Sustainable Construction – Regulation through Intermediation?

Sustainable Construction Workshop

Paris, June 2012

Dr. Libby SchweberUniversity of Reading

Professor Susse GeorgDept of Planning, Aalborg University at Copenhagen

Professor Martin Guy SextonUniversity of Reading

This project was funded by the EPSRC (EP/E001645/1) Sustainable design templates in the UK, France and Denmark

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Introduction

The Brundtland Commission Report of 1987 put a particularly ambitious vision for sustainable development onto the global agenda; ten years later the Kyoto Protocol (1997) privileged the reduction of green house gas emissions and energy issues more generally. Within the EU, a series of directives began the work of translating these overarching goals, calling on member states to introduce new procedural and performance requirements. For example, the 2002 EU building directive demanded a number of changes to energy requirements for new and existing buildings. The trans-national character of these and related initiatives is often seen to challenge national policy processes. A number of scholars single out global environmentalism as a driver for policy innovation. More specifically they point to the introduction of new types of policy tools and actors (Goldman, 2001; Sonnenfeld & Mol, 2002).

While these general trends may be common across the EU, national policies are also context dependent. Member countries vary in their combinations of welfare and neo-liberal modes of governance. Similarly, within each country, sectors vary in their relations to government and in their dominant business models. When it comes to the construction sector, the response of EU member states has been both uniform and diverse. Since 2002, member states have incorporated EU targets into their regular revisions of building codes. Some have accelerated the pace of revisions; others have developed and published schedules of anticipated changes. Some have developed above compliance standards. Some have introduced new certification schemes, while others have strengthened existing ones. In many countries these changes have been introduced as part of broader strategies for sustainable development, at either the national or sector level.

This paper compares national, sectoral policy responses to EU requirements for the construction sector in Denmark and the UK. Of the two cases, the UK is often seen to have embraced neo-liberal reforms of their welfare state the most enthusiastically, while DK is closer to a coordinated market economy, that is generally known for its “institutional competitiveness” (Campbell & Pederson, 2007). In both countries these models depend on a network of quasi state and extra state actors who work at the interstices between political and economic institutions, establishing links and articulating goals. We refer to this work as ‘intermediation’. A comparison between these two cases sheds light on the way in which national institutional models shape the translation of EU directives into specific policies and instruments.

This paper examines these issues by contrasting:

1. The development of national policies for sustainable development in general and for the construction sector in particular since 2001, with a focus on energy and social issues.

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2. The translation of those policies into techniques and instruments and the ‘fit’ between policy discourse and policy instruments, with a special focus on the role of non-state actors and extra-state instruments.

This latter analysis provides a basis to consider the innovative (or conservative) character of national responses to EU demands. This, in turn, provides an opportunity to develop an analytic framework which can be deployed more widely, to other countries and other sectors in the future.

Literature review

A number of literatures draw attention to changing policy modes and to the leading role of environmentalism and/or sustainable development in those changes. These include sociological versions of neo-institutionalism, political science work on environmentalism and policy regimes and critical studies of accounting.

The application of neo-institutionalism to environmentalism and sustainable development draws attention to the impact of changing societal expectations and regulations on firm behaviour and to the active role of firms and social movements in shaping emergent policies (Hoffman & Ventresca, 2002). A central concern in this literature is the way in which consensus comes to be built around the meaning of sustainability and embedded in societal level rules which in turn inform or constrain firm level behaviour (Jennings & Zandbergen, 1995). Whereas much of the literature on the meaning of sustainability focuses on what people say, institutional theory highlights the way in which meanings are embedded in rules and practices.

Another important contribution of this literature concerns the attention, which it pays to the structure and logic of the governance structures and actors (fields) associated with sustainable values and practices. For example, Lounsbury et al (2002) trace transformations in the (governance) structures surrounding solid waste management. An important theme in much of this literature involves the role of the nation state and more importantly, the framework for governance, which it sets up for sustainable development. Whereas Jennings and Zandbergen (1995) contrast command and control with market based forms, our own study explores variations in mixed neo-liberal and coordinated market economies. Our central research question concerns the impact of dominant institutional logics on emergent forms of governance for sustainable development in the construction sector.

Some institutionalists draw on theories of translation (Czarniawska & Jeorges, 1996) to draw attention to the extensive work involved in the transposition of meanings and practices from one context to another (Boxenbaum, 2005; Campbell, 2004). As these studies point out, policy innovation does not develop in a vacuum. Instead it is shaped by the broader institutional landscape. A growing political science literature on policy regimes draws attention to the path dependence of national responses to EU

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regulations. Four features of this work are particularly relevant for this study. These include: 1. the attention which it draws to variations in governance forms and more specifically in neo-liberal regulatory regimes (Janicke & Weidner, 1997; Sonnenfeld & Mol, 2002), 2. the identification of environmental regulation as a primary area for governance innovation (Arts, Leroy, & van Tatenhove, 2006; Gouldson & Bebbington, 2007), 3. the focus on policy mechanisms and instruments, ranging from trans-national tools (Higgins & Tamm-Hallström, 2007; Locanto & Busch, 2010) to national instruments and 4. the focus on new types of actors associated with more indirect modes of state control (Heritier, 2002; Janicke & Weidner, 1997).

A related literature on policy discourses and specific instruments and techniques (Christie, 2006; Lehtonen, 2011; Pawson & Jacobs, 2010) helps to explore these variations. According to Jordan et al (2005), changes in political rationalities can fruitfully be studied through changes in policy instruments. To the extent that the theorized shift to regulatory forms of neo-liberalism is progressing, this should be evidenced in a shift to new non-state actors and types of instruments. Jordan et al contrasts ‘government’, which they associate with command and control type instruments, with ‘governance’, which they associate with market and voluntary types. One of Jordan et al’s main findings is that, despite the anticipated change in environmental policy governance, Western European states continue to privilege regulations in national energy governance. A second finding concerns national variations in the mix and deployment of policy instruments. This observation draws attention to the overlay of different types of instrument and the need to examine variations in the combination of types of instruments.

The interest in the construction sector lies in its importance economically as well as socially and environmentally. The sector is both a leading business sector and an important vehicle for the delivery of social goals, be it in the form of schools, hospitals, infrastructure or homes. In the UK, for example, 35% of recent construction work was for public sector clients (down from 40% owing to the recession) (ONS, 2012) and the sector is often the target of strategies to jump start the economy. In DK, public sector clients have figured less prominently in the construction statistics over the last decade due a decline in the construction of social housing and a tax freeze reform limiting municipal spending (Dansk Byggeri 2006). In 2010 less than 20% have been public sector clients (Dansk Byggeri, 2011). That said, national and local government have been prone to step in and support construction projects, e.g. in the 1930s and ‘40s the government subsidized social housing and in the 1980s and ‘90s it invested in urban regeneration. In the current recession, the government’s initiative to mitigate climate change (e.g. infrastructure) is also expected to provide opportunities for the construction sector.

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A comparison of business sector governance around trans-national energy directives provides an opportunity to examine arguments concerning the emergence of new modes of regulation around environmental issue. As the discussion which follows indicates, in both DK and UK, the construction sector exemplifies the growing use of non-state actors and indirect modes of government/governance to roll out environmental and/or climate policy. Non-state actors include industry organizations, firms, professional consultants, civil society actors and standards organizations. Examples of instruments include taxes, subsidies, unofficial standards and ‘concepts’ such as Zero Emission Buildings (DK) and Zero Carbon Homes (UK), policy targets and benchmarks, certification schemes and assessment tools.

The comparison also allows for an exploration of the impact of national contexts on government responses to trans-national institutional change and for a comparison of changes in policies and strategies across the two cases. More specifically, it draws attention to the influence of sectoral logics. Finally, the comparison between DK and the UK provides an empirical basis to examine the continuity or convergence of national (sectoral) policy traditions around new global priorities.

The analysis which follows contrasts national policy aims with the policy instruments which have been introduced to support that policy. The focus is on governance of energy and social dimensions of sustainability. The first was selected because of its growing dominance of the environmental agenda in Western Europe and explicit EU directives concerning energy in buildings. The second was chosen because of the direct challenge which it potentially poses to neo-liberal aims and objectives.

