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This Is The Climate Change Regulation The Property Industry Should Expect In The Coming Years

The Rt. Hon John Gummer, Lord Deben

The UK government has committed to reducing the carbon emissions the country produces to net zero by 2050. In order to do this, every sector of business is going to face scrutiny about its contribution to meeting this goal. And because the property sector is not moving quickly enough to cut back on emissions, it can expect tougher regulation to be imposed upon it.

That is the very well-informed view of the Rt. Hon John Gummer, Lord Deben, former UK Environment Minister and now chairman of the UK government Committee On Climate Change. The committee advises the government on its climate policy, and so played a major part in the UK becoming one of the first developed economies to commit to a net zero carbon policy.

According to Gummer, the property sector has had something of a free pass with the public when it comes to scrutiny of its contribution to pollution and the environment: The impact of plastic bottles and car and air travel is far easier to grasp.

But the government has a firmer handle on the stats, which indicate that the built environment contributes between 30% and 40% of all global carbon emissions.

“The government has made its commitment to become net carbon neutral; that is now on the statute books, it can’t go back on that,” Gummer told Bisnow ahead of a keynote interview at the London Building for the Future event 30 October. “It is looking at radical solutions to meet that target, and the property industry can expect some significant changes. The industry has come a long way in the past five or 10 years, but it hasn’t moved nearly fast enough.

“I would much prefer that governments don’t intervene on businesses, but if they don’t move fast enough, it will.”

Areas where greater regulation should be expected include tougher minimum standards on insulation, ventilation and drainage, in order to make buildings more energy-efficient.

But there could also be legislation to try and improve construction practices and the way buildings are built, including reducing the number of vehicle journeys associated with a construction site and the ensuing amount of congestion, emissions and air pollution.

In terms of the type of energy consumed, after 2025, new homes will not be able to use 100% non-renewable power sources. Commercial properties should expect some mirroring of any policy put in place for residential homes, and of course, the nascent build-to-rent sector will need to conform to these regulations. 

Gummer said the housebuilding industry has a particularly poor record.

“If you look through the annual reports of the major housebuilders, the word climate doesn’t appear once,” Gummer said.

Retrofitting homes which are still being constructed that won’t conform to incoming environmental standards would be an expensive and intensive exercise. According to the Green Alliance, 27 million homes will need to be retrofitted between 2020 and 2050, which equates to 17,000 per week. One economic upside of this is it will be a good generator of new jobs. 

There is a significant political debate that will hold back the pace of change when it comes to sustainability, Gummer said: Brexit, of course. It will not change policy, but it will reduce the government’s ability to meet its objectives, he said.

“Brexit makes it very much harder,” Gummer said. “We may think we are an island but we are in fact very close to our colleagues in Europe, and moving ourselves away from working closely with them is a huge mistake. Also, Brexit is a very bad thing for the economy, so the government will simply have less money to make the changes it wants to implement.”

To join the vital conversation about how real estate can fight the climate emergency come to Bisnow's London Building for the Future event on 30 October.