Skip to main content.

Executive Summary

Overview

The Warm Homes project has been set up by the Ministry for the Environment to examine ways to encourage New Zealand households to move to cleaner heating sources and increase household energy efficiency, and overall to achieve warmer and healthier homes.

One key aspect of this investigation has been to investigate the social drivers behind householders' decisions on home heating, insulation and appliance choice. The objectives of this project have been to:

  • understand the drivers behind the choice of home heating type
  • understand the drivers behind the uptake of energy efficiency measures
  • investigate the incentives (financial or otherwise) required to achieve behaviour change
  • make recommendations on the most appropriate way to achieve behaviour change.

The social drivers work was carried out in two phases. Phase 1 focused on developing a conceptual framework, undertaking an international literature review, and analysing New Zealand's experiences of social drivers, based on a literature review and conducting 30 interviews with key informants. Phase 2, reported here, involved analysing issues and options for programme design, holding workshops in four communities throughout the country, interpreting the outputs of these activities into a pragmatic concept of 'a national programme', and producing a set of recommendations on how to develop incentives for behaviour change in relation to home heating and energy efficiency.

The consultants recommendations are based on eight key aspects of programme design:

  • ensuring the programme (and associated policy) is firmly oriented towards desired Warm Homes outcomes
  • maximising the scope for household participation and community buy-in
  • ensuring that education, publicity and awareness raising are an integral part of the programme of action, and that different market segments are targeted appropriately
  • designing a range of financial assistance packages to appeal to as wide a range of households as possible
  • ensuring that 'carrots' (information and incentives) are backed up with meaningful rules
  • developing a funding model that recognises a fair balance between central government and local resources
  • ensuring that the Warm Homes package of measures both provides for customer choice and achieves wider social and environmental outcomes
  • ensuring development of the programme is closely monitored, especially in the early stages, and that the monitoring focuses on outcomes, not just outputs.

Key messages

Following are what the consultants consider to be the key messages arising out of the social drivers investigations. The messages are aimed at all potential stakeholders who may become involved in initiatives under the Warm Homes banner.

Achievability of a national Warm Homes programme

  1. A Warm Homes programme, combining the twin objectives of achieving warm healthy homes and clean air, is a challenge.
  2. However, there are large social benefits to be gained from a multi-objective programme like this, in the form of premature deaths avoided, reduced incidence of chronic illness (resulting in fewer work and school absences), and significant and durable improvements to the housing stock. These benefits may not be achieved if the air quality objective is reached at the expense of home warmth.
  3. Currently there is some understanding in communities around New Zealand of the nature, extent and consequences of the cold homes problem, but very little understanding of the air quality situation. This lack of awareness applies not only at the household level, but also among businesses and some local and regional government agencies. This situation is beginning to change since the introduction of the air quality standards.
  4. Existing Clean Heat/Warm Homes-type programmes that have not totally engaged the health sector or local community-level organisations have experienced difficulties in involving the numbers of households necessary to improve air quality and to increase the standard of housing. These programmes have benefited from few, if any, agency referrals in recruiting households to participate.
  5. To achieve the 2013 air quality target, and the intervening 'downward trajectory' of exceedances, many communities will need to embrace the fullest range of drivers discussed in this report.

Potentially conflicting objectives and resolving the conflict

  1. For some households, the air quality objective can conflict with the Warm Homes objective when it constrains the range of acceptable and feasible home heating options, and thereby adds to the household's financial costs for home heating. Many low-income families are strongly averse to using electricity for heating because of the problem of paying large winter power bills.
  2. Achieving improved levels of dwelling insulation reduces this potential conflict. Better insulation helps achieve both air quality and warm homes objectives, by increasing the range of clean heating options that are viable and by making all forms of heating more effective at warming the house to adequate levels.
  3. In a perfect market there would be no need to provide financial incentives or assistance for improving dwelling insulation because of the certain benefits that arise. However, the general understanding is far from perfect and a number of benefits remain unpriced. Where such market failures exist, government may have a role in addressing them.

