UKGBC guest article: Building back better - the built environment at the heart of a green recovery

As we emerge from the COVID-19 lockdown, and start to adapt to the "new normal", it’s clear that the number one priority for government must be near-term job creation and economic growth. Yet rather than viewing this as somehow separate from our climate ambitions, it’s encouraging to note that businesses and politicians alike are now explicitly linking the two objectives. From the Prime Minister’s statement on World Environment day to the words of COP President Alok Sharma at the Petersburg Climate Dialogue, both a "green recovery" and securing a "more resilient economy" have been at the forefront of the government’s statements on plans to reboot the economy.

One good reason for this is the robust evidence recently provided by a team of internationally recognised experts, including Nobel prize winner Joseph Stiglitz and well-known climate economist Nicholas Stern. Through extensive research¹ they conclusively point to greenhouse gas mitigation projects creating more jobs and delivering higher short-term returns per dollar spend leading to increased long-term cost savings, by comparison with more traditional fiscal stimulus measures. Indeed, several of their top ranking fiscal stimulus policies that score the highest on both economic multiplier effect and climate mitigation fall within the built environment category.

Despite encouraging signs in recent years, the property sector’s scorecard remains far below what is required to meet the UK’s legally binding target of net zero carbon by 2050. As the Government looks for opportunities to boost growth, "level-up the regions", achieve net zero and create jobs, our sector is especially well placed to deliver. As this article will illustrate, tackling the climate and ecological crises can and must play a critical role in overcoming the COVID-19 crisis, through initiatives to stimulate clean growth and create jobs in every part of the country, while also improving the quality of life, health and wellbeing of communities and their residents.

Through an array of key built environment policies and incentives, the Government has a crucial opportunity to enable the property sector to truly "build back better", delivering substantial benefits for people, economy and planet.

New homes and buildings

Delivering better performing new buildings will be a crucial part of restructuring our economy and creating places that are truly fit for the future. New standards are not only vital for the development of low-carbon supply chains and technology to meet our net zero target, but also for making sure we do not kick the can down the road and lock in carbon emissions that will need addressing in future.

UK businesses are already investing heavily in reducing their carbon emissions, and that investment must not go to waste. In these highly uncertain times, the construction sector needs absolute certainty that there will be no backtracking on Government’s commitment to strengthen Part L of the Building Regulations this year. Indeed, the proposed Future Homes Standard should be significantly strengthened, to ensure that it aligns fully with net zero carbon outcomes and thereby maximises its potential to create green jobs and industries.

It is clear that the low carbon design and product solutions needed to deliver net zero – including innovative new construction methods – offer a golden opportunity to create jobs and improve skills, enabling the UK to gain a competitive advantage and export cutting-edge products and services, just when we need it most. Targeted capital investment focused on sustainable outcomes would support the transition by providing a timely boost to sustainable supply chains – not least additional investment in low carbon heat. A related government-funded training programme could also rapidly upskill furloughed workers or those looking to requalify from sectors severely impacted by COVID-19.

Indeed, alongside these substantial economic benefits, strengthening of new building standards is also vital for delivering higher quality, healthier homes and buildings. The quality and health of our homes and places has come into sharp focus during the lockdown period, and will likely remain so into the near future. This has highlighted the importance of features such as daylight, thermal comfort and sound insulation, alongside access to local amenities and green spaces. We must therefore take every opportunity to boost the design quality of our new homes and places – and in so doing ensure that all our communities are as resilient as they can be to whatever the future might bring.

Home energy efficiency retrofit

Looking beyond new buildings, how to decarbonise those already standing represents a considerable challenge. And yet, a flurry of evidence in recent months has not only compounded the case for greater action but highlighted the substantial benefits of doing so.

The International Energy Agency has rightly said that energy efficiency has a key role to play in any green economic stimulus, supporting existing workforces, creating new jobs and delivering economic growth nationwide. Closer to home, the Energy Efficiency Infrastructure Group’s latest report² suggests that investment in home renovation for net zero will help to "level up" infrastructure and opportunity across the UK – supporting over 150,000 skilled and semi-skilled jobs to 2030, reducing household energy expenditure by £7.5 billion per year at today’s prices – doing more in regions most affected by unemployment, under-investment and fuel poverty.

