Foreign Policy Blogs

Britain Announces Energy Efficiency Strategy

Photo Credit: Martin Argles for the Guardian

In the field of energy, conservation is about the least sexy topic out there. However, it is also the one area that can affect the picture immediately, and for that reason, we ought to be paying greater attention to it. For its part, the British government has just released its first Energy Efficiency Strategy.

I am usually suspicious of any claims made in studies like this because the assumptions are often too rosy, and implementation comes later and less effectively than bureaucrats believe. However, I do think the plan forms a useful basis of discussion. After all, as Ed Davey (the energy minister in the U.K.) wrote in his forward, “We could be saving 196TWh in 2020, equivalent to 22 power stations through, socially cost-effective investment in energy efficiency. That is around 11% lower than the business as usual baseline.” Even if he’s off by a factor of 2, this is a big deal.

The document recognizes four barriers to energy efficiency, but it does little to define strategies to overcome them – those must be blanks to be filled in later.

Problem one is that the energy efficiency market is “embryonic.” The government says “We do not need to create an energy efficiency market, but we want to see it grow and become ‘mainstream’.”

Problem two is information — “there is a lack of access to trusted and appropriate information.” And the government says this is in large part due to the embryonic nature of the market, solving one will improve the other.

Third, “Misaligned financial incentives: It is not always the case that the person who is responsible for making energy efficiency improvements will receive the benefits of there actions.” Government policy should seek to align the incentives better.

Fourth and last, “Undervaluing energy efficiency: The lack of salience of energy efficiency increases the impact of hassle costs and behavioural barriers.” Leaving aside for the moment HM Government using the word “hassle” in an official document (sometimes Cool Britannia goes too far), the problem here is the problem inherent in conservation as a whole — it lacks sex appeal.

There is one area where all of this comes together, and which is a plausible focus of the government – housing. Energy efficiency here dovetails nicely with the coalition government’s unemployment problems. As in America, house construction is a big part of the U.K.’s economy. Unlike the U.S., Britain is the second dip of a double-dip recession. Quite where the money will come from is hard to say given the austerity the Conservative Party demands.

Yet as the minister said, “Britain’s homes have been built and developed over hundreds of years, and their energy efficiency varies from good to dreadful. Bringing as many homes as possible up to the level of the best is not only a worthwhile investment; it also presents a huge business opportunity, including a chance for British companies to develop expertise which can be exported to overseas markets.”

I was born in North Dakota and grew up in Colorado both of which are rather chilly in midwinter, but the coldest I’ve ever been was indoors in Yorkshire one December afternoon. If that changes, it will be a sign that the strategy has had an effect.

 

Author

Jeff Myhre
Jeff Myhre

Jeff Myhre is a graduate of the University of Colorado where he double majored in history and international affairs. He earned his PhD at the London School of Economics in international relations, and his dissertation was published by Westview Press under the title The Antarctic Treaty System: Politics, Law and Diplomacy. He is the founder of The Kensington Review, an online journal of commentary launched in 2002 which discusses politics, economics and social developments. He has written on European politics, international finance, and energy and resource issues in numerous publications and for such private entities as Lloyd's of London Press and Moody's Investors Service. He is a member of both the Foreign Policy Association and the World Policy Institute.

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