Zero carbon agenda could destory SMEs: Ways and means

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If the government is really serious about reducing overall carbon emissions, it doesn’t do to be too precious about the means to the end. Just make sure SMEs can bear the burden

The Holy Grail in carbon reduction is sorting out our existing stock, as recognised this week by the government’s Climate Change Committee. Many of our 25 million homes are leaky gas-guzzlers that would be put in the scrapyard if there were an MOT for houses. But government policy relentlessly pursues expensive carbon reduction in new homes.

The background to this is, of course, a deep housing market recession, in which the priority for most housebuilders has been saving the firm, not the planet.

Difficult decisions will soon have to be made. First, it must be recognised that the recession has made the 2016 zero-carbon goal pure fantasy. Second, the metrics to be adopted for energy efficiency will have to be finalised. Third, the idea of “allowable solutions”, floated by the communities department, could provide a way to green the existing stock.

But how much will all this cost? Information coming through from post-completion testing of Code for Sustainable Homes level houses is worrying. First, the cost of complying is not properly reflected in most cost estimates. Second, significant costs arise from compliance failures and subsequent rectification.

This leaves small and medium-sized housebuilders in limbo. On top of the recession, the zero-carbon agenda could mean the end of all but a few large firms, with serious employment consequences and a massive loss of capacity to build homes.

Decisions will have to be made to reduce both compliance costs and complexity to ensure the survival of these firms. First, there will have to be accredited building forms, so smaller builders know how to comply.

Second, the incredibly complicated proposals for allowable solutions must include a simple buy-out arrangement, permitting much of the carbon compliance requirement to be met by a cash payment into a carbon fund that can help pay for retrofitting existing stock. It also gives far more bang for the buck than driving the last bit of carbon, at incredible expense, out of new-build. It would also create highly labour-intensive construction work.

The government must make these decisions soon. The purists won’t like it, but if aggregate carbon reduction is what really matters, this delivers.