LONDON AS A LEADER IN THE LOW CARB ON ECONOMY
DECEMBER 2009 London as Leader in the Low Carbon Economy
Project Title: London as a Leader in the Low Carbon Economy Report Title: London as a Leader in the Low Carbon Economy Project No: 49353232 Status: Final Client Contact Name: Jared Boow / Deborah Owens Client Company Name: London Councils / Government Office for London Issued By: URS Corporation Ltd St. George’s House 5 St. George’s Road Wimbledon London SW19 4DR
Document Production / Approval Record Issue No: Name Date Position 1
Darshini Ravindranath 09.12.09 Consultant Prepared by Brendan Tapley, 09.12.09 Project Manager
Sam Wilding 09.12.09 Senior Consultant
Sally Vivian, 09.12.09 Project Director Checked by Brendan Tapley 09.12.09 Project Manager
Approved Sally Vivian 09.12.09 Project Director by
Document Revision Record Issue No Date Details of Revisions 1 06.11.09 Original issue – work in progress draft
2 16.11.09 Revised draft
3 30.11.09 Final draft
4 09.12.09 Final
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London as Leader in the Low Carbon Economy
LIMITATION
URS Corporation Limited (URS) has prepared this Report for the sole use of the client group in accordance with the Agreement with London Councils under which our services were performed. No other warranty, expressed or implied, is made as to the professional advice included in this Report or any other services provided by us. Unless otherwise stated in this Report, the assessments made assume that the sites and facilities will continue to be used for their current purpose without significant change. The conclusions and recommendations contained in this Report are based upon information provided by others and upon the assumption that all relevant information has been provided by those parties from whom it has been requested. Information obtained from third parties has not been independently verified by URS, unless otherwise stated in the Report. This work has been commissioned by London Councils and the Government Office for London and does not constitute the views or policies of any aspect of London Government.
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CONTENTS
Section Page No
EXECUTIVE SUMMARY ...... 1
1. INTRODUCTION...... 3
2. LONDON’S STRENGTHS AND STRATEGIC DRIVERS ...... 4
2.1. London’s Strengths ...... 4 2.2. Key Drivers for Action in London...... 5
3. DEVELOPMENT OF MARKET OPPORTUNITIES: FINANCIAL MARKETS ...... 8
3.1. Context ...... 8 3.2. Key Drivers for London ...... 9 3.3. Economic Opportunities and Challenges...... 10 3.4. Recommendations for Action ...... 13
4. DEVELOPMENT OF MARKET OPPORTUNITIES: BUSINESS CENTRE ...... 15
4.1. Context ...... 15 4.2. Key Drivers for London ...... 15 4.3. Economic Opportunities & Challenges ...... 17 4.4. Recommendations for Action ...... 23
5. DEVELOPMENT OF MARKET OPPORTUNITIES: KNOWLEDGE AND R&D CENTRE...... 26
5.1. Context ...... 26 5.2. Key Drivers for London ...... 26 5.3. Economic Opportunities & Challenges ...... 28 5.4. Recommendations for Action ...... 29
6. DEVELOPMENT OF MARKET OPPORTUNITIES: CENTRE FOR CREATIVE INDUSTRIES...... 31
6.1. Context ...... 31 6.2. Key Drivers for London ...... 32 6.3. Economic Opportunities and Challenges...... 33 6.4. Recommendations for Action ...... 34
7. DEVELOPMENT OF MARKET OPPORTUNITIES: TRANSPORT HUB ...... 36
7.1. Context ...... 36 7.2. Key Drivers for London ...... 36 7.3. Economic Opportunities and Challenges...... 37 7.4. Recommendations for Action ...... 39
8. DEVELOPMENT OF MARKET OPPORTUNITIES: A WORLD-CLASS CITY TO LIVE IN AND VISIT...... 41
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CONTENTS
Section Page No 8.1. Context ...... 41 8.2. Key Drivers for London ...... 41 8.3. Economic Opportunities and Challenges...... 42 8.4. Recommendations for Action ...... 44
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EXECUTIVE SUMMARY
As the economic powerhouse of the UK, London makes a vital contribution to the national and global economy, and is home to more than 100 of Europe’s 500 largest companies. Its economy, worth over £160 billion, is larger than that of some countries and accounts for around 20% of the UK’s Gross Domestic Product. London is also an ‘entrepreneurial’ centre, with a strong base of small and medium sized enterprises, a growing venture capitalist market and a sound investment function. However, London is not only the UK’s economic centre - it is also the country’s administrative, political and cultural capital.
The stakeholders consulted as part of this project highlighted London’s status as a world class city, its potential to innovate, lead and deliver in terms of low carbon businesses, products, services and policies and the diverse contribution of its economy. In light of its global status, the eyes of the world are now looking to London to take the lead on climate change adaptation and mitigation, giving the city an opportunity to take a primary role in achieving a low carbon economy.
What is meant by the term ‘low carbon economy’? The term generally refers to the concept of an economy with minimal output of greenhouse gas emissions, specifically carbon dioxide, into the atmosphere. In addition, it is useful to help frame climate change adaptation with the concept of achieving a ‘climate resilient economy’ 1. This report explores how such concepts apply to London by identifying the city’s key strengths and drivers for low carbon action, followed by a more in depth look at the associated opportunities and challenges. London’s strengths on which we aim to build a low carbon economy are its financial markets, business services, knowledge and R&D, creative industries, transport infrastructure, and London’s status as a world-class city in which to live and visit. The key drivers for developing a low carbon economy in London are identified and used to frame potential priority actions for a low carbon, climate resilient economy. These drivers include decarbonising London’s energy supply and transport network, shifting to low-carbon goods and services and adapting infrastructure to meet future impacts of climate change. These drivers are discussed in more detail on page five. Recommended areas for action have been identified where there is an overlap of an identified strength, key policy driver and existing practice or stakeholder commitment for change. Each section therefore contains a series of recommendations for action, broken down into four levels (business, national, regional and local government) where appropriate. These recommendations are a combination of ‘strategic’ actions (such as linking sectors or building on existing programmes) and more specific tactical actions. We have made a number of recommendations, including the following:
• Financial markets – developing critical mass for low carbon projects to warrant larger scale investment, through the creation of an aggregated investment fund. Successful development of such a fund would facilitate greater investment into low carbon technologies, leading to job creation, skills enhancement, marketing and
1 UK Department for Business, Innovation and Skills and Department of Energy and Climate Change, Low Carbon Industrial Strategy, (2009)
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communications opportunities and reputational benefits for the city. Such a fund would drive progress in a number of London’s strength areas, but should not duplicate other provisions (such as HEEP). Rather, it should build on and dovetail with existing provisions to cover those parts of the economy not currently captured.
• Business services - Facilitate commercialisation of products and services by establishing a forum (or building on an existing model, such as the London Technology Network) to enable industry to inform subjects and issues for academic research. Aligning research to business need should increase the likelihood of investment in emerging products and services.
• Creative industries: this sector could work with communications teams at Borough level to develop and implement campaigns and messages to engage local communities and drive behavioural change. These campaigns and messages should be tailored to specific Boroughs, taking account of local characteristics including ethnic diversity and levels of affluence. Engaging local people and driving behavioural change is key to London achieving leadership in the low carbon economy.
• A world class city to live in and visit: working in conjunction with the tourist industry, national and regional Government, London could be marketed as a ‘green tourism’ destination. Information can be promoted through the Britain and London Visitor Centre, the British Hospitality Association, the Visit London website and other key bodies. This could lead to London can gaining recognition as the first urban centre in the world to promote and practice green tourism.
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1. INTRODUCTION
URS Corporation Limited (URS) has been commissioned by London Councils and the Government Office for London (GOL) to deliver a project to determine the priorities for London in the low carbon economy both in mitigating and adapting to climate change, and in developing a set of recommendations for London.
The study is intended to support the transition to a ‘low carbon economy’- an economy that minimises environmental impact, is sustainable and limits greenhouse gas emissions into the atmosphere. This is particularly relevant to London, as research published by the City of London indicates that London represents an approximate 1% share of the global economy. Although the city comprises only 13% of the UK population, London generates 19% of the UK's gross value added 2. London is presented with a range of economic opportunities and challenges associated with abating its own carbon emissions, supporting other UK regions and countries to abate their carbon emissions, and in adapting to the effects of climate change.
This report will feed in, along with a range of other reports and workstreams, to a further comprehensive London-wide report that the LDA are undertaking to determine London’s economic opportunities as a ‘Low Carbon Capital’ (to be published in Spring 2010) and to inform the wider debate on the transition to the low carbon economy in London.
The move towards a low carbon economy presents significant challenges and economic opportunities for London, all associated with both mitigating and adapting to climate change. The development of new carbon technologies for one, have proven to stimulate innovation and provide employment opportunities in new and existing green industries. A recently published report by Innovas suggests that the Low Carbon and Environmental Goods and Services market was worth £21 billion in 2007/08 in London 3.
The Mayor of London has published several headline studies and an action plan for the capital to lead on this agenda. To meet these targets, the city needs to harness its key strengths as a global centre for finance, business services, transport and creative industries. . The existing disparate nature of the low carbon economy will need headline priorities in order to focus efforts accordingly.
This study builds on existing work by highlighting key potential economic opportunities and challenges deriving from London’s strengths, therefore enabling clear priorities to be identified. The specific areas of focus are to:
• Identify the priorities for London in creating a low carbon economy;
• Identify the priorities for London’s economy in adapting to climate change; and
• Generate support and develop a consensus for action.
2 LSE (2008) London’s Place in the UK Economy, 2008-09, City of London 3 Innovas (2009) Low Carbon and Environmental Goods and Services: An Industry Analysis, BERR
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This report is completed by three appendices summarising the approach and methodology (Appendix A), literature review (Appendix B) and the stakeholder consultation process (Appendix C).
2. LONDON’S STRENGTHS AND STRATEGIC DRIVERS
Key to identifying priorities for London in a low carbon economy is to build on the strengths that London has as a cultural, business and finance centre as well as the policy drivers at a national, regional and local level. This section identifies the strengths and strategic drivers that have been used in the analysis.
2.1. London’s Strengths
London’s strengths as a cultural, business and finance centre are already well documented, such as in the recent Ernst and Young report 4. Based on a review of these, and discussions with the project steering group, we have developed these further:
• London as a centre for Financial Markets (including banking and carbon markets);
• London as a Business Centre (including sustainable construction and environmental goods and services);
• London as a Knowledge and Research and Development (R&D) Centre;
• London as a Centre for Creative Industries;
• London as a Transport Hub; and
• London as a World Class City to Live In and Visit.
London has been quick to respond to and lead the sustainable development agenda, having produced a raft of strategies, policies and initiatives developed by public bodies and agencies at both citywide and individual Borough level. Its unique two-tier system of local and regional governance has facilitated this response.
The Boroughs have a tremendous opportunity to show leadership on the low carbon agenda. With responsibility for waste collection, planning applications and environmental services, they are in the frontline of service delivery. Building low carbon tools, technology and messages into this delivery will have a transformational effect on London as a low carbon city.
This strong regional governance is key to London’s ability to lead and put in place the necessary policy framework to meet the challenging international goals that will set the UK on the road to leadership in tackling climate change. The various regional strategies that have recently been developed (or are in the process of development) provide a clear framework for action in the areas identified as key strategic drivers for London.
4 Prospectus for London, the Low Carbon Capital, Ernst & Young, 27th March 2009.
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2.2. Key Drivers for Action in London
Key drivers for promoting a low carbon, resilient London can be divided between:
• Climate change mitigation – actions associated with reducing carbon emissions and becoming a low carbon economy. London has already taken a leadership position in climate mitigation through various commitments such as the Mayor’s target of a 60% reduction in carbon emissions by 2025. Further information on relevant London policies and strategies are contained in Appendix B. This target precedes the UK Government’s commitment made in the Climate Change Act 2008 for an 80% reduction in greenhouse gases from 1990 levels by 2050.
• Climate change adaptation – there is widespread agreement that our climate is changing and the impact is already visible in the UK and London. The degree to which the climate will continue to change and the level of adaptation required will depend on our chosen development path. The draft 2008 London Climate Change Adaptation Strategy, published in 2008 by the Mayor of London, identifies how climate change will impact London and sets out a series of actions to manage those impacts.
Based on a review of existing policies and literature we have identified a series of drivers for action across both climate change mitigation and adaptation. These can be used to start to frame potential priority actions for a “low carbon, climate resilient economy” and are outlined below:
Decarbonise London’s building stock Domestic, commercial and public sector activity in buildings accounts for over 70% of London’s carbon emissions. The Mayor of London’s Climate Change Action Plan reflects this balance, with such buildings accounting for the majority (78%) of London’s 2025 carbon reduction. Energy use in existing homes is the largest single source of carbon emissions in London, at nearly 40% of the total. Due to the large proportion of emissions coming from the existing building stock, retrofitting existing buildings will be an important driver for low carbon activity in the construction industry, alongside the drive to reduce the emissions from new buildings. Increase renewable microgeneration Within the Mayor's Energy Strategy, the Mayor of London has set a target for 14% of London’s electricity to come from renewable energy by 2010. In addition, the London Plan states that all new developments must have a proportion of their renewable energy coming from combined heat and power. The Government has introduced financial incentives to encourage the take-up and generation of renewable energy, such as ‘feed-in tariffs’ which guarantee a price for renewable energy.
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Decarbonisation of energy supply / Shift to decentralised energy The Mayor of London’s Climate Change Action Plan includes a target for 25% of London’s heat and electricity to come from decentralised energy sources by 2025. The Mayor’s Powering Ahead report sets out his plan for delivering decentralised energy in London. Furthermore, the London Development Agency has allocated up to £16 million for decentralised energy projects starting in 2009/10 and for the subsequent four years.
Decarbonise London’s transport network Ground based transport currently contributes 22% of London’s greenhouse gas emissions, of which car and freight traffic represent nearly three quarters of emissions. The Mayor's Climate Change Action Plan sets out how annual transport emissions can be cut by 4.3 million tonnes as part of an overall target reduction of 60% by 2025.
Two key documents are London’s draft Transport Strategy and Electric Vehicle Delivery Plan, which identify low carbon vehicle technologies as a key opportunity for the city. In addition, London has set targets to encourage the use of more sustainable modes of transport and reducing the need to travel. This can be achieved through a number of mechanisms including infrastructure investment, service improvements and promotion of smarter travel initiatives.
Procurement of low carbon products and services Procurement of low carbon products and services presents a key element of the Government’s strategy to move to a low carbon economy. Given the size and scale of the public sector in London (including central Government departments, Boroughs and other agencies); there is an opportunity to disseminate low carbon procurement practices (and their associated impacts) more widely. The LCE (London Centre of Excellence) Sustainable Procurement project 5, for example, developed and delivered practical tools in the context of three specific local authority procurement exercises.
Shift to low-carbon waste management practices As part of the Low Carbon Transition Plan, Government has put in place policies to drive the exploitation of the full potential of energy from waste, by discouraging land filling of biomass as far as is practical. The London Plan also highlights the need for collaboration to minimise the waste generated in London, and to increase reuse, recycling and composting. In addition, the London Waste and Recycling Board (LwaRB) has been established to administer funds to tackle the 21 million tonnes of rubbish produced in London each year.
5 See http://www.lcpe.gov.uk/sustainable/
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Adapting infrastructure to future climate change London faces potentially significant impacts from climate change from flood risk, the urban heat island effect, and shortages in water supply. There are additional potential impacts to infrastructure – such as to critical energy and transport infrastructure that could cause widespread disruption to the economy. Stakeholders focussed on this issue as a challenge to be mitigated rather than something that presents significant opportunities for London. The literature review also had a much stronger focus on mitigating climate change rather than adapting to it. Therefore, while we identify the economic opportunities from adapting to climate change where possible, there are more opportunities identified from other key drivers.
An additional prerequisite underpins the drivers outlined above. Developing London’s low carbon skills base will be vital for achieving innovation and productivity and is essential in achieving a low carbon economy. Successful development of a low carbon skills base will therefore be a determining factor in the city’s ability to attract the relevant investment, successfully commercialise appropriate technologies and drive innovation within companies. It will be vital in terms of creating and meeting the city’s future employment needs and in retaining its leadership status. The London Energy Partnership study, ‘Skills Gap in the Energy Efficiency and Renewable Energy Sector in London’, funded by the London Development Agency, identifies that there are challenges to London’s workforce in a number of sectors, particularly those relating to energy and the built environment. The Mayor’s draft Economic Development Strategy for Greater London recognises the need to develop the capacity of business to assist with climate change adaptation and mitigation. In the following sections we explore each of London’s identified strengths in the context of these policy drivers and the information gathered during research and stakeholder engagement. Our analysis process presumes that where there is an overlap of a strength, key policy driver and existing practice or stakeholder commitment for change, these areas could form potential priority actions. Each section includes opportunities and challenges faced by London in terms of achieving low carbon leadership, along with key recommendations for action. Recommendations for action are set, where appropriate, for business, national, regional and local government. The recommendations are based on the scope of work for this study, consisting of stakeholder consultation and literature review.
