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Lobbyists oppose climate change A new study argues that 19 out of 20 financial industry lobby groups are actively opposing an ambitious climate change outcome, with all but one of those surveyed lobbying to dilute and delay key regulations designed to align the financial system with the Paris Agreement. Many of these “hidden” opponents are to be found in the City of London. The research by climate analysts Influence Map reveals that, while a few financial institutions are found to be actively pushing for progressive policy - including BNP Paribas, Aviva, and Groupe BPCE - most institutions have tended simply to offer highlevel words in support of advancing sustainable finance. But they have rarely engaged at the detailed, tactical level. Moreover, Influence Map accuses many of the associations representing specific industrial sectors of actively seeking to undermine proposed regulations. These bodies tend to offer high-level support for green finance policies, while lobbying to weaken the stringency of proposed regulations. The investigation details examples of hostile interventions from a number of powerful finance industry associations, including the European Fund and Asset Management Association (EFAMA), Association for Financial Markets in Europe (AFME), and the European Banking Federation (EBF). All these pushed back against the expansion of the EU’s policy taxonomy to cover environmentally harmful activities (see EiBI October 2019). They argued it should be limited to identifying certain financial products to be marketed as positively “sustainable”, rather than assessing all financial products on the established A to G basis. “The greatest pushback from finance industry associations appears to be in areas that would either increase transparency of financing of damaging activities (e.g. the expansion of the taxonomy to cover environmentally harmful activities),” the report observes. “Or require consideration of environmental (ESG) factors in mainstream financial decisionmaking (e.g. updating investor duties to incorporate ESG issues). These are also the areas where the least progress has been made.”
REPORT WARNS UK HAS NOT CONFRONTED SCALE OF THE TASK
Net zero ‘needs stronger leadership’ Stronger leadership and co-ordination from the prime minister is needed if the UK’s commitment to reach net zero by 2050 is to be credible, according to a report from the Institute for Government. The report warns that over a year on from adopting the target the UK has not yet confronted the scale of the task. A lack of co-ordinated policies, constant changes of direction, a failure to gain public consent for measures and too little engineering expertise and delivery capability has left the UK well off track to meet its target, the report adds. The absence of a comprehensive plan for achieving net zero has deterred private sector investment. The report recommends that the government should: • take responsibility for net zero out of BEIS, which lacks the clout to develop and implement the
necessary plan, and create a new net zero unit in the Cabinet Office with a senior Cabinet Office minister given responsibility for net zero; • ensure that the Treasury makes net zero a big theme of the spending review and produces a tax strategy to support net zero; • build on parliament’s climate assembly initiative to maintain public support for action; • create a climate change cadre,
with science and engineering expertise at its core, within the civil service; • build on the successful model of the Olympic Delivery Authority to ensure big changes like housing retrofit and the switch to electric vehicles happen smoothly; and • support the creation of a dedicated parliamentary net zero committee to hold the government to account. It calls on government to publish a clear plan setting out, sector by sector, how emissions reductions will be achieved and when decisions will be made where technology is uncertain. The Cabinet Office should be made responsible for co-ordinating the plan and holding departments to account for delivery. Polling suggests two-thirds of people have not heard of net zero, despite the fact that it will mean changing the way they heat their homes, the cars they drive and what they eat.
Architects call for VAT boost for refurbishment Footage of buildings being flattened in a noisy demolition may be a popular feature of local TV news. But a new coalition of award-winning architects argue such structures should be protected to save energy and fight climate change. They say property owners should be incentivised via the VAT system to upgrade draughty buildings, rather than knock them down. That is because so much carbon is emitted when creating the steel, cement and bricks for new buildings. In the past there was debate about whether it was better to demolish an old energy-hungry building, and build a well-insulated replacement. But that is now widely considered a serious mistake because of the amount of carbon emitted during the construction of the new building. The Royal Institute of Chartered Surveyors (RICS) estimates that 35 per cent of the lifecycle carbon from a typical office development is emitted before the building is even opened. It says the figure for residential premises is 51 per cent. These calculations mean it will be decades before some new buildings pay back their carbon debt by saving more emissions than they created - and these are decades when carbon must be sharply reduced. The architects’ coalition wants the government to change the VAT rules which can make it cheaper to rebuild than to refurbish a standing building. The architects argue that VAT on refurbishment, repair and maintenance should be cut from 20 per cent to zero. This would match the standard rate for new-build. Alex Green, from the British Property Federation,
admits that sometimes the different VAT level is the key factor in determining whether a building is felled or saved for a new purpose. But Treasury Minister, Jesse Norman, maintains that property owners already benefit from a reduced VAT rate on installing insulation under certain conditions. He said: “Going further would be very expensive: reducing VAT on all property renovation, repairs and improvements would cost the Exchequer approximately £6bn per year.” “The government has no plans to review the VAT treatment of construction.” Housing Secretary Robert Jenrick is now arguing in favour of easing planning rules for owners wanting to demolish offices and replace them with new-build homes.
06 | ENERGY IN BUILDINGS & INDUSTRY | OCTOBER 2020
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