The classification of policy instruments draws on a typology which Koeppel and Ürge-Vorsatz (2007) developed through their study of policy instruments for reducing greenhouse gas emissions from buildings. The typology distinguishes between four types of mechanism: 1. command and regulatory instruments, such as building codes and mandatory certification programs, 2. economic and market-based instruments, such as Kyoto flexibility mechanisms 3. fiscal instruments and incentives, such as tax exemptions and capital subsidies and 4. support information and voluntary action. When it comes to the construction sector, the distinction between market and fiscal instruments is less meaningful, given that much of the construction sector is not subject to the Kyoto mechanisms. For the purposes of this paper we have collapsed the two columns, leaving us with three types of mechanisms: mandatory, economic and voluntary. Table 1 summarizes these differences and provides examples of each type. This framework provides a basis for our own comparison of the types of instruments mobilized in the UK and DK

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Dominant institutional logics: the policy and sectoral context in the UK and DK

The UK context

In order to assess the innovative character of national policies regarding energy and social sustainability in the construction sector, it is important to say a few words about policy making and the construction sector in each country. Taking the UK first, as indicated above, of all the countries in the EU, the UK has probably taken the neo-liberal agenda the furthest. This is evident in a radical programme of privatization and deregulation, which Thatcher and the Conservative government initiated in the 1980s and which Blair and New Labour continued after their election in 1997. While the extensive privatizations were introduced in the name of free market competition, most of the newly privatized firms remained large monopolies; to protect the ‘public interest’ they were (and continue to be) subject to a heavy regime of micro-level management from above in the form of endless frameworks, performance targets, benchmarks and annual reporting (Jenkins, 2006). Within Government, departments and ministries were given autonomous budgetary control and subject to a similar type of regulation. This approach has been continued by the current Conservative-Lib-Dem coalition (2010-). Viewed from this perspective, the UK epitomizes the neo-liberal regulatory state. Another key aspect of the neo-liberal turn in Britain was Thatcher’s deliberate undermining of local government control and centralization of authority in the Treasury.

From the perspective of the construction sector, these developments had a number of consequences. First, they changed the client base of the sector, depriving it of a predictable and steady source of demand associated with the postwar governments’ ambitious programmes of housing and infrastructure development (Green, 2011). The significant curtailment of local authority budgets and extensive privatization of bodies such as the British Airport Authority (BAA) and British Rail transformed this source of demand. This, in turn, exacerbated the global move to out-sourcing. Within Government, the central procurement body, which had coordinated government assets (The Property Service Agency), was dissolved and responsibility for asset management was devolved to separate governmental departments, each of which set up its own property division (Burnes & Corum, 1999).

In the late 1990s the Government launched a concerted effort to reform the sector. The campaign was premised on the arguably mistaken impression that the construction sector was conservative and resistant to change. The aeronautics and automotive industries were held up as ‘best practice’ models. The “Improvement” or “Change Agenda”, as it is called, was based on the highly influential Egan Report, Rethinking Construction (1998)i. In contrast to other such reports, this one had enormous impact and it continues to set the agenda for policymakers and industrialists alike. According to Green (2011) , the ‘Improvement Agenda’ was informed by a mixture of enterprise and audit cultures, with little understanding of the sector itself or of the impact which universal management fixes might have. Some of the keywords of the report were

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‘efficiency’, ‘client focus’, and ‘partnering’. The main aim of the report was to get the sector to ‘modernise’ by adopting a proposed set of management methods.

As for other sectors, the main policy instruments were frameworks, key performance indicators, benchmarking and endless audits. In addition, the government created and enrolled a number of quasi-governmental industry bodies to develop policy instruments and monitor progress. Key amongst them was the Movement for Innovation (M4I), the Achieving Excellence Programme, designed to develop guidelines for public sector procurement, and the Construction Best Practice Programme, which was granted £2 million to ‘raise awareness’ of the Egan principles. The ten Key Performance Indicators associated with the Egan Report included: construction cost, construction time, predictability – cost, predictability – time, defects, client satisfaction – product, client satisfaction – service and company performance, through: safety, profitability and productivity. Other key policy instruments included support for demonstration projects (the initial grant was for £500 million, to be administered by M4I) and an exhortation to government departments to act as best practice clients, providing leadership for others to follow.

In terms of sustainable development, there was no mention of environmental objectives; although the report did focus considerable attention on the reduction of waste in the name of economic efficiency. Social dimensions were reduced to business related issues, such as recruitment, skills development and health and safety. The only target with any kind of social dimension was a 20% reduction in annual reportable accidents, which was justified in terms of a potential reduction in project costs (Green, Harty, Elmualim, Larsen, & Kao, 2008). This business focused specification of social goals was later developed into a Respect for People toolkit and set of guidelines, by Constructing Excellence, an umbrella body created in 2003 to drive the change agenda forward. In recent years a call for the digitalization of construction practices has been added to the list of management innovations designed to ‘modernise’ the sector. In 2011 the government announced its intention to require collaborative 3D BIM on its publically-funded projects by 2016; however the basic culture of enterprise and audit continues to inform the logic of reform.

The DK context

The situation in Denmark is similar in the sense that a neo-liberal regime of policies has gradually been put into place over the course of the last thirty years; it differs, however, in the centralization of political authority and consequent scope of change. Commonly referred to as “new public management”, these policy changes are generally associated with the neo-liberal Liberal-Conservative coalition government that was in power from 2001-2011. During its ten year reign, the DK coalition government designed and introduced more than 15 major public reforms aimed at enhancing the efficiency and quality of public (welfare) services, customizing them to meet citizen needs while simultaneously increasing public sector transparency and increasing innovation within

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the public sector. Whereas in the UK, the Thatcher government effectively broke the power of both the unions and local authorities, in DK municipal authority was on the one hand strengthened when the 2007 Structural Reform reduced the number of municipalities from over 250 to 98 and on the other hand reigned in by the state government’s tight financial control. In 2011, the DK government changed once again; the newly elected Social-Democratic government appears to be pursuing many of the same policies as their predecessors. In DK, the welfare state tradition of consensual politics, between unions, industry and government, emerged from the neo-liberal transformation intact, making for a far more consensual policy process than is currently the case in the UK.

As in the UK privatization and deregulation were high on the political agenda as was increasing the efficiency of the public sector. However, the extent to which these objectives were realized appears to have been less extensive. In what may seem to be a paradoxical development, the pace of privatizations, begun in the 1990s under a Social-democratic government, slowed under the Liberal-Conservative coalition government (2001-2011). In contrast to the UK, the use of public tenders and public-private partnerships have not become well established practices - despite the many claims as to the merits of these respective practices; performance contracts have not become a standard procedure in the public sector; and the number of services for which the users must pay has been limited. This relative ‘failure’ of the DK coalition government’s strong ideological arguments for extending market-thinking to the public sector can be partly ascribed to the relative weakness of the central state, compared to the UK. Whereas in the UK, the Thatcher government significantly restricted the authority of local government, in DK, the provision of many welfare services remains the responsibility of relatively autonomous municipal governments (Pedersen & Löfgren, 2012).

In DK, the construction sector first emerged as a distinct ‘sector’ in the post World War II building boom, when the Danish government sought to meet the shortage of social housing. Based on a model of industrialization within manufacturing, the Danish government initiated a (first) ‘modernization process’ that was to last into the 1970s. This involved the harmonization of local building regulations and the creation of a national building code containing a series of construction norms to enable the use of more standardized components. It was also marked by the integration of new production methods such as pre-fab, contributing to the ‘industrialization’ of the otherwise craft-dominated construction of buildings (Jensen, 2011). Ever since the end of the post-war building boom in the 1970s, the sector had been subject to extensive criticism for its lack of productivity. In the 1990s, the criticism intensified. One study showed that it took twice as many man-hours to build a house in 1986 as it did some seventeen years earlier in 1969 (BUR 1990 in Kristensen, Emmitt, & Bonke, 2006, p.503). Another showed that the sector was less competitive (higher costs/lower productivity) than the construction sector in other countries, that too many mistakes were made in the construction process, and that the buildings did not live up to customer

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requirements (Erhvervsfremstyrelsen, 1993). In addition to this, the construction sector was being called upon to orient itself to international markets (FRI, 1990).

Taken together, these arguments constituted a renewed call for modernizing the sector, paralleling that in the UK. The government’s vision for how this could be achieved was based on three tenets: increasing market transparency, increasing innovation and enhancing collaboration within the sector. The measures taken to realize these ambitions included establishing a government created “Evaluation Unit” to monitor company performance (using KPIs for price, punctuality, accidents, mistakes, customer satisfaction, etc.) and ranking them so that customers would have greater insights into company deliverables. Public-private partnerships were generally endorsed as promoting collaboration and the use of public procurement (particularly in connection with social housing) as well as an IT implementation programme, aimed at digitalizing the building processes, were considered instrumental for inducing companies to innovate (Erhvervsfremstyrelsen, 1993). Another measure aimed at increasing innovation was a strengthening of building research. Although originally conceived of as the responsibility of government (funded through a specific construction project tax), this idea has been aborted, and construction research is now primarily funded by general government research grants or from a private foundation.

