How to achieve the 40% house

Observations on 'rebuild and renew'

If you believed science-fiction films in the 1960s, by the early 21st century people would be flying around with personal jet-packs and living in plastic bubbles. Forty-odd years later, the humdrum reality is that most of us live in the same terraced houses, flats and semis that existed back then.

Yet a lot can happen in four decades. In the Sixties, Britain was an industrial economy under the threat of nuclear Armageddon. Now the service sector is dominant and the biggest threat is not from terrorism - according to the government's chief scientist, David King - but from climate change. What will things be like in another 40 years' time?

Currently, household energy use accounts for almost 30 per cent of the UK's CO2 emissions. With the population set to rise and the number of people per household set to fall, the UK will need seven million more homes than the country's existing 25 million. The problem could get much worse.

Britain has one of the oldest, most inefficient stocks of housing in Europe, with two million homes that are officially unhealthy. It has long been recognised that tackling energy efficiency in the domestic sector addresses the social ills of fuel poverty and poor housing, as well as the environmental challenge of climate change. What is now emerging is the scale of the challenge. If the UK is to meet its target of a 60 per cent reduction in CO2 emissions by 2050, we need a long-term strategy of refurbishment, renewal and adoption of low- and zero-carbon technologies.

The worst three million homes should be demolished, to be replaced by ten million new homes. Urban sprawl can be kept in check by building better homes at higher density on the same land. No valuable architectural heritage need be lost, only homes that will quickly be forgotten.

The new homes should be designed and built to the highest environmental standards. Not to current building regulations: much better is needed. Every new home should be super-insulated and air-tight, with low-carbon technologies such as solar panels and combined heat and power (CHP) built in from the start. Carbon-neutral bio-fuels can provide a significant fraction of the energy demand, once that demand has been reduced.

These new technologies are also key to transforming the carbon budget of existing homes: by 2050, every home needs to be generating as much of its own energy as possible, with an average of two generation technologies per dwelling. Refurbishing existing homes to a sufficient standard will require major work every time a home is bought, sold or rented. Regulations to support this are on the way, with the Home Information Pack from 2007 and the European Energy Performance of Buildings Directive from 2009 at the latest.

The current system of energy efficiency grants and advice needs to be replaced with new policies that regulate property transactions. The ideal time to refurbish is before the furniture moves in, making the more disruptive measures such as floor insulation and solid wall insulation as painless as possible. A rebate on stamp duty or a reduced rate of council tax could be used to reward energy efficiency measures installed within a year of moving house. With VAT on energy efficiency measures still at 17.5 per cent, the financial incentive would be revenue-neutral to the Treasury, while reducing future energy costs for the householder.

Major refurbishment projects are likely to come increasingly under the influence of the building regulations, making energy efficiency a prerequisite for home owners planning extensions and conversions. Grants and advice will still be needed, but the measures that get promoted need to be extended beyond the current list of loft insulation, cavity wall insulation and efficient boilers and controls. In spite of grant support for these measures, domestic energy consumption rose by 19 per cent between 1990 and 2000.

The biggest growth in the future is likely to come from the increasing number of consumer gadgets in every home. European policy has been effective in transforming the market for domestic appliances with the A-E rating scheme. Manufacturers have risen to the design challenge set by the EU's minimum standards, producing even more efficient products (A+, A++). Efficient new technologies, such as LED lighting, need to be encouraged to market, while others, such as new TVs and digiboxes, need to be made much more efficient. Stand-by power on consumer goods is set to consume the electricity from one whole power station by 2020. Existing design know-how could cut that by 90 per cent.

There are no plastic bubbles and no jet-packs in this brave new world. And no hair shirts, either. In 2050, there could be 32 million comfortable, healthy homes that are cheap to run, each generating a significant fraction of its own energy needs. And all for 40 per cent of today's carbon dioxide emissions. What are we waiting for?

Gavin Killip is a senior researcher in the Lower Carbon Futures Group at the Environmental Change Institute, University of Oxford