Hacker News Reader

> All the proposed carbon tax schemes I've seen are a carbon tax and dividend - you tax carbon, and redistribute the profits to those who can't afford the higher prices.

UK energy bills are something like this. About 15% of a dual fuel bill goes both on subsidising renewables and social payments.

> The other issue we have in the UK (and maybe elsewhere) is that the cost of energy is borne by the tenant, but the cost of renovations would be borne by the landlord. This means that landlords have no incentive to improve the energy efficiency of their houses, and tenants have no ability to. We should be changing that - make landlords of energy inefficient houses pay for it.

All rented properties (unless with an excemption) will have to achieve a EPC rating of "E" by 2023 and by 2025 will have to achieve "C". The intention is for that to rise to "B" by 2030: https://assets.publishing.service.gov.uk/government/uploads/...

Just to note that the exemptions on this are quite easy to get.

Right now, you only have to spend £3500. If it costs more than that to get to the required EPC rating, you can get an exemption. There is also the "seven year payback test", which is as it sounds.

What this means is yes, this may drive your landlord to install LED bulbs and thermostatic radiator valves, and maybe some double glazed windows, but it's not going to trigger a mass drive towards modern insulation and solar panels.

Personally I think we should just force landlords to bear the cost of heating to 18c.

> the cost of energy is borne by the tenant, but the cost of renovations would be borne by the landlord

In addition, as house prices are so high, owner-occupiers often don't have the means to make these improvements until they have been in the house for five or more years.

Landlords get to claim the cost of improvements as a business expense and can save an enormous amount of tax on making those improvements.

Owner-occupiers have to pay out of their net income. So if it costs me 10k, it only costs a landlord 6k. But they still don't do it.

Forcing rented accommodation to have EPC E or better is a really low bar. I think it should be compulsory for landlords to carry out all EPC recommendations to a certain value within a sensible period.

> Landlords get to claim the cost of improvements as a business expense and can save an enormous amount of tax on making those improvements.

> You may not deduct the cost of improvements. A rental property is improved only if the amounts paid are for a betterment or restoration or adaptation to a new or different use. See the Tangible Property Regulations - Frequently Asked Questions for more information about improvements. The cost of improvements is recovered through depreciation. [0]

Please explain your post.

[0] https://www.irs.gov/businesses/small-businesses-self-employe...

The parent was talking about the UK, while your link is for the US?

If you look at the actual HMRC guidance, rather than some random website, you'd see that

"alterations due to advancements in technology are generally treated as an allowable repair rather than an improvement, if the functionality and character of the asset is broadly the same. For example, when single glazing is replaced with double glazing"

So a more efficient heating system, better windows, better external doors, replacing loft insulation with material with a higher R-value are all within the scope of "allowable repair".

There are quite a few grants available for things like improving insulation, but you're right; a landlord doesn't really have an incentive to go through the hassle of applying for it and arranging for the work to be done. An EPC (Energy Performance Certificate) is required when you let a property, and it has to be at least an "E" rating (A: best, G: worst) but that's not really saying much.

Yeah - the EPC is a joke. It's just a tick box exercise. It doesn't take much effort to get a good enough rating to let.

High energy costs could be an incredibly powerful tool to drive changes in the UK housing stock. It's only when energy is expensive that the payback time starts to make sense. That would need sensible and cohesive policy decisions from people with a good understanding of high efficiency housing. Clearly we don't have that.

Aside from a few very simple improvements (LED lights, loft and cavity insulation, double glazing), is there really anything that can be done to an old house to improve its insulation that is actually cost effective?

My 1930s house is a D, so I had an energy contractor round to cost up some improvements. All the obvious cheap-ish ones have already been done. The next ones on the list were things like solar panels which would take 15 years to pay off, solar water heating which would take 30 years and exterior wall insulation which would cost around £40k and take nearly 300 years to pay off! And arguably worse, they couldn't guarantee that sealing up the house wouldn't cause damp problems to emerge since the damp proofing and construction of old buildings can be inconsistent.

