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Abstract
To achieve European Union (EU) greenhouse gas emissions of 80–95% below 1990 levels by 2050, CO2 emissions from residential energy consumption must be substantially reduced. Recognition of this has led to the introduction of a range of policy instruments at both EU and member state level. These policies are examined for the EU and the UK, first by grouping them into three ‘pillars of policy’ – standards and engagement, markets and pricing, and strategic investment (each of which focus on different ‘domains of change’ embodying different economic processes) – and then by assessing the strengths and weaknesses of each pillar in terms of instrument coverage and effectiveness. Strengths and weaknesses common to both UK and EU policy landscapes are found, including a comprehensive but broadly ineffective standards and engagement pillar of policy, and an ineffective markets and pricing landscape (including effective subsidization of energy consumption in the UK, permitted by the EU), with poor coverage. The strategic investment landscape is found (until recently) to be substantially stronger in the UK compared with EU instruments and requirements. Priority reform actions are also proposed to address the weaknesses identified. The paper also offers discussion of recent policy developments in the UK.
ORCID
Paul Drummond http://orcid.org/0000-0002-6921-0474
Paul Ekins http://orcid.org/0000-0003-1975-434X
Notes
1 Much of the research reported here was carried out in the context of the EU FP7 project CECILIA2050 (see http://cecilia2050.eu/) over 2013–14. However, for this paper the research has been updated.
2 Data for 2011 and 2012 illustrate annual CO2 reductions of 16% and –4% (an increase) respectively on the previous year (an average annual reduction of 6%) (EEA, Citation2015a). Data for 2013 onwards are not yet available, and thus the presence of a long-term trend cannot be discerned (particularly due to the substantial variability seen between these two years).
3 Although this target is economy-wide, EU ETS and transport sectors may be excluded. Other instruments such as CO2 taxation, training and information campaigns or the creation of an ‘Energy Efficiency National Fund’ may also be used to secure compliance if equivalent energy savings are produced. The remaining 11 member states intend to use such mechanisms alone to secure compliance.
4 ‘A ‘minor’ credibility issue is defined as that in which ‘confidence that the policy package as notified by the member state will realise 90% or more of the required target’, whilst a ‘major’ credibility issue is defined as that in which the ‘risk that the policy package as notified by the member state will realise less than 90% of the required target either due to insufficient policy savings and/or significant methodological issues’ (Rosenow et al., Citation2015). The final member state, Portugal, has an existing EEOS instrument in place but has not notified the European Commission of its intention to use this for Article 7 compliance, and thus instrument credibility was not assessed by this study.
5 Member states are not required to set minimum standards that are not cost-effective over the economic lifecycle of the building elements concerned, as determined using the comparative methodology framework described in Article 5 and Annex III of the directive.
6 Data for 2013 and the EU-28 were obtained from EUROSTAT.
7 Data source: http://www.res-legal.eu/compare-support-schemes/.
8 DG Energy (Citation201 Citation2) estimates that 75% of the EU’s building stock standing in 2005 will remain present in 2050.
9 This date was chosen because it was the year of the signature of the Kyoto Protocol, which set statutory GHG emission-reduction targets on industrial countries for the first time, and it was also the year of the election of a Labour government, which introduced many of the instruments to be discussed.
10 Data source: Energy Consumption in the UK (ECUK) Statistics, table 3.35.
11 Data for 2013, from DUKES, Chapter 3 (domestic data tables).
12 DEFRA GHG conversion factors.
13 Direct CO2 emissions from the UK residential sector were 74 mtCO2 in 2012, and 94 mtCO2 in Germany. In proportional terms, these emissions account for 15.4% of the UK’s total CO2 emissions in that year, exceeded only by Belgium (16.4%), Ireland and Hungary (both 15.9%) (EEA, Citation2015a).
14 The UK must achieve 15% of its gross final energy consumption from renewables by 2020 (from electricity, heating, cooling and transport), Under the 2001 Renewable Energy Directive, the UK was required to produce 10% of gross electricity generation from renewable sources.
15 The ZCH instrument had been in place since 2006, for compliance to be achieved by 2016. The instrument was cancelled in mid-2015.
16 The cost of renewable support mechanisms is projected by government to rise to £9.1 billion per year by 2020 – £1.5 billion above the limit set by the Levy Control Framework (DECC, Citation2015b), whilst the ZCH was removed to ‘reduce net regulation on housebuilders’ (HM Treasury, Citation2015), in order to encourage increased building rates.
17 See, for example, the Leaders’ Declaration from the 2015 G7 Summit at Schloss Elmau, which stated explicitly: ‘We remain committed to the elimination of inefficient fossil fuel subsidies [… ]’ (https://www.bundesregierung.de/Content/EN/Artikel/2015/06_en/g7-gipfel-dokumente_en.html).