Carbon Offsetting
The Building the Green Future Policy Statement (pp 16-17) discussed the ‘difficult issue' of carbon offsetting - the process by which the solutions that deliver renewable energy or emissions reductions away from the development should also be allowed to count towards meeting the zero carbon target. The policy statement acknowledged that small urban infill sites pose a particular challenge ‘.where it may be more effective or necessary to support offsetting elsewhere and where rigid application of on-site zero carbon could create perverse incentives for small infill site to be kept vacant' . Opinions were divided on this and the policy statement concluded that it will be right to return to this issue when there is more evidence to determine the right approach.
Subsequently the Code for Sustainable Homes Technical Guidance included in its definition of zero carbon the government's decision that off-site renewable energy contributions can only count when they are directly supplied to the dwellings by private wire arrangement.
Balance Trading
The issue of emissions reductions away from the development had earlier been given a different dimension by the Sustainable Development Commission when it pointed the way to the development of a new policy instrument by recommending action to ‘offset any increase in CO2 emissions or water consumption in the new Growth Areas ..with a commensurate reduction ....in existing homes in the same region'
Sustainable Development Commission Stock Take: Delivering Improvements in Existing Housing July 2006 p9
This principle of linking the resources going into the expanding house building programme to reducing emissions from the existing housing stock is being developed into pilot practice by eaga, a north-east based company which delivers energy efficiency improvements to some 250,000 households a year on behalf of government and energy companies by installing insulation and renewable energy systems. The company is undertaking an R& D project to develop Balance Trading.
Balance Trading is a new policy instrument which would enable the net carbon emissions from new housing development to be offset by providing for S106/tariff funded investment in energy installations and the application of renewable technologies to retrofit nearby neighbourhoods,. This investment would deliver the carbon emission reductions equal to the gap between the standard achieved in the new development and Zero Carbon CSH Level 6. In principle, Balance Trading is a simple, robust and cost-effective process which could deliver carbon neutral new housing now and accelerate improvement in the environmental performance of the existing housing stock over the next decade.
For a new housing development scheme the volume of carbon emitted would be calculated. An allowance would be made for the amount of energy generated on site by the maximum feasible application of renewables, verified by independent low carbon consultants. The remaining amount - the balance - of carbon would be saved off-site by improving existing homes in the local area, funded by a portion of the developer contribution for the scheme. The Balance Trading option would be particularly appropriate on smaller sites with limited scope for renewables.
The eaga Balance Trading project has estimated that for each new dwelling it would be possible to use the balance to fully insulate three homes. Each of these households would see their energy bills cut by an average of £160 per annum. Alternatively the balance could be used to subsidise the installation of renewables in conjunction with Warm Front grant funded insulation for low income families, or provide a financial incentive for ‘able to pay ‘ households to install renewables.
An assessment of the desirability/feasibility of this type of carbon offsettiing was undertaken by Faber Maunsell, as part of a project to assess the potential for zero carbon developments in the South West which reported in January 2007.
Supporting and Delivering Zero carbon Development in the South West. Final Technical Report prepared for: South West Regional Assembly, South-West Regional Development Agency (SWERDA) and Government Office for the South West (GOSW).
This analysis assessed the potential at a regional level of a carbon buy out fund, to which the developer would pay if they are not able to deliver the carbon reductions required by planning policy. A one-off payment would be made at a specified cost per tonne of carbon dioxide, based on the shortfall in carbon emissions in one year. The analysis concluded that, even at a low figure (£200-£500 per tonne) a carbon buy out fund could generate investment that would enable short term investments in projects that could deliver carbon savings far more cost effectively than within new build. But to take the idea of the fund further would require further work to identify the level at which the payment should be set, establish additionality and a process for the administration of such a fund.
These are some of the issues that are now being worked through at local authority level in a project which eaga is undertaking with SECBE - see Mike Gibson (2007) ‘Emissions Erasure' Planning 9 November 2007 p16-17.
