ACBE gets lukewarm response on energy efficiency and CO2

The Government's Advisory Committee on Business and the Environment (ACBE) has completed its first two-year term. Its latest report again contains important recommendations on energy efficiency and the role this should play in abating carbon dioxide emissions, but many of these have already been dismissed or attracted a cool response from the Government. Meanwhile, ACBE itself has enjoyed little success in soliciting voluntary energy efficiency commitments from industry.1

ACBE was set up in 1991 to promote a strategic dialogue between the Government and business on environmental issues. Its first Chairman was John Collins, Chief Executive of Shell UK. His successor is Derek Wanless, Chief Executive of National Westminster Bank.

ACBE's first two reports contained several recommendations, notably on transport and energy policy, which many environmentalists would have welcomed but proved not to the Government's taste. One of its successes has been to persuade the Government to sponsor a series of local "green clubs" to promulgate the environmental message to smaller businesses (ENDS Report 222, pp 3-4 ).

ACBE's latest report contains further recommendations on energy efficiency in domestic and commercial buildings and the Government's response to these. It also reviews progress on its earlier recommendations.

  • Sectoral CO2 targets: One of ACBE's key contributions to the debate on the UK's strategy on CO2 emissions has been to urge the Government to set CO2 or energy targets for the major sectors. ACBE itself promised to encourage the six major industrial sources of CO2 - iron and steel, chemicals, food, drink, tobacco and minerals - to set voluntary energy efficiency targets for the next five years, and to lean on the motor industry to improve on its offer to improve the fuel efficiency of new vehicles by 10% by 2005.

    Very little has come of these promises. Only the Chemical Industries Association has volunteered to introduce energy saving targets and performance measures for its member firms. And the report notes that, after discussions with the Society of Motor Manufacturers and Traders, ACBE "has not been able to persuade it to meet an earlier target."

    ACBE has now passed the buck for developing targets for industry to the Energy Efficiency Office. It has also urged the Government to get the 1,400 or so companies and public bodies which have signed up to the "Making a Corporate Commitment" energy saving campaign to announce both their targets and performance publicly.

  • Domestic energy saving: More than 25% of the UK's CO2 emissions stem from energy use by households. ACBE contends that potential energy savings in this sector will be realised only if the Government sets a target to cut its CO2 emissions by 10% by 2000, and backs this with a "co-ordinated programme of regulation and economic instruments."

    The foundations of the programme sought by ACBE are tougher regulation of energy efficiency in new dwellings, coupled with voluntary and then mandatory energy ratings on existing buildings when they are sold. Thereafter, investments in energy savings "will need to be triggered by economic instruments to overcome the inertia which prevents action."

    The Government's response is lukewarm. It makes no direct comment on ACBE's recommendation that its proposed insulation standards for new homes should be tightened. Progress in voluntary energy rating of existing dwellings will have to be assessed before mandatory ratings are considered. And two of ACBE's three recommended economic instruments - tax relief on loans for energy saving investments, and exemptions from stamp duty for properties with energy ratings - have been rejected. The idea of universal grants for cost-effective conservation measures identified by energy ratings has been passed to the Energy Saving Trust.

  • Commercial energy saving: Energy use by the commercial sector contributes almost 10% of the UK's CO2 emissions, and is growing faster than in industry or homes. The Government's proposed new Building Regulations will have only "a small initial impact on CO2 emissions in the medium term," says ACBE.

    Among the extra measures advocated by the report are mandatory energy statements for both new and existing commercial premises, paving the way in due course to a legal maximum energy consumption for new offices. Voluntary and then mandatory energy labelling of office appliances, which currently display a "wide range of energy intensity", and loans and capital allowances for energy efficiency investments also form part of the package.

    Again the Government's response is unenthusiastic. Mandatory energy statements, it says, will need very careful consideration, "especially in the context of deregulation." Appliance labelling is supported in principle, although getting agreement on this at EC level will take some time. And the idea of special reliefs and allowances is rejected.

  • Recycling: ACBE reiterates its earlier recommendation that a landfill levy is one of the best things the Government could do to promote recycling. A general commitment to discriminate in favour of recycled products, missing thus far from Government Departments' purchasing policies, would also "go a long way towards creating the volume demand necessary to stimulate greater recycling activity".

    The report, though, also urges the Government to reconsider whether its target to recycle 50% of recyclable household waste by 2000 is the soundest environmental option.

    On glass recycling, the report says that retailers could do "much more", for example by asking their wine suppliers to switch from green to clear bottles. And ACBE is also convinced that newspaper publishers could do much better than their target to use 40% recycled fibre by 2000, and recommends that this should be raised closer to 60% and given legal backing.

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