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3. DEVELOPMENT OF MARKET OPPORTUNITIES: FINANCIAL MARKETS
3.1. Context
The Global Financial Centres Index (GFCI), published in September 2009, provides ratings for 62 financial centres. It identifies London and New York as the only truly global financial centres, with London still leading New York in all areas of competitiveness 6.
The key components of London’s financial markets in the context of this study are:
• Banking and Financial Markets : From the latest GFCI ratings of the top five financial centres, London appears to have suffered the least as a result of the financial crisis. It remains in the top quartile of nearly all factors and leads all industry sector sub-indices (including asset management, government and regulatory, insurance and professional services). Furthermore, London leads other centres in all five areas of competitiveness (people, business environment, market access, infrastructure and general competitiveness).
• Carbon Markets : The UK ETS was the world’s first economy-wide greenhouse gas emissions trading scheme, operating from London over 2002 - 2006, and
resulting in a reduction of 5.9 million tonnes CO 2e against participants’ baselines in the 2004 compliance period. The scheme positioned London as a leader in both the trading and monitoring, reporting and verification (MRV) of carbon reduction permits, which helped to establish London as the centre for a Europe wide emission trading scheme - the EU ETS. London is now recognised as the “carbon finance hub of the world” 7. The UK is responsible for nearly 60% of purchases of Clean Development Mechanism (CDM) carbon credits, with London-based institutions, such as compliance buyers, project developers and banks, accounting for the bulk of this. European Climate Exchange contracts, traded on the ICE Futures Europe Exchange in London, made up 91% of futures trading on the EU ETS in 2008 8. London is also home to 75% of all carbon market trading desks, has the highest number of companies in the top 20 of CDM buyers worldwide (40%) and has 80% of all carbon market brokering firms 9.
In the following sections, we consider the key drivers, thoughts from stakeholders and the economic opportunities and challenges presented by London’s strength as a financial centre. We conclude with our recommendations for action at business, national, regional and local levels.
6 Z/Yen (2009) The Global Financial Centres Index 7 Cited in Climate Change Corporation (2008) ‘EU ETS: The winners and losers of EU carbon trading’, 8 GLA Economics (2009) Economic Evidence Base, City of London 9 Ernst and Young (2009) Prospectus for London, the Low Carbon Capital
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3.2. Key Drivers for London
Through the introduction of long-term, clear, consistent and credible policies, the UK Government has put in place a framework for encouraging business confidence. This will facilitate the timely development of innovative products and services to speed the transition to a low carbon economy.
The Government will also be looking to the private financial sector to raise the necessary capital to allow markets to move in the direction of a low carbon economy. As the UK’s financial capital, London will have to play a significant role in the realisation of the Government’s vision. London’s GDP represents around 20% of the UK’s entire output, and is bigger than many national economies 10 .
The market for low carbon technologies and services associated with the key drivers identified in Section 2.2 will require significant financial stimulus. This will allow new companies to enter the market and support the acceleration of market development for these new technologies, many of which would otherwise struggle to compete against traditional high carbon emitting alternatives.
Large scale investment, estimated at £200 billion 11 , will also be required to replace the UK’s ageing electricity infrastructure and to implement initiatives to meet the government’s renewable energy targets – with a significant proportion of the UK’s financial business activity occurring in London this could translate to significant economic opportunities for London.
The financing of low carbon projects in London cover a range of areas including buildings, transport, energy generation, adaptation to climate change and waste management 12 .
Stakeholder Consultation
All of the consulted stakeholders agreed that London plays a key role as a global centre for financial markets. Looking ahead, many stated that the challenge for London will be retaining its leadership as a financial and carbon trading centre, given the potential competition from New York and other cities. There was recognition that London’s financial markets are largely driven by global organisations, so global change is required for the City to really benefit from the demand for low carbon goods and services.
Stakeholders identified several opportunities for London, including creating and generating employment in financial services through the expansion of the carbon markets and investment in renewables.
However, a key challenge identified was the need to create ‘critical mass’ for attracting project investment by the large financial houses. A solution discussed could be for Boroughs/projects/businesses to group together to create this critical mass, for example, to establish an investment fund that would aggregate smaller projects and programmes covering
10 LSE (2009) London’s Place in the UK Economy, 2009-10; and GLA (2001) Investing in London: The case for the capital 11 Ofgem (2009) Project Discovery Energy Market Scenarios 12 For example the Mayor of London has identified priority opportunity areas for London’s low carbon economy to lie in building retrofits, decentralised energy schemes, electric vehicles, and the roll out of energy from waste and recycling plant.
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carbon mitigation and/or adaptation. This would build upon existing London-wide government funding programmes such as the London Green Fund.
Private sector stakeholders stated that perhaps the most important pre-requisite for a low carbon economy is a streamlined business environment, where Government makes quick and clearly communicated policy decisions, leaving the private sector to respond in its usually efficient manner. This is discussed further in the following chapter of this report.
3.3. Economic Opportunities and Challenges
This study has identified a series of key economic opportunities and challenges associated with London as a banking, finance and carbon trading centre, and these are discussed below.
3.3.1. Opportunities
Banking and Finance
The development and commercialisation of innovative low carbon technologies requires investment and financing. London’s banking and finance sector is well positioned to help facilitate and finance related business deals, covering such functions as investment, venture capitalism, risk management and financial modelling. Examples of areas in which such skills could be applied include in the development of energy transmission and distribution markets, and to help finance Government-funded programmes to provide low carbon goods and services.
There is increased interest from venture capitalists for innovative products and technologies as evidenced by professional networking events such as those held by the London finance and energy law firm Norton Rose on the topics of Smart Grid, Clean Tech and Carbon Trading. Furthermore, the high attendance by London’s leading financial institutions at the Private Equity and Venture Capital Clean Energy Investor Forum held in London on 19 May 2009 demonstrates both the keen interest on the topic, and the depth of companies operating in the field 13 .
Within the energy sector, there is a rapidly growing range of companies specialising in ‘Smart Grid’ technology – for which Ofgem (the UK electricity regulator) has already set aside £500m of investment. This is supported by the Low Carbon Transition Plan target for rolling out smart meters in all homes by 2020 14 . This would start an overhaul of the UK’s ageing electricity grid, making it both more efficient and flexible for using decentralised and renewable feed-in energy generation. A complementary initiative is the new £20m Government-backed venture capital support fund for clean energy technologies. As this sector grows, there is likely to be an increasing interest in low- carbon companies by investment banks and private equity firms – most of which have their headquarters in London.
13 New Energy World Network (2009), see www.newenergyworldnetwork.com 14 HM Government (2009), Low Carbon Transition Plan
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The Mayor of London has announced cross-sectoral support (the London Green Fund) that could help achieve the ‘critical mass’ required to warrant investment from the main financial investment houses. This includes support for large/community scale building retrofits, decentralised energy schemes, infrastructure for electric vehicles and the roll out of energy from waste and recycling plant.
Alongside this, there are several Government funding programmes (such as those listed below) that will help to catalyse investment in low carbon development and energy supply. This will have positive effects in terms of increasing demand for project appraisal and planning skills covering financial modelling, energy economics, and cost modelling. These include:
• The London Development Agency (LDA) has recently allocated up to £16 million for decentralised energy over the next four years (from 2009/10) to identify and facilitate potential projects and to leverage private sector finance on key strategic schemes;
• The Joint European Support for Sustainable Investment in City Areas (JESSICA) fund has allocated £100 million to London for climate change projects, such as the ground breaking low carbon London Thames Gateway Heat Network, after a deal was signed in October 2009;
• The LDA's programme of retrofitting buildings across London through its £9.5 million Homes Energy Efficiency Programme (HEEP) and Building Energy Efficiency Programme (BEEP) Programme for retrofitting London’s Public Sector Buildings.
There could be increased opportunity for London’s finance sector to play more of a role in such funding programmes, for example, through public-private partnerships with local authorities to deliver low carbon energy projects, such as for retrofitting or decentralised energy.
The global reach of London’s financial services means that the sector is exposed to extreme weather and lack of adaptation. Many financial services still do not consider climate risks when making investment decisions. This exposes investors to significant risk, but also misses the opportunity to stimulate an enormous potential market for adaptation information and services. There are therefore potential opportunities for the financial services sector to assist in identifying the threats and opportunities to London’s economy, and to prepare for further climate change through the advice they offer, the assets they invest in and the business plans they make. These are being addressed by the financial subgroup of the Mayor’s London Climate Change Partnership (LCCP).
Carbon trading
London’s strength and experience in carbon trading provides a solid basis for the city to be a key player in new developments across the globe. Carbon trading presents a significant profit-making opportunity, and According to the World Bank, the carbon market
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grew to $126 billion last year, up from $63 billion in 2007 and nearly 12 times the value in 2005 15 .
On the assumption that a global agreement is reached either in or post-Copenhagen, there could be significant opportunities for increased carbon trading, with London able to apply its skills to gain from the economies of the carbon trading markets. International carbon trading will help to reduce the costs of mitigation by allowing emission reductions to be made in countries where they are least expensive.
From 2013 at least half of the allowances under the EU ETS will be auctioned instead of being allocated to businesses free of charge. This could create additional market activity, with London already leading the way on carbon auction systems through the UK’s new auction-based carbon trading scheme, the CRC Energy Efficiency Scheme (formerly known as the Carbon Reduction Commitment), for more information see Appendix B.
While there is much focus on carbon trading as an economic instrument to address climate change mitigation, there are also resource scarcity issues across the globe associated with adapting to the impacts of climate change, such as water supply issues and rapid deforestation. There could be increased activity in water permit and forest carbon trading (and related instruments) in future, in which London would be well placed to participate.
The need for bespoke solutions at a Borough level can also be a barrier for investment, as small local projects tend not to attract financing from large investors. There is therefore an opportunity for Boroughs to play a role in creating an investment fund (or another mechanism to aggregate smaller projects) that could harness backing by the larger financial investment houses. This investment could focus on non-domestic opportunities and complement HEEP. It will support small business and microgeneration projects and help bring new technologies and products to market and dovetail with existing funding mechanisms such as HEEP and BEEP.
Case Study
London Accord
Established in May 2007, the London Accord is a unique collaboration between investment banks, research houses, academics and NGOs to help unlock the power of the markets in tackling climate change. At its formation, it was the largest cooperative project in the world on investment opportunities related to climate change. Teams from the leading investment banks and research houses have produced the London Accord's core research reports on various sustainability topics which has enabled better measurement of links between investment, finance and 'carbon' returns and better understanding of interactions between public policy and investment decisions.
The Accord offers policymakers an insight, which they may not otherwise have, and gives the financial services industry a way of engaging with society on long-term issues. It is a good example of a cooperative research programme to assess investment from the banking and financial sector in climate change initiatives.
15 World Bank (2009), State and Trends of the Carbon Market
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http://www.london-accord.co.uk
3.3.2. Challenges
Challenges for London’s financial sector to take a leading role in the low carbon economy, as identified in the Mayor’s Climate Change Adaptation Strategy, include:
• The global credit crisis has reduced available financing for new renewable energy projects. In addition, for project deals successfully closed, the cost of capital has been higher;
• Carbon markets are still evolving, with uncertainty as to how the development and agreement of an international emissions trading scheme will play out;
• The cost of carbon is not priced into goods and services, which limits the attractiveness of low carbon products;
• There is a suite of possible carbon mitigation measures and technologies available, the markets for many of which are immature and can present investment risks;
• Investment projects must reach a ‘critical mass’ to warrant investment from the main financial houses.
These challenges reflect those of many other global financial centres as they strive to address climate change. They are likely to become easier to address as the global economy recovers, carbon markets develop, and incentives for carbon reduction become better established and ingrained as part of standard business operations.
3.4. Recommendations for Action
Taking into account the key drivers, stakeholder views and economic opportunities and challenges identified above, we have identified the following recommendations for action:
• London business associations should take a lead - in hosting and promoting further events for investors, venture capitalists, businesses and innovators to share information and knowledge about low carbon projects, with the goal of overcoming barriers to investment, market creation and the commercialisation of innovative technologies. The LDA could play a role here to help establish support from associations including the London Chambers of Commerce and CBI London. Sector or issue-specific organisations could be brought in for events and knowledge sharing around particular technologies or industries. In addition, the London Accord holds and promotes a wide range of seminars, conferences and events involving the private, public and academic sectors, and these provide additional opportunities for engagement. Think London also promotes international investment into the city.
• Aggregated Low Carbon Investment Fund - explore the possibility of creating investment vehicles which will encourage investment in climate change related
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programmes at a macro and micro level, with an initial focus around retrofitting existing domestic building stock. This would help address a particular challenge identified by stakeholders: creating ‘critical mass’ on low carbon projects to warrant larger scale investment, such as by City financial houses. This should build on and complement existing initiatives such as the LDA's Homes Energy Efficiency Programme (HEEP), London’s Green Fund, the JESSICA fund, and decentralised energy funding planned to be delivered by the LDA and London Councils.
• National Government to work with the Financial Services Authority - to investigate how London’s financial sector can facilitate in the identification of threats and opportunities to London’s economy with respect to adapting to climate change, and in preparing for climate change through the advice they offer, the assets they invest in and the business plans they make. The FSA produces Annual Risk Outlook briefings, which include details of climate change risk, and these provide a useful model for developing further guidance and advice around climate change adaptation.
• Ensure that there is a link-up - between regional government and the ongoing, cutting edge energy/climate research being undertaken by London financial institutions as part of the London Accord, and policy making at the regional level. The GLA and other bodies could engage further with the London Accord in order to better understand the latest financial sector thinking and emerging trends, thus enabling them to develop policies which will maximise the flow of private sector capital into London’s low carbon economy.
• Raise awareness locally - for an aggregated low carbon investment fund to be successful, Boroughs would need to drive project/business participation, as well as raising awareness and buy-in.
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4. DEVELOPMENT OF MARKET OPPORTUNITIES: BUSINESS CENTRE
4.1. Context
As a leading global financial centre, it is no surprise that London is a well-established business centre. London supports companies involved in a range of activities including legal, accounting, consulting, information technology, construction and other specialist services 16 .
In the following sections, we consider the key drivers, thoughts from stakeholders and the economic opportunities and challenges presented by London’s strength as a business centre. We conclude with our recommendations for action at business, national, regional and local levels.
4.2. Key Drivers for London
The private sector will play a key role in supporting and implementing Government policy and targets around the low carbon economy (identified in Section 2.2 of this report). Environmental regulations are becoming increasingly complex, and organisations may struggle to assign necessary resources to meeting the challenges associated with policy implementation. The parts of the business sector on which this chapter is focused can play an important role in assisting both private and public sector organisations.
Globalisation and London’s world city status means that it is uniquely placed to provide the skills, advice and products that the world needs to adapt to climate change. Lawyers, accountants, management consultants, architects and engineers will all need to advise their clients on the ‘reasonably foreseeable’ impacts of climate change. This presents opportunities for all relevant businesses, including the construction related professions, architects, surveyors etc.
The construction industry has seen a shift in recent years, driven by Government regulation, towards higher demand for low carbon, sustainable buildings. This shift is set to continue with the UK Government’s goal of all new homes being zero carbon by 2016, and further targets to be set for non-commercial buildings. Ernst and Young recently reported on the economic opportunities for London, if it positions itself at the forefront of a low carbon economy. For example, the opportunity from the retrofitting elements of the Mayor’s climate change programme alone would require an average annual investment of £325m between 2009 and 2025. Opportunities for London’s economy are further explored in the following section of this report.
16 LSE (2009) London’s Place in the UK Economy, City of London
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Stakeholder Consultation
Stakeholders agreed that it is vital to attract investment into London so that it capitalises on investment into new solutions and renewables. Many stated that there was a need for more ‘commercialisation’ of British technology – London is great at creating ideas and solutions but falters in terms of investment into bringing them to market. This point was made particularly in relation to the challenges around London as a Knowledge and R&D Centre. Stakeholders also identified a need for giving companies incentives to innovate. There is also a danger that small London businesses are losing out in terms of contracts going to large organisations (that may not be based in London).
There was confidence that the private sector is very good at coming up with innovative solutions, many of which are yet to be designed, and that the best thing Government can do is to create an efficient business environment where policy is communicated clearly, with minimal uncertainty. This would allow businesses to respond most efficiently.
Stakeholders also highlighted the opportunities that could be realised through:
• Utilising/redeveloping previously underused industrial space as low carbon space. There are a number of unused, vacant and derelict buildings throughout the city fringes of London, which could potentially be redeveloped into low carbon developments. Examples include the recent push to redeveloping the Battersea/Nine Elms area into a world class zero carbon development, the London Borough of Barking and Dagenham’s development of its Sustainable Industrial Park, and the City of London’s work to identify locations for energy centres in its ‘city fringe’ area, as part of its current decentralised energy network feasibility study.