Whereas in the UK, a similar call was accompanied by strict requirements for public procurement, new types of formal contracts and an extensive audit regime, in DK, with the exception of the Evaluation Unit’s monitoring of the sector, these remained at the level of general exhortations. In DK the panacea for sector’s ‘ills’ was digital construction (ATV, 1999; Erhvervsfremstyrelsen, 1993) and digitalizing the entire building process, enhancing the sector’s innovative capacity through partnering, and increasing productivity has continued to be the government’s prime priorities. This development is a full decade prior to the UK push for BIM. It also reflects the government’s ‘soft’ approach to voluntary self regulation. In DK, digitalization was presented as a desirable aim; in the UK it is being imposed on the sector through mandatory requirements for public sector construction (albeit a full decade later).

The construction sector has undergone significant changes over the last two decades. Concentration has increased, as exemplified by the “Nordification” of DK contractors. Large Nordic contractors have grown at the expense of middle-sized ones as they have bought out DK ones. Also, the number of companies oriented toward international markets has also grown (Kristensen et al., 2006). Nevertheless, the sector is still criticized for being less innovative and less productive than industry (Clausen, 2002). As for sustainability, this was hardly an issue within the sector until the late 1990s and early ‘00s, even though there had be a growing interest in ‘urban ecology’ amongst activists and within the Housing Ministry earlier in the beginning of 1990s (Boligministeriet, 1995). Although the construction sector has had a long-standing interest in health and safety issues (through the labour movement), environmental aspects were not widely considered. The construction sector was first called upon to become sustainable in

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2001, as part of DK government’s national policy for sustainable development, as a follow up to the Rio Convention in 1992.

A comparison of sector and modernisation logics

As this discussion suggests, many of the same themes figure in both the DK and UK state policies for the construction sector. In both countries the sector was singled out in the 1990s as ‘backward’ and subject to a modernization campaign, marked by calls for increased efficiency, inter-firm cooperation and transparency. Three key differences would seem to distinguish between the cases. The first concerns the pervasiveness and persuasiveness of the neo-liberal state reform. In the UK, the past 30 years have witnessed significant privatization, accompanied by the shift of authority from local to central government and an extensive audit regime. In DK, in contrast, privatization has not been as extensive and local authorities have retained considerable autonomy and authority. The second contrast involves the extent to which the central government attempted to micro-manage change (again, this would seem to have gone much further in the UK, as the discussion which follows suggests). In the UK, policy making has shifted to the central government and implementation has been overseen by newly created (large) firm-government bodies, such as M4I. In DK, with the exception of the Evaluation Unit, the process has been more collaborative and industry involvement has been greater. Finally, the subordination of social goals to market logics would seem to have gone further in the UK than in DK.

Strategies for Sustainable Construction: Aims and objectives

UK policy aims

In the UK the concept of sustainable development challenged the ‘Improvement Agenda’ in a number of ways. Whereas the Egan Report focused on clients and short term business growth, sustainability called for attention to a much wider set of stakeholders, including future generations and social justice. Whereas the Egan Report defined quality in terms of contractual obligations, such as delivery on time and within budget, notions of sustainability privileged the whole life cost and the life time value of the building. In principle, trans-national and national commitments to sustainable development should have led to a significant re-think of the ‘Improvement Agenda’. However, at least until now, this has not happened. Instead, sustainability would seem to have been re-defined through the Egan lens. This process points to the importance of dominant policy styles in mediating the impact of trans-national environmental directives as well as to future challenges as increases in policy targets and public pressure bring the tension between the dominant business models and principles of sustainable development to a head.

The UK is one of the few countries to have developed explicit sector level strategies for sustainable development, whereas in DK the sector level strategies are part and parcel

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of more overarching strategies, e.g. the national strategies for sustainable development, the development of cleaner products and energy, and climate change strategies.

Two documents encapsulate the UK strategy (prior to the election of the Coalition government in 2011). Both were published in conjunction with a more general national strategy for sustainable development. In May 1999 the Government published A better quality of life – a strategy for sustainable development for the United Kingdom. This was followed with a sector level strategy entitled Building a Better Quality of Life (1999). In 2005, the Government came out with a revised national strategy entitled Securing the Future, followed by a revised sector level strategy entitled Review of Sustainable Construction (2005). These documents provide the basis for the discussion of aims and objectives and policy instruments which follows. A more detailed study would include the myriad of other reports which were published during this period, refining, complementing and covering for these core reports. Most notably they would include an extremely detailed strategy for the procurement of the government’s estate and the associated reports of the National Audit Office monitoring progress and recommending actions. They would also examine in greater detail the Coalition’s Low Carbon Construction Plan and Action Plan (2010), and the influential Low Carbon Construction Innovation and Growth Team report (2010) introduced one year after their entry into office. For a more comprehensive list of key reports and developments see Table 2.

If one compares New Labour’s general strategy aims with its strategy for sustainable construction one can identify a progressive narrowing in goals. Whereas the general strategies articulate many of the aspirations of the Bruntland Report, the sector specific strategy translates those goals through the lens of the Egan Agenda.

A Better Quality of Life (1999) sets out five priorities, including:

•more investment in people and equipment for a competitive economy• achieving higher growth whilst reducing pollution and use of resources• sharing the benefits of growth more widely and more fairly• improving our towns and cities and protecting the quality of the countryside• contributing to sustainable development internationally

As these bullet points indicate, the Report privileges economic aims, but balances them with environmental and social issues including equity and contributing to global well being. In Building a Better Quality of Life (1999) these goals have been considerably narrowed. The construction sector, we are told, can contribute to these general goals by:

• being more profitable and more competitive• delivering buildings and structures that provide greater satisfaction, well-being and value to customers and users• respecting and treating its stakeholders more fairly• enhancing and better protecting the natural environment

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• minimising its impact on the consumption of energy (especially carbon-based energy) and natural resources

Whereas these bullet points highlight the sector’s impact on the consumption of energy, energy does not receive particular attention in the body of the strategy. Instead, most of the discussion of environmental goals focuses on “reducing waste via design”, thus echoing the Egan Report’s emphasis on waste reduction for efficiency. In terms of social sustainability, it is important to note that, in the move from the general policy statement to the construction sector strategy, commitments to broader social goals have disappeared to be replaced by a focus on customers, users and stakeholders.

Turning to the chapter entitled ‘Construction and its Stakeholders’, the discussion focuses on the existing ‘Respect for People’ strategy with its focus on Health and Safety, recruitment and staff training. Moreover the definition of stakeholders is narrowed to ‘shareholders, pensioners, employees and suppliers’. The aim of sustainable construction is to “provide greater satisfaction, well being and value to customer and users”. While this is broader than the Egan focus on ‘clients’, it is considerably narrower than the Government’s commitment to “enhance quality of life, meet peoples’ expectations and aspirations; share benefits off growth more widely and fairly, a more inclusive society”, as articulated in A Better Quality of Life (1999)

If one now compares the statements of 1999 and 2005/6, there is evidence of almost manic policy activity. Whereas the 1999 strategy was 31 pages long, the 2006 version is over twice as long. More importantly, it is replete with initiatives, ranging from the creation of special commissions to the development of action frameworks, performance indicators, targets and guidelines. The general strategy goals remain roughly the same. The key objectives in the 2005 general strategy include:

Living within environmental limits Ensuring a strong healthy and just society Achieving a sustainable economy Promoting good governance Using sound science responsibly

Construction sector aims are to promote a built environment that: minimises adverse impacts on the environment, during construction and in use,

whilst enhancing the natural surroundings; maximises the positive contribution to business activity through the whole life of

the building; helps to encourage productivity through being flexible for future use, building

cost-efficiently and improving people's working environment; takes fully into account the impact of construction on the surrounding

environment by seeking to maintain biodiversity within the location and avoiding any unnecessary pollution;

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wherever possible, makes use of modern methods of construction to improve building efficiency and minimise environmental effects on construction sites.

The most notable shift in aims between 1999 and 2005 involve the place of economic growth. In each of these headings, qualifications are introduced to privilege economic over social and environmental aims. The aim is not to reduce pollution, but to reduce ‘’unnecessary pollution” and the economic aim is to “maximize the positive contribution” (of sustainability) to business activity. The Egan Agenda is strikingly present in the reference to ‘modern methods’, the meaning of which will become clear in the next section. Compared to the 2000 statement, all mention of satisfaction and well being, fairness and enhancement have disappeared from sector level goals. At the same time, far more frameworks, action plans, benchmarks and targets have been introduced along with a multiplication of new types of non-state actors created to facilitate environmental governance. When it comes to energy, the core objective was the ‘efficient management of energy resources’; social sustainability was again framed in terms of the existing Respect for People agenda. The commitments to both energy and social sustainability were not expanded at the level of aims, but instead developed in the setting of targets and development of frameworks and guides for best practice.

