Property Week editor Liz Hamson talks to Chris Cummings, a director in Savills Earth team, to discuss the challenges involved in reducing operational carbon, which along with embodied carbon is a crucial part of the journey to net-zero carbon.
For all the bold statements of intent, a lot of work is needed to get the industry on track and turn those words into meaningful action.
LH: What is the current state of play with regards to operational energy? Where is the industry on this versus government policy?
CC: We are talking about operational carbon more than we are talking about operational energy. There are three main factors in this area: embodied carbon, operational energy and operational carbon. It is only the last factor that has really been focused on in terms of policy and legislation. Operational energy is the longer-term view because that is what we need to do to live within our means by 2050. Operational carbon is what everyone is talking about.
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LH: Is it fair to say that we are coming from a very high base when reducing operational energy or carbon?
CC: It is almost looping back to where we were when we started doing this 25 years ago, when we really talked about carbon and creating energy-efficient buildings. Now, we need to talk about those two things separately and that is where policy and legislation is moving way behind where the industry is moving.
There has been a big delay with building regulations for a couple of reasons: Brexit and Grenfell. We are a long way away from a time when building regulations can be used to drive things forward in this country. The London Plan is great, but it took five years to get to this point and that is too slow.
There has been a real disconnect between society, the industry and financial markets, which are really trying to drive forward a stretching of industry. For policy and legislation, there are these elastic effects where we are stretching away from that point. This means we are going to get a snap back at some point because policy must catch up. Over the next five years, we should see a real snapping back of that elastic as everyone tries to catch up with what is being built and what is being asked for.
LH: The industry seems to have embraced this as a commercial imperative, but how do we get policy to catch back up again and that elastic to snap back?
CC: It is going to come bottom-up. The industry is in a great position and has combined voices, including the likes of the UKGBC. We are in a great position, but we need to make sure we keep that voice going and actually start to lobby for these things and keep the conversation front and centre of the agenda.
LH: What would you like to see happen on the lobbying front? Is there a particular message you would like to get across to government?
CC: There are no technical barriers to us hitting net zero – what we are really missing is that bigger, longer-term plan. We have had a lot of false starts, and that is OK as long as it is part of a longer-term, joined-up strategy.
It is about building things to a higher quality because they are going to be used for longer
There is currently no real roadmap, especially in the UK. There are short-term promises and pledges but there is never enough to build up a basis to actually deliver. The green homes grant is a great example of having the wrong-way-round approach. What is needed is the bottom-up approach, where we build the infrastructure and the skills and the training to be able to implement.
The green homes grant was a classic example of just throwing money at something and it fell flat on its face. There was no way to actually deliver what it was; there was no confidence for people to build up the training academies or for the material supply chains to adapt to be able to deliver it.
LH: What can be done to instil a longer-term view?
CC: To get to net-zero carbon we know the costs can balance out in terms of the capex and the effect between now and 2050. But they balance out nationwide, across different sectors, so that the person putting that money in is not necessarily going to be the person seeing the savings come out. But that needs to be something that comes down from government.
Also, that is where it comes down to the lending opportunities – it all unlocks on the finances. If you have a longer-term financial structure built around that longer-term roadmap as well as cross-parliamentary and international agreements, then that is what will hold it together for the longer term.
LH: What are the other main obstacles to tackling operational energy or carbon?
CC: It is not technical – again, we can do that in terms of operational carbon. The systems, know-how and design knowledge are all there across the UK. Making it stack up financially is going to be the trick. It is about having the confidence to build things to a higher quality because they are going to be used for a lot longer.
LH: How do you convince housebuilders that they need to pay more for the longer-term sustainability of their schemes?
CC: We cannot expect them all to just not make any money on these properties. They need support to make those decisions. We need some clever ways around unlocking planning and unlocking financing to try and encourage it as a viable opportunity going forward.
In the residential market, we know that is going to be a real challenge. There is not that longevity of property in new-build properties – a lot of the time people do not live in them for very long because people live very transitionally, for example when they grow their families. We need that longer-term involvement and care for buildings.
LH: What are the big opportunities for the industry if they get this right?
CC: There are a lot of building and infrastructure projects that the property industry can get stuck into, and a lot of problems for them to solve. But there are huge possibilities and opportunities, particularly around the existing buildings, because that is where the main stock is going to be.
So, it is about cracking that and the way it is built and bringing in those interventions to make that happen. There is an enormous amount of opportunity, probably more than we have had before.