Drivers for Low Carbon Development

To reflect the serious challenges posed by climate change, policy and legislation have evolved rapidly over recent years. This is set to continue up to 2016, by which point it is expected that legislation will demand ‘zero carbon' standard for new dwellings, with non-residential buildings to follow in 2019.  Building low carbon developments is therefore rapidly becoming an issue of compliance, not choice.

Over the last few years, ethical purchasing has grown at a rate of more than 10 per cent per year, with little variety in its categories (A-rated white goods, organic food, fair trade food, ethical banking)[1].However, whilst many retail products with ethical credentials are now available in the UK, the housing market is still lagging behind in meeting this demand.

[1]The Ethical Consumer Report, Cooperative Bank, 2003)

In a survey by Ipsos MORI (2006)  83 per cent of participants stated that they would be interested in living in a sustainable housing development.  Home owners react positively to sustainable homes, seeing them as modern, attractive, high-tech, fashionable and good value.

Whilst the current economic climate and a changed housing market will have to be taken into account, research has shown that, in principle, most people are willing to pay more to live in an "eco-home".  A study by the World Wildlife Fund, Insight and Commission for Architecture and the Built Environment (CABE) in 2004 found that 84 per cent would pay a 2 per cent premium for an ‘eco-home'.  An Energy Saving Trust study confirmed this research and found that 28 per cent would even pay a 10 per cent premium.  Similar findings were reported in a study by Ipsos MORI in 2006. This demonstrates that sustainable homes are no longer a niche product for a small minority of environmentally minded individuals. In fact customer needs are underserved by current housing provisions: in the longer term ‘eco-homes' are expected to play an important role in the market.

For low carbon development market players to remain competitive in a carbon constrained economy, they must stay ahead of legislation, which will tighten considerably over the relatively short period of time leading up to the enforcement of the carbon neutral standard in 2016.  Building up experience and credibility through continued monitoring and review will be crucial for survival and future positioning in the market.