• Involving manufacturing/production. There is potential for the manufacturing sector to become more involved in production of low carbon goods and services, including manufacturing batteries for electric cars and smart meters. Specifically, the London Development Agency plans to transform East London into a world-renowned centre for green industry and sustainable development, a Green Enterprise District, in the same way that Canary Wharf is a global financial centre.
• Increasing the provision of ‘carbon accounting’ skills that will be required within traditional accountancy and related roles.
Private sector stakeholders saw that an important prerequisite for a low carbon economy was to develop a streamlined business environment, which would consist of:
• Government setting clear targets for carbon emission reduction at a local level;
• Government using a combination of ‘carrot’ and ‘stick’ approaches to reduce carbon emissions and encourage low carbon industries;
• Where Government implements market intervention measures, to do this quickly and clearly, so as to give certainty and clarity to the private sector;
• Government intervention should involve joined-up action both (i) vertically between national, regional and local Government; and (ii) horizontally by providing coordinated and targeted initiatives across central Departments, Boroughs and agencies.
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4.3. Economic Opportunities & Challenges
This study has identified a series of key economic opportunities and challenges associated with London as a business centre, and these are discussed below.
4.3.1. Opportunities
Legal Services
London has six of the world’s leading legal advisors as well as a number of law firms in the climate change & energy markets 17 , for which there are economic opportunities in London and elsewhere, to:
• Advise on the contractual matters of low carbon energy and renewables schemes;
• Advise on the contractual aspects of procurement for low carbon energy or state-of-the-art utility systems suitable for alternative energy distribution;
• Advise on rules and regulations in the emissions trading markets, in particular the EU Emissions Trading Scheme, the Clean Development Mechanism, and carbon trading;
• Act and fundraise for clean technology companies and environmentally compatible energy schemes; and
• Advise on current and emerging policy and regulation.
There are opportunities to apply these capabilities to low carbon schemes in London. An example of this would be decentralised energy networks, which are receiving much support by the Mayor, Boroughs and London First. This includes advising clients on how to comply with and negotiate complex regulations, using precedent cases where relevant to show the best way to deal with issues such as implications of the use of private-wire energy networks, feeding back microgenerated energy into the national grid.
London’s legal sector also specialises in advising on intellectual property rights, which is key to facilitating the commercialisation of new low carbon technology, products and services, such as protecting the resulting intellectual property.
There is a large opportunity in London for decentralised energy, especially through the use of combined heat and power (CHP) and some types of renewable energy such as energy from waste. Decentralised energy networks can raise various legal issues associated with competition laws, ensuring security of supply, and valid frameworks for public private partnerships to operate within – all of which create a need for strong legal advisory services.
17 The nature of advice covers a range of issues, including environmental, regulatory, construction and property, corporate and intellectual property matters
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Information and Communication Technology (ICT)
As businesses attempt to reduce their energy consumption (both internally and across supply chains), the information and communication technology (ICT) sector stands to gain significantly from the drive towards a low carbon economy. Research suggests that green market opportunities, in terms of the value of emissions abated and energy-related cost savings, puts the value of green ICT between US$946.5 billion and US$1.2 trillion over the next five years 18 . Global low carbon electronics design markets are set to grow from US$1 billion in 2008 to US$20 billion in 2012 to US$51 billion in 2019.
The ICT sector’s key abatement opportunities include improved logistics, ‘smart grid’ and smart building technologies, building energy management, remote office capabilities, environmentally optimised data centres, dematerialisation (turning physical products into digital products) and equipment recycling.
Case Study
Greenstone Carbon Management
Greenstone Carbon Management is a London based start-up company specialising in carbon solutions comprising both consulting advice, and a suite of carbon management tools. These services cover:
Carbon readiness assessment
Carbon measurement
Carbon reduction strategies
The company is a good example of how a rapidly developing start-up company is providing the tools for organisations to progress towards a low carbon agenda. Greenstone supports organisations to measure and manage carbon emissions. Central to Greenstone's proposition is its innovative software that provides organisations with a robust carbon management and accounting solution. The software enables organisations to measure, manage, plan, store and report emission data and track performance on carbon footprints at multiple organisational levels, covering energy, travel and transport, together with waste and water consumption.
Greenstone was identified as a leading UK provider and a global challenger brand in the carbon management software market in a Verdantix study published in October 2009 19 . In 2008, Greenstone was listed in the 'Top 100 Low Carbon Pioneers' for the second year running by CNBC Europe – a leading business and finance magazine 20 .
http://www.greenstonecarbon.com/
Market leaders like Hewlett Packard, IBM and Microsoft, and smaller but rapidly growing London firms like Greenstone Carbon and Verisae, are offering innovative products and services. These include supply chain modelling systems that enable companies to visually manage and model energy data; manage server consolidation and virtualisation; and use ‘smart grid’ energy management technologies. As the headquarters of many
18 Insight Research Corp, 2008, Communicating GREEN: Telecommunications Value in Promoting Environmental Improvement, 2008 – 2013; World Wildlife Fund (2008) From Fossil to Future with Innovative ICT Solutions 19 Verdantix (2009) Green Quadrant: Carbon Management Software (Global)
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multinational corporations, there are opportunities in London for sophisticated ICT systems that can monitor and manage the energy use of a company’s domestic and international business operations.
The UK is also well placed in low carbon electronics design, particularly in power management devices that reduce costs and increase efficiency. There is considerable long-term potential from the emerging field of plastic electronics. The UK has been at the forefront of much pioneering research and has world-leading firms in this sector, many of which are based in London, with most elements of an embryonic supply chain in place 21 .
Accounting Services
Led by London’s ‘big four’ accountancy firms, London’s accountancy sector is grounded in core skills such as assurance, tax, transactions and advisory. Each of the big four firms have dedicated ‘energy and climate change’ teams to help businesses understand regulatory compliance and opportunities, explore and execute commercial transactions, monitor performance and assure public disclosures on progress. London is therefore at the cutting edge of ‘green accountancy’, something that will become more common as life-cycle costing, carbon accounting and related practices become standard practice business activities. London’s accountancy firms also have expertise in the energy and utility markets, for which regulations (overseen by the regulator Ofgem) are changing to require more consideration for energy efficiency and carbon reduction in energy transmission and distribution. As low carbon regulation evolves, it is likely that the market opportunity to advise on low carbon energy will expand.
Businesses participating in the compulsory UK Carbon Reduction Commitment, the EU ETS and any future trading schemes will need to use legal, ICT and/or accountancy services to ensure that they comply with the regulations and have the systems in place to monitor and audit carbon emissions. London’s business services are also well poised to help kick off renewable energy projects and become more involved in global carbon offset deals, to support the outcomes and goals established at the Copenhagen conference.
Construction Sector London’s construction sector is an important contributor to its economy, employing 8.4% of the London workforce. As policy continues to drive the development of low carbon new and existing buildings, the industry is likely to increasingly rely on low carbon knowledge, skills and products. All forms of construction-related skills will be in demand – including procurement, engineering, architecture, and various building trades.
Domestic, commercial and public sector activity in buildings accounts for over 70% of London’s carbon emissions 22 . Energy use in existing homes is the largest single source of carbon emissions in London, at nearly 40% of the total. The Mayor of London’s Climate Change Action Plan reflects this balance, with such buildings accounting for the majority (78%) of London’s 2025 carbon reduction. Due to the large proportion of
20 See http://www.cnbcmagazine.com/ 21 According to the UK Low Carbon Industrial Strategy, the global market for plastic electronics is currently around $1 billion but forecast to grow to $20 billion in 2012 and as much as $57 billion in 2019. 22 See Mayor of London’s Climate Change Strategy in Appendix B
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emissions coming from existing building stock, retrofitting buildings will be important, alongside measures to reduce the emissions from new buildings. For example, 70% of today’s existing building stock will still be around in 2050.
The UK already has a framework in place for rating and assessing new building stock, namely the Code for Sustainable Homes (CSH) and the BRE Energy Assessment Method (BREEAM) for non-commercial buildings. These regulations have led to a flurry of activity amongst UK developers, architects and consultants, all aiming to design low carbon buildings. In London, the latest draft replacement London Plan aims to set targets for all residential buildings to be zero carbon by 2016, and all non-domestic buildings to be zero carbon by 2019. These are ambitious targets for the city and are likely to trigger increasing demand for low carbon skills in the built environment 23 . A key issue in London is its carbon emissions from the existing building stock. Retrofitting buildings for a city the size of London represents a large undertaking, and something that will require vast amounts of skilled labour. Most of the required low carbon skills will be in the field of ‘building services’, for which training is already available through the Sector Skills Council for Building Services Engineering, in the form of short ‘top up’ courses covering environmental technology, micro-generation and other low carbon building service technicalities. Also, legal issues such as who pays for building retrofits (owner or occupier), and project financing requirements are likely to create demand for other professional services.
Case Study
powerPerfector - Voltage Power Optimisation Technology
Voltage Power Optimisation (VPO) is a unique, proven technology introduced to the UK by a London based company called powerPerfector. It reduces unnecessary energy consumption caused by the difference between the actual electricity supply voltage (up to 253 volts) and the voltage required by electrical equipment (220 volts), as well as improving electrical efficiency through the mitigation of poor power quality. VPO deals with the UK’s inherent issue of electricity over-usage and presents a number of benefits:
Cuts energy use and carbon emissions of building and factory sites by up to 20%
Reduces electricity costs by up to 20%, as well as cutting maintenance costs (5-10%) and the capital cost of replacing equipment early
Prolongs the life and reliability of all electrical equipment
Creates a more efficient and reliable electrical supply, as well as protecting a client’s entire electrical infrastructure from power spikes up to 25,000 volts. (Power spikes can cause catastrophic damage, and will become more common as the UK deals with a forecasted increase in widespread power shortage issues)
Provides an effective and straightforward solution for reducing carbon emissions from new and existing buildings – which is one of the key challenges for carbon reduction facing London and the UK as a whole
It gives businesses, manufacturers, councils and government the opportunity to micro- manage and improve their own power supply
23 Mayor of London (2009) The London Plan – Consultation Draft Replacement Plan
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powerPerfector has grown substantially over the last few years due to the rapid increase in the take- up of the technology, and win-win benefits in terms of cost and carbon reduction. Staff numbers in the company increased from 13 in 2008 to 80 in 2009. The company is presented with a variety of opportunities for expanding the business, with plans to further increase London staff numbers, expand international operations and possibly establish a UK-based production plant (most goods are currently shipped from the manufacturer in Japan). powerPerfector presents a snapshot example of the innovative, low carbon technology activity happening in London.
http://www.powerperfector.com
Case Study
Camden Abseiling Insulation Project
This is an innovative scheme whereby a London Borough is investing substantially in a retrofit programme, delivering it in partnership with local business. The innovation has resulted in more cost-effective delivery, enabling more money to be spent on the low carbon aspect.
Camden Council, working in partnership with Avalon Abseiling and Southern Electric, is the first council in the country to use abseilers to access and insulate cavity walls. Cavity wall insulation is the most effective way to stop heat loss from homes to ensure they are warm in the winter and cool in the summer. Without using abseiling the only way to install cavity wall insulation into tower blocks and high-rise homes is to use scaffolding. Scaffolding is expensive and unpopular with residents. The cost also often deters councils from insulating. Using abseiling is much quicker, around 40% cheaper than using scaffolding, and causes fewer disturbances to residents.
Camden Council is investing more than £3.7 million pounds in the cavity wall insulation programme over five years, to improve the insulation of tenants’ homes. Southern Electric is providing more than £100,000 for the cost of insulating the initial 500 homes, as part of the Carbon Emissions Reduction Target (CERT) programme. Camden will save time and money with the abseiling and residents will be able to save up to £80 per year on their energy bills.
http://www.camden.gov.uk/ccm/content/housing/housing-news/2009/october/abseiling-insulation- project--a-uk-first.en
4.3.2. Challenges
Low Carbon Energy
With respect to large-scale renewable energy generation, London has a limited natural resources (wind and wave) and limited low, cost industrial land adjacent to suitable dock and port facilities. This limits its capability to support the manufacturing of wind turbines and the related elements required for offshore wind farms. The neighbouring regions of the South East and East of England have historical strengths in supporting the offshore energy sector and have established companies and facilities. The South West has already been named as a ‘low carbon economic area’ by the UK Government for marine energies and this plays to its industrial and natural strengths. In contrast, London would have to start from scratch to develop such a capability. It would be more sensible to develop a collaborative approach with other regions whereby London’s strengths in research and development and financing can be much better employed and fill supply chain gaps.
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Stakeholders noted that there is no pan-London agreement on the specific renewable technologies to support, with the market left to determine which are the most viable. This presents a challenge in that businesses are not sure which technology has the most investment potential. There has been some support shown in response to the Mayor’s recent decentralised energy study 24 that could realise not only the efficiency benefits of decentralised energy but also could be used to disseminate renewable sources (decentralised energy is not the same as renewable energy) as well as generate the expertise and investment needed to spur other forms of green infrastructure and technology. This could lead the way for other renewable technologies such as solar, where there is arguably more potential.
Case Study
Solar Century
An example of an SME that is using an innovative approach to decarbonising schools which could be applied to other buildings.
Solar Century was founded in 1998 to design and supply solar energy solutions through the use of solar photovoltaics and solar thermal in buildings. Today, Solar Century is a small company of over 110 people. The team has an eclectic skills base and includes designers, engineers, project managers, consultants, logistics and support staff from a broad range of backgrounds including the oil and power industries, environmental groups, construction, the armed forces, government, development and aid/environmental charities, the IT industry, and investment banking.
The most unique aspect of the company is the Solar4Schools programme. The programme seeks to deliver half price solar photovoltaics to all types of educational buildings across the UK as part of the Government's Low Carbon Buildings programme. They have developed a standardised 4kWp system, to help reduce cost, which is being offered at approximately £20,000. In addition Solar Century provides each of the successful schools with a free activity-based educational pack. The bespoke pack is intended to help educate and inform pupils about the challenge of climate change, and to highlight the importance of efficient energy use and renewable energy.
http://www.solarcentury.co.uk
Carbon Pricing The Mayor of London’s Climate Change Action Plan acknowledges that the current lack of an implicit ‘carbon price’ on products is a key issue and an opportunity, as putting a price on carbon would incentivise markets for low carbon goods. The Stern Review on The Economics of Climate Change explored creating a global price for carbon, and while there are currently no plans in the UK to introduce carbon pricing, it remains a key opportunity for decarbonising consumption and promoting growth in low carbon goods and services.
24 Mayor of London, London First, London Councils and London Development Agency (2009) Powering Ahead - Delivering Low Carbon Energy For London
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Small and Medium Enterprises (SMEs) Small and Medium Enterprises (SMEs) account for 99.8% of London’s businesses and are responsible for 48% of London’s business employment 25 but have yet to make a proportionate impact in the low carbon sector. During the stakeholder consultation, two chambers of commerce both identified an interest from their members to operate more sustainably.
A number of challenges have been identified for SMEs:
• During the stakeholder engagement, it emerged that there is a lack of awareness around a standard accreditation system to encourage SMEs to operate in a sustainable way. Whilst there are number of schemes that could be used, such as the Mayor’s Green Procurement Code, there are clear opportunities for better promotion of these;
• SMEs interested in recycling and safe disposal of waste encounter barriers including inadequate access to services, large upfront costs charged by waste and recycling companies, and inadequate support in waste collection from councils. Wider provision of commercial waste recycling/collection services by local authorities, perhaps subsidised by Government or through commercial business rates, would help to address this issue;
• Public sector tenders are perceived to have a lengthy bidding process that acts as a disincentive for SMEs to apply, putting large companies at an advantage. Simplifying the procurement/bid process could encourage more interest from SMEs, helping to develop new “green” SMEs and therefore creating new markets.
4.4. Recommendations for Action
Taking into account the key drivers, stakeholder views and economic opportunities and challenges outlined above, we have identified the following recommendations for action:
• Continue a dialogue between regional government and the London business community to help SMEs better understand the opportunities and risks of the low carbon economy . Bolster the dialogue between business (SMEs) and key regional partners, including Government agencies and public sector. This would increase the range of business input into, and assist in streamlining, the policymaking environment and provide a mechanism for giving further support to SMEs. Links could be created between the GLA, for example, the Federation of Small Business London Policy Unit and London Chamber of Commerce . Business Link would play a key role in delivering support and advice services .
• National government to develop mechanisms to support SME’s - SME’s in London make up to 90% of all businesses in the capital providing nearly 2 million jobs 26 . The national government should develop a strategy to advise SME’s around Carbon
25 BIS National Statistics (2008) Small and Medium sized Enterprise statistics for the UK and regions 26 Federation for Small Businesses (March 2008) Keeping London Open for Business
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Reduction and Climate Change Risk. The Carbon Trust’s remit should be expanded to work with communities of SME’s that want to work collectively to reduce their Carbon Footprint, which will offer them saving in both carbon and cost.
