Britain's year zero: UK to leap from 'laggard to leader' on carbon dioxide emissions

Every new building put up in Britain will have to be zero carbon, emitting none of the pollution that is the main cause of global warming, the Government will announce this week.

Caroline Flint, the new housing minister, will commit herself on Wednesday to setting an "ambitious target" for eliminating carbon dioxide emissions from "non-domestic" buildings, ranging from schools to supermarkets, health centres to hotels, and from libraries to light manufacturing industry.

Taken with a year-old government commitment to make all new housing zero carbon by 2016 – the most exacting target anywhere in the world – the move will set Britain on the road to a new energy age, with conservation measures and renewable sources replacing the wasteful burning of fossil fuels.

At present buildings are much the biggest source of the pollution, contributing just short of half of all the country's emissions of carbon dioxide. So far only a few hundred homes, and only a handful of other buildings, are zero carbon.

Ms Flint will be responding to a landmark report by the industry-led UK Green Building Council which has been on ministers' desks since early December. Written by a group of Council members that includes some of the country's biggest developers and property companies – such as Arup, British Land, Hermes, Land Securities, Lend Lease, BRE and Fulcrum Consulting – it concludes that all new non-domestic buildings could be zero carbon by 2020.

The minister, who will be speaking at the Ecobuild conference at Earls Court – the world's biggest green building exhibition – will say that she is "very encouraged" by the Council's report, adding: "I am determined we commit to the most ambitious target we can." She will announce "a full consultation" on what it should be, expected to begin in April, insisting that "tackling climate change will be one of my central priorities as housing minister".

Though she thus will stop just short of endorsing the 2020 target this week, the Government's credibility will be severely damaged if she eventually adopts anything less exacting than the building industry is itself proposing.

Dan Labbad, the chief operating officer of Lend Lease Europe – one of the world's biggest property developers – calls the target "challenging but not unreasonable". He said yesterday: "We cannot wait for government to tell us what to do: we have to be proactive. Looking at the length of time that predevelopment takes, we also can't afford to start thinking about this in four to five years: we need to act now. 2020 gives us a window of time to innovate, collaborate across sectors and deliver this, while maintaining the economic integrity of the market."

Indeed, several major firms are convinced that they will be able to go zero carbon within a decade and Paul King, the chief executive of the Council – which celebrates its first birthday next week – supports a 10-year target, pointing out that the developments of 2018 are being planned now.

He said yesterday: "Industry is leading the way through the UK Green Buildings Council, demanding tough targets from Government, as long as the policy set out is clear, consistent and allows time to innovate and invest. The most progressive in the industry are not scared of innovation – quite the opposite, in fact."

Mr King added that the existing commitment to make all new homes zero carbon from 2016 – first announced by Gordon Brown as Chancellor in his pre-Budget statement at the end of 2006 – had already "galvanised the construction industry", and turned Britain from "laggard to leader".

The country's homes, as ministers now admit, have traditionally been the most polluting in Europe, responsible for about 27 per cent of the entire nation's emissions of carbon dioxide. Half of them have less than a third of the adequate amount of loft insulation, even though two-thirds of Britons are ready to pay more for an energy-efficient home.

Back in 2002, the then deputy prime minister, John Prescott, promised to build environmentally friendly communities across the country. But so little progress was made that three years later WWF (formerly the World Wildlife Fund) resigned from the official body overseeing the development of a new green buildings code on the grounds that it was "going backwards".

The atmosphere changed in the autumn of 2006 after Yvette Cooper – Ms Flint's predecessor as housing minister – went, with leaders of WWF and the Home Builders Federation, on the first-ever ministerial tour of eco-housing in Sweden and the Netherlands. As exclusively reported in The Independent on Sunday at the time, she returned determined to exceed the standards in those traditionally environmentally friendly countries.

The resulting 2016 target – as the minister will boast on Wednesday – is "unparalleled elsewhere in the world", and the Government has also laid down intermediate measures to ensure a 25 per cent improvement in energy efficiency by 2010 and a 44 per cent one in 2012. It has also promised to build 10 zero carbon eco-towns across Britain.

But until now it has had no target for the non-domestic buildings that contribute another 18 per cent of the country's carbon dioxide emissions, lagging behind France – where all new buildings must produce more energy than they consume by 2020 – and even the US, where new commercial ones must be "zero net energy" by 2030.

Ms Flint's announcement on Wednesday will begin to remedy this omission, but there are still big obstacles to be overcome if the Government is to deliver.

The biggest is the attitude of the Treasury, which Jonathon Porritt – the Government's own top environmental adviser – says is "an implacable barrier to any serious progress being made".

In his final Budget, Gordon Brown announced that he was stimulating the building of zero-carbon homes by making them exempt from stamp duty, a saving of about £10,000 on a typical detached house. But the Treasury has interpreted the definition of what makes a zero-carbon home so parsimoniously that so far only three of them have qualified.

It insists that, to be exempt, homes must either generate all their own energy from renewable sources, or receive it from nearby via their own private wire – excluding householders who buy electricity generated by wind power and other renewables from the grid through "green energy" tariffs to supplement their other zero-carbon measures. The Green Building Council is pressing for them to be included so that the tax break can work effectively in stimulating change.

Even more important is improving old buildings, since new homes account for only about 1 per cent of housing stock, while almost four out of every 10 are more than 60 years old. The Tories and Liberal Democrats have drawn up plans for retrofitting, but ministers have yet to do so.

Lots of targets – but results will be patchy

Target: Under the Kyoto Protocol, Britain must reduce its emissions of several greenhouse gases – chiefly carbon dioxide, methane, and nitrous oxide – to 12.5 per cent below 1990 levels by 2012.

Prediction: We will meet this target, becoming one of the few countries worldwide to fulfil its Kyoto commitments, largely through cutting methane emissions by half, and nitrous oxide ones by a third.

Target: The Government also promised in successive manifestos to cut carbon dioxide emissions by 20 per cent from 1990 levels by 2010 as a "voluntary measure".

Prediction: We are comprehensively failing; at the end of 2006 we were less than a third of the way. Even this progress was achieved under the Conservatives; emissions have increased under Labour.

Target: Under a binding European agreement, Britain must get 15 per cent of its energy from renewable sources by 2020. This will involve generating about 40 per cent of our electricity from them.

Prediction: Despite having the best renewable resources in Europe, we perform worse than any other country apart from Malta and Luxembourg – getting only about 2 per cent of our energy from them.

Target: The Climate Change Bill, now being considered by Parliament, requires a 60 per cent reduction on 1990 carbon dioxide levels by 2050, in what ministers claim is the world's toughest legislation.

Prediction: Scientists now say a cut of at least 80 per cent will be needed by then, and ministers are examining whether the target should be increased to reflect this.