Why the next Prime Minister needs to go further and faster on behaviour change to cut carbon and costs

The next Prime Minister has a long to-do list on decarbonising transport and buildings

In two weeks’ time, either Liz Truss or Rishi Sunak will be elected as the Conservative Party’s next leader following a vote among party members. Precious little time during hustings and TV debates so far has been allocated to the topic of climate action, and, when asked about moves to tackle the energy price crisis, the opinions of both candidates have drawn criticism from green groups.

Both Sunak and Truss are in the faction of the Conservative Party that is in favour of limiting the development of onshore wind and solar power. Truss has been extremely vocal in her criticism of solar panels, calling them “paraphernalia” and arguing that they could contribute to food insecurity.

Additionally, both candidates have stated that they would make moves to improve energy efficiency, but details on exactly how have been scant so far. This has been cause for concern for households, public sector bodies and businesses keen to improve efficiency ahead of further price increases this autumn.

Now, centre-right think-tank Onward has put forward a string of recommendations for the next Prime Minister on getting the general public to make the. Many of these changes, the report emphasises, will help people save money on their energy and transport fuel bills. The paper has the support of the Net-Zero APPG’s chair Alex Sobel MP and the Environmental Audit Committee’s chair Philip Dunne MP.

The recommendations build on the Climate Change Committee’s (CCC) recent annual progress report to Parliament, which confirmed that one-third of the emissions reductions needed between now and 2050 will require people to change their behaviours. For example, they will need to change how they heat their homes, their transport patterns, the rate at which they consume virgin natural materials and their diets.

Onward’s report, entitled ‘Going Green’, states that scaling up building retrofit needs to be a priority for the next Prime Minister if the UK is to adhere to its carbon budgets – and if the Conservative Party wishes to retain its popularity.

The report proposes a stamp duty rebate for retrofitting for home buyers, recommending that they should receive a 50% rebate if they pay for retrofitting within 12 months of purchase. It also proposes that the Government brings forward a national grant scheme for retrofitting, funded through the UK Infrastructure Bank, as well as more targeted loan schemes.

Last year, the UK’s last national grant scheme for home retrofitting, the Green Homes Grant, closed with the vast majority of its budget unspent. It intended to support 600,000 homes but only 43,000 successfully used vouchers. Ministers have attributed the scheme’s failure to a lack of tradespeople qualified to carry out the works which fell within the scheme’s requirements; there was little consultation with industry prior to launch, as Ministers were keen to get the scheme up and running.

Philip Dunne MP said: “During the Committee’s recent work on energy efficiency, it was clear that the Government had not properly grasped how much it would cost to bring homes to at least EPC C. Policy initiatives like the Green Homes Grant, which was a good idea, were poorly implemented and did not instil confidence in the sector. Boosting the energy efficiency of the nation’s homes is essential, not only to help households afford to heat their homes but also to help achieve both energy security and net-zero: emissions from domestic properties account for 20% of UK greenhouse gas emissions.

“Installing insulation and retrofitting properties with energy efficiency measures can bring the UK back on track to achieve net-zero goals, while also reducing household bills in the midst of the current cost of living challenges.”

Collective changes and nudges

Stamp duty rebate and a broader retrofit scheme are classed by Onward as individual incentives – interventions that help individual households weigh the high upfront cost of retrofitting.

Also assessed are collective incentives, those which enable people to act together to switch to low-carbon technologies and systems, and nudges. Nudges are gentle pushes to change behaviour, that do not involve significant changes to economic incentives or legislation.

Collective incentives proposed include the offer of a new salary sacrifice scheme for those looking to invest in solutions such as electric vehicles (EVs), home solar panels, home energy storage and/or heat pumps. This would be similar to existing schemes encouraging walking or taking the train to work. Onward is proposing that this scheme could be financed by corporates in some cases. In the public sector, Ministers may wish to consider funding these schemes.

Another proposed collective incentive is the launch of demand aggregation schemes for these types of emerging technologies, operated by councils and combined local authorities. In this way, groups of residents and/or businesses could benefit from economies of scale by purchasing and installing technologies at the same time. It bears noting that the Government has not, previously, indicated plans for a scheme like this. The Public Accounts Committee published a report in March stating that the Government is not adequately engaging with local councils on net-zero delivery, jeopardising progress. That same warning was made late last year by the Housing, Communities and Local Government Committee.

On nudges, Onward is recommending the following:

• Marketing schemes for public transport and active travel in major cities, overseen by local authorities
• Email campaigns to help EV drivers charge during off-peak times
• Campaigns from all energy suppliers to encourage households to improve efficiency and switch to clean generation
• A mandatory requirement for carbon labelling on food and drinks

Onward worked with the Behavioural Insights Team (BIT) to assess the potential impact of its recommendations and find ways to maximise the positive outcomes. The BIT is an arms-length body of the Cabinet Office jointly run with innovation organisation Nesta.

Findings highlighted the importance of emphasising that the new technologies and behaviours are already being taken up by peoples’ friends, families and colleagues – and that the new incentives are enough to make a significant difference to upfront costs.

The UK Government notably published then removed a report from the BIT in the run-up to COP26 last year which recommended changes to regulation, legislation and taxation to cut emissions from things like heat, transport and food systems.