The new low-carbon diet

Despite the economic downturn, with buildings the source of approximately half of the UK's carbon dioxide emissions, and construction the source of about one-third of all waste in the UK, sustainability remains an important issue for the property industry. Regulation is on the rise and the government expects the industry to play a significant role in reducing waste and cutting emissions.

The government has set binding targets to cut carbon emissions by 26-32 per cent by 2020 and 80 per cent by 2050. All new buildings are intended to be 'zero carbon' by 2019.

The drive towards sustainability

Among recent regulation, we have a drive towards sustainable development via the planning process. Planning Policy Statement 1: Delivering Sustainable Development, and the supplement on Planning and Climate Change stress the importance of sustainable development. Revisions to the Building Regulations set out minimum energy efficiency and sustainability targets, and company directors are now subject to codified duties including a duty to promote the success of the company. In doing so, they must have regard to the impact of the company's operations on the community and environment.

EPCs, DECs, etc.

The following have also been brought in:

• Energy Performance Certificates (EPCs)

EPCs give an energy efficiency rating for a building based on the characteristics of the building and its services. An EPC is also accompanied by a report (giving recommendations, not requirements) that will show how energy performance could be further enhanced. All buildings now require an EPC on construction, sale or let, unless one of the exemptions applies.

• Display Energy Certificates (DECs)

Public buildings with a floor area greater than 1,000 sq m must display a valid DEC and have a valid advisory report in their possession. The DEC shows the actual energy use and (if available) the intrinsic performance. It needs to be renewed every 12 months, so the public will be able to view the annual energy performance of such a building. The report will also contain recommendations for improving the energy performance of the building.

• Air conditioning inspections

Where the effective rated output of a system within a building is more than 12 kilowatts, an air conditioning inspection is required. The inspection will incorporate a written report on efficiency, including advice on improvements and on alternatives for cooling the building. If the system has an output of 250 kilowatts or more, the first inspection must be carried out by 4 January 2009, whereas if the system has an output of 12'“250 kilowatts, the first inspection must be carried out by 4 January 2011. Thereafter, inspection is required at regular intervals not exceeding five years.

The Site Waste Management Plans Regulations 2008 require a site waste management plan to be prepared for construction projects estimated to cost more than £300,000.

New framework

The Climate Change Act 2008 was passed at the end of November. It sets up a framework for the achievement of targets for the reduction of UK carbon emissions and aims to ensure that steps are taken towards adapting to the impact of climate change. A series of five-year carbon budgets is proposed which will limit the total amount of emissions in a given period. These are intended to enable firms and investors to plan for the future.

Commencing in 2010, the Carbon Reduction Commitment Scheme is a compulsory carbon-trading scheme affecting those who spend more than £500,000 per annum on electricity. It will apply to business and public sector organisations, government departments and local authorities, and will affect many landlords as well as occupiers.

It is expected to affect approximately 5,000 organisations. The performance of all participants in the scheme will be published in a league table. Preparations are already in hand for the implementation of the scheme. Full details have not yet been finalised and further consultation is taking place.

More to come

Further regulation is likely, particularly with a view to achieving the various government targets and promoting energy efficiency. The following are a few examples of the kind of possibilities under discussion:

• tougher enforcement of regulations;
• measures aimed at improving the sustainability of existing buildings;
• a compulsory rating system for new buildings along the lines of the voluntary Code For Sustainable Homes and the BREEAM system (which provide useful tools for assessing a building's green credentials);
• tax incentives and loan schemes '“ e.g. linking business rates and/or SDLT to energy performance ratings, reducing VAT on 'green' items, extending capital allowances, and providing low-interest loans for energy use improvements.

Targets and regulation have already brought about a change in behaviour and have been a catalyst for innovation in design and estate management. Indeed, many organisations are going beyond the new legal requirements and are addressing the issues on a

voluntary basis. They have been spurred on by such impetuses as the moral objective to protect the environment, corporate image, compliance with corporate policy and mission statements, a desire to save on energy costs, the possibility that 'green' buildings may be more desirable and/or command a higher value, and addressing environmental risks such as flooding, subsidence and water shortages.