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Carbon neutral homes a tough sale

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by Journal Of Commerce

An interesting experiment is about to begin in England. The government has announced that all new homes in the country will have to be carbon neutral by 2016.
Carbon neutral homes a tough sale


An interesting experiment is about to begin in England. The government has announced that all new homes in the country will have to be carbon neutral by 2016.

Along the way, building codes and regulations will be tightened in two steps, and all new homes will be given star ratings to reflect their energy efficiency.

The measure is a part of the British government’s drive to reduce carbon dioxide emissions by at least 60 per cent by 2050.

Carbon dioxide is a greenhouse gas and a key factor in global climate change that most scientists now agree is occurring.

England builds about 160,000 new homes a year, but only a handful are carbon neutral. Many builders reckon that making a new home carbon neutral adds about $57,000 (Canadian) to the price.

As an incentive, the government plans to exempt new homes from the hated stamp tax, a sliding-scale tariff that is levied on the purchase of real property. Depending on the value of the property, the tax can add thousands of pounds to the purchase price.

Even with incentives, though, the whole development/homebuilding industry will have to buy into the idea in a big way if it is to succeed, and judging from initial reaction, that is by no means certain.

The Home Builders Association dismissed the scheme as mere “gesture politics,” that threatens to undermine plans for tens of thousands of new homes sorely needed in the southeastern part of the country. An association spokesperson said the government “will jeopardize the increase in new home building that ministers claim to want if they impose excessive, eye-catching, sustainability requirements on house builders.

“Expecting house builders to install wind turbines and other devices is a waste of money and will slow house building down.”

Another group, the Home Builders Federation, was more cautious in its response, saying it “looks forward” to working with government on details of the plan.

“The challenge is to ensure that consumer behaviour adapts to zero-carbon living, that all homebuilding companies have the right capacity, and that the government sticks to its existing housing supply targets.”

The government defines a zero-carbon home as one with “zero net emissions of carbon dioxide from all energy use in the home.” That includes energy used by appliances, as well as heating, ventilation and hot water.

All this will be a boost for firms manufacturing and selling such things as small wind turbines, solar energy arrays, geothermal heating/cooling systems, and cisterns for collecting rainwater, triple-glazed windows and all the other elements that might go into a green home.

A firm that publishes information about the British mortgage market has pointed out building a zero-carbon home from scratch is cheaper than retrofitting an existing building into a truly green home. But it is still expensive.

The estimated cost of building a simple zero-carbon home is equivalent to $300,000 Canadian, compared to about $195,000 for a traditional house of similar size. But that does not include land or the developer’s profit.

Factor these in and the total basic cost of a zero-carbon home is unlikely to be less than $800,000 to $900,000 before subsidies are applied.

The company acknowledged, though, that as more and more such homes are built, the cheaper the technology and the expertise will become.

This represents a bold exercise in market intervention by a national government, and it remains to be seen whether homebuilders and their suppliers of environmentally friendly technologies will gear up to produce what will surely be more expensive houses.

Whether the demand will be there at a higher price will depend upon whether or not consumers accept that there is a need to curtail carbon emissions, and whether they are willing to move toward a lifestyle considerably different than they lead today.

Korky Koroluk is an Ottawa-based freelance writer. Send comments to editor@dailycommercialnews.com

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