• Regional government to exploit London’s business services and R&D strengths - to support the manufacturing and installation of large-scale renewable energy plant across other UK regions. An ‘investment chain’ could be created (drawing on a fuller understanding of London’s strengths in the supply value chain) driving support from research and development through to project finance and investment.
• Regional government to identify specific opportunities for London’s business sector, post-Copenhagen – following the Copenhagen Conference, a London- specific event could be convened to identify and take forward the resulting benefits and opportunities for the business services sector. The event could be led by the City of London, London First and the GLA, and involve attendees from the city’s key business services communities.
• Consult with London’s employers – Regional government to periodically consult with London’s businesses to identify low carbon skill gaps, linking the findings to the training offered by existing academies, including the Mayor of London’s Accord to upgrade the city’s existing housing stock. The LDA is investing in a brokerage approach to open up the jobs and skills opportunities associated with Mayoral programmes on retrofitting and decentralised energy. This consultation could be done through bodies including London First, London Chambers of Commerce and the Federation of Small Businesses’ London Policy Unit.
• Local Government Encouraging SMEs – explore developing an accreditation system that local businesses recognise (or promoting existing green accreditation standards such as the Mayors Green Procurement Code for businesses) to increase awareness amongst SMEs of London’s green accreditation standards. This could be extended to form a pan-London approach to SME green accreditation, and engagement could be driven through the Federation of Small Businesses’ London Policy Unit and the London Chambers of Commerce.
Case Study
Islington Climate Change Partnership
This is an example of a London Borough taking the lead and collaborating with local businesses.
Islington was one of the first local areas to commit to reducing its carbon emissions. This led to the formation of The Islington Climate Change Partnership (ICCP), which is a partnership of organisations within Islington that have committed to tackle climate change. Members of the ICCP commit to reducing their carbon emissions by 15% by 2010 or over three years. This is achieved through better energy management and energy saving measures.
Major achievements by the ICCP so far include:
Membership of over 150 organisations
Over 7,000 tonnes of carbon saved
Winning the Trailblazer award at London's first Green 500 awards
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Quoted as best practice by central and regional governments
In November 2006, the Centre for Sustainable Energy was commissioned to carry out a carbon baseline study. The study was based on a select group of organisations making up 10% of Islington's total carbon emissions. The study can be downloaded from the ICCP website. Other London Boroughs are following the ICCP's lead and setting up similar partnerships. http://www.islington.gov.uk/environment/sustainability/sus_climate/iccp
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5. DEVELOPMENT OF MARKET OPPORTUNITIES: KNOWLEDGE AND R&D CENTRE
5.1. Context
London has a long tradition of harnessing knowledge, innovation and skills with a strong presence of a number of world-renowned institutions including universities, research centres and R&D intensive sectors (including pharmaceuticals and aerospace). This is supported by London’s status as a world-class city in which to live and visit its strength as a financial centre and the fact that English is widely recognised as an international language of business.
Research and development in other sectors will help deliver low carbon energy in London. For example, innovation in solar photovoltaic technologies has benefited from developments in consumer and industrial electronics.
London has 17 universities and 80 departments focussing on climate change and renewable energy policy, research and technologies. These include:
• Imperial College’s Grantham Research Institute on Climate Change;
• The ESRC Centre for Climate Change Economics and Policy at the London School of Economics;
• London South Bank University’s Centre for Efficient and Renewable Energy in Buildings; and
• The University of East London’s Institute for Sustainability.
In the following sections, we consider the key drivers, thoughts from stakeholders and the economic opportunities and challenges presented by London’s strength as a centre of knowledge, innovation and skills. We conclude with our recommendations for action at business, national, regional and local levels.
5.2. Key Drivers for London
The rapid evolution of our understanding of the impacts of climate change and potential solutions to overcome these is a strong indicator of the importance of R&D. Building a strong knowledge base around areas that will support the UK’s move towards a low carbon economy and help the country adapt to the future physical impacts on infrastructure and associated services is crucial. By removing barriers and other disincentives and through support for research, development and demonstration, the UK Government has aimed to create the conditions that allow innovation to flourish.
The strong presence of organisations and educational establishments focusing on low carbon research and innovation puts London in an ideal position to take on the challenges the country’s economy faces with regard to finding the most cost-effective solutions to climate change mitigation and adaptation. However, new markets and jobs
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will need to continue to be created to meet this agenda, to attract further investment and avoid thought-leaders and innovators leaving the country.
Case Study
Hydrogen and Fuel Cell Energy Group – Imperial College, London
This case study demonstrates the leading role London’s R&D establishments are taking on renewable technologies.
The Hydrogen and Fuel Cell Research Group draws on scientific research to focus on the policy dimensions offered by hydrogen and fuel cell technologies. The Group is led by Dr David Hart, and its work includes hydrogen infrastructure modelling, fuel chain modelling, and emissions of greenhouse gases and criteria pollutants, policy analysis, economics and public acceptance of hydrogen technologies.
Hydrogen has great potential as a sustainable energy system that can be used to meet all of our energy needs. All forms of energy (oil, gas, coal, nuclear, wind, solar, biomass, etc) can potentially be converted and stored as hydrogen. This potential puts it at the heart of current energy and climate change policy debates.
Barriers to adoption and commercialisation still exist, however, including regulation, public uncertainty and incompatible infrastructure. The research carried out by the Group at Imperial plays an important role in contributing to this debate and working to overcome these challenges.
The Group’s recent projects include the development of hydrogen infrastructure for vehicle refuelling in London. This project resulted in a number of journal publications, articles, MSc and doctoral theses and presentations, which are available for download from the website. Workshops were also held with the Greater London Authority and the London Boroughs. http://www3.imperial.ac.uk/icept/ourresearchactivities/hydrogenandfuelcell
Stakeholder Consultation
Although it was recognised by all the stakeholder groups consulted that London is indeed a centre of excellence in terms of knowledge and research and development, ‘fragmentation’ was a key emerging theme. A number of stakeholders expressed the view that education is not ‘joined up’, and education and industry do not seem to be engaging successfully. London leads in terms of research and innovation, but the private sector needs to be brought into this conversation. Stakeholders identified an opportunity for London governance bodies (for example the London Development Agency) to work with academic institutions to drive this engagement.
Another key opportunity identified by stakeholders is the need to ‘upskill’ the existing workforce (particularly regarding retrofitting London’s building stock and in renewables technologies). Again, this requires academia and industry to engage, to ensure the right courses, apprenticeships and employment opportunities result.
The disparate nature of existing skills and bodies in London is a concern echoed by several of the stakeholders consulted, and a barrier to successful ‘upskilling’. This fragmentation (combined with the lack of engagement between academic and skills bodies and the private sector) reinforces the gap in the number of low carbon skilled workers to integrate the new technologies into their activities, particularly for retrofitting of buildings and integrating sustainability into planning systems. There is an opportunity for the newly convened London Skills and Employment Board (LSEB), to
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take a strategic and partnership approach to ensuring that London is well placed to provide skills at all levels to take advantage of the economic opportunities around the Low Carbon Economy.
5.3. Economic Opportunities & Challenges
This study has identified a series of key economic opportunities and challenges associated with London as a knowledge and R&D centre, and these are discussed below.
5.3.1. Opportunities
London must ‘upskill’ its existing workforce (and the unemployed) to meet the needs of a low carbon future. This could include providing people with practical skills (such as solar heating, insulation fitters, plumbers) to meet the needs of, for example, retrofitting London’s building stock. This is underpinned by the London Energy Partnership study, ‘Skills Gap in the Energy Efficiency and Renewable Energy Sector in London’, which identifies that there are challenges to London’s workforce in a number of sectors, particularly those relating to energy and the built environment.
There is an opportunity for London to continue to innovate in terms of developing new courses to meet the requirements of a low carbon workforce. Colleges and universities in London provide a wide range of choice for young people. Courses in environmental technologies, environmental management, and sustainable economic development continue to develop and are growing in popularity. Even traditional degrees such as economics, law and finance give students the option to select courses in climate change and sustainable development.
London already has a number of programmes and initiatives in place in terms of further developing its low carbon research and knowledge base. The Mayor, for example, has announced plans to help retrofit the capital with the launch of a new skills academy, to be delivered by the London Development Agency. The Mayor also launched ‘London’s Future: The Skills & Employment Strategy for London 2008-13’, which sets out a blueprint for improving employment and skills in London. This strategy is now being reviewed. In addition, the Mayor is working with the Carbon Trust and other partners to determine the right mechanism for a Mayor’s Prize for the best new ideas for low carbon technology. This prize will be open to all school and university students in London.
The national Low Carbon Knowledge Transfer Network (LC KTN) which focuses on the low-carbon automotive community, provides a useful model for additional sector-specific networks. It brings together a range of stakeholders including universities, research organisations, the private sector and the finance community.
More research and development into technologies such as carbon capture and storage, ground source heat pumps and solar photovoltaics will raise productivity and foster competitive businesses, while creating new markets and jobs. This will attract further investment, retaining London’s leadership and avoiding ‘brain drain’ to other international centres.
London must also further integrate sustainability into the planning system. One way to do this is by creating and implementing training programmes for planners in London to give
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them the appropriate knowledge and tools to build sustainability into the planning process.
5.3.2. Challenges
There is a need to ensure that course development is conducted at a pan-London level, balancing it with need and skill ranges, so that there is sufficient capacity in all areas.
There is significant innovation in new products and services at an academic level, but an ongoing challenge is to bring these innovations to market. There is a need for a clear mechanism to encourage academia and industry to engage, collaborate and drive this commercialisation. Research and development is very competitive, especially as a majority of innovation in the low carbon economy is still at its nascent stage, and needs this engagement and collaboration to thrive.
Technologies and areas of research will need to continue the process of developing, reinventing and innovating to stay ahead in a competitive international arena. Driving an inflow of specialist researchers to London, whilst retaining existing knowledge, will be key.
5.4. Recommendations for Action
Taking into account the key drivers, stakeholder views and economic opportunities and challenges outlined above, we have identified the following recommendations for action:
• Business to facilitate commercialisation of products and services – establish a forum (either new or building on one that currently exists) to enable industry to inform subjects and issues for academic research. Aligning research to business need should increase the likelihood of investment in emerging products and services. The London Technology Network (which facilitates interaction between private industry and the science and technology research community) is a useful model and could be the basis for this forum. Additional sector-specific networks (such as the Low Carbon Knowledge Transfer Network (cited above) could also be created.
• Establish a framework – national government through policy direction and strategic guidance (e.g. ‘Skills for Growth’, ‘New Industry New Jobs’, Higher Education Framework) in which the skills delivery system, particularly FE and HE, can respond to growing demand, as articulated by the UK Commission for Employment and Skills but also at regional and local levels, as the ‘low carbon economy’ takes shape
• Regional Government to work with new skills bodies – especially the London Skills and Employment Board (but through the LSEB: the London Development Agency, Skills Funding Agency and Jobcentre Plus), to ensure that this agenda is reflected in regional strategies and that London has the capacity and skills at all levels to seize the opportunities associated with the low carbon economy. It will also be important to secure, perhaps by building on existing networking and information channels, local (e.g. Borough/Local Strategic Partnership) understanding and commitment to developing economic development plans and
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directing their activity in ways which are coherent with regional and national strategies and take full account of the low carbon economy.
• Link sustainability and planning - regional government to create training programmes for planners in London to give them appropriate knowledge and tools to build sustainability into the planning process.
• Focus on carbon reduction targets – link academia (via the Accord) and London Boroughs to drive carbon emissions reduction in their areas, in order to meet national performance indicators 185 (percentage reduction from local authority operations) and 186 (per capita emissions reduction per local authority area).
• Focus on climate change adaptation – link academia and London Boroughs to support adaptation in order to meet national performance indicator 188 (adapting to climate change).
• Communicate local low carbon opportunities – London Boroughs, businesses and training bodies and organisations including the London Skills and Employment Board will have a key role in communicating low carbon course availability, apprenticeships and vacancies at a local level.
• Local government to work with regional, sectoral and national bodies – e.g. to ensure local economic assessments and economic development strategies take account of developments in the low carbon economy and are coherent with wider, including sub-regional, strategies.
Case Study
The Centre for Efficient and Renewable Energy in Buildings (CEREB)
This case study highlights the new LSBU facility providing a one-stop shop for research, training and demonstrations.
The Centre for Efficient and Renewable Energy in Buildings (CEREB) is a new facility set to open at the end of 2009 at London South Bank University (LSBU). Created in partnership with City and Kingston Universities, CEREB is a unique resource for the teaching, research and demonstration of low carbon energy technologies in the built environment. The three partners are leaders in training and research in the built environment and the Centre will be at the forefront of low carbon building design. CEREB will provide a high quality teaching resource in sustainable energy technology and building design, construction and management. It will also offer facilities to conduct research and to demonstrate specific sustainable energy technologies including photovoltaics, solar thermal, ground source heat pumps and wind power. Keyworth II is a landmark building at LSBUs Central London campus created by Grimshaw Architects. Its design includes features to reduce carbon emissions including thermal massing, solar shading, solar thermal, ground source heating and cooling. http://www1.lsbu.ac.uk/cereb/
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6. DEVELOPMENT OF MARKET OPPORTUNITIES: CENTRE FOR CREATIVE INDUSTRIES
6.1. Context
London is a world-class leader in film, broadcasting, publishing, music, advertising, the arts, design, fashion and the performing arts. The creative industries sector is the third largest employer in London with more than half a million people. In addition, 20% of all new jobs in London are in the creative industries 27 .
Key features of the sector in London include 28 :
• A profitable arts and culture sector;
• A thriving film and multimedia sector;
• The fourth largest advertising industry in the world 29 ;
• A global broadcast base, with brands including NTL, Freeview, BskyB, BBC, ITV, Channel 4, CNN, MTV Europe, Reuters and Associated Press among others;
• A publishing hub, with 210 newspapers including ten of the UK’s national 11 newspapers. This includes Trinity Mirror plc, Guardian Media Group, News International, Associated Newspapers and General Trust, the Telegraph Group, Penguin, Random House and others;
• The world’s third largest music market 30 ;
• A favourable regulatory environment, with the 2003 Communications Bill making the UK television and radio market one of the most liberal in the world; and
• The headquarters of the fashion industry, in particular eco-fashion.
London’s creative industries can be an important resource for influencing and encouraging behaviour change that will eventually lead to a reduction in energy use and the associated carbon emissions. The Stern Review identifies raising awareness as one of the three elements of the coordinated policy package needed to tackle climate change (alongside carbon pricing and innovation support) 31 .
People’s perceptions about climate change depend on their awareness and knowledge of the issue. Research has also shown that accurate knowledge of its causes is the
27 UK Trade and Investment (2008); Think London (2009), 10 Key Facts about London’s creative industries 28 Ibid 29 Advertising Association statistics, September 2006. 30 Music Industry report 2006, Keynote 31 HM Treasury (2005) The Economic of Climate Change
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strongest predictor of a person’s stated intentions to act 32 . The creative industries can play a vital role in furthering public understanding and engagement, by providing clear factual presentation of the issues. 33 .
This sector can also play a role on the supply side, as an instrument for businesses to market their products to consumers. However, there needs to be clear governance in place to prevent the communication of misleading or biased messages. The UK is already taking a lead in this area, as several advertisements have been named by the Advertising Standards Authority as making misleading claims, and guidance has now been produced on this issue.
In the following sections, we consider the key drivers, thoughts from stakeholders and the economic opportunities and challenges presented by London’s strength as a centre for creative industries. We conclude with our recommendations for action at business, national, regional and local levels.
6.2. Key Drivers for London
The creative industry has an overall role to play in supporting actions planned for tackling climate change. A number of the key drivers outlined in Section 2.2 require a change in either individual or collective behaviour. Effective use of London’s strength in the creative industries can provide a resource to help drive these essential changes.
Case Study
The Green Screen Initiative
The Mayor of London and the chief executive of Film London launched the Green Screen initiative in February 2008. The initiative aims to help film, television and commercial producers cut carbon emissions in the Capital. Green Screen is supported by the London Filming Partnership, Film London and a variety of leading names in the sector, including BAFTA, the UK Film Council and Ealing Studios, as well as award-winning actress Emma Thompson and producer Lord Puttnam.
Green Screen has developed a practical package of support and tools for filmmakers, in consultation with various production and film companies. These include a carbon calculator and a guide to the environmental impacts of screen production (on location and in the studio), available for download from the website. Using these tools, producers can identify how much carbon and waste they produce and so identify where best to focus their reduction efforts.
Filming on location in the Capital has risen by a massive 40% since Film London was launched in 2004. London is now the third busiest production centre in the world after Los Angeles and New York making a major contribution to London’s global competitiveness. Attracting significant inward investment, the production industries are estimated to directly contribute £13.6 billion per year to the capital’s economy. This initiative supporting this growing market to be low carbon.
http:// www.filmlondon.org.uk/greenscreen
32 Bord, R. J., O’Connor, R. E. & Fischer, A. (2000) In what sense does the public need to understand global climate change? Public Understanding of Science, 9, 205–218. 33 Geological Society, London (2008), Special Publications Media and Scientific Communication: A Case of Climate Change.
