Global Energy Assessment

Critically analyse how the Global Energy Assessment pathways represent future socio-technological change in the energy system, focussing on the building sector.

Abstract

There has been growing concern surrounding climate change over recent years and much emphasis has been placed upon the ways in which the environment can be protected. Accordingly, because of how important it is for organisations and individuals to adopt environmentally friendly practices, effective environmental controls are vital. There is much debate as to the extent to which the Global Energy Assessment pathways represent future socio-technological change in the energy system, yet this study intends to find this out by focussing on the building sector.

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1. Introduction

The government has placed a great deal of emphasis upon climate change in recent years by exploring the different ways it can be tackled (Department for International Development, 2011: 13). The Department of Energy and Climate Change aims to make sure that the UK has “secure, clean and affordable energy supplies” (DEEC, 2014: 1) and seeks to promote international action in order to eliminate climate change.

In 2012 the Global Energy Assessment (GEA) was therefore launched and a new global energy policy agenda was established (GEA Writing Team, 2012: 4). The GEA intended to change the way society uses and delivers energy in order to mitigate climate change. In doing so, it brings together hundreds of international researchers to provide an analysis of the current issues that exist and to identify the possible options that can be taken in tackling climate change.

Technology options and policies are also included in the GEA and are considered vital in protecting the environment and maintaining sustainable development (GEA, 2014: 1). As noted by Greening, the Secretary of State for International Development: “The long-term effects of climate change threaten to undermine progress in reducing global poverty” (Department for International Development, 2011: 3).

This is the main reason why the UK is committed to helping developing countries adapt to climate change in a positive way by ensuring that they take up low carbon growth and effectively tackle deforestation. This study will therefore examine some of the Global Energy Assessment pathways, by focusing on the building sector, in order to consider the effects these will have upon the energy system in the future.

2. Socio-Technological Change in the Energy System

In order for climate change to be tackled effectively, socio-technological changes are needed within the energy system. This can be ascertained by reviewing the different sectors which impact the environment and then considering what socio-technological changes are required. The building sector has a significant impact upon the environment because of the fact that it accounts for one-third of the planet’s total energy use (Global Alliance, 2012: 1). Technological improvements to buildings are therefore a cost-effective way of mitigating climate change.

By using existing proven technologies we have the ability right to “reduce energy consumption in new and existing buildings by 30-50 percent at extremely low or no cost, and usually at negative cost (Global Alliance, 2012: 1). Increased building efficiency is therefore the future for the building sector because not only do greener buildings help to promote sustainability but they are also better for the consumer in that they are more comfortable and cheaper to maintain (NAR, 2014: 1).

The pathways for transition that have been explored in the GEA therefore need to be followed if the building sector is to become more energy efficient. This is important given that GHG emissions are expected to nearly double by the year 2030 under a high-growth development scenario (Metz et al; 2007: 6). The GEA supports sustainability in the building sector by helping decisions makers address the challenges associated with building development (CCCSEP, 2012: 1).

3. Energy Efficiency Barriers in the Building Sector

The building sector can contribute to tackling climate change through socio-technological change in the energy system, yet there are many barriers towards improved efficiency in this sector. One of the main barriers that exists is a lack of technical, economic and general knowledge about the energy sector. Not only does this knowledge gap apply to consumers but it also applies to building designers, architects and politicians (Urge-Vorsatz, 2012: 702). Because of this lack of knowledge, it is very difficult for many of the technologies and practices that exist in this area to be implemented. Furthermore, although energy efficient practices are considered cost effective, they are not being widely adopted due to the high initial start-up costs.

The high upfront costs are thus discouraging, especially when there is a lack of knowledge that exists in this area and unless greater awareness is provided, it is unlikely that the GEA pathways will have much of an influence in the future. Market failures also provide barriers to energy efficiency because of the failures in the way the market operates (Urge-Vorsatz, 2012: 702). Such flaws prevent the trade-off between energy efficiency investments and energy saving benefits. Behavioural barriers are also a problem for energy efficiency in the building sector as the behaviours of individuals and companies may be difficult to change. For example, individuals may fail to turn the lights off in their homes, whilst organisations may fail to identify energy saving opportunities, especially if they do not benefit directly from them.

