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£44k Extra Rent Paid by Millennials Compared to Baby Boomers by Age 30

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World's End Estate across Thames by George Rex via Flickr

According to the Resolution Foundation, fewer home owners and rising costs in the private rental sector mean that millennials will have spent £44,0000 more in rent by the time they reach 30 compared to baby boomers.

The analysis, published ahead of the launch of the Resolution Foundation’s flagship Intergenerational Commission on Monday, highlights an alarming drop in home ownership over recent decades that has reduced living standards for the young and led to a further concentration of wealth among the old.

The analysis shows that baby boomers – those born between 1946 and 1965 – were the main beneficiaries of the growth in home ownership over the 20th century, with close to two-thirds (63 per cent) owning their own home by the age of 30. However decades of falling housebuilding and rising house prices have reduced home ownership for subsequent generations. Around 60 per cent of generation X owned their home by the age of 30, falling to 42 per cent of today’s millennial generation.

This shift away from home ownership has left many more millennials renting privately and has coincided with a sharp increase in the cost of renting. The analysis finds that millennials spend almost twice as much on rent as genXers did at the same age, who in turn spent twice as much as the baby boomers before them.

Combining the downward shift in home ownership with the rising cost of renting, the analysis finds that millennials have spent £44,000 more on rent than the baby boomers by the time they reach 30, and £25,000 more than generation X.

The Foundation says that the extra spending on rent has reduced young people’s living standards and made it harder to save for a deposit for a house. It notes that that the extra spending on rent is more than the average deposit for a first-time buyer today of £33,000.

With half of all non-commercial or institutional rental income going to baby boomers, the Foundation says that the growth of generation rent is a key reason why questions of intergenerational fairness are rising up the national agenda.

The Foundation welcomes Theresa May’s acknowledgement of Britain’s ‘housing deficit’ in a speech earlier this week, where she said that unless action is taken “young people will find it even harder to afford their own home.”

It says that a major housebuilding programme is likely to find support across the generations, contrary to popular perception, and points to findings in the British Social Attitudes Survey that baby boomers’ support for homes being built in their local area has almost doubled in recent years, from 29 per cent in 2010 to 56 per cent in 2014.

The analysis is published ahead of the launch of the Intergenerational Commission, an 18-month investigation that seeks to repair the fractured social contract between generations. It will consider the extent to which the living standards of young people today have been permanently scarred and recommend policies to raise the living standards of current and future generations.

The Commission’s members are: Vidhya Alakeson (Power to Change), Dame Kate Barker (ex-Bank of England), Torsten Bell (Resolution Foundation), Carolyn Fairbairn (CBI), Lord Geoffrey Filkin (Centre for Ageing Better), Sir John Hills (LSE), Paul Johnson (IFS), Sarah O’Connor (Financial Times), Frances O’Grady (TUC), Ben Page (Ipsos MORI), David Willetts (Commission Chair and Resolution Foundation) and Nigel Wilson (Legal & General).

Laura Gardiner, Senior Policy Analyst at the Resolution Foundation, said:

“The nation’s housing crisis is perhaps the most visible example of growing inequality between generations.

“Young people today are paying a heavy price for decades of falling home ownership. The struggle to get on the housing ladder has left many of today’s millennials renting, at a time when it has become more expensive to do so. Millennials have had to spend £44,000 more on rent by the time they reach 30 compared to the baby boomers.

“Britain’s continuing failure to build enough homes means that unless we change course the struggle of young people to own their home is only going to get worse.

“The good news is that older generations are just as concerned about young people’s struggle to own their home, and support for housebuilding is growing across all age groups. A sustained programme of housebuilding to cut Britain’s ‘housing deficit’ would send out a clear message from the incoming Prime Minister that she is committed to repairing the social contract between generations.”