Even things like a heat pump would either need an incredibly beefy drop in boiler replacement, costing more than £30k, or I would need to install a hot water tank, previously mentioned insulation, larger radiators and upgrade my pipes - and even then savings would be marginal because electric costs so much more than gas.

Is it worth spending all this money upgrading old housing stock, or is it better spent on things like solar farms, wind farms and hydrogen (or synthetic natgas) generation. Even district heating might easier than trying to retrofit heat pumps to our old leaky houses.

Ultimately the goal is net zero. Insulation helps, all else being equal, but if the energy production is zero carbon then the energy efficiency of the homes is basically irrelevant. Given that, where is it more efficient to spend the money?

Whether something is cost effective is directly proportional to energy prices - hence rising prices suddenly reduce payback periods for energy saving.

Sealing houses up without accounting for moisture can cause issues, but it's not insurmountable. Rather than ventilating through accidental means, you seal the house until ventilation needs to be intentional - and then you can do it using mechanical ventilation with heat recovery - which effectively keeps 80% of the heat in the air and transfers it to incoming fresh air. Equally insulating without moisture management can cause issues - but as long as the insulation is designed with vapour barriers and ventilation in the right place, it's perfectly doable. The problem is that it's very easy to do it wrong, and not realise until years later all the timbers are rotting because of condensation.

I'd argue that (at least in the UK) we have far too many old houses not to deal with them. Space heating accounts for 27% of our national energy consumption. So much energy, which could be useful, is just wasted.

I can't speak for your situation, but the costs you suggest for external wall insulation seem very high - eg https://www.checkatrade.com/blog/cost-guides/external-wall-i... suggests it's more like £6-£20k depending on house size.

Speaking as someone working in the energy industry, we are a very, very long way from zero carbon energy. Renewables only work intermittently - we don't have a solution to fill the gaps in dark winters or calm days. Batteries are at least a couple orders of magnitude too small, pumped hydro needs very specific geography, and all other energy storage methods are unproven or highly inefficient.

Of course, mechanical ventilation and heat recovery helps. I had it in my last place which was a new build. But now you're saying on top of the wall insulation and heat pump, I also have to spend £10k on a MVHR system? My heating bill is only around £1200/yr - I'll never see that all money back even if it reduced my costs to nothing.

The reason costs are high is partially because costs have gone up a lot lately, and I'm in London. Even a new garden fence is going to cost me around £5k. But also, my house would need to have a brick cladding put on after the insulation to get it past planning. There would also be a lot of remedial work required before installing the insulation, such as removing the existing pebbledash render. And I don't even have asbestos to worry about (as far as I know), unlike a lot of other properties of similar age.

I agree we're a long way off net zero, but don't you think spending all this money on marginal improvements to old houses would be better spent on the generation side of things? Personally I can't see a future in the UK that doesn't involve some kind of hydrogen or synthetic natgas generation. We're going to need to solve the generation side anyway.

I had district heating which I had in my last place, which was great and had the footprint and plumbing was comparable to that of a regular gas boiler.

So long as the rating is shown in estate agent's listings, tenants can take it into account when deciding what to rent.

I guess that by itself that would be helpful but the truth is that most people wouldn't really pay any attention to it or certainly not much attention compared to price, location, what the place looks like etc.

There is definitely room for a lot of improvement in the UK housing stock but every possibility is poisoned by the large numbers of people it would affect. Not all Landlords are fat cats and not all tenants are poor, which is why things move so slowly.

Even in new-builds, the quality of insulation work can be somewhere between shocking and non-existent. What do you do? You need umpteen million new houses and don't have enough skilled tradespeople to be able to fire those that do a crappy job.

I think a much bigger win would be further back where we need to align incentives and opportunities for school leavers to the industries that are short of workers. It seems daft to me that people can choose "Health and Beauty" courses when we already have a million of those and a massive shortage of engineering trades.