An example of this can be seen in relation to green leases since these are one of the main pathways to energy efficiency. Green leases thus impose obligations on landlords and tenants to achieve targets for energy consumption. This ensures that the energy use of commercial buildings is minimised through “better measurement, greater awareness and systematic management” (All Party Urban Development Group, 2008: 2). There are a number of different green lease shades which represent different commitments to the green agenda: light green leases represent a modest commitment to the agenda, whilst dark green leases reflect a much more serious commitment (Bright, 2008: 158).

Regardless of the benefits green leases have on the environment, however, they are not being used as much as they should. This is largely the result of the “conventional relationship between the landlord (as building owner) and tenant (as occupier)” which generally neglects “environmental considerations” (Hinnells et al; 2008, 1). The extent to which green leases represent future socio-technological change in the energy system is therefore unclear and it seems that further changes are required if a more robust system is to be implemented. Green leases should be used more frequently than they are at present, yet it is questionable whether this is likely to happen given that “change may be rapid, disruptive and challenging (Hinnells et al; 2008: 1).

Bright believes that capital investment will allow for more efficient equipment to be introduced that will allow for better energy savings to be made (Bright, 2008: 158). This will encourage landlords and tenants to enter into a green lease if they can identify the real benefits that are associated with them. Consequently, it is evident when looking at green leases that one of the main barriers towards improved energy efficiency is the lack of awareness that exists. In order to remove this barrier to energy efficiency, campaigns and sector learning networks could be introduced in order to increase the current awareness of GEA’s (Carbon Trust, 2005: 16). Furthermore, actions could also be taken that raise the attention of building owners such as; tax incentives and low interest loans (Rezendes, 1994: 41). This will allow greater access to energy efficient equipment and will encourage individuals to take advantage of the opportunities that are available. Another barrier towards energy efficiency in the building sector is transaction costs and the limited availability of capital. Because building owners do not generally have spare capital available to make their buildings more energy efficient, they are less likely to take the GEA pathways into consideration (Ecofys, 2012: 3). Furthermore, as has been pointed out; “financial barriers to the penetration of energy efficiency and building integrated distributed generated technologies include factors that increase the investments costs and/or decrease savings resulting from the improvement” (Urge-Vorsatz, 2012: 698).

Arguably, building owners are unlikely to make energy efficient changes if they are not also cost-effective despite the fact that the equipment is more efficient. This could also be rectified through tax incentives and low interest loans, yet economic instruments could also be introduced that reduce the overall costs of the equipment. Energy prices could also be increased so that going green would be more of an incentive than it is at present. This is because, unless there are significant cost benefits of becoming more energy efficient, it is unlikely that individuals will be actively encouraged to do so. Market misalignment is another barrier that prevents “the consistent trade-off between specific energy-efficient investment and the societal energy-saving benefits” (The Carbon Trust, 2005: 16). An example of this can be seen in relation to tenant-landlord relationships where companies have no direct control over the premises and so are reluctant to invest in energy efficiency. This barrier could be overcome through the provision of split-incentives. This would encourage landlords to become more energy efficient if they were being incentivised to do so. If the GEA pathways are implemented, the environment will benefit significantly from this and the passivhaus standard will be applied in the building sector. This standard is the robust approach to building design which seeks to minimise the heating demand of buildings by building houses that have exceptional thermal performance (Passivhaus, 2011: 1). Unless it is less costly for builders to employ the passivhaus standard, there will be no incentive for them to do so as they will not benefit from the reduced energy savings.

