Everyone from Prime Minister Kevin Rudd down has identified that one of the biggest political challenges of an emissions trading scheme is the impact it will have on low income earners.
A group of Future Sustainability Leaders had taken great strides in developing a program that would counter the problem of an emissions trading scheme. Therefore “Just Change” had been developed to tackle the issue of energy efficient housing for low income earners.
There are an estimated 500,000 low income rental households in Victoria alone.
While these households use comparatively less energy, they spend a much higher proportion of their overall income on it — a problem likely to be exacerbated by the introduction of an emissions trading scheme.
There is a large pool of funding available to support household energy efﬁciency activities. However the schemes and rebates are complicated, difﬁcult to access and change frequently. The aim for Just Change was to change that by helping low income renters navigate through the system.
Roland Dillon, who is the founding member of the project and alumnus of the Fellowship Program, said they were hoping to assist this disadvantaged group adapt to climate change, while promoting social equity through energy efficiency.
“Energy efficiency is the most cost effective way to reduce emissions in the residential sector,” said Roland.
“It is also the easiest way to reduce the financial impact of electricity price increases that will flow from an emissions trading scheme. As a percentage of income, low income households spend twice as much on electricity as average households.”
The problem is that landlords have little incentive to retrofit their properties as they incur all the upfront costs and don’t directly benefit from the savings. At the same time, low income households are less likely to be able to find the money to meet the upfront costs, even if the payback period is quite short.
Even if they could afford it, installing insulation — the most effective form of energy efficiency — requires the consent of the landlord.
Compounding the problem is that information on the financial assistance available for energy efficiency can be difficult to access.
The aim of Just Change was to bring landlords and tenants together in a win–win situation.
“This issue of split incentives is a world–wide one and it’s only ever really been tackled well in the UK,” said Roland.
“There is a lot of funding available for energy efficiency measures. Our job is to bring the two groups together — tenants and landlords — to help them access these funds and to set up formal structures and arrangements to make it easier for both sides.”
Roland said the response from the Tenants Union of Victoria and the Real Estate Institute of Victoria had been very encouraging.
In 2008 Just Change had launched a polite scheme involving ten low income households. The scheme had provided energy efficient retrofits including insulation, carbon-fluro light bulbs, draught stoppers and water-saving shower heads to 10 low-income rental homes, worth around $1500, for free.
Once the results were in, Roland Dillon said that the group were delighted with the progress they had made.
“The basic ﬁndings were that every house improved in comfort. Most reported a reduction in energy usage,” he says.
Just Change, which is supported by Sustainability Victoria and the Real Estate Institute of Victoria, is looking to maximise opportunities for the scheme by looking at potential partnerships with peak bodies, government agencies and community organisations.
Roland and his team had also identiﬁed a number of issues to be addressed before the scheme could be expanded, including the need for speciﬁc incentives for landlords and the reluctance of some tenants to engage with property managers and owners on the issue.
Just Change had experienced a significant amount of external recognition for its innovative program. The Age newspaper published an article in March of 2009 and it had also been featured on the Green Renters blog, giving tips to people who have difficulty in making eco-friendly and energy efficient changes to their places of residence.
Renew Magazine, which focuses on sustainable living, published a proﬁle on Just Change and covered one of the low-income earners who had made a successful transition to a more energy efﬁcient lifestyle with the help of Just Change.
Roland says the Just Change team has been approached by several potential partner organisations about collaborating on future programs.
Further information can be found at www.justchangeaustralia.org
More alumni from 2008 Melbourne Fellowship Project
Encouraging Australians to help save endangered gorillas in Africa by recycling their old mobile phones.
To transform the lives of Sudanese students by simply providing them and their families with a bike to keep.