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Stakeholder Consultation
The message that London is a thriving creative hub emerged from a number of our stakeholder sessions. Many stakeholders consulted expressed the view that the creative industries have a vital role to play in delivering key messages around the low carbon agenda; messages that can drive home behavioural change. Many agreed that this expertise was still largely untapped and presented a huge opportunity.
Another challenge articulated by stakeholders was that many creative industries want to be based in central London, given its accessibility and amenities. However, this presents its own set of challenges in terms of space and power requirements. There is another opportunity inherent here to making other parts of London attractive to these industries, which would require greater engagement at the Borough level.
6.3. Economic Opportunities and Challenges
This study has identified a series of key economic opportunities and challenges associated with London as a centre for creative industries, and these are discussed below.
The National Endowment for Science, Technology and the Arts (NESTA) report, ‘Seven lessons from advertising and marketing to sell low-carbon living’ examines existing national research into climate change and provides an excellent starting point to identify possible economic opportunities and challenges for London’s creative sector. The report highlights two priorities to move the climate change communications agenda beyond awareness to changing behaviour 34 :
1. Increasing levels of awareness so that individuals understand the relationship between their consumption and climate change; and
2. Moving people beyond awareness and understanding to secure lasting behaviour change.
6.3.1. Opportunities
The creative sector could play a strategic role in driving the required behaviour change that underpins the drivers identified in Section 2.2, which will influence demand and consumption over time. Opportunities include:
• Build a trustworthy relationship with the consumer – the UK has developed clear guidance for advertising environmental credentials of products and services. Adoption of these by London firms can enable these organisations to take a leadership position in evidence based advertising and communication, which is particularly important given the low level of consumer trust in business;
34 URS Corporation Ltd (2009), Perceptions of Climate Change in the North West of England, NWDA
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• Mainstream low carbon technologies – make the low carbon agenda meaningful and understandable to ordinary people, by employing a range of jargon-free messages through all media channels;
• Encouraging behavioural change – that results in Londoners altering the way that they live, work and travel;
• Targeting children as a key audience – thereby changing behaviour now that will last well into the future;
• Develop Borough-based campaigns – to inform and engage with local residents; and
• Communicate leadership – highlight areas where Boroughs are leading by example.
6.3.2. Challenges
For these opportunities to have a beneficial impact, communicated messages (whether via film, publishing, online or television) must be factual and clear. Currently, there is a concern that conflicting messages regarding the threats and opportunities of climate change are not driving behavioural change, but are actually disengaging people. Examples of such messages include:
• “Green future will come at big price” (Metro, 16 July 2009)
• “Switching to low carbon energy will cost households £249 a year” (The Times, 16 July 2009)
• “£15,000 the cost of Green Home ” (The Guardian 11 Nov 2009)) However, there are a number of areas whereby switching to energy saving devices or low carbon services will save households money. The media reporting should be clear about the evidence and benefits presented.
In light of the above, the questions raised by the stakeholders consulted were as follows:
• Are the skills available to market the opportunities in the right way?
• Are we finding the right organisations to raise awareness?
• Is the cosmopolitan nature of London with its vast cultural differences going to present problems in terms of targeting specific behaviours?
6.4. Recommendations for Action
Taking into account the key drivers, stakeholder views and economic opportunities and challenges outlined above, we have identified the following recommendations for action:
• Develop Borough-specific communications – business members of the creative industries should work with Borough communications teams to identify and implement campaigns and messages tailored to particular areas, taking into account local issues, ethnic diversity and affluence. For example, ethnically
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diverse areas may need specific engagement on retrofitting, and allowing access to their homes.
• Create collaborative guidance for different sectors – national government guidance could comprise tailored memoranda for each sector, giving advice on how messages should be communicated to key audiences. The guidance could be created in partnership between central Government, creative agencies and the private sector, with input from Boroughs and local bodies.
• Regional government to develop a clear programme that provides a coherent package about what is happening at all levels – establish a clear process of reviewing and communicating the progress of implementation (and performance) of low carbon economy initiatives. Establish a pan London partnership either as a new entity, or potentially as part of an existing body that would help align the messages, policies and audiences. . The partnership could include public and private sector organisations, with creative agencies acting as specialist advisers.
• Develop regional communications – the creative sectors could work with the LDA, GLA and others to develop pan-London communications.
• Local government to disseminate information regarding the aggregated low carbon investment fund (set out in Section 3.4) – information on the nature and purpose of such a fund would need to be developed and disseminated to drive interest and take up. Tailored information for the various stakeholders would need to be developed – for potential investors, recipients and fund managers.
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7. DEVELOPMENT OF MARKET OPPORTUNITIES: TRANSPORT HUB
7.1. Context
Transport plays a central role in making London one of the top cities to live, work and visit. London has a strong transport infrastructure base that includes:
• Rail and underground infrastructure;
• Heathrow, Stansted and other airports; and
• River transport.
Ongoing development of this infrastructure (through schemes such as Crossrail and the Olympics legacy) will help retain this key strength, underpinning its world-class status. Excellent public transport links complemented by schemes such as congestion charging, Low Emissions Zones, rolling out light emitting dioxides (LEDs) at traffic light junctions and the Smarter Travel Unit (STU) among others already indicate London’s commitment to moving towards a low carbon transport sector.
Whilst there are a lot of market opportunities in this area, many of them are already in the process of being addressed in the Mayor’s draft Transport Strategy.
In the following sections, we consider the key drivers, thoughts from stakeholders and the economic opportunities and challenges presented by London’s strength as a transport hub. We conclude with our recommendations for action at business, national, regional and local levels.
7.2. Key Drivers for London
The decarbonisation of London’s transport system has been identified as one of the key drivers for the city to meet the challenges associated with the move towards a low carbon economy. Compared with many other large cities, London’s emissions from transport (excluding aviation) are relatively small (approximately 22% of total emissions). High levels of public transport use, unprecedented investment in the public transport network, and implementation of policies such as congestion charging have helped maintain consistent levels of emissions since 1991. This is at a time when rapid growth in London’s population and economy has led to significant increases in emissions in other sectors 35 . Decarbonisation of the transport system is thus critical to maintaining and advancing this position.
A second driver for action is the need to ensure that the transport infrastructure is resilient to predicted climate change impacts, as well as being able to meet potential changing demand.
A third key driver is the need to develop sustainable transport solutions for all the logistics functions serving the city. Logistics refers to the management of the flow of goods and
35 Mayor of London (2006), Climate Change Action Plan
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other resources between the point of origin and the point of consumption in order to meet the requirements of consumers 36 . Despite the logistics sector being a relatively small direct employer, it is essential to supporting the wider London economy.
Stakeholder Consultation
There was clear consensus amongst all stakeholders involved in the consultation that London’s success as a transport hub was vital to its current and future economic success as well as its international standing. Private sector stakeholders were particularly vocal about this issue, emphasising that the city’s accessibility and public transport infrastructure are key to its attractiveness to business, current and future competitiveness, and vital for achieving a low carbon economy. London has led the way on congestion charging and low emissions zones, but is in danger of falling behind in terms of investment in infrastructure and grasping the opportunities around lower carbon options.
Several stakeholders identified an opportunity for London to take a leadership position on electric vehicles, as they would work well in the city given its shorter ranges of travel and potential to produce recharging points across the city. Complementary opportunities include expanding car club and car-sharing schemes to help ease congestion. Locally based schemes were also cited as vital to achieving modal shift – cycling to work, renewable buses, etc – with the need for Boroughs to lead by example to bolster credibility. The Crossrail project is also seen as a huge opportunity.
7.3. Economic Opportunities and Challenges
This study has identified a series of key economic opportunities and challenges associated with London as a transport hub, and these are discussed below.
7.3.1. Opportunities
The opportunities for London’s transport sector from the transition to a low carbon economy are as follows:
Electric Vehicles
The Mayor of London, in the recent draft Transport Strategy, has identified low carbon vehicle technologies and fuel as a key opportunity area for London 37 . This is line with what has become a global race amongst manufacturers to establish a foothold in electric vehicle production. Following the report, the Mayor of London is already capitalising on London’s stronghold in manufacturing of electric cars. The Electric Vehicle Delivery Plan (2009) identifies a range of measures to put at least 100,000 electric vehicles on London’s roads as soon as possible, from investment in re-charging infrastructure to financial incentives for consumers such as exemption from congestion charge for electric vehicles (leading to savings of £1700 per year for the average electric vehicle user) 38 . Use of electric vehicles for local logistics and distribution is also an opportunity. Sainsbury's is the first business to introduce a network of publicly accessible electric
36 Thompson, S (2009), Working Paper 37: London’s Logistics Sector, GLA Economics 37 Mayor of London (2009), Transport Strategy 38 Mayor of London (2009), An Electric Vehicle Delivery Plan for London
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parking spots across nine stores in London. The opportunity therefore exists for more businesses to support electric car manufacturing and infrastructure.
High Speed Rail
High-speed rail links (for instance, Eurostar and the forthcoming Crossrail) provide further opportunities for London in terms of employment and infrastructure development. These schemes also enhance the city’s reputation as a key global destination.
Cycling
The Urban Bike Sharing system, already prominent in other major cities (such as the Velib scheme in Paris) was originally announced for London by the then Mayor Ken Livingstone in 2008. The current draft Transport Strategy (2009) reiterates this commitment for Central London and promises a ‘revolution in cycling’ through improvements in cycle infrastructure and increased awareness of the facilities available. 39
River Transport
Greater use of the river for the movement of people and goods will relieve the pressure on roads and public transport. Additional benefits will be improving London’s air quality, improving accessibility and provision of growth for the maritime industry.
Public Transport
The Climate Change Action Plan identifies the importance of an ambitious programme of energy-saving measures across public transport. Techniques such as regenerative braking on the Tube - which allows energy generated in braking to be reused to drive the train are already in place. There is also an opportunity to convert London’s entire 8,000- bus fleet to diesel electric hybrid vehicles as envisioned in the 2006 plan.
Behavioural Change
There are opportunities to raise awareness amongst small businesses, consumers and the wider private sector to drive behavioural change regarding transport. This might comprise mode-switching, or devising new methods and approaches to goods and service distribution.
7.3.2. Challenges
The key challenge for introduction of new smarter travel choices is a lack of adequate infrastructure. For instance, the urban bike-sharing scheme has been delayed due to inadequate investment to date in the required infrastructure. Similarly, until recently, electric charge points were few and far between. Recent developments might provide the adequate incentives needed for businesses to provide a more comprehensive delivery network.
It is also difficult to incentivise customers to look past cheaper and faster air travel. London’s transport 'hub' and its links to Europe are key for retaining international
39 Mayor of London (2009), Transport Strategy
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leadership, and so any risk of congestion or ‘bottlenecks’ in the transport system need to be checked and addressed on a ongoing basis.
Case Study
Brompton Bikes
As a successful London-based cycle manufacturer, Brompton could offer an opportunity to work with London’s agencies to deliver urban cycle schemes and drive further behavioural change.
Brompton Bikes are the designers and makers of the Brompton folding bicycle. Brompton’s is one of only two major bicycle frame manufacturers still based in the UK, and have been in full production since 1988. The company remains in private ownership.
Today, Bromptons are sold in 27 export markets. In the UK and USA, they sell directly to carefully selected bicycle retailers; in other territories, the bikes are sold to distributors who operate their own dealer networks. Brompton founder Andrew Ritchie, who is still involved in the company as Technical Director, was awarded the Prince Philip Designers Prize in October 2009
http://www.brompton.co.uk
7.4. Recommendations for Action
Taking into account the key drivers, stakeholder views and economic opportunities and challenges outlined above, we have identified the following recommendations for action, above and beyond those in the Mayor’s recent draft Transport Strategy:
• Business to develop campaigns to drive uptake of electric vehicles – the private sector, in conjunction with national and regional government, should work with the creative industries to develop appropriate messages and campaigns around electric vehicles, to drive uptake and engagement. This engagement should happen at national, regional and local levels.
• Extension of cycle hire scheme to outer London Boroughs – regional and local government to work together to obtain Boroughs to buy-in to extension of the Central London scheme. Determine potential demand and usage patterns. There is an opportunity to develop a niche market for the manufacture of cycles for this scheme (Brompton Bikes could be an appropriate model), attracting further investment into London and showcasing its world class potential.
• Assessing opportunities for increased use of the river – regional government to conduct a city-wide study analysing the potential opportunities arising from greater use of the river for the transport of people and goods.
Case study – London Electric Vehicle Partnership
The partnership was set up to encourage greater take-up of electric vehicles in London. The purpose is to bring together key stakeholders and decision makers from within the vehicles manufacturing industry, London Boroughs, GLA group, energy and infrastructure suppliers and electric vehicles users. This multi-stakeholder approach will aid in comprehensive identification of the barriers, costs and benefits of electric vehicles and to develop and implement an action plan to
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encourage greater use.
At their inception meeting, the partnership set out their key aims as below:
• Develop an action plan for the greater use of electric vehicles in London
• Develop and share best practice
• Develop and share a common process and technical standards, particularly across the capital’s Boroughs
• Increase the level of support for users of electric vehicles
• Coordinate resources to achieve the best possible value for money
This partnership is critical to realise the opportunities and initiatives set out in the Mayor’s draft Transport Strategy.
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8. DEVELOPMENT OF MARKET OPPORTUNITIES: A WORLD-CLASS CITY TO LIVE IN AND VISIT
8.1. Context
London is often cited as one of the best places to live, work and visit. In addition to its position as a financial and business centre, it has a world-class transport system, educational facilities and a high quality skills base, all of which are important considerations for companies and/or workers in choosing a place in which to live and work. London also has a holistic planning system that focused on providing adequate socio-economic provisions for all its citizens. The attractiveness of London as a tourist centre due to its vast array of leisure and cultural activities is also well documented.
The long-term vision for London includes creating a thriving green and clean city that becomes more energy efficient helping households and businesses cut energy bills and make London a more pleasant place to live.
In the following sections, we consider the key drivers, thoughts from stakeholders and the economic opportunities and challenges presented by London’s strength as a world-class city to live in and visit. We conclude with our recommendations for action at business, national, regional and local levels.
8.2. Key Drivers for London
Whilst none of the drivers identified in Section 2.2 of this report are specifically associated with London’s strive to become a world-class city to live in and visit, many will have an indirect association. Meeting these key drivers will support the city’s continued status as a world-class city.
Stakeholder Consultation
London was recognised by all as a vibrant and world-class city, with ‘diversity’ emerging as a key theme. Many discussed the diverse contribution of London’s economy – financial, artistic, and as a tourist centre - along with the multicultural nature of the city.
Stakeholders from the private sector expressed the view that investment in infrastructure needs to be maintained for the city to retain its world-class status. Several also cited the need for a change in approach – to a more village/community/local approach in terms of advice, business, retrofitting, and engagement – to meet the needs of the low carbon economy across a diverse set of Boroughs each with very specific characteristics. It was widely felt that a pan-London approach was not always appropriate given London’s economic and cultural diversity. There is also an opportunity to bring the planning community into the sustainability agenda, and to find solutions to reach ethnic communities who may not currently be engaged.
Specific economic opportunities highlighted in the consultations linked to London’s status as a world-class city include:
• Reduced taxes and costs from locally produced food. Buying locally produced food also means far fewer ‘food miles’.
• Cheaper energy through greater incentives for smart meters and other low carbon
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technologies.
• Preserving the number of green spaces throughout the city, for leisure and for use in renewable technologies such as biomass
• Increased investment in health services to deal with climate related health problems will incentivise people to live in London
• The need for greater safety through good flood defences will further improve London’s position for financial and business markets as a location for their European or Global headquarters
Potential economic benefits from increased tourism and spending (linked to warmer summers) and marketing London as a sustainable city to visit.
8.3. Economic Opportunities and Challenges
This study has identified a series of key economic opportunities and challenges associated with London as a world-class city to live in and visit, and these are discussed below.
8.3.1. Opportunities
To maintain London’s position as a great place to live and work, the city will need to design and deliver green space improvement. Deprived areas of London will need to be regenerated via upgrades and improvements. Programmes such as the All London Green Grid in East London, and ‘Priority Parks’ aim to do that. Nearly £80 million has already been raised to design and deliver green space improvements, which will improve London’s overall value as a place to live.
Manufacturers and providers of green roofing and walls will experience an increased opportunity for their businesses in light of the adaptation measures required. Green roofs and walls will provide insulation, absorb rain so as to help reduce flooding, support biodiversity and keep the city cool.
London with its history, architecture and cultural attractions is already a must-see for travellers. Global warming is leading to rising temperatures, as witnessed in London in the past decade, which increases its attraction as a tourist destination. The large numbers of tourists present significant opportunities, especially for London’s small local businesses and recreational industries.