They would pay attention to an actual number "cost to heat this property per year".

Doesn't cold weather still kill more old folk than heat in the UK? High heating bills doesn't really move the needle any if they are also significantly subsidized.

Out here in the midwest US, high propane and natural gas prices have caused a massive spike in the installation of wood heating. Our bill went up by nearly 50% this winter due almost entirely to supply issues.

Unfortunately, heat pump installation is still too expensive (many years payback) and electrical heating isn't particularly green (resistance heating a house at -40 degree wind chills off of coal and natural gas at night is the worst outcome possible short of burning petrol generators).

We are much better off saving residential heating for later and focusing on other carbon priorities until the grid itself is greener, I think.

> Our bill went up by nearly 50% this winter

What is happening in Europe is of a different magnitude. Gas prices on variable price contracts have tripled here in Belgium. See graph here:

https://callmepower.be/nl/energie/gids/tarief/prijs-gas#gasp...

>> In many ways, high energy prices are a positive thing for society (in the long run).

If you don't mind, I wonder if you might expand on this? For me it seems a bit blithe. For instance, we know that higher energy prices cascade into many, if not most, consumer end items, and so I think it follows this decreases the standard of living generally.

I understand the important consideration of negative externalities, and how fossil fuels negatively impact 3rd parties (the world generally/climate change). I think the economic argument that there should be a carbon tax to account for these externalities is quite right. This is true regardless of climate change. So let's assume for arguments sake, we're going to tax above and beyond that to account for climate change as well.

Are we hoping then, by hiking the cost, it ushers in a new discovery of lower cost energy, with fewer externalities? And if this turns out to be the case, then these austerity measures if you like, turn out to be transient, and the temporary lower standard of living sacrifice is made for the betterment of posterity. Or is it simply we must accept a lower standard of living permanently lest we allow climate change to continue unabated, as it were?

Sorry if this distracts from the main point you were making.

It stops people consuming energy they don't really need, and it makes people more likely to consume renewable energy which is often more costly.

Right, and I agree to both. This also lowers their standard of living.

My question was probably too vague. Maybe more directly, is raising costs across the board as a matter of policy more effective in our fight against climate change than other interventions? Like subsidizing research into renewable energies, etc. Have we given up on those?

I am far from qualified in judging the effectiveness of alternatives, I just wonder if these taxes are draconian, and if so, have we given up hope on these alternatives.

This was besides the point the parent was making, however, so I am regretting my digression now.

Is not consuming energy you don't need really lowering your standard of living? I mean, is being pressured into driving a 30mpg car vs a 20mpg car which serves your needs just as well - does that lower your standard of living?

If we don't reduce fossil fuel use will that negatively affect the ability of the planet to support humanity? If so, isn't that lowering your standard of living?

To your first question, yes I think it does. Government coercing my decisions is negative ( individually, not necessarily society/humanity ). In the same way, if government policy mandated televisions to be twice the cost because they deemed it hindered education, that would make me worse off as a consumer of televisions.

To your second question, I suppose I would argue that it lowers my standard living now, but _may_ raise the standard of living for posterity, since obviously climate change time scales are vastly greater than the effect of a tax now. However you could rightly argue that by UK citizens reducing their carbon footprint now, 3rd parties downwind directly benefit now by being less harmed by UK pollution, yes.

I don't agree with you but that was a good, honest answer which I can respect.

You would hope so but it doesn't.

Think about how many people drive half a mile to the shop. They don't care about hidden costs even though all of those short trips might add up to $50 a month that they didn't need to spend.

Visibility of prices is OK on a Smart Meter but it is still disconnected from where energy is used e.g. not obvious that having your 80" TV on all night uses up a tonne of energy although only a little at a time.

And then you have a lot of people, as mentioned elsewhere, who are paying because their landlord won't spend the money on improving the insulation on the house. You can't always vote with your feet so although some people can and do sort things out, a lot of people don't.