DK policy aims

In Denmark, the notion of sustainable construction was first introduced in the national strategy for sustainable development, “Thoughtful development – our common responsibility” (Regeringen, 2001). The Government’s strategy for ensuring sustainable development rest on 8 aims or principals:

The continued development of the welfare society while seeking to break the link between economic growth and the effects that this can have on the environment and the natural resources

Ensuring a healthy and safe environment for everyone, and maintaining a high level of protection

Ensuring biodiversity Improving the use of the resources DK continues to play an active internationally Ensuring that environmental considerations are taken in all sectors of the

economy Ensuring that the market structure supports sustainable development and,

finally, ensuring that Sustainable development, as defined in the Brundtland Commission’s report, is a

common responsibility.As this list indicates, the DK government explicitly linked its strategy for sustainable development to the Brundtland Commission’s broad definition of sustainability and to its Rio translation into three pillars. The report also recognizes current tensions between the three ‘pillars’ and the need to reconcile them. As in the UK, environmental concerns were largely framed in terms of protecting resources and improving their use.

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The report identified the built environment as an important object for achieving these goals; it did not, however, develop a sector specific policy. The implication of this general strategy for the built environment is described in the body of the report as follows:

Buildings and infrastructure are an essential part of society’s economic and cultural capital and play an important role for society’s resource use and environmental damage. The energy used to construct and operate buildings accounts for half of DK’s energy use, while most of DK’s use of raw materials is associated with the construction of buildings and infrastructure. It is therefore a big challenge to visualize and reduce resource consumption and environmental damage throughout the buildings’ life-time. This can be achieved by improving the buildings’ use-value, flexibility and quality, so that the life time is extended and the need for changing the buildings is limited (Regeringen, 2002, ch.9).

Construction was, despite being noted for its energy consumption, oddly not listed among the sectors that need to be involved in combating climate change (Regeringen, 2002, ch.11) As in the UK, social sustainability was addressed in terms of health, safety and jobs. In contrast to the UK, the DK strategy explicitly called on the sector to think in terms of building life time and use.

The 2001 elections marked the end of a decade with Social Democratic rule, and with the change of government the national strategy was revised and titled “Our common future – Balanced development” (Regeringen, 2002). The overarching aims and description of the construction sector were essentially the same as in the Social Democrats’ strategy, and the neo-liberal government reiterated the overarching critique that the Social Democratic government had made regarding the construction sector’s lack of competencies within sustainable construction. The report indicated that

“the government will motivate an increased demand for sustainable and energy efficient buildings. Growth and a good environment must go hand in hand. Different kinds of instruments will be used – ranging from market-based instruments as a form of self-regulation to [command and control] regulation. This will take place by stimulating the development of sustainable products and through the introduction of a new labeling scheme that the sector can use to declare the buildings’ resource use, effect on health and on the environment” (Regeringen, 2002, ch.14).

Compared to the previous Government’s national strategy, this version emphasized the use of (non-descript) market-based instruments and voluntary (informative) measures such as labeling. Once again, although reference was made to the energy use associated with the sector, this issue was not specifically addressed as part of the climate issue (Regeringen, 2002, ch.4). As in the UK, what appears to have had priority was economic growth, with resource and energy efficiency figuring as a key to realizing this end.

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The emphasis on energy efficiency pervaded the follow-up document, “Action plan for a renewed effort in energy saving – energy saving and the market”, which, as the title indicates, also emphasized the importance of utilizing market mechanisms in reducing energy consumption (TEM, 2005). The grounding principles for the action plan included cost efficiency, increasing competitiveness, reducing costs, taking a “balanced approach” to what should be done, and developing more energy efficient products that can enhance business development and increase exports. In 2009 the government introduced its first Strategy for reduction of energy use in buildings (Regeringen, 2009). Although the theme - energy efficiency - and the arguments for it - ensuring economic growth - were essentially the same as in previous documents, the policy process was new. Whereas earlier strategies were the work of a single ministry, the Strategy for reduction of energy use in buildings was the work of multiple ministries all of which were involved in the government’s energy strategy. These included: the Ministry of Economic and Business Development, the Climate and Energy Ministry, the Ministry of Finance and the Ministry of the Interior and Social Affairs. The strategy was based on recommendations from a specially created “partnership” consisting of 22 members, representing leading architecture and construction companies and component suppliers, the main interest and professional organizations, knowledge organizations/think tanks, a few NGOs and some of the leading clients.

What is interesting in this development is the active involvement of a host of actors, and that these actors are all actively involved in developing “calculative practices” (Callon & Muniesa, 2005) for evaluating buildings and setting the standards for what is to be expected in the future. Emphasis is still given to economic growth, extending the sphere of markets (also in light of the liberalization of the energy/electricity markets), and enhancing energy efficiency; the difference being that there are many more of the stakeholders actively involved in normalizing this agenda. Another striking feature of the DK strategy concerns the commitment to whole life approaches to measurement and valuation. This contrasts sharply with UK policy statements, although the UK frameworks for government procurement do emphasize whole life integrated approaches.

As for the social dimensions of sustainable construction these are almost lost from view, with one notable exception contained in The 2020 Vision – Construction with Meaning, developed and issued by the Ministry of Economic and Business Affairs (2006) in collaboration with 20 top managers from the construction sector, including investors, consultants, component producers, real-estate and facilities management. This report suggested that the building and construction industry should be considered as “meaningful” for not just the users and the various parties within the sector but also for society at large, and that the building and construction industries’ responsibilities should be extended to include other things than increasing productivity: If the sector is to be meaningful for society, then it has to contribute to resolving society’s challenges with regard to social, health and energy issues and play an important role for citizen well-

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being as well as competitiveness (EBST, 2006, pp.12-15). This call to go beyond market measures of values in sharp contrast with the UK government’s taken-for-granted assumption that social and environmental measures should be assessed in terms of their contribution to economic growth.

A comparison of policy aims

As this discussion suggests, in both the UK and DK, national policies for sustainable development posited broad environmental and social goals and in both countries these were linked (and, to a certain degree, subordinated) to economic efficiency gains. Similarly in both countries initial commitments to resource efficiency and worker well-being were privileged over broader goals of climate change mitigation or social and generational equity. In both countries, the EU building directive (2002) was followed by a shift in the focus of policy objectives from resource efficiency to energy efficiency and carbon reduction. In the UK, the translation from national to sector specific aims involved a narrowing of goals and a privileging of economic over social and environmental goals. This is particularly evident in the reformulation of environmental goals from environmental stewardship to waste reduction for efficiency and of social aims as limited to ‘shareholders, pensioners, employees and suppliers.’ A similar move can be seen the DK focus on ‘health, safety and jobs.’ That said, the DK policy aims stand out for their emphasis on a whole life approach to building. While UK policymakers introduce this consideration at the level of policy instruments, it does not enter into the formulation of policy aims.

In the UK, the construction sector was singled out as a key sector for realizing these goals, whereas in DK, the construction sector was not initially the focus of specific policy efforts. In the UK, sustainable development was modeled after an existing improvement agenda; the government initially turned to bodies created specifically for that agenda to deliver sustainability. In DK, the election of a neo-liberal Liberal-Conservative coalition government in 2001 was the occasion for promoting the market as an effective means to promote changes in the construction industry, while continuing to articulate the sector’s responsibility for citizen well-being. This commitment would seem to have been continued under the current coalition government.

As for the policy process, in the UK, policy formulation initially followed the Egan lead, by excluding industry from significant involvement, except at the level of delivery. In DK, in contrast, the linkage of ‘modernization’ with sector specific energy policies led to greater industry consultation and involvement in the policy process. In both countries, responsibility for energy policy and more specifically sector improvements were spread across a number of different ministries, opening the way for conflict as well as coordination.

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Strategies for Sustainable Construction: Policy Instruments

In the UK and DK, both the modernization and sustainability strategies for the construction sector were accompanied by the inflection of existing policy mechanisms and introduction of new tools. The discussion of the UK case focuses on the 2005/6 strategies, while the analysis of policy instruments for the DK takes its point of departure in the 2009 Strategy for reducing energy use in buildings, but adds to this actions/initiatives taken by actors outside the formal policy circles.

The discussion distinguishes between regulatory, economic and voluntary mechanisms, where the latter includes support, information and exhortations to voluntary action. When discussing policy instruments it is helpful to keep in mind that the EU 2002 building directive called for a number of policy measures, including the introduction of minimum standards on the energy performance of buildings, labelling systems for energy use in buildings, a common methodology for calculating the integrated energy performance of buildings and regular inspections of boilers and central air conditioning systems. All call for regulatory and control type of mechanisms. While the EU has a number of directives focused on aspects of social sustainability, none are explicitly targeted at the construction sector, although issues of skills training, diversity and human rights clearly affect employment practices.