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‘Green Tourism’
Increasingly, studies have identified the risks to London from climate change. Environmentally friendly tourism is traditionally associated with eco-travel to countries such as Costa Rica, Nepal and Madagascar. While eco-tourism as a concept might not be of relevance to a city such as London, there is a unique opportunity for the city to promote environmentally friendly ways of visiting and experiencing the city for its many tourists. As London’s residents become increasingly aware of their responsibility to their natural environment, tourists visiting London should be expected to do the same. The existing scale of the tourist industry in the city, with its many hotels and amenities, offer many opportunities to develop and apply the ‘green tourism’ concept.
Applying the concept of ‘green tourism’ to a city environment such as London would present a huge opportunity for the tourism and hospitality industries. If the concept catches on, London could see increases in the number of visitors per year. It could also open new revenue streams for hotels, generate new models of accommodation and increase the scale of the hospitality industry as a whole.
8.3.2. Challenges
There are a number of challenges associated with London’s position as a world-class city. Increased population migration from abroad and other parts of the UK is a reason for concern for many. Firstly, it leads to a stress on services and public financing. As a result, there could be less funding available to invest in low carbon goods and services.
London is strategically at risk due to 40 :
• The urban heat island effect: will result in poorer air quality and a need for greater comfort cooling (with associated increased demand for electricity) in the city’s buildings and transport network.
• Flood risk: a significant proportion of London lies within the floodplain of the River Thames and its tributaries.
• Water shortages: changing rainfall patterns predicted associated with climate change are expected to have a detrimental effect on water reserves (particularly in south-east England), with a resulting decrease in water availability coupled with anticipated increasing demand.
A large amount of investment is required to adapt existing services to the changing climate. There is concern that some adaptation measures will remain redundant for the rest of the year. For example, a significant amount of resources and money will be spent on installing air-conditioning in the London Underground. While this is a must during the summer, it has been recognised that the service may not be used for the remainder of the year.
With regard to green tourism, the main challenge would be the presence of adequate infrastructure to support a growth in visitor numbers. In addition, ‘green tourism’ amenities
40 London Climate Change Partnership (2002), London’s Warming
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might be perceived by potential visitors to be too costly, which could act as a deterrent. Also, there is a risk that some potential visitors could be ‘turned off’ by the green tourist agenda.
8.4. Recommendations for Action
Taking into account the key drivers, stakeholder views and the economic opportunities and challenges outlined above, we have identified the following recommendations for action beyond those already presented in earlier chapters:
• Private and public sector support for climate change adaptation – harness support from organisations such as those in the insurance sector, engineers, builders, water, sewerage and flood risk consultants, andinnovation and knowledge based sectors.
• National government to increase co-ordination of behaviour change messages to help citizens adopt greener lifestyles.
• Promote London as a ‘green tourism’ destination - national and regional Government, in conjunction with the tourist industry, can work to promote the city as a green tourism destination. Information can be promoted through the Britain and London Visitor Centre, the British Hospitality Association, the Visit London website and other key bodies. This could lead to London can gaining recognition as the first urban centre in the world to promote and practice green tourism.
• Local government to generate local benefits – local businesses can gain from greater visitor numbers, the development of new green hotels and services and increasing visitor spend. Local areas may also experience enhanced reputational benefits.
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Appendix A – Approach and Methodology
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APPENDIX A - APPROACH AND METHODOLOGY
Two key activities underpinned the approach to the project: 1) a review of current literature and relevant policies and other existing research; and 2) consultation and engagement with a range of stakeholders. The resulting findings of these activities were mapped and analysed, and more detail of the approach taken is set out in the sections below. Literature and Policy Review
An initial high-level literature and policy review was conducted to inform our identification of London’s strengths and priorities in creating a low carbon economy. The review covered key international, national and regional policies and publications on climate change mitigation and adaptation, and the key requisites to achieving a low carbon economy.
As well as the summary of literature reviewed, which is contained in Appendix B, there were two key outputs from this work element:
• A series of themes which were used to structure the stakeholder interviews and workshops; and
• A series of key strategic actions for London associated with the commitments made within the reviewed policies. Stakeholder Consultation
The complexity and importance of London’s approach to climate change adaptation and its potential role as a leader in the low carbon economy means that collective engagement and action is required. The primary mechanism for developing this consensus is through a stakeholder consultation exercise, comprising a series of interviews and workshops. Aims of the consultation
The aims of the engagement were threefold: 1. To discuss the concept of a ‘low carbon economy’;
2. To explore London’s key strengths, and obtain views on any additional strengths; and
3. To obtain stakeholders’ views on the economic opportunities arising from the identified strengths. Specifically:
What are some of the economic opportunities that would enable London to achieve leadership in a low carbon economy?
What could these opportunities look like in terms of new markets, skills, jobs, etc?
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Responses from the consultations were used to prioritise and focus the possible economic priorities and opportunity areas associated with the key strategic actions for London based on policy commitments. Consultation mechanisms
Stakeholders were engaged via two key mechanisms:
• One to one interviews (face to face or by telephone), lasting up to one hour in duration, (a total of 19 have been held); and
• A series of four half-day workshops with key stakeholder groups (London Boroughs, public sector, private sector and academic/skills).
Between these two mechanisms, representatives from a range of stakeholders, including London Borough leaders, Non-Governmental Organisations, trade and membership organisations, universities and business have been involved in the study. Each interviewee or workshop attendee was sent a briefing note beforehand, outlining the key aims of the project and the nature of the meeting. Please see Appendix C for a full list of workshop attendees and interviewees.
Consultation challenges
In conducting the consultation with stakeholders, URS faced two key challenges: a) the slow (and low) take-up of and response to consultation invitations; and b) drawing out a clear articulation of the economic opportunities for London in a low carbon economy.
a) The level of response and take-up: response rates and take-up of interview or workshop invitations proved challenging due to short timescales and the existing diary commitments of the targeted stakeholders. A second round of consultation was developed during the project, with a particular focus on private sector stakeholders, for which there had been lowest engagement in the initial planned process. This second stage proved to be fruitful, with additional specific interviews scheduled and held.
b) Articulating the economic challenges and opportunities: stakeholders at the workshops found it challenging to articulate the economic challenges and opportunities for London in terms of moving to a low carbon economy. Attendees tended to focus on the technical aspects of climate change impacts (both in terms of mitigation and adaptation) articulating technical responses without necessarily identifying the wider economic opportunities these responses could create. Detailed findings from the consultation are set out in Appendix C. Analysis of Findings
Following the literature review and the initial round of stakeholder consultation, we collated our findings. We also, in discussion with the project panel, identified and agreed London’s key strengths, namely London as:
• A global centre for financial services;
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• A global centre for business;
• A research and development/knowledge centre;
• A centre for creative industries (including the arts, media and communications);
• A transport hub; and
• A world-class city to live in and visit.
We then mapped the key strategic actions for London identified by the policy review, and the outcomes from the consultation against each of these strengths. This mapping process enabled the identification of possible areas for economic opportunity that reflected the strengths of the city, actions required by policy and the areas of interest and priority for stakeholders. The identified areas were then reviewed for economic opportunity and a suggested set of recommended actions developed.
A number of examples of best practice and case studies were identified at the stakeholder workshops and in discussion with individuals – these examples were added to our analysis to bring it to life.
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Appendix B – Literature Review
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LITERATURE CONTEXT
The following literature review considers the relevant climate change policy at a national and regional level; as well as providing a high level review of the relevant international and EU policies. It has not been developed as a comprehensive review of climate change legislation.
1. INTERNATIONAL CONTEXT
1.1. Kyoto Protocol and Copenhagen
On an international level, the UK is a signatory to the Kyoto Protocol and has committed to reduce its GHG emissions by 12.5% below base year levels over 2008 and 2012. The
GHGs covered by the Kyoto Protocol include carbon dioxide (CO 2), methane (CH 4), nitrous oxide (N2O), hydro fluorocarbons (HFCs), per fluorocarbons (PFCs) and sulphur
hexafluoride (SF 6). CO 2 is the main GHG, accounting for about 85% of the UK total, and
the vast majority of CO 2 emissions result from the burning of fossil fuels.
The Bali Climate Change Conference (COP13) in 2007 launched a two-year process to strengthen international climate change cooperation. The EU and others at the COP14 held in Pozna ń in 2008 stressed their ongoing commitment to combating climate change, arguing that a transition to a low carbon society entails not only costs but also important economic opportunities.
In 2009 the COP15 conference will be held in Copenhagen, with the goal to obtain an international agreement on climate change actions and emission reduction targets to be achieved after 2012. At the COP14 agreement was reached that Annex I countries’ further commitments should “principally” take the form of quantified emission limitation and reduction objectives (QELROs). However, no clear decision on the aggregate range of mid-term emission reductions by industrialised countries was made. 1.2. European Policy
Policy is a key driver in a move towards a low carbon economy. In December 2008 the EU agreed a wide ranging Energy and Climate Change Package. The agreement included:
• Phase III of the EU Emissions Trading Scheme (EU ETS)
• An effort sharing agreement to reduce greenhouse gas emissions in non-ETS sectors
• An overall target of 20% cut in EU CO 2 emissions by 2020 (UK target for cutting emissions to be set at 16% by 2020)
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• An overall target for 20 per cent of EU energy to come from renewable sources by 2020 (UK target for increasing renewable energy is 15% - from a 2005 UK base of under 2% by 2020)
• A proposal to revise the Energy Performance of Buildings Directive
2. NATIONAL POLICY AND PRACTICE
2.1. The UK Climate Change Act
The UK Climate Change Act, the first of its kind in the world, became law on 26 November 2008. The Act creates a new legal framework for the UK achieving, through
domestic and international action, at least an 80% reduction in GHG (i.e. equivalent CO 2) emissions by 2050 against a 1990 baseline 41 . It is estimated that this higher target (the
Act was previously drafted setting a 60% target for CO 2 only) could represent a mid-term goal of 35–45% reduction by 2020.
Through the Climate Change Act, the Government is required to set five-year carbon
budgets, placing binding limits on aggregate CO 2 emissions. The Act also establishes an expert, independent body – the Committee on Climate Change, whose remit it is to advise Government on the level of these budgets. As a result, the short term and long-term reduction targets defined in the Act could become more stringent in future, based on the Committee’s recommendations. The Committee will also examine the implications of
including greenhouse gases (GHGs) other than CO 2, international aviation and shipping emissions in UK targets.
The consequence of this Bill and the revisions of the EU ETS for the phases beyond 2012 will be both tightening of the “caps” set for the current legislation EU ETS and Climate Change Agreement (CCA) schemes to deliver both the UK and EU carbon reduction commitments.
More needs to be done to meet the challenging domestic target of 80% reduction by 2050. In response, the UK Government has introduced a range of policies and measures to reduce GHG emissions, on both a domestic and international level. These policies and measures include:
• The Environmental Transformation Fund – to enhance the commercialisation of low carbon and energy efficiency technologies;
• The Renewables Obligation – a mandatory obligation for energy suppliers to produce a percentage of their energy from renewable sources;
• The Climate Change Levy – an environmental tax on industry, commerce and public sector energy use, administered by HM Revenue & Customs;
41 The Climate Change Act 2008 replaced the previous target of 60% reduction in GHGs after recommendations from the government appointed Climate Change Committee.
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• The Renewable Fuels Obligation – an obligation for all transport fuel in the UK to be 5% renewable by 2010;
• The CRC Energy Efficiency Scheme (CRC) – due to begin in 2010, a mandatory emissions trading scheme for large, non-energy intensive private and public sector organisations.; and
• A new set of National Indicators (NI) for local authorities as part of a new performance framework (the Comprehensive Area Assessment). The CAA assesses the performance of each local authority against the NIs, including three related to climate change. These have been discussed in more detail below.
The Climate Change Act commits the UK Government to carry out an assessment of the risks to the UK of climate change every five years. The first cycle is required to report to Parliament by end of January 2012.
The Secretary of State has the duty to lay 5-yearly reports before Parliament containing an assessment of the risks for the UK of the current and predicted impact of climate change, and taking into account the advice of the Committee on Climate Change.
The CCC has the duty to advise the Secretary of State (SoS) on the preparation of each of the Secretary of State’s reports on climate change.
The SoS has the duty to lay programmes before Parliament setting out the Government’s objectives in relation to adaptation to climate change, as well as the Government’s proposals and policies for meeting those objectives, and the time-scales for introducing those proposals and policies, addressing the risks identified in the most recent report on impact of climate change. The objectives, proposals and policies must be such as to contribute to sustainable development.
The CCC needs to report on progress in connection with adaptation. The report must contain an assessment of the progress made towards implementing the objectives, proposals and policies set out in the programmes laid before Parliament.
To date, the Government has established the Adapting to Climate Change (ACC) Programme. This was last reported on in July 2008 in ‘Adapting to Climate Change in England: a framework for action’ and subsequently an update provided in June 2009 in ‘Adapting to climate change: UK Climate Projections’. 2.2. The Carbon Budgets Order 2009
Alongside the Budget 2009, the Government announced that it agreed with the Committee on Climate Change's (CCC) approach on carbon budgets and intended to set the levels of the budgets now for the period 2008-2022. These ‘interim’ budgets require a reduction in GHG emissions by at least 34 percent by 2020, relative to 1990 levels.
In May 2009, the levels of the first three carbon budgets were approved by Parliament and are now set in law as follows:
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Budget 1 Budget 2 Budget 3
(2008-12) (2013–17) (2018–22)
Carbon budgets (MtCO2e) 3018 2782 2544
Percentage reduction below 22 28 34 1990 levels
2.3. Building a low carbon economy – the UK’s contribution to tackling climate change, 2008
The report identifies the feasibility of achieving an 80% reduction in GHG emissions by 2050 42 . In addition it gives recommendations on the policies and budgets (five-year carbon budgets) needed to achieve this feasibility. It also explains the wider social and economic impacts of the proposed recommendations.
The report identifies a very strong case for the UK to adopt a significantly more ambitious target than the 60% objective set in the 2003 Energy White Paper which it believed was attainable at manageable cost. (As noted earlier in this section this recommendation has been implemented with the target revised in the Climate Change Act to 80% (for the six Kyoto GHGs) The CCC’s modelling suggests that the least-cost option is likely to entail a major contribution from energy efficiency improvements in both buildings and surface transport between now and the mid-2020’s, the radical decarbonisation of power generation by 2030, and the increasing application of electricity to surface transport from 2015 and to the production of heat from 2020 43 . This is in line with findings from the IPCC and the Stern Review.
The report stresses that, appropriate and strong policies need to be at the forefront of making the above an achievable target for the U.K. Policies will also need the strong backing of businesses and consumers alike. The report recommends policies including financial incentives through carbon prices, taxes and subsidies, support for technology innovation, information and encouragement, regulation. A number of renewable energy technologies are identified as being technically feasible, including wind energy, solar PV and heating. 2.4. Low Carbon Transition Plan
The five key aims of the Low Carbon Transition Plan are:
• Protecting the public from the immediate risk arising from climate change
• Preparation for the future
42 This is a significantly more ambitious target than the 60% objective set in the 2003 Energy White Paper. 43 Committee on Climate Change (2008), Building a Low Carbon Economy – The UK’s contribution to tackling climate change
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• Limiting the severity of future climate change
• Building a low carbon UK
• Supporting individuals, communities and businesses to play their part
The carbon emission reduction targets are to reduce emissions by 18% from 2008 levels by 2020 and by 80% from 1990 levels by 2050, 40% of electricity from sustainable energy sources by 2020 and 30% specifically from renewables. The Government’s Low Carbon Transition Plan, as well as cutting emissions from domestic transport by 14% on 2008 levels.
There is a stated aim to have smart meters in all homes by 2020. The warmfront energy efficiency retrofit programmes are to be extended to 2012. £3.2 billion is being provided to make homes more energy efficient supported by a potential clean energy cash back scheme. The target is to cut emissions from homes by 29% on 2008 levels by 2020.
On transport the pilot of 340 new low carbon vehicles (LVCs) is being supported along with £30 million of the introduction of LC buses and £30 million for researching, developing and installing recharging infrastructure. Transport for London has 56 hybrid buses and is expected to bring in a further 300 by 2011. Government departments are accelerating the purchase of vehicles that meet the new EU standard by 2011 rather than 2015. Targets include sourcing 10% of UK transport energy from renewable sources by 2020. Transport is an area where London could lead on the implementation of new LCVs and charging systems. Further details of the government initiatives on LCVs are provided in the DTI report Ultra Low Carbon Cars (2009) which sets out Government’s current thinking on the implementation of a number of consumer incentive schemes and the “Plugged in Places” Electrical Vehicle Infrastructure Framework.
Procurement of green products and services by the public sector is seen as critical and a real driver towards developing a genuine world class low carbon industry in the UK. Various mechanisms were mentioned but nothing concrete was specified – a summit late in 2009 is planned to start the introduction of new legally binding processes and targets for the public sector. 2.5. The Renewable Energy Strategy
The UK Renewable Energy Strategy 2009 states that promoting the development of new and renewable energy technologies will be important for meeting the 2020 target and vital for longer term climate change goals. The strategy further emphasises the role played by innovation in achieving these targets by recognising that innovation can make improvements to existing renewable technologies and reduce costs, as well as create new technologies.
