For those who missed our April Fool's joke yesterday, the EU is not planning a ban on all light bulbs - it spent the day doing something far more craven and stupid.

The move to change the A-G energy labelling system for TVs and household appliances is little short of a disgrace - the kind of spineless decision that explains precisely why so many people are disillusioned with politicians and believe the whole sorry lot of them are in the pocket of old school industry lobbyists.

From next year the A-G labels that appear on household appliances such as fridges, freezers, washing machines and TVs and are recognised and understood by 90 per cent of Europeans will be augmented by new "dynamic" labels such as A-20% and A-60% intended to designate how much better than A rated a product is.

So anyone entering a shop and purchasing in good faith an appliance with a nice green label and A rating will not have one of the most energy efficient products on the market, they will have a product that could be up to 60 per cent worse than the best in class.

Confused? You certainly will be.

In a statement that admirably demonstrates politicians' ability to enter a parallel universe governed by entirely different rules of logic and human behaviour as and when it suits, EU Energy Commissioner Andris Piebalgs insisted that the new energy label is "very clear for consumers", adding that the new "beyond A" classes would help accelerate the "race for top efficient products".

It isn't and it won't.

Here's what will really happen.

On the most part customers will continue to see a green label and an A-rating and buy those products, blissfully unaware of the fact that if the labelling scheme had been updated as it should have been the A-rated product they have purchased would have carried a C or D label.

Where environmentally-conscious customers do try to seek out a "Beyond A" product they will have to navigate an array of labels that make it difficult to know which appliances really are the best in class. Is 20 per cent better than A good, or should you be looking for 60 per cent better than A? Who knows? Who cares?

Meanwhile, manufacturers will know that A products will look "good enough" to most customers and will therefore have less of an incentive to invest in developing more energy efficient products. And where they do deliver "Beyond A" products they will charge a hefty premium for them, safe in the knowledge that the commodity end of the market will be happy to hover around the standard A label that has now not been updated in ten years.

It is not hard to see how this has been allowed to happen.

Legislators realised that improvements in the energy efficiency of products over the past decade, driven in large part by the A-G labelling scheme, meant that 70 per cent of appliances sold were carrying the A rating. As such there was a need to update the scheme to ensure that customers really could pick out the best in class, and various proposals were drawn up.

At which point industry lobbyists arrived and pointed out that if you took the blindingly obvious route of updating the standards by which labels were awarded they would have to relabel many of their A products as C or D products - and they couldn't very well do that "in the current economic climate".

So rather than updating a scheme that had been proved to work over the past decade and protecting the interests of consumers and the environment (not to mention those manufacturers who had genuinely invested in developing the most energy efficient products available) Brussels instead passed messy new rules that will only serve to confuse the very people the EU claims to represent.

Lord Hunt, minister for sustainability at Defra, said he was "disappointed" by the decision. I can only hope he was being diplomatic. Given the contemptible way the EU has just undermined all its rhetoric on energy efficiency and the environment, I'd argue he should be more apoplectic than disappointed.

Posted by James Murray on April 2, 2009 | Permalink | Comments (3)

For much of the past two years one of the most compelling drivers behind green business investments has been the soaring cost of energy. So what happens when those energy costs begin to fall?

As the UK today has its recessionary status officially confirmed, businesses are facing a new energy landscape where bills are falling for the first time in years.

The price of oil has slumped, and even green energy providers such as Good Energy are now lowering their tariffs alongside conventional players such as British Gas. Moreover, the fall in industrial output has pushed the price of carbon to record lows, putting still more downward pressure on energy prices.

For business leaders falling energy bills mean the temptation to push energy efficiency issues back to the bottom of the corporate in-tray will become ever more beguiling. Many will understandably ask why they should fork out for more efficient technologies or buildings when their bills are already falling and capital is unbelievably hard to come by.

And yet there are compelling reasons for businesses to continue to curb energy use that go far beyond the obvious truism that during a recession you should look to control all operational costs as tightly as possible, even if they are already falling.

The fact is that those firms that don't address their energy use now could recover from the credit crunch and find themselves thrown right into an energy crunch characterised by soaring power bills.

There are already signs that a perfect storm is brewing that could well break just as we'd hope to see the economy surging forward again.

The most obvious basis for this prediction is the simple reality of supply and demand. The price of oil may have fallen over a $100 from its peak of around $140 last year, but that collapse in price is the result almost entirely of falling demand, not an increase in capacity.

When demand recovers to pre-recession levels or above - and while it might seem hard to believe at the moment the history of recessions tells us this will happen - then the oil price will soar again. In fact, with many of the oil giants scaling back investments in new capacity as the recession bites the situation will likely be even worse than it was in mid-2008 as supply inevitably struggles to keep pace with rising demand.

