Eco-Towns Move Forward

This week the UK government announced that it would move forward with its plans to create four new ‘eco-towns’. The details of these towns are fuzzy but the general idea is that these towns will be built with the highest sustainability standards, thus pushing forward the development of new technologies, and demonstrating to Britain and the world what a low-carbon society might look like.

It is a very interesting proposal that makes many environmentalists and green entrepreneurs giddy. But it is not without its critics. The most legitimate complaint is that it focuses unnecessarily on future developments rather than paying due attention to retrofitting existing homes. Critics might argue that the whole concept of eco-towns obscures the unglamorous business of making existing towns carbon-friendly. That is a good point.

The less-reported but perhaps much more interesting element of the eco-town debate is that Labour has decided to roll out something that, according to a 2007 cost-benefit analysis, is economically unjustified.

Regulatory Impact Appraisals (RIAs) are cost-benefit exercises that are haphazardly applied to government plans and proposals. Typically these exercises are used to justify stalled or contentious government ideas. But the Eco-Towns RIA did just the opposite, showing that under different scenarios, the new cost would be between £1.9bn to £12.3bn.

This might be a small price to pay for enormous carbon reductions and untold long-term benefits in technology development. However, it certainly does not fit with the central argument advanced by Labour that attention to climate change will come at a neutral or negative cost. Those who have done their homework acknowledge that keeping global warming under 2 degrees celsius will require serious economic sacrifices. Could the decision to go forward with the eco-towns initiative suggest that government is ready to face this difficult fact as well? If so, this is a momentous change in thinking.