Rental income across generations

 

Mean annual rental income Mean annual rental income among landlords Number of landlords Share of all landlords by generation Total rental income Share of all rental income
Silent (and earlier) £180 £7,200   220,000 23% £1,560,000,000 20%
Baby boomers £240 £5,700   670,000 39% £3,825,000,000 50%
Gen X £150 £4,500   440,000 31% £1,975,000,000 26%
Millennials £30 £3,600   100,000 7% £339,000,000 4%

 

Source: Family Resources Survey

  • The millennials are aged between 15 and 35. Generation Xers are aged between 35 and 50 and the baby boomers are aged between 50 and 70.
  • The Commission will be officially launched at an event with David Willetts, Frances O’Grady, Carolyn Fairbairn and Ben Page on Monday 18 July at the Skyloft in Millbank.
  • In her leadership speech on Monday Theresa May said: “Unless we deal with the housing deficit, we will see house prices keep on rising. Young people will find it even harder to afford their own home. The divide between those who inherit wealth and those who don’t will become more pronounced. And more and more of the country’s money will go into expensive housing instead of more productive investments that generate more economic growth.”
  • Halifax Building Society estimate that the average first time buyer deposit was £33,000 in 2016.

Economy

Will Self-Driving Cars Be Better for the Environment?

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self-driving cars for green environment
Shutterstock Licensed Photo - By Zapp2Photo | https://www.shutterstock.com/g/zapp2photo

Technologists, engineers, lawmakers, and the general public have been excitedly debating about the merits of self-driving cars for the past several years, as companies like Waymo and Uber race to get the first fully autonomous vehicles on the market. Largely, the concerns have been about safety and ethics; is a self-driving car really capable of eliminating the human errors responsible for the majority of vehicular accidents? And if so, who’s responsible for programming life-or-death decisions, and who’s held liable in the event of an accident?

But while these questions continue being debated, protecting people on an individual level, it’s worth posing a different question: how will self-driving cars impact the environment?

The Big Picture

The Department of Energy attempted to answer this question in clear terms, using scientific research and existing data sets to project the short-term and long-term environmental impact that self-driving vehicles could have. Its findings? The emergence of self-driving vehicles could essentially go either way; it could reduce energy consumption in transportation by as much as 90 percent, or increase it by more than 200 percent.

That’s a margin of error so wide it might as well be a total guess, but there are too many unknown variables to form a solid conclusion. There are many ways autonomous vehicles could influence our energy consumption and environmental impact, and they could go well or poorly, depending on how they’re adopted.

Driver Reduction?

One of the big selling points of autonomous vehicles is their capacity to reduce the total number of vehicles—and human drivers—on the road. If you’re able to carpool to work in a self-driving vehicle, or rely on autonomous public transportation, you’ll spend far less time, money, and energy on your own car. The convenience and efficiency of autonomous vehicles would therefore reduce the total miles driven, and significantly reduce carbon emissions.

There’s a flip side to this argument, however. If autonomous vehicles are far more convenient and less expensive than previous means of travel, it could be an incentive for people to travel more frequently, or drive to more destinations they’d otherwise avoid. In this case, the total miles driven could actually increase with the rise of self-driving cars.

As an added consideration, the increase or decrease in drivers on the road could result in more or fewer vehicle collisions, respectively—especially in the early days of autonomous vehicle adoption, when so many human drivers are still on the road. Car accident injury cases, therefore, would become far more complicated, and the roads could be temporarily less safe.

Deadheading

Deadheading is a term used in trucking and ridesharing to refer to miles driven with an empty load. Assume for a moment that there’s a fleet of self-driving vehicles available to pick people up and carry them to their destinations. It’s a convenient service, but by necessity, these vehicles will spend at least some of their time driving without passengers, whether it’s spent waiting to pick someone up or en route to their location. The increase in miles from deadheading could nullify the potential benefits of people driving fewer total miles, or add to the damage done by their increased mileage.

Make and Model of Car

Much will also depend on the types of cars equipped to be self-driving. For example, Waymo recently launched a wave of self-driving hybrid minivans, capable of getting far better mileage than a gas-only vehicle. If the majority of self-driving cars are electric or hybrids, the environmental impact will be much lower than if they’re converted from existing vehicles. Good emissions ratings are also important here.

On the other hand, the increased demand for autonomous vehicles could put more pressure on factory production, and make older cars obsolete. In that case, the gas mileage savings could be counteracted by the increased environmental impact of factory production.

The Bottom Line

Right now, there are too many unanswered questions to make a confident determination whether self-driving vehicles will help or harm the environment. Will we start driving more, or less? How will they handle dead time? What kind of models are going to be on the road?