Rising oil prices would not only lead to increased transport fuel costs they would also have a knock on impact on wholesale electricity prices that will already be being forced upwards again as a result of the raft of green regulations that are scheduled to converge upon the energy sector between 2010 and 2013.

As a leaked Whitehall memo revealed this week, the UK government is concerned new EU legislation designed to limit air pollution from power stations could add as much as 20 per cent to energy bills. And that is before you even begin to consider that EU targets requiring the UK to cut emissions and generate 15 per cent of energy from renewables by 2020 mean that by the early 2010's work on a huge expansion in renewable and nuclear capacity will be well underway, leading to a predictable impact on energy bills.

Meanwhile, the current low price of carbon in the EU's emissions trading scheme is subject to much the same rules of supply and demand that will impact the oil market once the recovery materialises.

Prices have dropped in recent months because heavy industries are producing less, releasing less carbon into the atmosphere and therefore require fewer emission allowances. The number of carbon credits issued between now and 2013 however remains constant, so as the recovery materialises and production and emissions increase again the price of carbon will also rise placing further cost pressures on energy producers. Again, these pressures will become more pronounced from 2013 when the EU moves to impose still tighter emission caps on heavy polluters.

The net result is that companies that fail to address their energy use could find themselves climbing out of the credit crunch only to find themselves locked into an energy crunch characterised by 100 per cent plus increases in energy costs and fuel bills.

That is why businesses such as Tesco and Sainsbury's this week announced new stores and initiatives that display a continued commitment to addressing energy issues despite tough trading conditions, and why those companies that really want to position themselves to fully exploit the inevitable economic recovery would do well to follow their lead.

Posted by James Murray on January 23, 2009 | Permalink | Comments (4)

Saturday morning and I find myself with a moderate sized hang over (family wedding, since you ask) standing in Gatwick Airport trying to work out how I get to the railway station.

I'm staring at a sign that reads "for arrivals follow the illuminated signs".

It's the word illuminated that's got my attention. I'd never noticed before, but as soon as you look you realise that all the yellow signs everywhere in the airport are backlit by what must be several thousand bulbs. Every last one of them is illuminated, even at ten in the morning on a bright sunny day.

One question: why?

What was so wrong with all the old signs? You know the ones: white background, black fonts, worked perfectly adequately for centuries.

I don't doubt BAA could trot out some kind of spurious business case for these signs. It would probably quote a research project somewhere that has shown that backlit yellow signs are the easiest to spot when you are hurrying to the gate - that the illumination makes it easier for the myopic amongst us to read the signs at a distance. They'd probably add that all the bulbs used are energy efficient.

But I'm not sure I buy it, particularly when you consider that airports, like shopping malls and most other public spaces, are typically hyper-illuminated forums, capable of giving you a headache regardless of what you were up to the night before.

I don't believe that prior to some bright spark deciding to illuminate many of the signs that we are bombarded by everyday we were all constantly wondering around getting lost and confused. Even if the most efficient bulbs available are used, the benefits of the illuminated signs are surely so marginal as to be outweighed by the environmental and financial cost of the energy they are using.

It is always difficult to advocate ditching a technology in favour of a simpler alternative. It is too easy for such a move to be accused of being regressive, even luddite, in its thinking.

Ask public spaces to ensure signs are only illuminated when it is dark and anti-environmentalists will inevitably try and lump you in with those killjoys who call for an end to Christmas lights or turn their nose up at any technological product that has the faintest whiff of frivolity.

And yet, as resource scarcity issues mount and pressure to cut energy use becomes more acute, perhaps it is time for more firms to ask if the technologies they use have been over-engineered. If the original, low tech version a product replaces could not continue to do the job just as effectively?

Technological progress is, of course, essential to the transition to a low carbon economy and new low carbon product need to be developed at a breakneck pace over the next two decades. But for every low carbon leap forward achieved by engineers and scientists, a new over-engineered technology emerges that threatens to negate some of the environmental gains achieved while delivering only a fractional, or in many cases non-existent, improvement on the product it aims to replace.

My personal recent favourite were the reports of a new installation in the changing rooms of a New Look store in Birmingham that uses a video camera and plasma screen TV to allow shoppers to tell what the clothes look like from behind. Because, apparently mirrors just aren't good enough anymore.

That, and the electronic post it notes that beep at you if you forget to do the things on your to do list.

It is not regressive to suggest that some technologies have reached a level of perfection, or at least satisfactory competence, whereby further "improvement" can not be justified in a resource strapped world. The sooner firms realise this, the easier they will find it to focus their attention on the genuinely sustainable technologies and business models that promise to reduce both their running costs and their carbon emissions.

Posted by James Murray on May 13, 2008 | Permalink | Comments (0)