Climate action: the green economy

Have we reviewed our investment strategy and procurement models to consider climate impacts? While also promoting climate education, diversifying the labour market and growing sectors that are sustainable?

Climate change hub

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The LGA’s Sustainable Procurement Toolkit has been developed for commissioners, procurement practitioners and contract managers. Spending more than £60bn every year, our procurement teams are uniquely placed to put environmental issues at the forefront of the decision-making process and use our collective purchasing power to drive the transition to net zero and deliver real change.

Sustainable procurement toolkit

Our webinar highlighted the importance of effective and sustainable procurement in local government with presentations from Cllr Clyde Loakes (Deputy Leader, London Borough of Waltham Forest / LGA Improvement and Innovation Climate Working Group), Krista Middleton (Oxford City Council), and Kelly Greer and Steph Hacker (The Association for Decentralised Energy).

Notes from our webinar on sustainable procurement

The Design in Public Sector programme equips councils with design skills and methods to apply to their toughest local climate challenges and most ambitious aspiration or mission.

View the Design in the Public Sector: Green procurement webinar blog

As part of our support to councils on the green economic recovery, the LGA offered a selection of local government economic development and climate change officers and Members a chance to come together from a variety of councils to share experiences and learn together, as they progress towards a green economic recovery from the COVID-19 pandemic. These Leading and Learning Programme sessions were based on Action Learning Set (ALS) principles.

Building on the Local Green Jobs report (2020), the intention was to bring together officers and Members to work through challenges to find common solutions. Whilst it was assumed that each local situation would be different and have its own challenges, these collective experiences would provide a shared understanding which would be valuable to the sector to inform practice and policy development, and to provide a space for personal reflection and mutual support. The final report captures the shared learning, top tips, case studies and journeys that every council can benefit from, and can be found via the link below:

Creating local green jobs report

In collaboration with Ecuity Consulting, the Local Government Association has published research which considers the projected net zero jobs and the associated skills demands across England by 2030 and 2050. Accompanying this report is a dataset which includes the results of the employment projections made by low-carbon sub-sector, local authority and across two time-periods (2030 and 2050).

Michael O’Doherty from Local Partnerships and architect Charlie Baker from Red Co-operative were invited to a webinar to talk through the strategic challenges around housing retrofit. Charlie is the director of Red Co-operative, an expert in low carbon refurbishments and energy supply, who has written several reports on retrofits standards and finance.

Some of the key questions Michael and Charlie were asked included:

  • what can local authorities do to develop relevant skills and the supply chain for domestic retrofit?
  • what do they think are the likely skills gaps and bottlenecks?
  • what are the barriers to local authority engagement?
  • what help and support do local authorities require?

There is now a lot of attention being focused back on the retrofit agenda. Indeed, of 29 million existing homes across the UK, at least 18 million still need to be made into low carbon energy and resilient to address climate change. Given that approximately 80 per cent of those properties will still be around in 2050, we can conclude that it is as much about the existing stock as it is about the new stock.

Given that domestic properties account for 30 per cent of energy use and around 20 per cent of greenhouse gas emissions in the UK, the Climate Change Committee recognises that energy efficiency is a vital first step towards decarbonising homes whilst addressing health and fuel poverty issues as well.

In England alone, there are over 10 million owner occupied homes and over 3 million private rented sector homes which need upgrading to EPC A, B or C, so tackling these sectors is going to be challenging. From a local authority perspective, however, there could be some easier wins. Specifically, the social housing sector might be one of those areas that we could initially focus on. This would help develop supply chains and provide jobs across the UK.

We have willing leaders in this area who are somewhat easier to engage – a Chief Executive or a Director of Property, rather than hundreds of individual households.

Investment needed to bring all homes up to EPC C varies, but will be between £35 - 65 billion to 2035, whilst the Climate Change Committee puts a figure of about £55 billion to 2050 and an energy efficiency infrastructure group estimates £73 billion.

Both Michael and Charlie were clear that the most effective approach would be “fabric first, but not fabric only”, with insulating your building being the most important aspect to get right first, followed by renewables, and then to consider other options.

They highlighted the view that if you replace heating with electric heat pumps, and you have decarbonised your grid, then you can go a long way towards a decarbonised stock without maybe having to do as much of the installation. Of course, this creates other challenges. For example, the cost of electrified heat will be very expensive, and could actually put more people into fuel poverty, and could pose issues around the capacity of the electricity networks.

There are also some questions about the fairest way of funding the transition. The Government has recently introduced the Green Homes Grant. The local authority driven schemes helped to promote and manage it are ongoing. It is relatively small scale at the moment, but the suggestion is that it will be expanded.