Households' financial circumstances

  1. The majority of benefits from changing to cleaner forms of heating will be public rather than private benefits. Society as a whole will benefit from improved health due to cleaner outdoor air. Private benefits will not be experienced until householders have to replace their existing appliance (either because it no longer works or because of other drivers, such as fashion or convenience). Regulation would be effective for bringing about change in this group.
  2. Even though there will be both public and private benefits from a move to cleaner heating, households may require financial assistance to facilitate this change. A suite of tools that includes regulation, financial assistance, education and information will facilitate the move to cleaner heating and warmer homes whilst ensuring that a balance is achieved with equity and public health.
  3. Overseas experience suggests that individuals tend to give more weight to perceived private benefits than to public benefits in their own financial decision-making. Furthermore, even private benefits of some kinds (such as reduction in the risk of illness, being non-monetary) are often overlooked by individual households in their home heating decision-making.
  4. Private benefits from converting to clean heating in the home vary a great deal from one household to another, which means the private incentives to change vary considerably as well. This illustrates the need for a flexible financial tool (or tools) to meet the differing individual needs of a diverse range of households.

Diversity of community circumstances

  1. Workshops conducted in four centres with air quality problems showed strong common issues, but also unique local circumstances. The extent of the air quality problem may be more or less acute; there may be some unique local drivers for existing behaviours or for alternatives; the history and effectiveness of organisational relationships will be unique; some will have more local resources at their discretion to support change than others; and some have already experienced publicly funded programmes of change while others have not.
  2. In greater contrast to location variation is the segmentation in each community (low income, owner-occupied, rental, retired), which is of greater significance for the design of financial incentives and social marketing programmes to effect change.

A range of drivers

  1. The combination of regulation, attention to other social drivers, and financial assistance will result in behaviour change over time leading to cleaner air and warmer homes. Any of these tools in isolation will be less successful.
  2. Regulation alone is likely to result in a variety of perverse or adverse effects. Regulation will also be too slow to achieve the clean air outcomes required, particularly the need for a gradual improvement in air quality over time.
  3. A wider range of financial instruments is needed, to engage a significant proportion of households, such as the design and introduction of loan schemes. Historically, financial incentives in New Zealand have been mostly in the form of grants of public money. Appropriate loans schemes would reduce the overall social cost (government funding requirement) and could have low transaction costs if secured through a targeted rate on properties. It is recommended that such loan schemes be available to all households, thus accelerating uptake among households generally.
  4. Overseas experience suggests that successful programmes of change are those that engage stakeholders across the whole spectrum – central government, regional government, local government, community, industry/private sector, individuals and households. Within this concept of broad engagement, however, it is important to have clear leadership at each level, and to ensure engagement begins at the earliest stages of the programme. Integrating mechanisms such as the Home Energy Rating Scheme and a long term perspective to achieve market transformation are considered critical to success in other countries.
  5. A Warm Homes programme will require a national framework, with successful implementation enhanced via community-level responsiveness. Additionally, any programme should set out, from the outset, to appeal in the broadest way possible to as many people as possible.

Funding issues

  1. The overall level of investment to improve air quality and to achieve warm homes is substantial. However, public funding requirement will be moderated to the extent that private funds – from households and business stakeholders – can be leveraged.
  2. The transition to an economy that supports clean heating and energy efficient housing will build both labour and knowledge capacity. A key constraint, regardless of funding, is capacity in these sectors - a clear opportunity for both economic and employment growth.
  3. Communities are beginning to ask, "Where is the public health sector funding to support a Warm Homes programme?", given the economic benefits of health improvements to be accrued from improvements in air quality. If the benefits are seen as being a mix of better health outcomes (a local community benefit) and lower health costs (a saving to central government), then there is a strong argument for shared funding between central and local sources. Not only would this make economic sense in terms of where the benefits accrue, but it is also likely to make the target outcome more achievable in high-impact communities.
  4. In achieving the clean air outcome, focusing assistance solely on low-income households is likely to be inefficient. It is recommended that incentives be available to all households.

Choices need to be available

  1. The large-scale replacement of wood burners is a challenge current Warm Homes-type programmes have yet to face. For a number of reasons, it is recommended that programme implementation design allows for clean-wood-burning choices as much as possible (within the confines of the air quality objective).

Lack of outcomes focus

  1. To date, there has not been enough effort put into evaluating policy outcomes so far, particularly social outcomes. Monitoring has tended to be 'output' focused (such as number of houses insulated or number of open fires converted), which undermines perceptions of programme effectiveness. This makes it difficult to transfer experience between programmes and to share learnings when similar outcomes can be achieved. Development of a Warm Homes 'standard' would help this outcomes focus and provide the basis for future programme design.

[ | ]