Then they complain that the government should help them out!

If it's $500 a month, they might start to think about it. Or buy a more efficient car - which is what we'd hope would happen with high energy prices.

> Are we hoping then, by hiking the cost, it ushers in a new discovery of lower cost energy, with fewer externalities

Not just discovery. We already have plenty of measure to either use energy more efficiently (such as improved insulation in a home) or things like renewable energy. And as you say, the cascade of energy use into many more aspects of the economy than people expect should trigger a realignment of consumption to means that are less likely to have energy-based externalities somewhere in their supply-chain or operation.

> Or is it simply we must accept a lower standard of living permanently

Depends upon the implementation. If we are replacing existing taxes (like corporate or income tax), or refunding the amount (via a citizen dividend or similar) the net impact shouldn't be a lower standard of living, though the distribution will affect people differently.

Thanks, great points. I hadn't at all considered replacement of other taxes. That changes the calculus a great deal, I agree.

If it's truly about externalities, the proceeds of a carbon tax should be distributed in the same way as legal compensation for damages. Compensation payments to people affected by climate change, proportional to the increment of damage caused by the amount of GHGs emitted. That's pretty much impossible to calculate though.

Certainly high energy costs, in the absence of any action to reduce energy usage, reduce standards of living. Ultimately almost every aspect of our "comfortable" life comes from expending energy - heating, concrete, entertainment, transport, home appliances, fertiliser, mechanised farming - at the heart of everything is external energy expenditure to make us comfortable.

However, in most cases comfort isn't proportional to energy expended. For a given heat, a well insulated room is as comfortable as a badly insulated one - but with less energy input. A modern computer is as useful (more so) than a Pentium 4, but with less energy input. An LED bulb provides as much light as an incandescent, but with less energy input. When energy becomes expensive, it makes energy saving worthwhile, which makes the return on investment higher, which draws in R&D money.

Honestly - I don't know for sure whether high energy costs will drive innovation, or just lower living standards for everyone. However, it's pretty clear that relying on fossil fuels isn't a good long term strategy, and that at historical energy prices (which don't take into account externalities at all) there's essentially no headroom for new energy saving R&D. High energy prices make efficiency improvements and novel energy production highly lucrative - and then capitalism can do the rest.

> For a given heat, a well insulated room is as comfortable as a badly insulated one - but with less energy input. A modern computer is as useful (more so) than a Pentium 4, but with less energy input. An LED bulb provides as much light as an incandescent, but with less energy input. When energy becomes expensive, it makes energy saving worthwhile, which makes the return on investment higher, which draws in R&D money.

You're right, and I think these are compelling examples. And climate change need not even be considered for these to support a carbon tax.

Thanks for the response.

"For a given heat, a well insulated room is as comfortable as a badly insulated one"

I actually disagree with this. There are factors beyond air temperature, such as air movement and radiation.

Air movement is pretty obvious, if your house is draughty, 20c may still feel chilly.

But radiation is commonly ignored and in my experience contributes more to comfort than air temperature beyond a certain level. If your room is at 20c and your walls are 12c, there's a good chance you will still feel uncomfortable compared to a building with well insulated walls. I've been in old buildings where even at 25c it still felt a little chilly. Worse, if only the exterior walls are cold, you might find one side of you is too hot and the other is too cold!

This is commonly experienced as "why is my house still cold in winter even though the thermostat is at 22c, when in the summer it's too hot even at 18c?".

The landlord/tenant thing would be mitigated by publishing the energy cost of the property to allow price comparisons.

If prospective tenants knew the energy costs of the different options when looking, a place with higher energy costs would then attract a lower monthly rent (commensurate with the difference in energy bills) than an otherwise identical place with cheaper energy costs. Tenants would ideally see the combined cost of rent+taxes+energy+bills when comparing places.

Edit: perhaps this could be an idea for a website.