Building Market Transformation: transforming markets from the inside

Mark Hinnells, Environmental Change Institute, University of Oxford

Buildings account for 47% of UK carbon emissions. Building Market Transformation is exploring how markets could be transformed to achieve large-scale reductions in carbon emissions from both residential and non-residential buildings (eg as much as 80% by 2050).

For many years, policy has been evolutionary and has allowed businesses and business models to remain broadly unaltered. However, policy is now arguably becoming revolutionary and eliciting exciting unexpected and unpredicted responses from business. The paper several examples of how business models may fracture and then new ones emerge as a result of changed policy. There are also likely to be new ways of learning in response to policy, eg using internet based communities to build partnerships and share learning much faster than through conventional routes.

The author, as well as being a researcher at Oxford is a partner in a business incubator in the process of developing four low carbon businesses, each of which has been given the opportunity to emerge because of changed policy and market conditions. The paper is based on both active participation and reflection as a researcher (participant observation).

The lessons for policy are important and discussions focus around four themes: first implications of change from evolutionary to longer term and more transformational policy (eg longer term, fixed, and very challenging targets); second that we cant transform markets without getting inside them and understanding the market, its issues and its practitioners; third that innovation policy is aiming at technology, whereas many of the technology solutions we need already exist and there is a need for service innovation (or social innovation or social entrepreneurship) rather than technology innovation alone; fourth, when modelled, policy scenarios are often relatively evolutionary, whereas change in practice is likely to be discontinuous and unpredictable. How can policy modelling reflect transformational change?

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