Written evidence submitted by the Decarbonisation of Homes in Wales Independent Advisory Group and the UCL Centre for Behaviour Change (DHH0082)

1. Summary

1.1.            This evidence is submitted jointly by the Welsh Government’s independent advisory group on the decarbonisation of existing homes in Wales and the UCL Centre for Behaviour Change. We worked together on a set of recommendations to Welsh Government on the policies it should adopt to help decarbonise every existing home in Wales.[1] Our submission is based upon the lessons we learned about the application of behavioural science to the ‘wicked’ problem of residential decarbonisation. We briefly describe both organisations, then:

1.2.            We give our view of the impact of past UK government policies and three lessons to be learned from international experience:

• The importance of long-term policy certainty
• The importance of understanding human behaviour
• The importance of a systems perspective

1.3.            In the following sections we apply these lessons to address:

• Barriers and enablers to scaling up low carbon heating technologies, including measures to reduce home heat demand
• Interventions to encourage and ensure households reduce their heat demand and install low carbon heating technologies
• Actions required by policy-makers to support governance, coordination and delivery of low carbon heating.

1.4.            We explain and illustrate how an established behaviour change framework can be used to design interventions that will help ensure that owner-occupiers (the group that owns the majority of homes in the UK) have the capability, opportunity and motivation to improve the energy efficiency of their homes. We conclude by illustrating how actions by government can bring about those interventions.

1.5.            We make one recommendation: Policies for decarbonising heat in homes should be developed by

• first applying a systematic approach to identifying the behaviours involved in low carbon heating, and then
• using established behavioural science frameworks to understand the influences on these behaviours and develop interventions to change them.

Our recommended approach and framework are set out in Achieving behaviour change: A guide for national government.[2]

2. About the Decarbonisation of Homes in Wales Independent Advisory Group

2.1.            The Decarbonisation of Homes in Wales Advisory Group advises Welsh Government on how to reduce carbon emissions from Welsh homes. The original goal of the group was to advise Welsh Government on the policies it should adopt that would support the decarbonisation of every existing home in Wales. The group began work in April 2018 and in July 2019 it presented Welsh Government with its policy advice. In September of that year Welsh Government accepted all the recommendations. The advisory group now works to help Welsh Government implement the policies. Wales is starting with all socially owned homes and all privately-owned homes in fuel poverty.

2.2.            In setting up the advisory group Welsh Government followed the example of the Dutch Government in bringing together people from across the nation to advise on policy. The Dutch government did this seven or eight years ago to redesign national energy policy.

3. About the UCL Centre for Behaviour Change

3.1.            The Centre for Behaviour Change (CBC), based at University College London, brings together cutting-edge, cross-disciplinary academic expertise in behaviour change and translates it through research, consultancy, training and events to address key challenges facing society, including threats to human health and well-being, environmental sustainability and social cohesion. The CBC authored Achieving behaviour change: A guide for national government, commissioned and published by Public Health England in 2020. It also contributed to the development of the recommendations on the decarbonisation of Welsh homes put forward by the Decarbonisation of Homes in Wales Advisory Group.

4. Impact of past and current policies for low carbon heat: Lessons learned

4.1.            The underlying arguments for legislative involvement in the energy sector are understood by all, and for two decades UK energy policy has been framed, approached and developed through the prism of the energy trilemma. Policies by successive governments have been designed to increase the sustainability, resilience and affordability of the UK’s energy system. Substantial pieces of legislation received Royal Assent, and energy and climate policy has never been far from the headlines. From the Climate Change Act to Electricity Market Reform, a lot of effort has been put into shaping energy policy to deal with the pressing issues of our times. And yet:

• Millions of families cannot afford to heat their homes properly
• The UK is not on a cost-effective path to its net zero 2050 target.

4.2.            Based on our experience of developing the plan for the decarbonisation of housing in Wales we have identified three main factors responsible for the failure of previous energy policy to deliver affordable and sustainable housing decarbonisation at scale:

• Lack of a long-term policy certainty
• Failure to understand and change human behaviour
• Lack of a systems perspective of the problem

4.3.            The importance of long-term policy certainty

4.3.1.      A major reason for lack of progress in residential decarbonisation has been the absence of a stable policy environment. Not counting this year’s Green Homes Grant, there have been 13 significant changes in UK residential energy efficiency policy since the introduction of the Energy Efficiency Commitment in 2002. These are shown in Figure 1.

Figure 1. Changes in UK residential energy efficiency policy.

4.3.2.      It is not so much the impact of any individual policy as the uncertainty and confusion caused by so many policy changes that has impaired the decarbonisation of heat in UK homes. The National Infrastructure Commission has referred to the damage caused by “frequent, almost arbitrary changes in [government] policy… with numerous and sometimes conflicting aims”.[3]

4.3.3.      The lesson to be learnt is that the UK badly needs enduring policies that command cross-party support. Long-term policy consistency is essential to create a favourable investment climate, both for industry and for homeowners.