A further funding route that has been announced is the social housing decarbonisation fund (£3.8 billion). Given the amount of money involved, local authorities, working with social housing providers, could develop supply chains over the next few years, which would then enable the development of supply chains to support efforts within the private sector.

One of the biggest challenges of upskilling and reskilling is around heat pumps, installation, management, etc. There will be large skills gaps which needs to be addressed now. A large component of this is to increase the understanding of actually what is involved in domestic retrofit: the mix between the traditional and new kind of building trades, insulation, dry walling, electrics and heating sides.

How do you build support for action at a local level? You need to make sure your key politicians and councillors are on board, supportive and are champions. Local authority teams such as planning, building control and economic development, as well as social housing providers, should be part of a joined-up approach. In addition, local education colleges and universities are valuable in terms of knowledge, engagement and are, of course, training providers.

There also needs to be engagement with business representatives, Chambers of Commerce and key employers if you want to drive this agenda and champion it locally. Lastly, but not least, community organisations, organisations that provide retrofit and willing households that want to engage with this agenda are crucial players. A key component of the local authority challenge is to be able to bring about a top down approach with a bottom up approach.

In summary, Michael and Charlie argued that it is possible to get to zero carbon by 2038, we could eradicate fuel poverty by 2030 – and Charlie showed how the whole thing can be done with no net cost to the public purse, as long as the government helps to jumpstart it. However, it is not for the faint hearted – there are a huge amount of homes to retrofit, and it needs to be looked at strategically. Local authorities are best placed to convene the right people, and develop a framework with pathways for how housing stock can be retrofitted.

Presentation slides

Below you can find the slides for Michael O’Doherty’s presentation. Charlie Baker’s presentation slides are also included, which can guide you through the more detailed practical side of the what we mean when we talk about retrofitting and the skills which need to be developed.

Strategic overview: green skills and housing retrofit - Michael O’Doherty, Project Director, Local Partnerships.

Scaling up retrofitting – Charlie Baker, Director, Red Co-operative.

This guide looks at some of these sources of funding, as well as green loans, community municipal bonds and more and how they might apply to different types of projects.

The Greening Procurement webinar (slides), jointly run by the Business Services Association (BSA) and the Local Government Association (LGA), was an online workshop to explore the climate emergency and how local government and businesses can work together on meeting local carbon reduction goals. During the session, the following was covered:

The climate emergency and the work of local authorities in helping to prevent climate change and mitigating its effects

The ways in which councils have worked to reduce carbon emissions in the communities they represent

The role of the private sector and Voluntary and Community Sector stakeholders in working with councils to these ends

Best practice in incorporating sustainability as a factor in the public procurement process, including through the Social Value Act.

Councils can use procurement to achieve wider financial and non-financial outcomes, including improving wellbeing of individuals and communities, social value and improved environment. Climate emergency social value themes, outcomes and measures (TOMs) have been published. The 2020 TOMs have been launched with extra emphasis and focus on providing councils and organisations with measures specifically dedicated to reducing and mitigating the risks of climate change in our communities.

Energy is one of the largest controllable overheads in many council buildings. To insulate councils from wider energy price trends, and to benefit from the huge opportunities presented by new energy technologies and business models, councils must look to gain greater control over this spend.

Energising procurement: National energy procurement category strategy

This toolkit has been developed to support delivery of the National Procurement Strategy for Local Government in England 2018. A large part of the strategy is about achieving community benefits, including those for the environment. 

National Procurement Strategy 2018: toolkit 

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Devon County Council have supported Altilitech through the Green Innovation Fund to scale-up their proprietary process for recycling electric vehicle (EV) batteries to a commercial operation. Verified by the University of Plymouth, the innovative method recovers over 95 per cent of the critical metals contained within spent batteries at a quality for reuse in new batteries. Altilitech operates under a circular economy model; retaining value in the local economy whilst reducing the toxic waste and emissions produced in mining.

Devon County Council: Commercially Recycling EV Batteries

The Heart of the South West LEP and East Devon District Council have worked with Ampaire, a US hybrid electric aircraft developer, to complete the first English Hybrid electric test flight from Exeter Airport. This has led to an inward investment plan for the region, focusing on high potential opportunities for Smart and Sustainable Aviation within Devon & Somerset. The first stage of this plan will see the development of a Living Lab for Future Aviation testing and demonstration.

Heart of the South West LEP and East Devon District Council: Electric aircraft as a catalyst for economic growth

In January 2021 the Apricot Centre carried out a study that highlighted a huge skills deficit in Regenerative Systems, holding back farmers, growers, and food systems workers from transitioning to regenerative farming methods. With natural capital becoming a key economic and environmental driver in the sector, equipping workers with the necessary skills to protect the land on which they work is crucial. Devon County Council supported the Apricot Centre to deliver a pilot training programme, helping local businesses to develop the required skills and to create new jobs in the sector.