Policy instruments in the UK

The Review of Sustainable Construction (2006) explicitly presents the strategy as “part of the Improvement Agenda”. The objective is to help deliver sustainable construction through target setting. In a discussion of means, the Review advocates: “a mixture of regulation, guidance, encouragement and demonstration and managed networks”. Demonstration programmes are presented as the key means to communicate benefits to business, associated with a range of indicators of progress.

Relevant performance indicators include the Key Performance Indicators associated with the Strategy for Sustainable Development, along with two separate sets of indicators, a set of Environmental Performance Indicators and Respect for People Indicators, both developed by bodies created to implement the Egan Agenda. The indicators were explicitly designed to be used by firms and Government departments in annual reporting. Another key policy mechanism is the use of government procurement to provide a model for other clients and construction firms. The aim is to lead by example. Whereas in 2000 this was an aspiration, by 2006 the Government had commissioned and developed an extensive framework for the measurement and reporting of departmental management of Government Assets. Moreover, the National Audit Office (NAO) was charged with monitoring and reporting back on departmental performance annually and with making recommendations. The central role of the NAO role in the design and monitoring of policy instruments both reflects and reinforced the dominant audit culture at Whitehall.

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Agencies involved in the production of these frameworks, actions and benchmarks include a variety of government departments, most notably the Department for the Environment, Food and Rural Affairs (DEFRA), The Department of Trade and Industry (DTI), the Environment Agency (EA), the National Audit Office (NAO) and the Sustainable Development Commission (SDC), as well as joint industry – government bodies such as the Movement for Innovation and Constructing Excellence, set up explicitly to roll out the Egan Agenda. As the report explicitly states, the government sees its primary role as “informative, to guide people”. In keeping with the Egan Agenda, this extends to leveraging its role as client to provide a baseline of good practice (in word, if not in deed), producing directives for local and regional planning authorities, producing reams of guidance and resorting to more traditional command and control mechanisms in the form of regulations.

When it comes to energy, the 2006 Review signaled a number of achievements including: the Energy White Paper( 2003), Energy Efficiency Action Plan (2004), Revisions to Part L of the Building Regulations (regarding energy), the Code for Sustainable Homes (see below), and Planning Policy developments. The mix of policy mechanisms in the UK can be characterized as largely regulatory and voluntary. While the Government has introduced a number of market and fiscal mechanisms supporting its carbon reduction commitment, most of these do not directly affect construction firms. For example, the Climate Change Levy, which is a tax on energy use, is generally passed on to clients and is not enough to affect design decisions or production processes. Similarly, the Carbon Reduction Commitment which is a cap and trade programme, only applies to firms that have a half-hourly metered electricity consumption greater than 6,000 MWh per year, as such it does not include construction firms. The primary fiscal mechanisms directly affecting the construction sector are the aggregates and landfill levy, which are seen to support the Egan emphasis on waste reduction.

When it comes to energy, the main regulatory instruments include the revisions to the building codes, planning policy guidance and Energy Performance Certificates (which were introduced in 2007 in response to the EU 2002 directive). The key and perhaps most effective policy instrument are the revision of Part L (energy) sections of the building code and planning requirements, which vary locally. In general, building regulations in the UK are revised every 8-10 years. However, with the introduction of the government’s carbon reduction commitments, Part L (the energy section of the building regulations) was revised, partly or fully, in 1995, 2002, 2005, 2006, and 2010.

Voluntary energy related policy instruments include the Government’s official set of Environmental Performance Indicators, to be used in reporting, and a very detailed framework (replete with targets and benchmarks) for government procurement, which private clients and firms are encouraged to follow. These, along with the numerous demonstration projects, constitute the main mechanisms for educating and guiding businesses. They are complemented by numerous professional guidelines. For

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construction firms and clients, the multiplicity of different frameworks, action plans, KPIs, benchmarks and targets is bewildering. While the plethora of voluntary instruments attests to Government activity, its impact on the sector has yet to be ascertained. Like the Egan Report on which they are modelled, most of these targets set highly unrealistic universal goals, with little attention to the mediating effect of the market or sector structure. In many cases ambitious goals for carbon or GHG emissions can be met for one year or two, focusing on ‘quick wins’, but continued performance depends on more structural change which both the government and sector have been loath to support.

Turning to social sustainability, the policy regime relies on a similar mix of regulatory and voluntary tools, with regulatory tools largely limited to issues of Health and Safety. The Executive Summary of Review of Sustainable Construction cites current achievements as including:

• Formation of Sector Skills Councils: Construction Skills, Asset Skills and Summit Skills;• Health and Safety: the incidence rates for fatal major and over-three day injuries for 2003/04 were the lowest since current records began;• Launch of Respect for People Code of Good Working Health and Safety Practices – 350 organisations have signed up so far

The list is striking for the reliance on the Egan Reports reduction of social issues to those elements deemed to be essential for relatively narrow economic goals of efficiency and competitiveness. It is also notable for the emphasis on voluntary mechanisms, such as the formation of Skills Councils with a purely advisory role and voluntary codes of practice. More generally, the agenda continues to be shaped by the Respect for People strategy which focused on the development of a framework for action, toolkit and separate Key Performance Indicators. Other initiatives include the Sustainable Communities Plan (2003), the use of Considerate Contractors (a widely used certification programme) and the use of Design Quality Indicators, which were commissioned to provide a broader indication of quality (beyond delivery to cost and time). All of these mechanisms it should be emphasized are voluntary, thus demonstrating the Government’s commitment to self regulation and its perceived role as educator and guide. From the perspective of the construction sector, the most effective tools remain regulatory mechanisms, most notably building regulations and planning requirements.

Policy innovation in the UK

The Code for Sustainable Home offers a peculiar twist on the use of regulatory instruments. The Code is one the centre pieces of the government’s implementation of its ambitious commitments for carbon reduction. The Climate Change Act set the UK some of the most ambitious targets in Europe, calling for a national reduction of carbon

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emissions by 20% by 2020 and 80% by 2050 relative to 1990 levels. The Code for Sustainable Homes is a voluntary comprehensive building assessment tool which has been transformed into a quasi mandatory tool. Instead of imposing a single target, the Code called for a progressive increase in carbon reduction standards between 2008 and 2016, leading to a requirement for ‘zero carbon homes’ from 2016. In an innovative move for a policy instrument, the government explicitly linked the successive energy requirements of the Code to revisions of Part L of the building regulations.

Failure to specify what ‘zero carbon’ means initially generated enormous confusion and consternation in the sector. In an example of sector engagement with institution building and the way in which environmental issues are challenging dominant modes of governance, this has led to the introduction of a novel form of industry-state partnership in the policy process. In the process, the concept of zero carbon has been progressively narrowed, with concrete requirements on building fabric and a restriction of the requirement to the construction process (‘unregulated’ or discretionary use of the building by occupants is no longer covered). The main outstanding issue concerns the form and delivery of ‘allowable solutions’ in the specification of zero carbon.

Initial uproar from the industry led to the creation of a special task force, jointly chaired by the Housing Minister and the House Builders Federation Executive Chairperson. This was unusual in the UK context and pointed to a degree of industry – government cooperation unseen since the pre-Egan era. The Zero Carbon Taskforce was established in January 2007. Its terms of reference are to (CLG, 2007, p.97):

identify the barriers to implementation of the zero carbon 2016 target and put in place measures to address them;

develop a commitment publication alongside the final Building a Greener Future policy statement, which will set out the respective roles of Central and Local Government and business as they move towards the zero carbon 2016 target; and,

develop a timeline for steps that need to be taken over the next ten years to support the implementation of the zero carbon 2016 target.

In June 2008, a second body, the Zero-Carbon Hub (ZCH) was established by the Housing Minister to support the delivery of zero carbon new homes by 2016 (ZCH, 2008). The organization brings together state and industry actors, as well as NGOs such as the Carbon Trust, whose interests map across numerous sectors. Its remit is to “assist the housing development sector understand the challenges, issues and opportunities involved in developing, building and marketing low and zero carbon homes”. In addition, the ZCH advises the Government on the development of the energy and carbon reduction parts of the Code. To coordinate the delivery of zero carbon homes and to monitor delivery against the Government’s targets, the ZCH has been working closely with the new build housing sector and other interested parties to establish a common view on a series of broadly representative timelines. The timelines have been designed

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to help build an understanding across the industry of what is required for zero carbon delivery and to allow progress towards the 2016 target to be monitored and evaluated.

The ZCH serves a number of novel functions in the specification and implementation of energy regulations. First, it provides a vehicle for the involvement of industry and relevant non-government organizations in the specification of standards and regulations. Secondly, it informs the housing sector of upcoming developments and advises them on how to adjust their practices to accommodate a changing policy context. Third, it serves to legitimize the Code and the progressive ramping up of the Part L of the Building Regulations in the eyes of housing developers. Finally, the ZCH, through its very creation and activities, also introduced a new type of regulatory process, aimed at the specification of regulations.