4. GEA Pathways for the Energy Efficiency Transition

Because of how important it is to protect the environment, it is necessary that the multiple objectives outlined in the GEA are being met through environmental control. The main objective of the GEA pathways is to understand the combination of measures, time scales and costs that are needed to transform the energy system. In understanding this, however, it is necessary to first identify the energy efficiency barriers that exist so that appropriate measures can be implemented to alleviate them. Reducing thermal energy use is achievable through a number of different pathways such as; best practice in building design, construction and operation; the elimination of energy poverty; the increase of living space and economic development ((Urge-Vorsatz, 2012: 703). Before these pathways can be incorporated, it will be necessary to for significant investments to be made as well as the introduction of new appliances and technology and discounted energy saving costs. Because this will require high start-up costs, increased knowledge of the GEA pathway benefits will be needed so that individuals and organisations will be incentivised to adopt such pathways. Hence, many approaches have already been implemented to manage pollution-generating processes (Stuart, 2006: 1), yet it cannot be said that the obligations placed upon individuals under the Environmental Protection Act 1990 and the EU’s Council Directive 96/61/EC to control the environment are being realised (McEldowney and McEldowney, 2010: 48). This is likely to be the result of market failures and behavioural barriers since individuals and organisations may not be able to identify when an energy saving opportunity arises. Nevertheless, since the Climate Change Act 2008 was first enacted various mitigation and adaption strategies have been introduced, such as the Government’s ‘Green Deal’. The objective of this deal was to limit greenhouse gas emissions so that the increase of global temperature could be decreased. The Green Deal has been considered a welcoming development because of the fact that it has enabled the energy efficiency of many households and businesses to be improve “without consuming so much energy and wasting so much money” (DEEC, 2010: 1). This is beneficial for consumers and is likely to reduce the initial startup costs. The Green Deal is also effective in increasing the awareness of energy saving benefits, which is likely to remove any subsisting behavioral barriers.

Conversely, it has been argued that the implementation of the GEA pathways may actually lead to further energy use, through the so-called rebound effect (Gillingham et al, 2013: 474). Although the GEA have identified the possible re-bound effect the implementation of their pathways may have, it seems as though little consideration has been given to this (GEA, 2012: 1573). Accordingly, it cannot be said that the barriers to energy efficiency have been given much thought and unless the behaviour of individuals and organisations change, it is unlikely that the GEA pathways will have much of an impact in the future. There are both direct and indirect rebound effects that are likely to occur. The direct rebound effect happens when people consume more energy as a result of the low costs, and the indirect rebound effect happens when people use savings from lower energy costs to spend on other energy intensive activities (Sorrell, 2010: 636). In view of this, is thereby essential that rebound effects are taken into consideration when evaluating how beneficial energy efficiency really is. As noted by Giillingham et al; however: “Empirical evidence indicates that the direct rebound effect will dominate in the near term” at around 10-30 per cent (2013: 476). Regardless of this, it was also pointed out that rebound effects are not necessarily bad since the overall well-being of society will be improved as a result. Therefore, even if the re-bound effect does not lead to a significant reduction in energy use, societal well-being will be improved. It is unclear whether the target of 80 per cent emission reductions by 2050 will be achieved since there are a number of different changes that need to be implemented in order for the barriers to energy efficiency to be overcome (Bell and McGillivray, 2008: 531). In effect, whilst many implementations have been made towards establishing a sustainable future in the energy sector, the extent to which these have proven successful remains largely unclear. If the barriers to energy efficiency are removed and the GEA pathways are followed, there is a possibility that the emission reductions will be reduced by 2050, yet it remains to be seen whether this will be by 80 per cent. This is because as put by Riahi et al; “although the GEA pathways have shown that such a transformation is possible, the task remains and ambitious and will require rapid introduction of policies and fundamental policy changes that lead to coordinated efforts to integrate global concerns” (2012: 1300). Consequently, the barriers to energy efficiency will need to be overcome before the GEA pathways can be implemented, yet this is likely to prove extremely complex. Increased awareness would be the first step as this will lead to behavioural changes that will ensure the GEA pathways are being adopted.

5. Conclusion

Overall, whilst there are a number of different GEA pathways that are intended to make effective socio-technological changes in the energy system, the extent to which these will prove successful remains unclear. This is because, whilst many of the pathways are considered effective ways of creating an environmentally friendly energy system, it cannot be said that the current mechanisms are being employed by all. This is evidenced by the introduction of green leases, which are aimed at establishing energy efficient ways of occupying commercial property. Whilst these leases do seem rather beneficial to both landlords and tenants, their place in the market has not yet been established. The lack of incentives may be one reason for this, which signifies how further benefits ought to be made available. In addition, the future of the mitigation and adaption strategies that have been implemented into the building sector is also unclear because of the fact organisations do not always co-operate in the implementation of such strategies. The re-bound effect is also not being given enough consideration and thus needs to be taken into account when analysing the GEA pathways. Consequently, in order to maintain sustainable development and minimise climate change, it is vital that the GEA pathways are being promoted a lot more so that the impact the building sector has on the environment can be minimised, yet in doing so the re-bound effect should be taken into account in order to ensure that a more realistic approach is undertaken

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