Mr Green and the mortgage lenders
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When I was knee high to my dad green people generally came from Mars and were hell bent on destroying the planet but these days it’s the Earthlings who are green and while they are firmly focused on saving Mother Earth they seem intent on destroying life as we know it.
For example, in the run up to the UN climate change conference in Copenhagen this month Lord Stern of Brentford, a former adviser to the government on the economics of climate change and development, called on us to forsake meat to save the planet. Presumably he’d like to see a global cull of methane emitting cattle and all grazing animals. Obviously grass guzzlers will have to go.
Other experts have pointed accusingly at the growing number of pets that we keep and claimed that a large dog emits more greenhouse gases annually than a Toyota Land Cruiser (assuming it does 6,000 miles a year). This offers an interesting carbon offsetting proposition – buy a four track and shoot your pooch: that way you’ll be carbon neutral!
Nearer to home and more pertinent for mortgage lenders is the fact that Lord Adair Turner, chairman of the Financial Services Authority, is also chairman on the government’s Committee on Climate Change – a role that may explain his disparaging comments on the socially useless activities of the City and his contribution to Do Good Lives Have to Cost the Earth (February 2008), a collection of essays on the challenge of climate change by academics, environmentalists and people from the business community.
In his essay Lord Turner argues that “growth has to be dethroned” if the planet is to survive. It’s high moral ground stuff, though the reference to water shortages is a trifle hypocritical, given that his country pad sports a swimming pool.
“At the global level, the growing population, on average increasingly rich, is imposing an unsustainable burden on the world’s environment”, he writes. “Increasing demands for fresh water are destroying fragile ecosystems and in some cases threaten conflict between nations.”
He observes that the biodiversity is being eroded at an alarming rate and that greenhouse emissions are changing the world’s climate, with uncertain but potentially very harmful results. The solution, apparently is “dethroning the maximisation of measured GDP as an end in itself”.
To be fair a large section of the national press misreported his contribution to the Final Report of the Green Fiscal Commission which was published on 26 October and called for swinging increases in fuel duties and car taxes. Lord Turner took part in a panel session at the launch of the publication and was not responsible for it contents.
However, the worry remains that higher fuel bills and carbon taxes could drive up the number of people in fuel poverty and in this respect it is worth noting that recent figures released by the Department of Energy and Climate Change show that 4.9 million households in England currently fall into that category while CML data indicates that 40% of the poor in the UK are owner-occupiers.
On the other hand, the first annual report of the Committee on Climate Change, published on 12 October, suggests that there is an opportunity for mortgage lenders to become, in environmental newspeak, “engaged” in the fight to save the planet.
For instance the report argues that energy efficiency in homes could be improved by 35% by 2020 with an ambitious program of improved insulation (covering 10 million lofts, seven million cavity walls and two million solid walls), the installation of 12 million energy efficient condensing boilers, and major improvements in electrical appliance efficiency.
But to achieve this, the reports says that there needs to be a shift from the current approach to the problem whereby electricity companies meet their supplier obligation through specific measures such as the supply of energy efficient light bulbs.
Instead, the report calls for “whole house approaches (simultaneously implementing the full range of measures) and street-by-street approaches involving local government and energy companies within a strategy defined by national government .
It’s odd that Lord Turner doesn’t consider that banks and building societies could help fund this massive program of energy efficiency improvements but given the mind set of a regulator I suppose it is hard for him to see mortgage lenders as his allies.
