Hopes of turning the Leeds city region into a ‘low carbon area’ have been given useful underpinning by an academic study which shows how cutting energy bills could be both profitable and create jobs.
The two-year project by four universities offers three levels of investment in largely conventional energy-saving measures – everything from park-and-ride schemes to solar panels – which would pay for themselves over terms ranging from four to seven-and-a-half years.
The most modest would cut £1.2 billion from the annual £5.4 billion energy bill for the region, which has a population of 3,000,000 and includes Barnsley, Bradford, Calderdale, Craven, Harrogate, Kirklees, Leeds, Selby, Wakefield and York. The most ambitious would cut £1.71 billion but need £13.03 billion investment rather than the £4.9 billion needed for the smallest scheme.
Raising such sums in current circumstances is recognised as the principal challenge by the academics, led by Prof Andy Gouldson of the University of Leeds which collaborates in the Centre for Low Carbon Futures with the universities of York (co-authors of the report), Hull and Sheffield. The report acknowledges:
Transition depends on political and social capital as well as financial capital.The levels of ambition, investment and activity needed to exploit the available potential are very significant indeed. Enormous levels of investment are required, along with major new initiatives with widespread and sustained influence in the domestic, commercial and industrial sectors.
And, of course, we need to think about some major innovations, particularly in stimulating the supply of and the demand for major investment resources. We need to think about innovative financing mechanisms, based on new forms of cost recovery and benefit sharing and new ways of managing risk. And we need to develop new delivery mechanisms that can stimulate and sustain demand for investment in low carbon options by overcoming the many potential barriers to change.
The study makes a start on achieving this aim by using realistically pessimistic data in its economic modelling to show how low carbon status would save money. Paying the current energy bill, for instance, sends ten percent of all locally-generated income out of the region, a sum forecast to grow in the next decade.
Prof Gouldson says:
The business case for major scale investments in energy and carbon management is very strong. If local government can underwrite early stage investments, as is happening in some places, then major flows of private sector investment can be secured. Investments can come from institutional investors such as pension funds, or in the near future through the Green Deal, the Green Investment Bank or Energy Company Obligations. The direct economic reasons for securing investments from sources like these are strong enough – but the wider economic, social and environmental benefits make the business case even more compelling.
Interestingly, the major property development proposed for one of Leeds city centre’s last ‘holes’, the area north of the Lower Headrow around the old Lady Lane Methodist chapel, includes a low-carbon energy centre to power £600 million worth of offices, restaurants and shops.
The chief executive of Leeds city council, Tom Riordan, welcomes the data as realistic ammunition against inevitable sceptics in hard times. He tells the Yorkshire Post:
There’s been a feeling in some quarters that in difficult times we’ve got to forget about ‘nice to do’ things like tackling climate change. But the headlines that come out of this study – basically that we could reduce our carbon emissions by a third through purely profitable activities, and at the same time create 1,000 jobs per year – are very impressive.
What this report demonstrates very clearly is that rather than being a ‘nice to do’, this is a ‘must do’ for an economy which wants to become more competitive and at the same time help its poorest people into jobs and to cope with very difficult and stretching financial conditions.
Another advantage is that low carbon status has the support of the Government, which included Leeds city region a year ago in a list of nine pilot areas. The others chosen in the aftermath of the Stern Review on climate change are Bristol, Bournemouth Poole and Dorset, Haringey, Manchester, Northumberland, Nottingham, Oxford and Plymouth.