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Expert's view

ECONOMY

Allan Wilen, economics director, Construction Products Association The opportunities for the construction industry inherent in a shift towards a greener built environment are already many and varied.

Plenty more, as yet unknown, will emerge as the pressure to reduce carbon emissions and preserve finite resources intensifies.

Encouraging clients and Government alike to pursue a more environmentally-friendly approach to building will favour many throughout the industry. And below we have isolated just a few examples of how these oppor tunities could shape into real commercial benef its for the construction industry. The most obvious way in which the industry can release funding for construction work from greener building is to cut the money spent on fuel. Britain's fuel bill, all told, amounted to about £85.7 billion in 2005, of which about £20 billion was spent on fuel by households.

The scale of the opportunity here is quite obvious. Were the construction industry able to reduce that bill by 10 per cent it would release £8.5 billion a year at today's rate of consumption and prices. If the industry could then find ways to capture this money it would increase its output by more than 5 per cent.

There are about 6.5 million owner-occupied homes without insulated cavity walls.

Under taking this work costs about £500 per home. So to upgrade all homes produces a potential market of £3.2 billion.

There are around 12,000 owner-occupied homes with loft insulation less than 150 mm thick. At a similar £500 cost per dwelling this generates a potential market of £ 6 billion. The potential market is consequently far more if we look at upgrading all homes with loft space to the 270 to 300 mm now being recommended.

Bringing old boilers up to modern standards also offers huge opportunities. There are still in service more than 3.5 million open flue gas boilers that are over 10 years old, with typical efficiency rates of under 60 per cent. Replacing these alone with modern boilers is a potential market of up to £10 billion or, say, 2 per cent of construction output over five years.

Moving away from energy we can see that preserving our clean water, fast becoming a scarce resource, offers opportunities. The water industry currently invests £3.4 billion a year to improve water supply and effluent treatment, yet leakage rates remain high. Substantially reducing these to, say, half the present rate, would require a step change in investment that could add 1 per cent to construction output a year.

What these few illustrations show is the scale of commercial opportunity offered to the construction industry by the environmental challenge.