As a consequence of energy efficiency enabling households to save money on their energy bills, they will have much needed additional disposable income to spend, thereby helping to address the demand-side factors underlying any recession. Moreover, the economic cost to the NHS of cold homes, at a time of great pressure, is around £1.4 billion and living in a cold home markedly increases the incidence of respiratory disease, which in turn is a risk factor for more severe incidences of COVID-19. Investing in home retrofit would play a vital role in addressing this.

In terms of how we then start the process of delivery, there is a clear case that social housing should lead the way – and the Government must provide targeted support to enable social landlords to act. The National Infrastructure Commission has recommended in their National Infrastructure Assessment that £3.8 billion of grant or direct funding be allocated for energy efficiency improvements in social housing between now and 2030. This is consistent with the commitment in the Conservative manifesto to a £3.8 billion Social Housing Decarbonisation Fund – which should be brought forward immediately. This should go hand in hand with the accelerated deployment of the other manifesto commitments - the Home Upgrades Grant and the Public Sector Decarbonisation Scheme.

One necessary point of caution, however, is that any stimulus package must avoid the pitfalls of previous stop-start funding, with the poor-quality outcomes that this often drove – such as “boom and bust” cycles in the (often SME) construction sector. It must clearly lay firm foundations for a continuing programme of energy efficiency activity across the owner-occupier sector, which is self-sustaining. Encouragingly, the Government has already committed to an energy efficiency strategy for the able-to-pay market, but forthcoming plans must ensure that consumer demand is built up to meet the supply. This should include the early introduction of a revenue-neutral stamp duty incentive, which could play a key role in driving consumer demand and starting to build a value for energy efficient properties in the home-buying market. Such measures have also been called for by the Green Finance Institute in its latest report³ calling for Government to provide short-term incentives to prime the green consumer loans and green mortgage markets.

Biodiversity and climate resilience

Finally, alongside addressing the climate crisis, it is important to remember the other side of the same coin, biodiversity decline.

Access to greenspace has proven incredibly important to many during this period, but this time has also highlighted the disparities between those with and those without access. Given high levels of public support, there is clearly a real opportunity here for positive action. Delivering green infrastructure and nature-based solutions can not only enhance the resilience of our streets and properties to climate change, but also help enhance both residents’ health and biodiversity.

The evidence on the links between green space and both physical and mental health benefits is extensive and well-established. Defra previously estimated that if everyone had access to sufficient green space, the benefits associated with increased physical activity could save the health system at least £2.1 billion per year. In addition, it is estimated that tree cover saved London more than £5 billion in 2014-18 through air cooling, and prevented productivity losses of nearly £11 billion by keeping summer temperatures bearable.

With many more of us working from home and aware of our local environment, now would be the ideal time to introduce a new "Green Communities Urban Resilience Fund" for investing in local green space, biodiversity, opening up access and improving climate resilience. This would build on the success of the Government’s current Pocket Parks Fund, and allow communities to go further in regreening existing neighbourhoods through street trees and shared green spaces, echoing the recommendations of the Building Better Building Beautiful Commission and emulating the likes of the Greener Cities Fund in London. This would deliver significant economic benefits through reducing health inequalities, enhancing climate resilience and improving both physical and mental wellbeing. It would leave a legacy of green spaces as a permanent reminder of the important role green spaces have played in maintaining public health during this crisis.

Conclusion

As we look to the future of the built environment and the wider economy after this crisis, it is important that both the industry and the Government learn the right lessons from our current experience. It is only through this, and taking the right measures now, that we can "build back better" in a way that secures a truly resilient, sustainable and prosperous economy for the future.

Author: Julie Hirigoyen, CEO, UK Green Building Council

¹. https://www.smithschool.ox.ac.uk/publications/wpapers/workingpaper20-02.pdf

². Energy efficiency’s offer for a net zero compatible stimulus and recovery

³. Stimulus actions for a greener and more resilient property sector