Viewed from the perspective of the regulatory process, the establishment of the 2016 Task Force and ZCH was unprecedented. Until this point building regulations had been specified by government, sent out for a period of consultations, and then decided behind closed doors. While industry input was ‘invited’, industry representatives were not involved in the actual specification of regulations. In contrast, the ZCH combines state and non-state actors with diverse, often contradictory interests and views on role of the housing sector in the policy process. Nor is the ZCH a temporary body. Instead the government has stated its intention to retain the organization as a formal consultative body. To appreciate the novelty of this development, it’s helpful to compare the composition and policy input of the Zero Carbon Hub with the near absence of construction actors (except for clients) from the Industry Task Force charged with producing the Egan Report.

In principle this combination of Part L and the Code offers a strict regulatory regime with a voluntary complement to educate housing developers and signal upcoming revisions, thus helping the industry to prepare. In practice, a number of observations qualify its impact. First, when the Code was initially introduced, the concept of zero carbon was unspecified such that house builders were at a loss as to what this would mean. This has been the occasion for extensive lobbying, organizing and policy consultation, the outcome of which is not yet fully resolved. In addition the Code was introduced in 2008, just before the recession hit and the level of new house building plummeted. In the current market, the ability of the UK to meet its carbon reduction commitments depends far more on programmes for retrofit than for new build.

Policy instruments in DK

According to the Government’s 2009 Strategy, Danish energy requirements for new buildings are among the strictest in the world, and the Government would like to the country to continue to have this lead position. Accordingly, the long-term vision is that all new buildings should be “energy +” buildings, i.e. buildings that produce more energy than they consume. However, the strategy notes, given that Danes spend more than

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90% of their time in buildings due consideration must be given to ensuring the indoor climate and the aesthetic qualities of buildings as well, therefore “new buildings should not only be energy efficient, they should also be healthy and comfortable to be in” and it is posited that indoor climate, comfort, architecture and energy need not be contradictory (Regeringen, 2002, p.3). ( The DK Government presents the development of buildings that live up to these ambitions as a market opportunity for the sector; the realization of which depends on stricter energy consumption standards and the developments of new products/components.ii

The strategy is based on a mix of initiatives with regard to improving the energy performance of new and existing buildings, encouraging and engaging other actors in energy conservation as well as a number of guidance/educational initiatives. In keeping with Koeppel and Ürge-Vorsatz’s (2007) typology many of the initiatives involve changes to the main regulatory instrument with regard to buildings in DK – the building code. These changes include a gradual tightening of the energy performance requirements (a 25% reduction in energy use by 2010, an additional 25% reduction by 2015 and at least a 25% reduction by 2020, totalling to at least a 75% reduction by 2020), stricter requirements for the energy performance of the building envelope, the introduction of a subsidy for windows living up to high performance standards, allowing for an increased use of renewable energy in (rural) areas not serviced by central district heating and for an increased use of solar panels (for water heating), adjustment of ventilation norms and the development of standards to ensure the comfort and quality of the indoor climate, as well as new component requirements. In addition to these requirements, which Koeppel and Ürge-Vorsatz (2007) have labelled as a ‘normative’ control instruments, the strategy is also based on the use of ‘informative’ control instruments, e.g. the mandatory labelling of windows and buildings and monitoring of energy use of apartments, houses and other buildings. In addition, owners are obliged to publish this data in the “Housing and Building Registratrar (BBR),” which contains data on the size and condition of all buildings in DK. In addition, energy providers are also required to assist homeowners in identifying how they can reduce energy consumption.

Among the economic instruments mentioned in the Strategy is energy performance contracting, i.e. encouraging municipal governments to develop Energy Service Companies to help finance energy renovations and operate buildings through the cost savings that are achieved. While similar measures have been trailed in the UK, they have not been as effective. As in the UK, other (economic) instruments include various subsidy programs to foster product development, enable demonstration projects as well as to support experimental construction projects within social housing. In addition to this, funding is also given for educational programs and information campaigns.

Most of these developments are framed in terms of the Government’s neo-liberal aims of promoting transparency, supporting consumer choice and market growth. The provisions that allow for monitoring and disclosing energy-related information in the

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Danish “Housing and Building” register and those mandating the labelling of windows and buildings can be seen as attempts to increase transparency and reframe both the building and energy markets by providing the users with additional information. And even the tightening of the building code (classified as a normative regulatory instrument) was presented as providing a sense of direction for innovations which would benefit the construction sector.

Moreover, in the years up to and after the Government developed its Strategy, there have been a growing number of voluntary initiatives taking place, i.e. in connection with the introduction of new concepts such as “Zero emission buildings” (www.zeb.aau.dk and www.zeb.no). While zero emission buildings is a generic term used to designate buildings with zero greenhouse gas emissions during their construction and operation, there is considerable uncertainty as to what this more precisely entails, i.e. a common, unambiguous definition and associated methodology for calculating the energy balance has yet to be agreed upon. In DK, this is being worked out on case-by-case basis. Supported by “strategic research grants” from the Danish government, a number of demonstration projects have been set up to give content to the concept of ‘zero emissions buildings’. Initiatives include “Bolig+” and “ Active Houses.” Both are development projects undertaken by networks of companies and interest organizations, and in the case of “Bolig+” local government. “Bolig+” is a multi-story housing development project that is energy neutral (ZEB, on a yearly basis), intelligent and user-friendly, flexible, comfortable, and characterized by its high architectural quality, whereas “Active Houses” are as the name indicates houses that produce more energy that they consume. Both projects ‘go beyond’ existing regulatory requirements. However, the key issue driving these projects was the increasing priority given to reducing climate change. The aim in both instances is to demonstrate to the construction sector and to end-users that it is possible to build, afford and live in an aesthetically pleasing and energy efficient building/house.

Another noted form of voluntary action is the rapidly proliferating energy, environmental and building certification schemes. These schemes - for passivhaus, Green Buildings, BREEAM, LEED, EU’s Swan label, etc. – certify that building performance live up to certain requirements, and through the signalling or reputational effects associated with them, the schemes are considered as helping to alter existing practices. As standards, they are inscribing particular qualities to the buildings that can enable market transactions, e.g. higher rents in buildings that are certified. Although much debated, both private companies and public organizations primarily use these schemes on an ad-hoc basis.

A comparison of policy instruments

As Jordan et al (2005) noted, in both countries regulations continue to provide a primary policy instrument. In both countries, building codes have been updated to support EU

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and national goals. In the UK a second crucial regulatory driver involves the use of planning permission to impose mandatory requirements. These requirements vary locally, thus challenging large firms’ reliance on standard models. This in turn has led to considerable firm level experimentation in how to meet anticipated requirements associated with the Code for Sustainable Homes. The DK energy labelling scheme, introduced in 1997, has served as inspiration for the EU directive (Jensen & Gram-Hanssen, 2008) that has induced the introduction of mandatory informative command mechanisms, such as the Environmental Performance Certificate in the UK. In the UK these are primarily activated at points of sale, thus limiting their effectiveness somewhat; in DK they are published in the BBR, which is also activated in market transactions.

A key contrast between the two countries lies in the use of ‘voluntary’ mechanisms. Whereas in DK, tools such as building assessment methods remain purely voluntary and the industry is largely responsible for producing information and guidance, in the UK these activities are government driven. In the UK one of the key vehicles is the government’s use of public sector procurement both as a model of best practice and as a source of client control. Government departments must measure and report their procurement using an elaborate framework of performance targets and benchmarks and they are audited by the National Audit Office. BREEAM assessments or their equivalent are required for all public sector procurement. This is overlaid with variations in local and regional planning requirements and local procurement requirements. In DK, in contrast, the mobilization of green procurement is left to individual local (municipal) governments. There is, however, a concerted effort on the part of the Green Building Council of DK, an independent non-profit organisation with members from across the construction sector, to have state and local government adhere to a green certification scheme.

In the UK, the active involvement of central government in developing and supporting quasi-voluntary mechanisms is equally evident in the extensive body of guidance information which it has produced and commissioned. In DK, this type of top-down direction is largely absent. In both countries, the government has also used demonstration and experimental construction projects, often in social housing, to develop knowledge and support innovation.

In both countries, a commitment to energy efficiency has led to the introduction of new concepts capturing ambitious policy goals for new housing. In the UK, the relevant concept is ‘zero-carbon’, in DK it is ‘zero emissions buildings’. In the UK, the problem of specification has been the occasion for considerable innovation in the policy process, leading to an unprecedented degree of industry involvement in the specification of definitions and metrics. In the DK, specification would seem to be left to the sector, with government support taking the form of demonstration projects.