The strategy also highlights the key business opportunities to be derived from the shift towards a low carbon economy. For example, the Carbon Trust estimates that UK annual revenues from offshore wind alone could reach £2 billion per year by 2020, around half of which would come from exports, while revenues from marine renewables could range from £300-900 million by 2020. In addition, the renewable energy sector will generate a
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large number of jobs potentially benefiting the economy. The Energy White Paper, published on 23 May 2007, sets out the Government’s international and domestic energy strategy to respond to these dynamic possibilities and addresses the long term energy challenges faced and delivery of energy policy goals. Furthermore, the supply chain is also highlighted and the key area where constraints need to be overcome. The aim is to provide a clear, long-term policy framework that gives increased confidence to investors and suppliers.
The key mechanism put forward for delivering growth in renewables is the Carbon Reduction Commitment (CRC), Feed in Tariffs (FITs), and Renewables Obligation (RO). The RO requires electricity suppliers to source a prescribed and increasing proportion of their electricity from renewable sources.
The strategy includes the following headline targets 44 :
• Extending and raising the level of the Renewables Obligation to encourage up to 30- 35% of our electricity to come from renewable sources by 2020;
• Introducing a new financial incentive mechanism to encourage a very large increase in renewable heat;
• Delivering more effective financial support for small-scale heat and electricity technologies in homes and buildings;
• Helping the planning system to deliver, by agreeing a clear deployment strategy at regional level similar to the approach established for housing;
• Ensuring appropriate incentives for new electricity grid infrastructure and removing grid access as a barrier to renewable deployment;
• Exploiting the full potential of energy from waste, by discouraging the land filling of biomass as far as is practical.
The strategy highlights that development of new and emerging renewable energy technologies will be important for meeting targets set in the Energy White Paper and vital for our longer term climate change goals. Innovation can reduce costs of existing renewable technologies, as well as developing new technologies. The least cost delivery of the renewable energy goals for 2020 might require approximately 30% of the UK’s renewable energy to come from bio-energy (energy produced from the direct or indirect combustion of biomass material such as energy crops, wood and waste, and biogas) across the heat and electricity sectors (in addition to bio-energy in transport). 2.6. Low Carbon Industrial Strategy
The Low Carbon Industrial Strategy highlights key sub sector priorities for support and funding as follows:
44 DECC (2009), The UK Renewable Energy Strategy
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• Offshore wind;
• Marine Renewable Energies – wave and tidal;
• Civil Nuclear Energy;
• Low Carbon Vehicles;
• Energy and Resource Efficiency;
• Low and zero carbon construction;
• Aviation;
• IT, ICT and Electronics;
• Smart energy grids and decentralised energy systems;
• Carbon trading; and
• Development of Low Carbon Economic Areas.
Of these areas, the key ones of importance to the London region include Low Carbon Vehicles, Construction and Energy Efficiency, IT, ICT and Electronics, Aviation and Carbon Trading. These are looked in greater detail below.
There is clear support for the testing of all types of electric, hybrid and hydrogen fuel cell powered vehicles, with the aim to test 340 vehicles of all types over the next few years. As well as the vehicles themselves critical issues for urban areas, such as London, include researching and implementing charging infrastructure and interfaces for chargers.
In the area of low carbon buildings and retrofit of energy efficiency equipment, the government targets are for all new homes to be zero carbon by 2016 and buildings by 2019. There is also clear support for the development of new sustainable construction materials and the warmfront initiative to retrofit homes is to be extended to 2012.
The strategy identifies that the IT, Electronics and ICT sectors have the potential to reduce carbon emissions by 15%. Key areas cited are motor systems, logistics, smart building technologies, energy grids and remote communications. It is stated that this could result in an estimated increase in global low carbon electronics design markets from $1 billion in 2008 to $20 billion in 2012 to $51 billion in 2019.
London is seen as a world leader for carbon trading with an estimated 39% of carbon transactions going through London. General finance and business services are expected to benefit from the increase in the low carbon sectors.
Skills and training are seen as a major area with the identification of relevant and focused support to support the above areas being of paramount importance. Renewable energy is seen as requiring far more support than is currently available.
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The Government is also developing ‘Low Carbon Economic Areas’ to accelerate low carbon economic activity in areas where Britain’s existing geographic and industrial assets give a locality clear strengths. The first of these will be located in the South West of England and will focus on the development of marine energy demonstration, servicing and manufacture. 2.7. Towards a Low Carbon Economy – economic analysis and evidence for a low carbon industrial strategy, 2009
The aim of this Economics Paper is to review the economic rationale and supporting evidence of the potential for UK Government action to help transform the UK economy to one based on low carbon production and consumption. It looks at the issues facing certain sectors when transforming to the low carbon economy.
Specific economic opportunities mentioned in the report include:
• Opportunities for business will arise from growth in the Low Carbon and Environmental Goods and Services sector (LCEGS), which is expected to expand by over 4% pa over the next seven years.
• Opportunities in the supply chains of growing sectors, such as low carbon energy, and in the sectors providing business services such as finance, consultancy and business advice.
• There are significant economy-wide benefits to be gained from, developments in low carbon energy and transport and from greater resource efficiency and waste management.
• Opportunities for the nuclear and renewable energy industries, prompted by the UK’s mandatory target of 15% renewable energy by 2020. This in turn will create opportunities for the renewable energy supply chains.
• As the economy moves to lower carbon there are expected to be growing business opportunities in waste minimisation, re-use, recycling and recovery as these help reduce overall carbon emissions. New policies and regulatory frameworks are helping to internalise environmental costs hence promoting growth in these sectors.
• For the UK to exploit the low carbon opportunities, capabilities in R&D
• Need to be strengthened and skills need to be adapted. Government can influence these through setting the policy framework, giving clear consistent signals, creating incentives, taxing, regulating and buying goods/services.
• Projections of ‘green jobs’ and the number of ‘green businesses’ crucially will depend on, amongst other factors, the speed and take up of new low carbon opportunities and global market shares captured by UK industry. This will depend on the extent to which existing jobs in traditional sectors may be transformed or displaced by the development of low carbon technologies, abatement in traditional industries and the changing pattern of consumer demand.
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2.8. The Stern Report
The ‘Stern Review on the economics of climate change’ (2006) identifies the need for businesses to adapt and/or take advantage of new opportunities that might arise from changing climatic conditions. In particular it states that it will be more cost-effective to identify solutions now than wait till the effects of climate change are more apparent 45 .
Climate change presents a unique challenge for economics: it is the greatest and widest- ranging market failure ever seen. The Stern Review considers the complex policy challenges involved in managing the transition to such a low-carbon economy, while effectively correcting the market failure caused. It identifies three key elements in making this transition:
• Putting an appropriate price on carbon: through taxes, trading or regulation ensures that people pay the full social cost of their actions, thereby correcting the externality. This will lead individuals and businesses to switch away from high-carbon goods and services, and to invest in low-carbon alternatives.
• Encouraging low-carbon technologies: Research and development, demonstration, and market support policies are all needed to help and drive innovation and bring about interest from the all sections of the community. Smaller firms and households are envisaged to have better access to capital while larger firms facing problems such as long return periods and lack of credibility in the carbon markets.
• Encouraging people to change their behaviour: This can be corrected with policies on regulation, information and financing, labelling and certification.
Overall, the evidence presented in the Stern report shows that ignoring climate change will eventually damage economic growth. Tackling climate change is the pro-growth strategy for the longer term, and it can be done in a way that does not cap the aspirations for growth of rich or poor countries. The earlier effective action is taken, the less costly it will be. At the same time, given that climate change is happening, measures to help people adapt to it are essential. 2.9. UKCIP09
The UK Climate Impacts Programme (UKCIP) publishes climate change scenarios on behalf of the Government. The scenarios considered are Low Emissions, Medium-Low Emissions, Medium-High and High Emissions. These show how the UK’s climate might change in this century.
The UKCIP09 report builds on the previous study UKCIP02 and was launched in July 2009. It includes all the latest developments in climate modelling and science. In particular, it is said to incorporate probabilistic data consequently allowing for enhanced quantification in risk assessment, eliminating the element of uncertainty present in the previous analysis.
45 Cabinet Office - HM Treasury (2006) Stern Review on the economics of climate change
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An assessment of impacts on businesses in the region has been undertaken using the principals developed by UKCIP and Trade and Professional Bodies joint project, ‘A Changing Climate for Business’. The four key messages for businesses released by the UKCIP09 include:
• Climate change will bring in commercial opportunities as well as threats
• Businesses that have global markets or suppliers will probably be affected by climate change in other countries
• Although the impacts of climate change are uncertain, they can be managed like any other business risk
• Planning ahead is often more likely to lead to cost-effective adaptation than responding to changes as they happen
This led to the creation of the ‘Business Areas Climate Impacts Assessment Tool’ (BACLIAT). This tool stimulated the assessment of climate change impact on different sectors and is divided into the following headings:
• Logistics: vulnerability of supply chains, utilities, and transport infrastructure
• Finance: Implications for investment, insurance and stakeholder reputation
• Markets: Changing demand for goods and services
• Process: Impacts on production processes and service delivery
• People: Implications for workforce, customers and changing lifestyles
• Premises: Impact on building design, construction, maintenance and facilities
• Management
• Management implications 46 .
The above help provide actions for businesses and decision makers to help overcome the impacts of climate change. 2.10. Low Carbon and Environmental Goods and Services – an industry analysis
The UK market for the full sector was £107 billion in 2007/08 and grew to £112 billion in 2008/09 a growth level of 4.3%. The global market value in 2007/08 was £3,046 billion.
Level 1 UK Market Values
46 UK Climate Impacts Programme (2009), A Changing Climate for Business
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Total £'Billions % Total Level 1 2007/08 Environmental Sub 22.28 20.87 RenewableSectors Energy Technologies Sub 31.10 29.14 EmergingSectors Low Carbon Sub 53.34 49.98 TotalSectors All Sub 106.72 100.00 Sectors
Level 2 UK Market Values – 2007/08 Total Total £'Billions £'Billions Level 1 Level 2 2007/08 2008/09 Air Pollution 0.95 0.98 Environmental 0.74 0.77 EnvironmentalConsultancy 0.15 0.16
MarineMonitoring Pollution 0.12 0.12 Environmental NoiseControl & Vibration 0.20 0.21 ContaminatedControl 0.91 0.94 WasteLand 4.80 4.95 WaterManagement and Waste Water 7.93 8.1 RecoveryTreatment and Recycling 6.48 6.72
Hydro 0.50 0.52 Wave & Tidal 0.07 0.08 Renewable Biomass 4.95 5.22 Energy Wind 11.46 12.26 Technologies Geothermal 9.22 9.72 Renewable Consulting 0.48 0.49 Photovoltaic 4.43 4.72
Alternative Fuel Vehicle 12.61 13.11 Alternative Fuels 18.45 19.4 Low Additional Energy Sources 1.19 1.25 Carbon Carbon Capture & 0.46 0.48 CarbonStorage Finance 5.19 5.64 Energy 2.54 2.63 BuildingManagement 12.90 13.53
TechnologiesTOTAL ALL SUB 106.72 112.00 SECTORS
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2.11. CRC Energy Efficiency Scheme
The CRC Energy Efficiency Scheme (CRC) is a new mandatory emissions trading scheme that aims to improve energy efficiency and reduce the amount of carbon dioxide
(CO 2) emitted in the UK. This is vital to achieving the Government’s overall targets of reducing GHG emissions by 2050 by at least 80% compared to the 1990 baseline.
The CRC will affect over 5,000 organisations in the UK, while an additional 15,000 organisations may be required to register under the scheme. It has been designed to encourage the uptake of energy efficiency measures by leveraging financial and reputational drivers. It is a ‘Cap and Trade’ emissions trading scheme, which means that the total amount of emissions that participants are collectively allowed to emit is capped. It targets large, non-energy intensive organisations such as retailers, large office buildings, universities, hospitals, local authorities and central government departments.
Participants will be required to purchase allowances corresponding to their energy use and surrender them at the end of the year. Allowances will be auctioned with the revenue recycled to participants based on their performance in a CRC league table 2.12. National Performance Indicators (NIs)
NI 185 on percentage CO 2 reduction from LA operations
The indicator assesses year on year reductions of CO 2 emissions emitted directly or indirectly as a result of LA operations. Direct emissions include those from sources that are owned or controlled by the local authority e.g. emissions from the combustion in owned or controlled boilers and vehicles, while indirect emissions are those that are a consequence of the activities of the local authority, but occur at sources owned or controlled by another entity e.g. emissions from consumption of purchased electricity or heat, transport-related activities in vehicles not owned or controlled by the local authority and outsourced activities. Covered are all of the authorities own operations and outsourced services, including schools, but excluding social housing.
NI 186 on per capita reduction in CO 2 emissions in the LA area
The indicator measures an annual amount of end user CO 2 emissions across an agreed set of sectors (housing, road transport and business) measured as a percentage
reduction (or increase) of the per capita CO 2 emission from the 2005 baseline year.
NI 188 on Adapting to Climate Change
The indicator comes early in the development of the government’s adaptation programme. It measures the local authority’s progress in assessing and addressing the risks and opportunities of a changing climate. As such it sets out a four-stage process that is useful in providing guidance for adaptation in the public sector:
• Assess the risks and opportunities comprehensively across the area;
• Take action in any identified priority areas;
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• Develop an adaptation strategy and action plan setting out the risk assessment, where the priority areas are; and
• Implement, assess and monitor the actions on an ongoing basis.
Ultimately these objectives are looking to ensure that considering the risks and opportunities from climate change is embedded across all decision-making, services and planning, is providing a major stimulus for local authority work on adaptation. 2.13. National Planning Policy
At the UK level, PPS1 ‘Delivering Sustainable Communities’, PPS22 ‘Renewable Energy’ and the companion guide to PPS22 are intended to encourage the appropriate development of renewable energy schemes, throughout the U.K. This will include schemes in urban as well as rural locations, ranging in size from the domestic to the commercial scale. The statements highlight that if the targets are to be met, a positive and innovative approach will be required. 2.14. Green Stimulus
The UK announced its stimulus measures as part of its November 2008 Pre-Budget Report 2008 for the 2009-2011 budget years, while the 2009 budget (announced in April 2009) also includes stimulus policies. While these two plans are primarily focused on propping up the economy, the measures do include some ₤27.4 billion in environment- related spending (see Chart x below).
The UK Government’s plans to place a priority on three areas: power grids, railways, and renewable energy (see Figure 1 below). The stimulus package extended the existing Renewable Portfolio Standard program by another ten years, and also indicated support for the inclusion of aviation activities in the EU Emissions Trading Scheme from 2012. The Government expects to create some 350,000 jobs from these proposals.
Before September 2008, the British Government had already pledged some ₤50 billion in environment-related spending, totalling around ₤80 billion when added to the most recent package. In 2008, the UK established a Department of Energy and Climate Change, and was one of the first countries in the world to encode its greenhouse gas emission reduction targets into law with the Climate Change Act of 2008. The British Government is now ramping up environment-related investment to promote business opportunities aimed at reducing global warming.
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Figure 1: UK Government Green Stimulus Package
Source: Diawa Institute of Research, July 2009, ‘Green Industrial Revolution Gaining Momentum, Promising Industries and Players in
Next-Gen Eco, Energy Technologies’. Published on the London Accord website. See http://www.london-
accord.co.uk/images/reports/pdf/daiwa_greenindustrial.pdf
3. REGIONAL POLICY AND PRACTICE
3.1. Prospectus for London, the Low Carbon Capital
The report is a study carried out by Ernst and Young. It justifies why London is well positioned compared to other cities to promote a low carbon economy (e.g. London is the location for 75% of all carbon market trading desks; London is home to 75 AIM listed clean technology companies P12/13 + P21) It explores the opportunities associated with promoting a low carbon economy, how they may be realised and how they may benefit the UK as a whole (p14).
The Ernst and Young study shows that under the most likely scenario the Mayor’s Climate Change Action Plan measures would result in £845 million of investment per annum to 2025, creating 14,000 jobs (gross) per annum and £720 million per annum in Gross Value Add to the UK Economy in 2025. However, assuming that London can win a proportionate amount of world share in the low carbon economy this would represent an annual opportunity of £3.7bn per annum.
A number of obstacles will need to be overcome in order to successfully implement the Mayor’s proposed programme and to unlock the additional market potential, these include financing, the establishment of firm planning targets, comparative investment compared to other Global cities and fragmentation of public bodies overseeing low carbon agenda in London. A series of recommendations are made in the report including:
• The provision of financial incentives for low carbon businesses
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• Investigation of incentives for low carbon investments that can be incorporated within the tax regime
• Working with the London Boroughs and Central Government to accelerate the planning regime for low carbon projects.
