By Daniel Hunter

A major independent study is now underway into whether the Government’s energy and carbon policies are having the desired effect on the property sector.

The Government-led Green Construction Board has joined forces with the Green Property Alliance, a group of the UK’s leading property industry organisations, to commission Deloitte to carry out the study.

Buildings remain the single largest contributor to carbon emissions, with energy use in non-domestic buildings accounting for 17 per cent of the total. The Government is legally committed to an 80 per cent carbon reduction by 2050 and has already introduced a range of energy and carbon focused policies and instruments to achieve this target. These include the Carbon Reduction Commitment, Energy Performance Certificates and the Green Deal, as well as many more that are planned by the UK Government and European Union.

It is widely recognised that to achieve these challenging but important carbon reduction targets, policies must be effective. In its recently published 2013 Progress Report to Parliament, the Committee on Climate Change has urged the completion of a comprehensive assessment of non-residential low-carbon policies to ensure they are working effectively.

In a major example of cross industry and interdepartmental collaboration, this jointly supported independent research project is focusing on exactly this issue.

Bill Hughes, managing director of Legal & General Property and chairman of The Green Property Alliance, said: “There is a growing interest in the management of regulatory and financial risk for property arising from climate change, with a belief that its relationship to the financial performance of real estate may emerge in the near future. It is in the industry and Government’s interests to ensure that laws and taxes designed to elicit energy and carbon efficient behaviours are achieving their objectives, not to mention those of the wider economy. In taking a broad view of the framework for carbon incentives and penalties, this project may also illuminate opportunities to influence energy efficient behaviour that we had not previously discerned.”

Co-chair of the Green Construction Board and Business Minister, Michael Fallon said: “I look forward to seeing the outcome of this work. Through the Green Construction Board and the Construction Leadership Council, we are putting a lot of focus on the potential for growth in low carbon and sustainable construction.

“It is important that the regulatory framework works with that objective, so that business opportunity is maximised and business burden is minimised.”

Jon Lovell, director in sustainability at Deloitte Real Estate, who will lead the study, said: “The landscape of penalties and incentives pertaining to the energy and carbon performance of commercial property is complex and fluid. People and organisations tend to become exercised on the merits and limitations of individual instruments, such as the Carbon Reduction Commitment Energy Efficiency Scheme or Feed in Tariffs, when individual policy changes are mooted by Government. This project is about taking a helicopter view of the aggregate impact of the regulatory and fiscal framework, and to consider how it can be shaped to best effect, both for the industry and for the environment.

“This is a genuine effort to constructively inform future policy by those who understand the risks and opportunities presented to the commercial real estate industry: climate change, energy insecurity and environmental pressures. All of which demand a coherent, proportionate and manageable framework of regulatory and fiscal instruments.”

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