Devon County Council and the Apricot Centre: Future of Farming – Training the next generation of Regenerative Farmers

Councils that have declared a Climate Emergency may struggle to fund the measures needed to cut emissions in their area. Warrington Borough Council has piloted the use of community municipal bonds, a fundraising tool for local authorities, to fund renewable energy projects. Community municipal bonds allow councils to raise money directly from residents. In Warrington, the money raised has been used for low-carbon infrastructure, to speed up carbon emissions reductions and increase resilience to the pandemic.

Warrington Borough Council: Investing in Renewable Energy with Community Municipal Bonds

Wiltshire Pension Fund has set an investment belief: “We seek to invest in a way that, where possible, aligns the interests of the Fund with those of the contributing employers and the Fund membership”.

Wiltshire Pension Fund - engaging with our members on climate change risk

There has been a growing interest in ‘civic crowdfunding’ for local authorities. This project sought to work through the options available to councils to raise additional funds for climate work whilst engaging with and involving the community, and potentially increasing community wealth. Through a series of workshops, issues and barriers were investigated in order to produce a tool to aid decision making and prepare the council for delivering alternative finance mechanisms.

Lewes District & Eastbourne Borough Councils and the University of Sussex: Citizens and Climate - Crowdfunding for net zero

Energy is one of the largest controllable overheads in many council buildings. To insulate councils from wider energy price trends, and to benefit from the huge opportunities presented by new energy technologies and business models, councils must look to gain greater control over this spend. 

Energising procurement: National energy procurement category strategy

As part of the Government’s drive for a green industrial revolution and the Council’s COVID Economic Strategy and climate change commitments, Derbyshire County Council has launched a Green Entrepreneurs Fund – a £2 million grant fund to help local businesses develop and invest in green energy and carbon reduction, and provide a boost to the local economy in the wake of the coronavirus pandemic.

Derbyshire County Council: Green Entrepreneurs Fund

Blue Biosphere is a net-zero economic development programme collaborating across Torridge and North Devon to stimulate marine and catchment jobs and raise social mobility through development of Blue Carbon projects, improved fisheries management and marine conservation as well as Blue Growth targeted to deliver high-value jobs to our coastal community.

North Devon and Torridge Councils: Blue Biosphere Natural Capital Accelerator

Lewes District Council adopted a new corporate plan in February 2020, following the declaration of a climate emergency in July 2019, under a new Green/Lib Dem led ‘co-operative alliance’.

Green Economic Recovery in Lewes District Council

Essex County Council is leading ERDF-funded project, BLUEPRINT. It will help local authorities in England, France and beyond transition to a circular economy. They are working with partners across the France (Channel) England (FCE) region to help local authorities connect the circular economy to sustainable and inclusive growth. The project will create a toolkit for local authorities, develop a circular economy training programme and engage residents and businesses in circular economy practices.

Essex County Council: BLUEPRINT to a Circular Economy Project

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The Association of Directors of Environment, Economy, Planning and Transport (ADEPT) has launched its key policy position on clean and green growth, saying we need to ‘build back green’ to both create jobs and build resilience, post COVID-19.

Based on 32 countries, this report examines what is driving the change in skills, the employment affects of the greening economy, the changing of skills and occupations and what is needed in the future for a circular economy.

Dr Paul Brockway and fellow researchers conducted a systematic review which indicates that carbon emissions and GDP are unlikely to decouple enough to rely on green growth to meet climate targets.

This report was produced in response to over two hundred local authorities declaring climate emergencies. It identifies that the challenge now is for local policy makers to translate this momentum into co-ordinated action. In all fields there will be commercial potential to create and drive new markets, replacing high carbon with low carbon activity.

Looking at England, this report explains why a successful approach to reaching the national net zero goal should also focus on local industrial strategies. It sets out criteria for success at the local level and what national government can do to help.

A report published in response to the government's economic rescue package in the wake of the coronavirus crisis. It sets out five building blocks that would support new long term employment opportunities, thriving businesses and a healthier, fairer society, whilst protecting against the potentially devastating future impacts of climate change and nature’s decline:

  • Invest in net zero infrastructure
  • Restore nature
  • Stop wasting valuable resources
  • Ensure clean air and healthy places
  • Make the recovery fair

Full briefings on each of these areas can also be found via the source link.

This guide covers what green finance actually is, the Government’s green finance strategy, types of green finance, a view from private sector investors and a number of case studies from councils.