4.3.4.      Two examples of long-lasting and successful policies and programmes are in the USA and Germany:

4.3.5.      Property Assessed Clean Energy (PACE) financing has been in place in the USA in one form or another for well over a decade. By 2019, over 200,000 homeowners had made $5 billion in energy efficiency and other improvements to their homes through PACE financing.

4.3.6.      In Germany, the Kreditanstalt für Wiederaufbau (KfW) has been lending to homeowners for energy efficiency improvements since the 1970s. Schröder et al.[4] identify seven important lessons from the activities of KfW that are relevant for the UK, starting with “The German ‘three-pillar’ approach of integrating energy efficiency provisions into a clear framework of regulation, information and support for renewables has served it well, creating a strong, enforceable legal standard to underpin change and generating a clear, consistent message about the direction and required radical nature of change.”

4.3.7.      A stable policy environment creates the necessary conditions in the energy ecosystem to allow homeowners and industry to understand what needs to be done and to believe that it is both necessary and beneficial. Policies that change faster than business development cycles allow no time for new products and services to be developed, trialled and rolled out.

4.4.            The importance of understanding human behaviour

4.4.1.      The second lesson to be learned is the importance of designing energy efficiency policies with an understanding of the behaviour of owner-occupiers, landlords and tenants at its heart. Low carbon heating technologies will only deliver benefits when people install and use them correctly within homes, and decarbonisation of home heating will also critically depend on reduced demand for heating in the first place. This lesson has been highlighted by several groups:

4.4.2.      The failure to test the finance design of the Green Deal with consumers was identified by the NAO[5] as one of the reasons for poor uptake. The NAO report’s recommendations included the following: “For energy-efficiency schemes this means, in particular, testing designs with consumers to ensure policies have the desired impact on behaviours, and being realistic about the motivations of energy companies in fulfilling their obligations.”

4.4.3.      According to the CBI:[6] “To retrofit the UK’s housing stock at scale, consumers need to be at the heart of the domestic energy efficiency agenda.”

4.4.4.      Research by the Cabinet Office Behavioural Insights Team[7] showed that: “Research indicates that social, cognitive and behavioural factors are important in explaining why many people have not – yet – introduced changes that could help them to enjoy cosier homes and lower energy bills.”

4.5.            The importance of a systems perspective

4.5.1.      A focus solely on the actions of owner-occupiers, landlords and tenants neglects the important ways in which the behaviour of these groups are influenced by the actions of other actors in the energy system, such as banks, building societies, builders and builders’ merchants, and others including:[8]

• Government: BEIS, MHCLG, local planning authorities, devolved administrations, Building Control, regulators,
• Infrastructure: Energy supply companies, infrastructure companies
• Non-Governmental Institutions: Insurance companies, valuation companies, certification bodies, professional bodies, warranty providers, finance companies, energy advisory services
• Markets and User Practices: Owner-occupiers, house builders, social landlords, private landlords, residents
• The ‘Technical Regime’: Equipment manufacturers, materials manufacturers
• The ‘Knowledge Regime’: Universities, other research bodies, consultants, manufacturers, training Providers
• The ‘Production Regime’: Contractors, installers, manufacturers, resellers

4.5.2.      To achieve the use of low-carbon heating technologies at scale the actions of all actors in the system need to work in a coordinated way. Taking a systems perspective can help to improve decision-making and avoid unintended consequences that have characterised previous low-carbon heat policies.[9],[10]

4.5.3.      Systems mapping tools can be used to help identify and describe how different actors’ behaviours and influencing factors are related to one another.[11] Figure 2 presents some of the key actors, behaviours and influences involved in the Welsh housing system in the form of a behavioural systems map, illustrating the interplay between local and national government, supply chain and financial services. The map was used by advisory group members to draw up the recommendations for a 30-year housing policy submitted to Ministers in Welsh Government in the Better Homes, Better Wales, Better World report.[12]

Figure 2. Behavioural systems map of the influences on retrofit behaviour of owner-occupiers in Wales.[13] High-resolution PDF version.

4.5.4.      We recommend that long-term policies for decarbonising heat in homes should be developed by first applying a systematic approach to identifying the behaviours involved in low carbon heating. In the following sections we recommend and illustrate how an established behaviour change model and framework can be used to understand influences on these behaviours and develop interventions to change them.

5. Barriers and enablers to scaling up low carbon heating technologies

5.1.            Scaling up the adoption of low carbon heating technologies will require behaviour change at levels that are unprecedented in this sector. Policy will need to be drafted in ways that ensure it is targeting the key influences for each behaviour required.

5.2.            Influences on key behaviours can be identified using the COM-B model of behaviour[14] which has been widely used to inform UK policy-making.[15],[16],[17],[18],[19] The COM-B model forms the hub of the Behaviour Change Wheel (BCW), an evidence-based framework for designing and delivering interventions to change behaviours at the individual, organisational, community and population level. We illustrate the use of the BCW to the issue of scaling up low carbon heating technologies in the following sections.