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A final difference between the two countries would seem to lie in the approach to thermal performance, although this requires further investigation. In the UK the regulatory focus does not extend much beyond the design and construction phases (post occupancy evaluations being limited to the year after completion), where as in DK there are attempts to address the use phase as well, e.g. as witnessed by the attempts at developing standards for the indoor climate. This difference in emphasis can be linked to the UK focus on clients (who are not usually occupants, but rather housing developers, large private firms and public sector clients) as compared with the DK focus on citizens.

Discussion and Conclusion

This paper has compared UK and DK efforts to develop and implement policies for sustainable development in the construction sector. More specifically, it has contrasted government responses to EU building directive 2002. The analysis focuses on the relation between policy aims and mechanisms.

In both countries, reliance on mandatory system of building codes and regulations points to the continued importance of command and control mechanisms. Where the DK and UK differ is in the additional policy mechanisms which governments have mobilized to meet the requirements, first of the modernization agenda, and then of pressures for sustainable development. A key argument in this paper is that the way in which individual EU member states have responded to the first, has shaped their initial responses to the latter. Although as the environmental goal posts surpass the capacity of dominant neo-liberal and coordinated market mechanisms to deliver, this may (have to) change.

The paper began with Campbell and Pederson’s (2007) contrast between the Anglo neo-liberal state and a coordinated market economy in DK. This contrast can be seen in the extensive privatization in the UK since the 1980s and in the introduction of market mechanisms into public-private relationships (rather than classical free market mechanisms in the conventional sense). These have been accompanied by the centralization of government functions and an extensive audit culture. In DK, modernization and sustainable development have relied on a more corporatist mode of governance. Limited privatization, relative to the UK, has been accompanied by a more cooperative approach in which industry is actively enrolled in the design and implementation of government policy. When it comes to sustainability, the government has used building codes to set minimum standards and left industry to translate more ambitious policy aims into directives for action. In both countries modernization has been accompanied by a move to greater transparency and accountability.

When it comes to policy discourse, a comparison of policy documents in the two countries underlines a common set of themes with slight differences in inflection. Common themes include the modernization tropes of efficiency, client interest and

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transparency and sustainable development goals of resource efficiency and citizen welfare. Differences in inflection can be seen in the UK subordination of environmental and social goals to economic growth and DK recognition of the need to reconcile current tensions between these different types of aims. While these may reflect differences in national policy culture, they also point to differences in the Party in power when these different documents were produced. That said, it is worth noting that whereas in the UK, New Labour continued and even intensified neo-liberal policies introduced by the Conservative government, in DK the Liberal-Conservative government moderated and even slowed down the pace of privatization introduced by the Social Democrats prior to 2001. This observation supports the general contrast between neo-liberal and coordinated market state.

A key structural difference which both informs and results from these political differences concerns the centralization of political authority. In the UK, centralization went hand in hand with neo-liberal reform, thus clearing the way for a centralized regulatory state. In DK, the neo-liberal Liberal-Conservative coalition of 2001-2011 worked within the confines of Denmark’s long standing tradition of decentralized government and a clear division of labour between different levels of government. This in turn limited the scope of privatizations and limited the use of an audit culture to control local government and industry. It also accounts for contrast between top down and bottom up approaches, as evidenced in the UK reliance on endless frameworks and formal targets and the DK emphasis on industry-state cooperation in policy development.

At the level of policy instruments, both countries exhibit a similar mix of policy instruments. In keeping with Jordan et al’s (2005) observations both countries rely heavily on building codes to implement their policies for sustainable construction. Both also rely on a mix of other command and voluntary mechanisms to complement this basic mechanism, with less investment in economic mechanisms. Additional command mechanisms include planning requirements in the UK, which are a major driver, and mandatory certification programmes for buildings and appliances in both countries, as mandated by the EU building directive. Where the two countries differ is in the nature and mix of voluntary mechanisms (many of which are subsidized by the State, giving them a quasi economic dimension). In both countries, voluntary mechanisms such as demonstration projects are subsidized by the State, giving them a quasi economic dimension, although the primary goal is to support innovation and, thereby, to give content to abstract concepts such as ‘zero emission buildings’. In the UK, these projects are complemented by extensive experimentation by large construction firms, concerned with how they will meet already announced future increases in building regulations.

In the UK, so-called voluntary mechanisms have increasingly assumed a quasi mandatory quality, whereas in DK, changes continue to be industry driven. The UK hybrid between control and voluntarism is epitomized by the Code for Sustainable Homes whose energy component tracks future increments in Part L building codes. It is

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also evident in the government’s leverage of its role as a major client to impose beyond regulation requirements on central government procurement and an associated set of performance targets and audit mechanisms. The use of this mechanism in the UK (and absence in DK) can be partly ascribed to the greater importance of public sector procurement in construction sector demand as well as to the top-down approach of the ‘Improvement Agenda’ more generally. Thus, whereas in the UK, specially constituted government bodies and the National Audit Office oversee government policy for the construction sector, in DK oversight seems to be located in professional bodies. It is also less formalized.

This comparison between policy aims and instruments in the two countries raises a number of points for the literature on eco-governance. It also suggests a framework for more in-depth analysis of policy responses to trans-national requirements. The literature on eco-governance underlines innovations in the policy process and governance structures. More specifically it points to the inclusion new types of actors. Jordan et al argued that these developments could be tracked through changes in the types of policy instruments at play and predicted a shift from command type instruments (both normative and informative) to market, fiscal and voluntary tools. Their analysis of the construction sector in 8 EU countries documented the persistence of command type regulations and a mix of policy instruments.

Our own discussion calls for the development of this argument in a number of directions. First, it calls for a closer examination of who is involved in the development and deployment of those tools and a more nuanced analysis of which actors in the construction sector are directly affected. Secondly, it calls for much greater contextualization of these ‘mixes’, both so as to explain them and to assess their impact. Two contexts would seem to be particularly important. These include the modernization agenda, which, we argue, set the framework for the elaboration and implementation of policies for sustainable construction, and the impact of neo-liberal reform on the construction sector. This latter point is important as it accounts for differences in the centralization of state authority and in the relative autonomy of industry actors.

Finally, similarities in the language of reform in the two countries highlights the need for move beyond a formal comparison of command, economic and voluntary tools to their implementation. The study of policy impact and effectiveness will help to establish whether the seeming more directed nature of UK policy and more ad hoc, bottom up character of DK responses to calls for sustainable construction are grounded in practice. If they are, such a study will draw attention to the way in which particular policy instruments either ‘fit’ with dominant business models and practices or contribute to their transformation. If they aren’t, research will draw attention to a ‘mis-alignment’ between policy logics and business logics, the negotiation of these tensions and their consequences for sustainable development and the built environment

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Turning to the theme of standardization and innovation, this paper contributes a number of points to this topic. First, it confirms the eco-governmentality claim that global environmental requirements have led to innovations in the policy process. Interestingly, many of these changes have developed around the introduction and subsequent specification of unachieveable and ambiguous policy goals, such as ‘zero-carbon homes’ and ‘zero emissions buildings’. As institutional theorists suggest, new environmental goals invite institutional work, aimed at influencing the content of institutional rules. While this was already standard practice in DK, it marks a break in the dominant practice in the UK (or rather a return to the pre-Thatcherite practice of tripartite cooperation between unions, business and government, without the unions). In DK, in contrast, environmental legislation has provided an opening for the (modest) introduction of the type of auditing and reporting mechanisms common in the UK, but hitherto rare in DK, as evidenced by the creation of the Environmental Unit.

This latter observation draws attention to the introduction of new types of intermediation between traditional policy actors. This is evident in the introduction of smart meters and reporting mechanisms at the building level and the involvement of energy companies in educating clients. It is equally evident in the increasing use of performance targets and auditing (in the UK) and transparent reporting (in DK). One option would be to write this off as an instance of regulatory capture, but this would not ‘capture’ (sic) the ways in which these non-government actions augment the existing regulatory instruments. It is not, as the regulatory capture argument would suggest, that these are weakened, replaced or markedly tweaked to favour particular actors within the sector (even though the actors may have this intention or aspiration). Instead, it appears that environmental issues have been the occasion for the development of an elaborate network of intermediaries, made up of non-government actors calculative and rhetorical devices (Callon & Muniesa, 2005) charged with documenting building performance.

One contribution of this paper is to call attention to variations in the content, form and function of these new forms of intermediation. As the comparison between the UK and DK illustrate, these processes are inflected by national policy styles and government-sector relations. Thus, whereas in the UK, there is a move to impose common standards, in DK the emphasis is on raising awareness and ad hoc solutions. These observations call for a movement beyond simple observations of isomorphism to a more detailed analysis of the origins of these networks (do they build on existing actors and practices, do they change them or have they been created de novo and if so, by whom) and how they function. This, in turn, would allow for a more nuanced understanding both of their impact on the distribution of both economic and political power and on market and policy logics more generally. They would also provide the basis for a more systematic analysis of their effectiveness as policy mechanisms and their impact on the delivery of a more sustainable built environment.

