Energy efficiency could be a shot in the arm for economy

Fuel poverty

Economists say extra investment could create up to 9000 jobs around the country and reduce fuel poverty.

12th September 2016 by Gavin Stuart 0 Comments

More investment in energy efficiency would boost Scotland’s economy and help tackle climate change, according to financial experts.

Leading economists from the University of Strathclyde and London School of Economics said further investment in the sector could provide an economic “shot in the arm” both nationally and at a local level.

They claim extra investment could create up to 9000 jobs around the country and reduce fuel poverty, putting more money into people’s pockets.

The economists welcomed the first minister’s pledge to channel an extra £20 million into energy efficiency programmes and urged more investment to amplify the benefits.

If the Scottish Government were to increase its warm homes spending, it would find its investment paid back many times over

Professor Karen Turner, director of the Centre for Energy Policy at the University of Strathclyde, 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.”

While annual spending on energy efficiency will increase to roughly an annual £125m, analysis suggests that the Scottish Government must spend closer to £450m per year in order to tackle fuel poverty and meet climate targets.

Dimitri Zenghelis of the London School of Economics said: “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.

“If the Scottish Government were to increase its warm homes spending, it would find its investment paid back many times over.”

The economists join more than fifty organisations calling for increased investment to tackle cold homes and climate change  

Lori McElroy, chair of umbrella body the Existing Homes Alliance, 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.

“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 9000 jobs across the country.”