Governance and policy

Strong energy demand reduction policies are needed to meet the challenge of net-zero emissions by 2050; current policies and funding levels are insufficient [1]. New policy is needed in a number of areas including new build regulations, support for building retrofit, active and public transport and material resource efficiency.

The scale, multi-level character, engagement needs and interactions of different interventions make net-zero policymaking a complex problem. Institutions designed for earlier energy policy making in the UK are not well-placed to design, coordinate and deliver against these new challenges, and therefore governance and institutional arrangements need review. Governance reform can draw on the more planned approach in Scotland, which treats reducing building energy demand as an ‘infrastructure priority’, ensuring better strategic framing and funding [2].

Energy supply continues to be central in the energy policy agenda, even when the potential benefits of energy demand reduction are larger. Policy needs to have a greater demand side focus to also support systemic change in energy, transport, food and materials systems to drive demand reduction.

Policy innovation in scope, mix and type of policy instruments is required. Long term policies need to expand the scope of what is recognised as energy and climate policy. Policy packages will continue to be needed, but expanded to include a wider set of energy demand solutions. More is needed on education and public engagement [3], including public debate on fair and sustainable consumption levels [4]. This will require policy innovation that combines fairness with effectiveness. Untried options, such as frequent flier levies [5] and personal carbon allowances [6] could play a role and should be trialled.

In transport, a shift to electric vehicles is justified. This is beginning to happen, but delivering existing ambitious targets will require more policy support at various levels [7]. To achieve UK carbon goals, other approaches to sustainable mobility are also needed: for example, the road building programme needs to be reviewed, and buses re-regulated to allow more effective local intervention [8].

In commercial buildings, current policies have failed to stimulate an effective retrofit sector and new financing mechanisms are required. There are lessons from the successful Australian performance-rating model [9].

In residential buildings, opportunities for retrofit should be triggered at key points, such as change of ownership/tenancy [10]. Retrofit policy needs to build relevant skills (see Engaging people) and promote a cultural shift in construction to value low carbon and energy efficient performance [11]. Target deployment rates for heat pumps of 600k per annum by 2028 are challenging and will not be achieved without changes in incentives, relative gas and electricity prices, performance measurement and enforcement [12].

In energy intensive materials sectors, a twin track approach is needed to promote material efficiency [13] and new zero-carbon production processes [14]. There is no blueprint for a materials consumption strategy, but there is evidence from past experience in the UK and globally from which to learn [15]. Concerns about international competition deter investment in higher-cost low carbon processes. Key policy options to drive green steelmaking therefore include reforming UK carbon pricing and introducing a carbon border adjustment mechanism, as well as supporting investment in hydrogen direct reduction, lowering industrial electricity prices and government procurement [16].

Energy demand reductions in construction materials can be achieved using both land use planning laws and building regulation to promote low energy materials and material efficiency [17].

There is insufficient policy attention to the energy impacts of digitalisation. There is scope for policy interventions to reduce their direct energy consumption, e.g. through product standards [18, 19], and to encourage indirect energy savings, e.g. via land use planning to capture the potential benefits of e-working and e-retail.

Evidence

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