As another green policy goes up in smoke, does the government risk failing to live up to its obligations?

Sarah Richardson

Another week, another green policy goes up in smoke, as the government continues burning through the environmental agenda with all the fervour of a teenage petrol head.

Energy secretary Amber Rudd’s announcement last Thursday that the government is pulling the plug on funding for the Green Deal’s Finance Company and Home Improvement Fund, ending its assistance for the retrofit scheme, is expected to effectively kill off the initiative. The coalition government’s “flagship” energy efficiency programme will join solar farms, offshore wind projects and zero carbon housing as casualties of the new administration’s apparent war on green.

As virtually everyone who has worked with the Green Deal would readily admit, it was a scheme in great need of reform. But that is far from being the same as saying it should be scrapped, with nothing but a “review” ready to be put in its place.

After curtailing support for the Green Deal, Rudd asserted that the government should not back schemes that encourage a “permanent reliance on subsidy”. Fair enough, but a market goal once supported by subsidy can only stand on its own once one of two things happens: market forces naturally take over, or a partnership between government and industry leads them to do so. Rudd claims the latter needs to happen in the case of retrofit; but by scrapping the Green Deal before working on this plan, she is forcing the market to go cold turkey for a worryingly ill-defined period of time. The result will be a lack of any consumer or business drive to undertake retrofit work – the thing the subsidy was meant to stimulate. On top of that will follow the likelihood that, whenever the government’s review is concluded, there will not be market capacity to drive retrofit forward again at scale.

By scrapping the Green Deal, Rudd is forcing the market to go cold turkey for a worryingly ill-defined period of time

The only thing that looks like it could mitigate against that scenario would be an expansion of the unaffected Energy Companies Obligation (ECO) scheme in the meantime. Despite Rudd’s assertion that ECO will continue to drive energy improvements while the review is carried out, it is estimated that scheme’s existing targets will be met next year, and take up is already waning as a result. But given the direction of travel on sustainability, any expansion looks unlikely.

None of this, however, is likely to trouble Rudd or her colleagues. Because, despite her comments and the government’s austerity outlook, financial support itself is not off the agenda – look at the money being pushed into the Conservatives’ favourite housing policy, Help to Buy.

In fact, financial interventions are a great tactic for politicians to employ to drive the market to deliver on their priorities, as the Conservatives’ experience with Help to Buy shows. The problem is that, for this government, a green built environment clearly is not one of those priorities.

In failing to prioritise the green agenda, and retrofit in particular, the government puts at risk its legal obligation to EU climate change targets, and its moral obligation to future generations. It also jeopardises the chance of driving a world-leading retrofit industry, with all the jobs and export opportunities that provides.Moreover, its claim that Green Deal funding has been pulled because green subsidies are incompatible with the government being “on the side of hardworking families and businesses” is disingenuous.

Rudd herself, in launching an extension to the ill-fated Green Deal Home Improvement Fund last December, said: “We know that the best way for households to cut their bills is to use less energy … it makes sense to go even further to help more families install measures so they see the benefits of lower bills and a warmer home for years to come.”

Perhaps this link between warmth, fuel bills and retrofit has conveniently disappeared with the onset of summer. But when it comes to both winter living costs and climate change, the nights will soon start drawing in.

Sarah Richardson, editor