Economists back Existing Home Alliance in call for infrastructure efficiency for jobs boost
ECONOMISTS from the London School of Economics (LSE) and the University of Strathclyde (UoS) have backed the call by the Existing Homes Alliance (EHA) for greater investment in energy efficiency in Scotland, saying it could bring up to 9,000 extra jobs.
The housing and energy charity has called for a national infrastructure plan which focuses on energy efficiency in Scottish homes as a key way to increase economic activity as well as tackle damp and cold dwellings.
The EHA was joined by over 50 organisations who have stated that improving the efficiency of Scotland’s homes would also alleviate fuel poverty and climate change.
"Such a programme would cut energy bills, helping the 845,000 households currently living in fuel poverty in Scotland heat their homes, as well as reduce climate emissions, prevent ill-health and create up to 9,000 jobs across the country."
Lori McElroy, chair of the EHA, said: "It’s great to see leading economists highlight the benefits of energy efficiency and the First Minister’s announcement lays solid foundations from which much could be achieved.
"Her government can build on this success by creating a national infrastructure programme to support all homes in Scotland to reach at least an Energy Performance Rating (EPC) of C by 2025, funded with increased public investment and leveraged private funding.
"Such a programme would cut energy bills, helping the 845,000 households currently living in fuel poverty in Scotland heat their homes, as well as reduce climate emissions, prevent ill-health and create up to 9,000 jobs across the country."
In her programme for government last week First Minister Nicola Sturgeon pledged £20m of the Scottish Government's post-Brexit stimulus to be channelled to energy efficiency programmes as part of the warm homes initiative.
The Scottish Government stated that spending on energy efficiency will increase to £125m annually but analysis by the economists and the EHA suggests that the amount should be closer to £450m per year in order to tackle fuel poverty and meet climate targets.
"Our own research shows that energy efficiency improvements free up disposable income for low income households to better heat their homes or to spend on other things." Professor Karen Turner
Professor Karen Turner, director of the centre for energy policy at UoS, said: "It’s good to see the Scottish Government recognise the multiple benefits of improving the energy efficiency of homes.
"Our own research shows that energy efficiency improvements free up disposable income for low income households to better heat their homes or to spend on other things.
"This helps reduce fuel poverty and drive new economic activity, delivering a long term and lasting boost to the economy on top of the infrastructure programme itself.
"With the UK economy still reeling in shock from the EU referendum, energy efficiency investment is a direct shot in the arm, delivering a relatively rapid economic stimulus."
"The uncertainty created by the EU referendum continues to cast a shadow over investment in the economy and it will be vital that government spending be used on projects that can quickly boost local economies." Dimitri Zenghelis
The argument from advocates of the scheme is that energy efficiency programmes are a good way to boost the economy by getting cash into the hands of local communities and direct to the pockets of consumers.
Dimitri Zenghelis of LSE, who used to work as an economist for the Treasury along with Turner, urged the Scottish Government to build on its "good start", to secure and extend the economic benefits of efficiency as Scotland has historically had a unique problem with low efficiency homes.
Zenghelis said: "It’s great to see the Scottish Government recognise the immediate economic benefit and value of channelling new infrastructure investment into scaled-up home energy efficiency programmes.
"The uncertainty created by the EU referendum continues to cast a shadow over investment in the economy and it will be vital that government spending be used on projects that can quickly boost local economies.
"Now is a good time for government to borrow to invest; there’s no shortage of private money available with a glut of household savings making no real returns because of a lack of perceived investment opportunities.
"However, the current investment package is small in relation to the size of the Scottish economy and the levels of economic uncertainty. If the Scottish Government were to increase its warm homes spending, it would find its investment paid back many times over."
Picture courtesy of Jack Amick
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