Andy Gouldson, Niall Kerr University of Leeds

Corrado Topi, Ellie Dawkins, Johan KuylenstiernaUniversity of York

Climate Change and Economics

The Stern Review changed the political landscape on climate change by claiming that:

• The cost of avoiding dangerous climate change (1-2% of GDP).

Is much less than

• The costs of dangerous climate change (5-20% of GDP).

The Key Questions

Can we provide an accessible and locally specific evidence base on the low carbon economy?

Does the evidence base suggest that there is a business case for major scale investments?

Does it suggest that there is also a wider social and economic case?

If so, how can we secure, structure, deliver major scale investments in the low carbon economy in the Humber?

The Approach

A review of thousands of energy efficient and low carbon options – only considers energy efficiency and small scale renewables.

A realistic assessment of the costs and the energy (and hence cost and carbon) savings associated with each measure.

A review of the scope for the deployment of these measures in households, commerce, transport and industry at the local level.

Identification of the most cost and carbon effective options for different sectors.

Mapping the capacity of the low carbon goods and services sector to absorb investment and create employment.

All based on conservative assessments and realistic projections.

Headline Findings for the Birmingham and the Wider Urban Area

£5.1 billion (c10% of GDP) left the local economy in 2012 through payment of the energy bill. This figure is forecast to grow to £6.6 billion by 2022.

There is a commercially attractive opportunity to bring £3.6 billion of investment into the local economy to exploit cost effective low carbon and energy efficient options.

Such investments would pay for themselves in 3.8 years, cutting energy bills by £954 million a year.

They would also create 1,650 jobs and an extra £100 million in wider GVA every year.

The Carbon Impact

+7%

7%

22%

32%36%38%

Cost Neutral Investments – Domestic

• £1.5 billion of investment opportunities

• Exploiting these would generate savings of £507 million a year

• Payback period 3 years

• Would create 1200 jobs

• Carbon savings equivalent to 3.9% of emissions

Top 10 Measures - Domestic

Cost Effective

Mini wind turbines (5kW) with FIT Reduced heating for washing machines Electronic products ICT products Integrated digital TVs Reduced standby consumption Reduce household heating by 1 C A++ rated cold appliances A rated ovens Efficient lighting

Carbon Effective

Reduce household heating by 1 C Solid wall insulation Pre-76 cavity wall insulation Electronic products Ground Source Heat Pump with RHI Air source heat pumps ICT products Efficient lighting Solar water heating with RHI Glazing – single to new

Cost effective – Cost neutral – Realistic potential

Cost Neutral Investments – Commercial

• £586 million of investment opportunities

• Exploiting these would generate savings of £292 million a year

• Payback period 2 years

• Would create 414 jobs

• Carbon savings equivalent to 4.7% of emissions

Top 10 Measures - Commercial

Cost Effective Vending machines - energy

management Photocopier - energy management Computers - energy management Monitors - energy management Printers - energy management Most energy efficient monitor PC only Lights - Turn off lights for an extra hour Lights - Sunrise-Sunset timers Lights – basic timer More efficient air conditioning

Carbon Effective Most energy efficient boiler Programmable thermostats Biomass boilers with RHI Air source heat pumps Ground Source Heat Pumps with RHI Heating – reducing room

temperature Most energy efficient double glazing Heating - Optimising start times Lights - Basic timer Most energy efficient air

conditioning

Cost effective – Cost neutral – Realistic potential

Cost Neutral Investments – Industrial

• £1.1 billion of investment opportunities

• Exploiting these would generate savings of £118 million a year

• Payback period 9.3 years

• Would create 222 jobs

• Carbon savings equivalent to 4.2% of emissions

Top 10 Measures - Industrial

Cost Effective

Burners Refrigeration and air-conditioning Lighting Compressed air Design Fabrication and machining Low temperature heating New food and drink plant Operation and maintenance Drying and separation

Carbon Effective

Renewable heat Others High temperature heating Process improvement Drying and separation Motors and drives Controls Heat recovery Energy management Operation and maintenance

Cost effective – Cost neutral – Realistic potential

Cost Neutral Investments – Transport (road)

• £2 billion of investment opportunities

• Exploiting these would generate savings of £228 million a year

• Payback period 6.51 years

• Would create jobs – number tbc

• Carbon savings equivalent to 2.1% of emissions

Top 10 Measures - Transport

Cost Effective

tbc

Carbon Effective

tbc

Cost effective – Cost neutral – Realistic potential

BES

Green Deal Paymentscollected via energy bill

Green Deal Payments

Generator meter (if PV is fitted)

Benefits

Energy Companies

Surveying

Marketing

Installing

Maintaining

DeliveryPartner

Green DealAgreement

Feed in Tariff

Originating, Managing

Collecting and allocating

Public Borrowing

ECO

Private Finance

A Business Model

Conclusions

There are financially attractive ways of…

• stimulating the economy, • reducing vulnerability, • protecting competitiveness, • creating employment, • improving public health

Whilst at the same time slashing your carbon footprint.