G8's climate change targets

Because the leaders of the rich countries, at their meeting in Italy, have just made a great headline-grabbing pledge to cut their emissions of carbon dioxide, in the fight against climate change, by 80 per cent by 2050.
How would we go about an 80 per cent C02 reduction once it was properly agreed?

This will be the greatest common enterprise on which humanity has ever embarked. To bring it about you might instinctively think windfarms, or solar panels, or electric cars, and they're all on the way and important, but the basic tool is really a more abstract one: the price of carbon, as determined by markets such as that of the European Union's Emissions Trading Scheme (ETS).

Why is that so important?

Nicholas Stern, in his groundbreaking report on the economics of climate change, said that global warming represented the greatest market failure in history: the true cost of emitting carbon dioxide was not remotely reflected in its price. As the governments in the ETS (and later, we hope, the US and elsewhere) squeeze the amount of CO2 companies are allowed to emit each year, the rising price of permits will drive the efforts to do without it, throughout society; it will drive the necessary behaviour changes by consumers, from transport, to heating choice, to diet (Oxfam points out, for example, how large is the carbon footprint of a steak compared to the same amount of calories produced from vegetarian sources).

Behaviour change is one of the two ways forward, yet despite the fervent hopes of "deep greens", it will need state or market intervention to make most people change their ways. The ultimate (and fair) way of doing it would be to give everyone the same personal "carbon allowance" which they can use as they wish; this is a long way off in practical terms, but as global warming gets worse, it may yet appear on the agenda.

What's the other way forward?

Technological fixes. Nuclear power and the coming technology of carbon capture and storage may – stress the "may" – mean we can carry on with our electricity-based lifestyle while slashing our emissions, as renewable energy on its own is unlikely to be sufficient. Electric motors and hydrogen fuel cells may allow us to maintain private car mobility, carbon-free, on the roads.

Aviation is a lot more difficult: the aviation industry sees biofuels as its get-out-of-jail card, but their expansion shows every sign of drastically pushing up food prices, never mind wrecking the rainforest. Getting aviation emissions down may ultimately mean restricting people's ability to fly, a very difficult job for any politician to undertake. It is becoming obvious that technological fixes are much preferred by politicians to asking people to change their behaviour; it is dawning on them that no one ever got elected by asking voters to make do with less.

Is an 80 per cent cut in emissions just pie in the sky?

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Gas firms fail to pass price cuts

Consumers are being denied the benefits of a sudden collapse in the price of natural gas that is bringing a profits surge to gas utilities.

Margins in the gas industry are reaching record levels, experts claim, because of an emerging glut of fuel in the wholesale markets caused by the recession and new supplies.

But utilities are failing to pass on the benefit of a fall, by two thirds, in the wholesale price. The gap between the retail price and the wholesale cost is expected to boost the profits of the residential business of British Gas by more than 50 per cent this year.

Wholesale prices are tumbling and are expected to fall further, says Niall Trimble, director of The Energy Contract Company, a gas consultancy.
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the zero-carbon home

This is because its super-insulation (three times as much as a normal house) means that, other than in exceptional circumstances, it will not need heating in January, or air conditioning in August. One small radiator and a tiny cooling system are optional extras for days of extreme weather.

The electricity that it will use, to power its state-of-the-art energy saving domestic appliances, is generated by the house itself from an array of solar panels on the roof. If you are in a suitable site for a roof wind turbine, you may be able to generate enough surplus energy, say the manufacturers, to run an electric car for 10,000 miles.

Water heating will be from other roof panels, backed up in winter by a biomass boiler (fired by wood chips) which can serve half-a-dozen houses at a time. The house itself is based around a very strong timber frame, supplied as a flat-pack kit, "a bit like a sofa from Ikea", according to Bill Dunster, the director of ZEDfactory, the architectural firm behind the project.

The cost for a three-bedroom version, including setting up, which will take about three weeks – and ruralZED will erect it for you – will be about £150,000. Note that this is not the finished house price. It does not include the price of the land, or installation of the surrounding infrastructure.

But to get an idea of comparative costs, the build price of a three-bedroom home put up according to current building regulations – which will soon be out of date – is about £100,000. On the other hand, the build price of the only other Code 6, zero-carbon home so far designed in Britain, the Lighthouse, created by the building materials firm Kingspan Offsite, is about £180,000, Kingspan say – and you have to erect it yourself.

This cost differential makes the ruralZED house a practical proposition, especially for housing associations, the consortium says. The first six homes are being built, 24 more are in the planning stage, and the finance director, Anthony Dickinson, said he expects to sell "thousands" in two to three years – "mainly to self-builders and local authorities, but looking to market them to commercial house builders".

The key to the house is that it has high levels of "thermal mass" – the ability of a material to absorb and release heat slowly. This is provided by the extremely thick insulation around the walls. Further temperature control is provided by a heat exchanger in the ventilation system, which does not require any power.

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