Three free flights with your insulation, Sir?

In today’s Times Chris Huhne was quoted as saying:

“We will legislate to allow the energy companies to incentivise owner-occupiers, so if they want to offer the chance of a cruise for two to the Norwegian fjords that’s something they can do through the eco-obligation. Or it could be a cash voucher, cash rebate, or rebate on your energy bill for a year or two years. It’s up to the energy companies.”

How about insulate your loft and get a hummer or a patio heater?

Whilst it is great that the Green Deal team have been working with the “nudge unit” and accept that incentives are needed to encourage different consumers to take up measures under the Green Deal- something that we believe is essential to driving demand- surely they cannot support programmes that although might decrease emissions on one side (through retrofitting homes) will increase them through their incentive programme? Especially since some studies have shown that cruise ships emit three times as much CO2 per passenger per kilometre than flights.

The public are looking for consistency from government on climate change- this was one of the conclusions of our report From hot air to happy endings. Advertising emissions-heavy holidays to encourage people to insulate their lofts will be seen through in an instant.

There is a real danger that without an overall focus on carbon emissions the Green Deal scheme could end up a very complicated and expensive way of insulating lofts, but not actually contribute to overall emissions reductions.

If DECC is serious about emissions reductions it needs to ensure the programme is actively avoiding spillover- meaning that the money saved on energy bills, or given as a rebate or cash voucher is not used for some high carbon purchase or habit. And incentives do not encourage more harmful behaviours in other areas of people’s lives.

We wrote on this blog that one way to deal with spillover is by having a clear brand that links action on the Green Deal with other initiatives such as smart meters, the RHI and FITS. Later it could be linked with initiatives to support public transport or electric vehicles or green purchasing.

DECC needs to start looking at incentives that take into account more how people work:

  • Losses loom larger than gains: where’s the council tax or stamp duty penalty for not having your home insulated?
  • Commitment periods are key: where’s the time limit that incentives can be received within?
  • Defaults are essential, where’s the default that ensures that homes are entered into Green Deal processes automatically, perhaps through the smart meter rollout?
  • Messengers are key: why is it only energy companies that are going to be incentivising people to take up the Green Deal. Part of the benefit of this kind of scheme is the wide range of organisations that could become providers, and ensuring that odd-jobbing builders, who will be key messengers are incentivised to take part in the scheme.

Fundamentally it’s crucial that DECC offers incentives that don’t undermine the whole aim of the Green Deal – which after all is to reduce carbon emissions. Otherwise what’s next – airmiles for buying energy efficient lightbulbs? Oh wait, that’s already happened.

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