Energy Efficiency and Sustainability

Energy efficiency: not just a matter of more money

David Reilly, head of cities & regions at the Carbon Trust, reports on the findings from this year’s Low Carbon Cities Conference.

Each year, in advance of the Carbon Trust’s Low Carbon Cities Conference, we reach out to delegates asking them about their current progress on sustainability, the commitments they have made, and the challenges they are facing. Thanks to over 100 responses from this year’s event, we have a very useful snapshot of the state of public sector sustainability in the UK today.

One of the most important findings is that we are seeing a significant climate leadership gap. Although 90% of respondents believe that the public sector will need to play a very important role in meeting international ambitions on climate change, just a quarter of their organisations have actually committed to take action and align themselves with the Paris Agreement.

Of the many barriers to action we explored, the most commonly cited was a perceived lack of available budget or finance. Organisations claim that they are unable to find the money to pay for beneficial projects that will cut carbon emissions. What this tells us is not that there isn’t enough money – it’s that many people are unaware of where to look or how to get their hands on it. There are plenty of options out there.

For example, more than 1,800 public sector bodies across the UK have already made use of the interest-free loans and financing through Salix Finance, which can pay for the installation of over 120 types of technology. Higher Education institutions have also accessed over £90m since HEFCE set up its Revolving Green Fund. And in England and Wales, 139 local authorities have already received subsidised project development support from the Heat Networks Delivery Unit at BEIS, and this year will see the launch of the government’s £320m Heat Networks Investment Project.

This money is made available because investments into cutting carbon emissions often make good business sense – borrowing to save on overheads frees up much-needed budget to pay for frontline services.

Even where grants or interest-free finance are not available, the public sector can still borrow at very attractive rates. There is also a huge amount of interest in green bonds, with city issuances becoming increasingly common and institutional investors eager for long-term, secure, sustainable returns. And the market for energy performance contracts is really starting to take off in the UK.

Of course, there is still good progress being made in taking action, even despite challenges. Over half the delegates we surveyed claimed that their organisation has improved performance on climate change and environmental sustainability when compared to the previous year.

The problem seems to be one of ambition and scale. It’s still only two-thirds of respondents that claim that their organisation has a proper plan in place to take action on the environment. There is also an apparent skills gap, with 46% stating that having stronger internal expertise would help them take more effective action.

There appears to be an expectation that central government should do more of the heavy lifting, with 68% calling for stronger leadership from Whitehall and the devolved administrations. And while this is always very welcome, stronger leadership needs to go both ways.

Speaking at our Low Carbon Cities Conference, the energy and clean growth minister, Claire Perry, provided a different perspective. She insisted that central government will rely on local leadership, which will need to play a key delivery role in implementing the government’s Industrial Strategy and Clean Growth Strategy.

As she – quite correctly – pointed out, public sector leaders know their areas as well as anyone. They know the local building stock, transport needs, and where clusters of energy demand exist. They know the skills that can be found within local businesses, colleges and universities to help drive low-carbon economic development. They know what will and will not work in their areas.

Getting the money is just one element in transitioning the UK to a sustainable, low-carbon economy. It is important, but equally as important is going to be leaders within public sector organisations stepping up, taking responsibility and making things happen. Bold action will help to create a platform for a secure, sustainable, and successful future for Britain.

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