Climate Contract Playbook Edition 3
154
[Rory’s clause]
The Origin Story
Child’s name
Rory’s clause
Full name
Net Zero Land Promotion Agreement
Practice Area / Sector
Real Estate, Planning, Construction
Landowners often hold significant influence and control over future development through land promotion documentation. The drafting of commercial objectives is often singular, focusing on maximising returns, and silent on climate change and environmental issues. This creates an imbalance that landowners may not be aware of and can lead to the development of estates and homes that are inconsistent with net zero strategies and policy. Landowners have often been custodians of the land and wish to see it sympathetically and conscientiously developed. Establish a concept of ‘Zero Carbon by design’. Use amendments to standard land promotion agreements and precedents to balance climate change and environmental issues against maximising financial returns for the landowner and promoter. In effect, this creates a carbon price and accounting through a “market value” based on a different economic model, balancing financial returns and environmental impact. Development starts with the ownership of land. However, landowners often don’t have the knowledge or resources to promote and sell their land for development and will contract with third party promoters/developers to do this for them. A land promotion agreement is a contract between the landowner and a promoter or developer who agrees to apply for planning permission on the landowner’s property and, once planning permission has been obtained, the promoter/ developer markets the land for sale. As the development cannot take place without the land, net zero development is within the landowner’s control. However, precedents and drafting may not trigger this realisation as they often focus on maximising returns and minimising Open Space (such as woodland), and Infrastructure (such as cycleways, footpaths, and landscaping). As such, new precedents and drafting are required to provide the options to assist landowners in creating net zero developments of the future. The proposed clauses will ensure environmental and net zero considerations are cascaded to developers. In effect a commercial relationship is established to take account of natural capital consumed during construction and operation of the future development to be built on the land. This should: • Reduce energy consumption • Make the transition to renewables • Make occupation and living more affordable • Improve air quality and wider sustainability • Build communities for the future rather than estates of homes. Further, planning should be easier to achieve in and around cities or local government areas that have declared climate change emergencies 77 . Arguably the development will be a nicer place to live and ultimately command a comparable land price as the house sales should be stronger 78 .
Issue
Solution
Context
Impact
77 https://www.climateemergency.uk/blog/list-of-councils/; https://netzeroexeter.co.uk/wp-content/uploads/2020/02/ECF-Net-Zero-Exeter-Blueprint. pdf 78 https://www.rics.org/globalassets/rics-website/media/knowledge/research/insights/energy-efficiency-and-residential-values.pdf
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