"An incentive that encourages investment in energy efficient supply is well worth doing," Orr argued, adding that it would be appropriate for the EU to take a strong leadership role considering that taxation policy and VAT in particular are determined at EU level.
Orr conceded that it may be too great a challenge to get a bloc of 27 member states to agree upon a common rate. Nevertheless, a signal from the EU that such measures are acceptable may be sufficient to stimulate negotiation in individual countries, he added.
"The UK government has a clear programme called 'A Code for Sustainable Homes', which has as its target that all new homes built in the UK by 2016 should be zero carbon," Orr explains. "What we do not have is such a programme for retro-fitting and investing in the existing stock."
According to Orr, such investments are key to improving people's health and reducing their fuel bills. He welcomed the debate in the European Parliament on energy poverty, but argued that the EU needed to be more ambitious and make 20% greater energy efficiency a binding target.
Savings of 25% in CO2 emissions by building more energy efficient housing would be a "huge prize", Orr argued, expressing his desire to see bold ambitions for 2020 or 2050, even if the steps made towards these are incremental.
"The UK government has recently announced that the target of their new climate change department is an 80% reduction in CO2 emissions by 2050," Orr said, hoping that the new department would collaborate with the housing sector.
"We are at the forefront of building environmentally sustainable new homes and committed to playing a leadership role here," Orr concluded, citing two reasons for this: the macro-economic impact of global warming and the fact that members of housing associations are people on very low incomes who are therefore hit hardest by high energy costs.