5.3.            The COM-B model identifies three factors that need to be present for any behaviour to occur: capability, opportunity and motivation. Capability refers to a person’s physical (e.g. strength, dexterity) and psychological attributes (e.g. understanding, memory). Opportunity refers to attributes of the physical environment (e.g. finances, policy content, material resources) and the social environment (social norms, culture). Motivation refers to the reflective (e.g. beliefs, identity) and automatic psychological processes (e.g. habits, emotions) that drive a behaviour when the capability and opportunity are present.

5.4.            These three factors form an interacting system with behaviour (Figure 3). If just one of these is not in place, then the desired change will not occur. Therefore it is important to not only remove barriers to the behaviours required for scaling up low carbon heating technologies, but also put in place targeted enablers to support capability, opportunity and motivation where needed.[20]

Figure 3. The COM-B model of behaviour.

5.5.            Table 1 illustrates how the COM-B model can be used to classify a range of known influences on homeowners’ adoption of low-carbon heating.[21],[22],[23],[24],[25],[26],[27]

Table 1. Influences on homeowners' behaviours to adopt low-carbon heating.

6. Interventions to encourage and ensure households take up low carbon heat

6.1.            To encourage and ensure households take up low-carbon heat, policies will need to deliver a variety of interventions that target the actions of homeowners, but also the actions of other actors within the energy ecosystem[28]. Interventions are likely to be successful if they target the underlying influences on the target behaviour as identified using the COM-B model.

6.2.            The Behaviour Change Wheel (BCW)[29] provides a systematic framework for change behaviour by developing interventions that modify its influences. The framework lists nine intervention types, linked to COM-B, that can be used to develop strategies to change behaviour. Table 2 defines each of these intervention types with relevant examples.

Table 2. Intervention types from the Behaviour Change Wheel with relevant examples.

6.3.            Previous attempts to encourage householders to adopt low carbon heating technologies have failed to deliver on their ambitions because they have:

• Focused only on the behaviours of homeowners, neglecting the contributions made by the behaviours of other actors in the energy ecosystem
• Focused primarily on a limited range of motivational factors to the detriment of opportunity and capability influences on behaviour
• Used a limited range of intervention types (e.g. incentivisation) and failed to make use of the full range of ways to bring about change in the influences on behaviour

6.4.            Use of the BCW framework can help to create policy in which the desired behavioural changes throughout the system can be more precisely targeted, reshaping the energy ecosystem to encourage large-scale behavioural change. Figure 4 illustrates the output of applying the BCW to the challenge of getting homeowners to apply for finance through the Green Home Grants scheme. In this illustration, four intervention types were identified and combined to address homeowners’ capability, opportunity and motivation.

Figure 4. Illustration of how the BCW framework can be applied. Adapted from ‘Designing an intervention to increase the impact of the Green Homes Grant scheme – An application of the Behaviour Change Wheel Framework’[30]

6.5.            Figure 4 illustrates the process we recommend that policy-makers use for developing key interventions for decarbonising homes, after considering the whole system of behaviours involved in low carbon heating and the range of influences on behaviour.

6.6.            Other interventions that have been widely discussed include:

• Building renovation passports[31]
• Financial products tailored to the particular needs of different segments of the population[32]
• Changes to planning regulations to enable work in conservation areas
• Demonstrator projects that show what is possible
• Pilots and field trials to test promising ideas and iron out any wrinkles before widespread rollout, such as Welsh Government’s Optimised Retrofit Programme[33]

7. Policy actions required for the transition to low carbon heat

7.1.            Interventions can be supported by a range of policy actions. The BCW framework lists seven policy categories: regulation, service provision, communication/marketing, guidelines, environmental/social planning, fiscal measures and legislation. Table 3 characterises each of these options with relevant examples.

Table 3. Policy categories from the Behaviour Change Wheel with relevant examples.

7.2.            Previous attempts to use policy to encourage householders to adopt low carbon heating technologies have failed to deliver on their ambitions because they have:

• Failed to use policy measures in a coordinated way to target the behaviours involved in low carbon heating across all actors involved in the system
• Relied heavily on policy levers in a limited number of categories, failing to make use of the full range of possible options (e.g. over-reliance on regulation)

7.3.            Combining policy options is often the best strategy for a large or complex behaviour change task. Figure 4 illustrates how two policy options (Service Provision and Communication) could be used in tandem to deliver the four types of intervention that were identified for increasing uptake of financing through the Green Home Grants scheme.

7.4.            To decarbonise heating in UK homes, coordinated action will be needed across all levels of the system. The framework-based approach we advocate can help national and local government within the UK to develop co-ordinated policies that engage partners to deliver a range of targeted interventions which support people to use less energy to heat their homes.

November 2020