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In conclusion, the above discussion calls attention both to similarities in the types of directives and processes accompanying calls for sustainable construction and to variations in their implementation. Far from privileging either the state or industry, these new policy processes introduce new layers of intermediation, whose impact has yet to be systematically examined. When it comes to government policy, this analysis warns against a simple analysis in terms of two discrete, coherent actors (industry and the state) and calls for more nuanced analysis of the way in which policy instruments are enacted and their impact. When it comes to standards and innovations, it cautions against the location of standards in state and institutional level mechanisms and innovation in individual and firm level action. Instead it locates innovation in both the institutional and firm/individual levels and calls for a multi-level analysis of the dynamic interaction between them. Finally, the recognition of new modes of governance at the interstices of state and industry calls for investigation into the democratic implications of new forms of global governance and their impact on dominant business and political logics.

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Table 1: Classification of policy instruments chosen for assessment in the studyBased on a similar table in Koeppel and Urge and Vorsatz (2007)

Control and regulatoryinstruments

Fiscal and market-basedinstruments

Support, informationand voluntary action

Normative:−Appliancestandards−Buildingcodes−Procurementregulations−Energyefficiencyobligationsand quotas

Informative:− Mandatoryaudits− Utilitydemand-sidemanagementprograms− Mandatorylabelling andcertificationprograms

−Taxexemptions /reductions−Capitalsubsidies,grants, subsidizedloans− Energyperformancecontracting− Cooperativeprocurement− Energyefficiencycertificateschemes

− Voluntarycertification andlabelling− Voluntary andnegotiated agreements− Public leader-shipprograms− Awareness raising,education, informationcampaigns− Detailed billing anddisclosure programs

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Table 2: Key policies and documents shaping the governance of energy in buildings, DK and UK

Year International event/regul

DK Document UK Document

1987 Brundtland Report1992 Rio Summit1994 Sustainable

Development: The UK strategy

1995 Building Code, BR95, BR-S98

Ministry of Housing: “Urban Ecology, Buildings and Housing – An Action Plan” [Boligministeriet: Byøkologi, bygninger og boliger – En handlingsplan]

Revisions to building regulations, Part Liii

1997 Kyoto Protocol1998 CHANGE IN GOVT

-Rethinking Construction (Egan Report)

1999 -Agenda 21 construction (CIB)-A Better Quality of life (White Paper, policy case for sustainable Development)-Achieving Excellence in Construction initiative (guides for government procurement, including one on sustainability in 2007)

2000 -Major revisions to Building Regulations -Building a Better Quality of Life (sector level strategy)

2001 Agenda 21: ”Udvikling med omtanke – fælles ansvar” [Thoughtful development – our common responsibility] (DK follow up to the Rio Convention)

Establishment of the Construction Panel; Action Plan for

-Modernising Construction (NAO report, marks intro of policy cmt to sustainable procurement)-Climate Change Levy (for high consuming firms)

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Sustainable Development in the Danish Building and Construction Industries, EPA.

2002 -EU Building Directive-Rio+10: Johannesburg Summit

Following CHANGE OF GOVT in 2001: Above mentioned document reworked: ”Fælles fremtid – udvikling i balance” [Our common future – balanced development]

-Revision to building regulations;

-Renewable Obligation (obligation on energy co.s to develop renewable supply, initially 3%, 2010 raised to .11%)

-Accelerating Change (2nd

Egan Report)

2003 -The Construction Best Practice Programme (CBBP) developed Environmental Key Performance Indicators for the construction industry, -Sustainable Communities Plan

2004 PPS 22 Renewable EnergyEnergy Efficiency Action Plan

2005 “Handlingsplan for fornyet energispare indsats” [Action plan for (renewed) energy savings] – the DK energy strategy toward 2025, Ministry of Transport and Energy.

(minor) revisions to Building Regulations, Part L

2005 New law on “Energy savings in bldg”, follow up to EU Directive

Securing the Future (revised national sustainable development strategy)-Planning policy statement (PPS 1) Delivering sustainable development -Achieving Excellence in Construction Procurement Guide 11: Sustainability,

2006 2020 Vision: Construction - revisions to Building Regulations, Part L to incorporate EU directive-Review of Sustainable

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Construction (revised sector level strategy)Draft planning policy statement: Planning and Climate Change. Supplement to Planning Policy Statement 1’-Low Carbon Building Programme-grants for inv in MGTs (2006-9 for demonstration projects)-revisions to Part L standards, includes compulsory CO2 emissions calculations and airtightness testing for new buildings Energy ReviewUK Climate Change Programme (UKCCP) revised

2007 The New Energy Plan for Europe

-Code for Sustainable Homes introduced as voluntary standard (all new homes must be zero carbon by 2016; non domestic by 2019)-System of Energy Performance Certificates for new homes (following European Energy Performance of Buildings Directive

2008 European plan on Climate Change (20-20-20 target) 1, proposal to recast building directive

-Climate Change and Sustainable Energy Act legally binding framework to cut GHG emissions by 80% against 1990 levels by 2050; requires 5-yearly carbon budgets to be set for coming 3 budgets/15 years)

2009 -“Cirkulærer om energieffektivisering i staten” [Amendment to

-Low Carbon Transition Plan (White Ppaper on how government will

1 Aims of EU Plan on Climate Change: by 2020, reduce by 20% the emissions of greenhouse gases, increase by 20% the energy efficiency in the EU and to reach 20 % of renewables in total energy consumption in the EU

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the Law: Increasing State Energy Efficiency]-“Lovbekendtgørelse om miljøvenligt design af energirelaterede produkter” [Legally binding rules on environmentally friendly design of energy related products]-Lov om energimærkning af energirelaterede produkter[Law on Energy Labelling of energy related products]-Regeringens strategi for bæredygtig udvikling“Vækst med omtanke” [Government Strategy for Thoughtful Growth]-“Strategi for reduktion af energiforbruget i bygninger” [Strategy for the reduction of energy use in buildings], Developed by a cross-ministerial collaboration between 4 ministries: Økonomi og ‐Erhvervsmini- steriet/Erhvervs og ‐Byggestyrelsen, Klima og ‐Energiministeriet/ Energistyrelsen, Finansmini-steriet og Indenrigs og ‐Socialministeriet.

meet Climate Change Act targets)

2010 Directive 2010/31/EU on the energy performance of buildings (recast)member states must establish and apply minimum energy performance requirements, ensure certification of building energy performance; must ensure that by 2021 all new buildings

Revision of the Building Code BR10

-Revised building regulations – alignment with Code -25 % reduction in CO2 emissions from new buildings, relative to the level of emissions that would have resulted from the Part L standards introduced in 2006- CSH level 3 compliance mandatory for all new homes

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are ‘nearly zero-energy’

-Govt sets targets for reduction of carbon emissions for govt. depts. (10% in one year)-Feed-in-Tariff (replaced Low Carbon Buildings Programme)

2011 -Low Carbon Construction Plan and Action Plan-(New) Government Construction Strategy-Renewable Heat Incentive

Planned policy interventions

Green Deal, Smart meters, Energy Co. Obligations, revised version of domestic EPCCHANGE IN GOVT

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i The ‘Improvement Agenda’ was shaped by three key documents: Latham, M. 1994. Constructing the Team: Final report of the Government/Industry Review of Procurement and contractual arrangements in the UK Construction Industry. London: HMSO., Egan, J. 1998. Rethinking Construction: Report of the Consruction Task Force to the Deputy Prime Minister, John Prescott, on the scope for improving the quality and efficiency of UK construction. London. , and Strategic Forum. 2002. Accelerating Change. London. Of the three documents the first Egan Report tends to dominate discussions and thus will be privileged in this discussion.ii An example of this is the product panel on buildings introduced by the Danish EPA in 2001. The aim was to “make social and economic growth environmentally neutral” through an extensive use of LCA to increase energy efficiency within the building and construction industry (EPA, 2001:4). Particular emphasis was given to: cutting the consumption of non-renewal energy; reducing and optimizing the use of scarce, non renewable material resources; and improving health and safety by reducing the use of hazardous and environmentally harmful substances. Not being particularly productive, the panel was dismantled some years later.iii Note most building regulations get update every 8-10 years, Part L was updated in 1995, 2002, 2005 (minor), 2006, 2010 and there’s a planned updated for 2013. Aim is to get to zero carbon by 2016 for domestic and 2019 for commercial new building.