focus the mind. With floods, the message is beginning to get through. As industry we need to recognise what the changes are bringing and what it amounts to - insurance industry, power failure with flooding. Denmark has problems in ensuring a uniform energy quality. What are the problems with feeding chp energy back into the grid. Networks do not readily support it. Needs planning.
27. Asset stripping angle.
28. People should look carefully at parts of their portfolio to see whether they are amenable to these sorts of approaches. We need the flexibility. If we cannot move forward then building regs. Might be needed to bring these about.