Engineers and the general public are in complete control of how this develops in the near future. Hopefully, we’ll be able to see all the safety benefits of having autonomous vehicles on the road, but without any of the extra environmental impact to deal with.

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Economy

New Zealand to Switch to Fully Renewable Energy by 2035

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renewable energy policy
Shutterstock Licensed Photo - By Eviart / https://www.shutterstock.com/g/adrian825

New Zealand’s prime minister-elect Jacinda Ardern is already taking steps towards reducing the country’s carbon footprint. She signed a coalition deal with NZ First in October, aiming to generate 100% of the country’s energy from renewable sources by 2035.

New Zealand is already one of the greenest countries in the world, sourcing over 80% of its energy for its 4.7 million people from renewable resources like hydroelectric, geothermal and wind. The majority of its electricity comes from hydro-power, which generated 60% of the country’s energy in 2016. Last winter, renewable generation peaked at 93%.

Now, Ardern is taking on the challenge of eliminating New Zealand’s remaining use of fossil fuels. One of the biggest obstacles will be filling in the gap left by hydropower sources during dry conditions. When lake levels drop, the country relies on gas and coal to provide energy. Eliminating fossil fuels will require finding an alternative source to avoid spikes in energy costs during droughts.

Business NZ’s executive director John Carnegie told Bloomberg he believes Ardern needs to balance her goals with affordability, stating, “It’s completely appropriate to have a focus on reducing carbon emissions, but there needs to be an open and transparent public conversation about the policies and how they are delivered.”

The coalition deal outlined a few steps towards achieving this, including investing more in solar, which currently only provides 0.1% of the country’s energy. Ardern’s plans also include switching the electricity grid to renewable energy, investing more funds into rail transport, and switching all government vehicles to green fuel within a decade.

Zero net emissions by 2050

Beyond powering the country’s electricity grid with 100% green energy, Ardern also wants to reach zero net emissions by 2050. This ambitious goal is very much in line with her focus on climate change throughout the course of her campaign. Environmental issues were one of her top priorities from the start, which increased her appeal with young voters and helped her become one of the youngest world leaders at only 37.

Reaching zero net emissions would require overcoming challenging issues like eliminating fossil fuels in vehicles. Ardern hasn’t outlined a plan for reaching this goal, but has suggested creating an independent commission to aid in the transition to a lower carbon economy.

She also set a goal of doubling the number of trees the country plants per year to 100 million, a goal she says is “absolutely achievable” using land that is marginal for farming animals.

Greenpeace New Zealand climate and energy campaigner Amanda Larsson believes that phasing out fossil fuels should be a priority for the new prime minister. She says that in order to reach zero net emissions, Ardern “must prioritize closing down coal, putting a moratorium on new fossil fuel plants, building more wind infrastructure, and opening the playing field for household and community solar.”

A worldwide shift to renewable energy

Addressing climate change is becoming more of a priority around the world and many governments are assessing how they can reduce their reliance on fossil fuels and switch to environmentally-friendly energy sources. Sustainable energy is becoming an increasingly profitable industry, giving companies more of an incentive to invest.

Ardern isn’t alone in her climate concerns, as other prominent world leaders like Justin Trudeau and Emmanuel Macron have made renewable energy a focus of their campaigns. She isn’t the first to set ambitious goals, either. Sweden and Norway share New Zealand’s goal of net zero emissions by 2045 and 2030, respectively.

Scotland already sources more than half of its electricity from renewable sources and aims to fully transition by 2020, while France announced plans in September to stop fossil fuel production by 2040. This would make it the first country to do so, and the first to end the sale of gasoline and diesel vehicles.

Many parts of the world still rely heavily on coal, but if these countries are successful in phasing out fossil fuels and transitioning to renewable resources, it could serve as a turning point. As other world leaders see that switching to sustainable energy is possible – and profitable – it could be the start of a worldwide shift towards environmentally-friendly energy.

Sources: https://www.bloomberg.com/news/articles/2017-11-06/green-dream-risks-energy-security-as-kiwis-aim-for-zero-carbon

https://www.reuters.com/article/us-france-hydrocarbons/france-plans-to-end-oil-and-gas-production-by-2040-idUSKCN1BH1AQ

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