Time to Reverse Pricing

So, what to do about the fact that household CO2 continues to increase? We posted a statement of the problem yesterday, so today we post a suggestion on what to do about it. We think the government should require that domestic energy prices increase as you consume more energy, not the opposite as happens at present. Look at the charts: the left hand side shows how electricity tariffs work today, the right hand chart shows how they would work under reverse pricing. The average price is the same for the average user (4-5 MWh / year), but the marginal price would be 2 x higher - halving the payback time of a typical energy saving investment.

You can read more in our article on this in The Financial Times, or click here to download a more detailed explanation of the idea. We would welcome your comments!

Household CO2 is 500 years off target

The latest CO2 statistics were published today. Not good news. Residential emissions grew by 3 million tonnes in 2008, despite the economy being in recession for most of the year. This is why we say that current policies are not working in this sector: the average reduction in household CO2 emissions since 2002, when the flagship EEC/CERT program began, is now 0.3% per year, meaning it would take 500 years to achieve an 80% reduction. That's supposed to be our target for 2050, by the way.

You can download the data for yourself on the DECC website. The picture looks better for 2009, but DECC attribute the improvement to warmer weather in 2009 and the full dataset won't be published for another year or so.

£1 billion bank is nothing new

So, yesterday we heard the Chancellor put £1 billion of our money into a green investment bank.

But did you know we already spend much more than this? The Carbon Emissions Reduction Target (CERT) creates an obligation for energy companies to spend money every year to encourage us to buy less energy from them. The cost of this program (paid for by each of us, with small increases in our energy bills) is about £1.3 bn every year. It's mostly spent on subsidising loft and cavity wall insulation and a few hundred million low energy light bulbs.

Unfortunately this very expensive program isn't working: we'll do a post to explain why that's the case later on. I don't know why nobody writes about this in the press.

What is a tonne of CO2?

About as much as

• 100 trees can absorb in a year 
• Driving across America in a car 
• A 10,000km long haul flight, per passenger
• £175 of gas and electricity at current UK prices

The Carbon Trust publish some useful conversion ratios for this kind of thing. We use a figure of about 10kg per tree which is widely quoted on the internet; the United Nations Environment Programme puts it at about 12kg a year, but 10 kg / tree (or 100 trees per tonne) is a pretty good rule of thumb.

How much CO2 can I save?

Well, here's the answer from all properties in the Carbon Census to date :

On average a UK household can save 2 - 6 tonnes of CO2 each year by implementing all of the measures identified in an official Energy Performance Certificate. About a third of the saving can be achieved with relatively cost effective measures - lighting, insulation, thermostats, heating system and so on - and about two thirds from more expensive improvements such as installing solar thermal hot water, solar panels or solid wall insulation. That said, solar panels are one of the more cost effective investments now that feed-in tariffs have been introduced. A typical installation saves about 1 tonne of CO2 per household per year.

Why the Carbon Census?

So, let's use our first post to answer the first question: why do we need a carbon census? The answer is easy: 27 million homes in the UK; 142 million tonnes of CO2; each of our homes is producing 5-6 tonnes of CO2 every year. That's just from using the gas and electricity that's piped into our homes every day. Altogether home energy use creates a quarter of all CO2 emissions in the UK, more than all road transport combined. It's a huge deal. We definitely need a census. The official emissions statistics are published here for those who are interested.