• A single point of contact for private enterprise to engage with government.
• The setting of clear targets for low carbon projects
• Collaboration with London Boroughs and National boroughs as well as the private sector to gain firm financial commitments and ensure that financing is put in place to deliver low carbon opportunities. 3.2. London City Charter (April 2009)
The City Charter is a declaration of intent by London’s elected leaders (Mayor, Boroughs and City Corporation), reflecting the aspirations of the capital’s government at regional and local level. It will help to ensure that London’s government continues to deliver efficient and high quality services to its residents. Starting from the powers and duties of these institutions, it has as its key purposes: democratic leadership, the delivery or regulation of public service and the oversight of appointed service-providers. The people of London – residents, workers and visitors - are its intended beneficiaries.
The document sets out the roles of the Mayor, Boroughs and City Corporation, defining where they overlap and also where they complement national agencies and departments. Areas for joint action by the Mayor, Borough Leaders and their partners include a specific action to respond to climate change as well as delivering the best possible transport outcomes for London and supporting economic recovery in London including tackling worklessness. 3.3. Mayoral Strategies
3.3.1. The draft London Plan (October 2009)
Under the legislation establishing the GLA, the Mayor has to produce a spatial development strategy (SDS) which has been called the London Plan. The Plan has to be taken into account when planning decisions are taken in any part of London unless there are planning reasons why it should not.
The draft Plan emphasises the need for London’s economy to grow in a sustainable way. It also identifies key actions and priorities that should be implemented in London in order to mitigate and adapt to climate change. These priorities are not described in terms of economic opportunities and the idea of a low carbon economy is not explored in this report. The London Plan is closely integrated with the Mayor’s Energy Strategy, and promotes energy efficiency and increased reliance on renewable resources.
A number of initiatives are mentioned that would help reduce energy use such as sustainable design and consultation, on-site generation, combined heat and power and
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renewable technologies. The plan also acknowledges that despite mitigation measures, London will still face some of the impacts of climate change. Detailed policies referenced of relevance include:
• Support for the establishment of green industries and green practices in business;
• encouraging demand for environmental goods and services by applying policies on sustainable design and construction;
• a wide range of transport measures such as integrating transport and development, providing strategic rail services, increasing the capacity, quality and integration of public transport, providing new cross-London links, enhancing London National Rail network;
• collaboration to minimise the level of waste generated, increase reuse and recycling and composting of waste and reduce landfill disposal;
• developing spatial policies for waste management, including specific actions on aggregates;
• support to the Energy strategy and its objectives of reducing carbon dioxide emissions, improving energy efficiency and increasing the proportion of energy used generated from renewable sources through a number of initiatives (e.g. integration of land use and transport policy and reducing the need to travel by car; inclusion of energy efficient and renewable energy technology and design; facilitating and encouraging the use of all forms of renewable energy where appropriate including giving consideration to the impact of new development on existing renewable energy schemes; minimising light lost to the sky, particularly from street lights);
• assessment of the energy demand of proposed major developments;
• supporting the provision of renewable energy;
• work in partnership with appropriate agencies to increase water efficiency, ensure a sufficient supply and enhance quality;
• assess and develop policies for the likely impacts of climate change on London in light of the outcome of the work by the London Climate Change Partnership;
• Expectation for future developments to meet the highest standards of sustainable design and construction. 3.3.2. The Mayor's Economic Evidence Base, GLA, 2009
The Evidence Base highlights the key strengths in London and their significance for a Low Carbon Economy. It builds on London’s competitive strengths across a range of factors, including access to qualified staff, access to markets and a competitive business environment that encourages innovation. It also identifies that people like to live and visit London due to its variety of career opportunities, the diversity and openness to different
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cultures, its green spaces as well as the vast array of leisure and cultural activities. This document seeks to provide an economic evidence base to support the public consultation drafts of the three Mayoral strategies currently being revised: the London Plan, the Economic Development Strategy and the Transport Strategy (see below for further details).
Climate change is identified as a significant risk to London’s future economic prosperity. It suggests that economic activity needs to become more carbon efficient and that there are likely to be economic opportunities in this transition. The report highlights some of London’s key strengths and their significance for a Low Carbon Economy. The report makes reference to the opportunities presented in the ‘Prospectus for London, the Low Carbon Capital’ (Ernst and Young). With regard to employment opportunities, the Evidence Base indicates that the Mayor’s carbon abatement programme is likely to require 14,000 potential low carbon jobs per annum to 2025 for implementation. In terms of economic specialisation and carbon markets, the Evidence Base states that London is central to the EU Emissions Trading Scheme (EU ETS) as European Climate Exchange contracts, traded on London’s ICE Futures Europe exchange, made up 91 per cent of futures trading on the EU ETS in 2008.
3.3.3. The Mayor’s draft Economic Development Strategy for Greater London (October 2009)
The fundamental purpose of the Mayor’s Economic Development Strategy (EDS) is to set out the Mayor’s ambitions for the economic development of the capital. One of the objectives in this draft strategy is to “drive London’s transition to a low carbon economy and maximise the opportunities that this creates”. Two main strands appear to support this objective;
• Developing the expertise and capacity of businesses and technologies to assist adaptation to and mitigation of climate change, for the benefit of London, the UK and the world, which will also provide economic opportunities and new jobs for London’s businesses; and
• Taking measures to reduce London’s carbon emissions and ensure it is adapted to cope with the impacts of climate change.
A number of supporting proposals exist including for the Mayor to lead by example and work with partners to realise the associated economic potential; encourage business participation in exemplary projects; and create a policy framework to address climate change. The transition to a low carbon economy is described as “an urgent environmental necessity”, which could be turned to London’s economic advantage. London should use its experience, expertise and reputation to develop market leadership. 3.3.4. The Mayor’s Transport Strategy: Statement of Intent (May 2009)
This document contains the Mayor’s initial thoughts on a new transport strategy for London. It is in the form of a Statement of Intent, which offers a framework for developing
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the new strategy and tentatively outlines potential policies and proposals that could be developed further. Economic development and population growth is to be supported through the delivery of transport capacity and connectivity improvements, managing demand for travel and ensuring an efficient and effective transport system. It is recognised that this document needs to tackle climate change considering both reducing CO2 emissions and adapting for climate change. Proposed policy measures include:
• Encouraging the use of more sustainable, less CO2-emitting modes of transport and reducing the need to travel, through investment in infrastructure and service improvements and through the promotion of smarter travel initiatives
• Introducing initiatives to incentivise the purchase or use of cleaner vehicles (e.g. car clubs), the scrapping of older, higher CO2-emitting vehicles, and/or the uptake of electric vehicle and other lower carbon technologies; further railway electrification;
• Introducing or promoting stricter carbon emission standards for vehicles controlled, procured or regulated by the Mayor, GLA Group and/or other public sector bodies;
• Promoting behavioural change measures aimed at encouraging smoother driving techniques, better maintenance and operating regimes (e.g. reducing vehicle idling or reducing ground-based aircraft emissions at airports) to reduce CO2 emissions;
• Securing additional low carbon, electricity generating capacity to provide power for transport purposes;
• Improving efficiency of freight movement through greater consolidation of freight deliveries, more off-peak freight movement and a shift from road to water and rail where feasible;
• Risk assessing existing transport assets to determine where there is vulnerability to the impacts of climate change and designing/siting new transport infrastructure to minimise and/or withstand the impacts of climate change; and
• Developing and testing plans and procedures to manage and respond to disruption resulting from the impacts of climate change, e.g. flooding, impacts of heatwaves etc. 3.3.5. The Mayor’s Adaptation Strategy
This strategy identifies how climate change will impact London contains a series of actions to manage the impact and to capitalise on any benefits, although there is less detail on the opportunities that climate change offers. The three key effects of climate change for London are identified as: heat, flooding and drought. Relevant points from this strategy include:
• Longer growing seasons, more cloud free days and potentially windier winters may benefit the generation of renewable energy through biomass, wind turbines, photovoltaic and solar thermal arrays.
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• Many financial services still don’t consider climate risks when making investment decisions. This exposes investors to significant risk, but also misses the opportunity to stimulate an enormous potential market for adaptation information and services.
• London is also exposed to the impact of climate change beyond its boundaries. But at the same time local, national and international demand for the knowledge and skills required to prepare for these changes means that London is well placed to help the world adapt. There is a clear economic opportunity to capitalise on this leading position.
• Incremental changes in the climate may affect London’s businesses and those who do not change their business model will find that opportunities will be missed. 3.3.6. The Mayor’s draft Air Quality Strategy (October 2009)
This is currently a draft Strategy for consultation which presents a framework for delivering improvements to London’s air quality and includes measures aimed at reducing air emissions (including CO2) from transport, homes, offices and new developments, and also increasing awareness of air quality issues. It aims to prioritise actions that contribute to achieving more than one policy objective. For example, measures that reduce emissions of air quality pollutants and also reduce carbon emissions, improve transport choices or promote economic growth. Measures proposed to target reduced transport-related carbon emissions include encouraging smarter travel choices and sustainable travel behaviour; reducing emissions from construction and demolition and raising awareness and promoting lasting behavioural change. 3.3.7. The Mayor’s draft Water Strategy (August 2009)
This is currently a draft strategy has been developed to support the plans and strategies of other organisations by presenting a London-specific view of managing water resources in light of climate change impacts and the ageing water infrastructure. Of particular relevance for the focus of this report and study are the following suggestions:
• Improve energy and water efficiency at the same time, to maximise practical and financial efficiencies. Help Londoners to control their energy and water bills as well as to reduce their GHG emissions.
• Work with the water companies, the Environment Agency, and other partners in joint programmes to raise awareness of the benefits of water efficiency, including the possible savings that householders can achieve through their water and energy bills.
• Work with the water companies and other partners to raise awareness of the high quality of London’s tap water, the contribution of bottled water to climate change, and the benefits of drinking water to health and wellbeing.
• Encourage green roofs, rainwater harvesting, grey water recycling and sustainable drainage through planning policies in the new London Plan.
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• Work with Thames Water and other partners to identify ways in which the management of sewage can provide renewable energy and reduce GHG emissions. Encourage Thames Water and other partners to identify opportunities to use new technologies to contribute towards the Mayor’s targets for decentralised energy, particularly through the production of biogas, and GHG emissions reduction. 3.3.8. The Mayor’s draft Business Waste Management Strategy (May 2007)
This document comprises a management strategy for the 75 per cent of London’s waste that comprises commercial, industrial and construction, demolition and excavation waste. The strategy indicates that, whilst London currently recycles nearly half of all its waste, its performance is poor compared to other regions in the country and in an international context. London continues to rely too heavily on landfill to manage its waste, particularly on sites outside the Greater London area. The Capital’s performance must improve; inaction will lead to a worsening environment that will harm London’s businesses and communities. Whilst driven specifically by waste management elements there are clear benefits for a low carbon economy. This is recognises in this document which states that London’s businesses and waste sector can play a key role in reducing the Capital’s carbon footprint, by using and managing waste more sustainably. This will also help to stimulate the secondary materials economy and can provide the reliable sources of material needed to catalyse investment in recycling industries or non-incineration energy from waste industries.
The economic benefit to London of sustainable waste management and the smart use of resources is significant. By implementing sustainable waste management systems, London’s businesses can reduce the costs of waste management and legal compliance, which are rising. They may also reduce their expenditure through improved manufacturing techniques and more holistic thinking around the resource implications of their business processes. The strategy goes on to describe in detail the ways in which businesses can implement sustainable waste and resource management systems and techniques.
Developing the required infrastructure within London will expand London’s green economy and benefit Londoners through the provision of new jobs and training opportunities. Furthermore, the development of key waste facilities will enable businesses and the waste management industry to maximise the efficiencies in waste and recycled materials transportation. 3.3.9. The Mayor’s Municipal Waste Management Strategy (September 2003)
This strategy covers London’s municipal waste, which is collected by the London boroughs from households, including litter from the streets and some of the waste from businesses. The vision is that by 2020, municipal waste should no longer compromise London’s future as a sustainable city. The strategy focuses on waste reduction, reuse and recycling and recognises that if London is to become sustainable, a more fundamental long-term change is required to establish a secondary materials economy. The collection of more recyclables will require more reprocessing facilities in London. The Strategy sets out 44 policies and 101 supporting proposals
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3.3.10. The Mayor's Energy Strategy (February 2004)
The Energy Strategy sets out the Mayor’s proposals for changes in the way that energy is supplied and used within London during the next ten years and beyond. The strategy aims to improve London’s environment, reduce London’s contribution to climate change, tackle fuel poverty, and promote economic development in the capital. This will be done by promoting energy efficiency and introducing new and renewable energy technologies across London.
The production, distribution and consumption of energy involve a complex configuration of infrastructure and activities that ranges from the local through to the global scale. The strategy provides a framework for the work on energy taking place in London and specifically covers potential improvements in sustainable energy use as well as examples of potential improvements in sustainable energy provision. The document contains a series of policies and proposals including
• reduction of emissions of carbon dioxide by 20 per cent, relative to the 1990 level, by 2010, as the crucial first step on a long-term path to a 60 per cent reduction from the 2000 level by 2050;
• target for at least one zero-carbon development in every borough in London by 2010;
• target for no occupied dwelling in London with a SAP rating less than 30 by 2010, and less than 40 by 2016;
• Promotion of energy-efficient electrical appliance, and strongly encourages the use of efficient electrical appliances in London’s households and offices.
• Generation of at least 665GWh of electricity and 280GWh of heat, from up to 40,000 renewable energy schemes by 2010. 3.3.11. Action Today to Protect Tomorrow: The Mayor’s Climate Change Action Plan (February 2007)
This plan acknowledges the risks associated with climate change and sets out how London will contribute and show leadership in meeting this global challenge. It identifies carbon and financial savings associated with the proposed measures and emphasises the importance of putting a price on carbon. Relevant points to note from the report is that it states there is an absolute priority for the Mayor is to work with national government to introduce a comprehensive system of carbon pricing Specific chapters with priorities and economic opportunities are defined for existing homes, commercial and public sector activities, new build and development, energy supply. Ground based transport and aviation.
• The document also contains a number of priorities for government including - Encouraging behaviour change ;
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- Ensuring that new buildings are designed and constructed to high standards of energy efficiency and renewable energy is used; - Enabling 25% of London’s energy supply to be moved off the grid and on to local, decentralised systems by 2025 - Education and training: - Reduction of emissions from car and freight traffic and promoting low carbon vehicles and fuels; - Seeking to influence EU and international aviation policy, - Working with airlines to cut carbon emissions and - Challenging the need for further runway expansion at London airports.
3.4. 'Smarter Finance', Forum for the Future (June 2009)
This report has been prepared as part of Forum for the Future’s Climate Finance project, and presents opportunities to create carbon savings in the UK Public Sector with limited funds. “Smarter finance” is defined as using money in ways that increase the funds that can be spent on carbon savings. This can involve raising more capital, or investing it rather than granting it, so that it can be reused.
The report suggests that are five models for using finance and five sources of finance open to the UK public sector, which can be combined to create news ways of financing carbon reductions:
• Sources of capital: grants, loan finance, levies, partnerships and equity investment; and
• Funding models: trading schemes, service companies, revolving funds, offsetting, and behaviour change enterprises.
The report presents a “heat map” of the emission sources best tackled with smarter finance. For each emission area, the map shows the top three opportunities for new models. The emission sources are prioritised as follows, in terms of greatest opportunity to tackle carbon savings with finance:
• Housing & non-domestic buildings;
• Energy generation;
• Transport; and
• Waste.
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SUMMARY FOR CONSULTATION QUESTIONS
Issue Quote Source National carbon reduction 80% reduction in Greenhouse Gases by 2050 Climate Change Act, 2008 target Sustainable Buildings All dwelling s to be zero carbon by 2016 Building a Greener Future Policy Statement, 2007 Non-domestic buildings to be zero carbon by 2019 Code for Sustainable Homes the least-cost option is likely to entail a major contribution UK Building Regulations (BREEAM) from energy efficiency improvements in both buildings and surface transport between now and the mid-2020’s Initiatives that would help reduce energy use…inc. Building a low carbon economy – the UK’s contribution to tackling Sustainable design and construction climate change, 2008 Stated aim to have smart meters in all homes by 2020. The The London Plan warfront energy efficiency retrofit programmes are to be extended to 2012
Low-carbon technologies Research and development, demonstration (of low-carbon The Stern Report tech) ‘support for technology innovation’ Building a low carbon economy – the UK’s contribution to tackling climate change, 2008 The least-cost option is likely to entail a major contribution Building a low carbon economy – the UK’s contribution to tackling from…the radical decarbonisation of power generation by climate change, 2008 2030 Wind energy “ “ Solar PV “ “ Heating “ “ the least-cost option is likely to entail a major contribution “ “ from… the production of heat from 2020 Introducing a new financial incentive mechanism to The Renewable Energy Strategy encourage a very large increase in renewable heat ; Delivering more effective financial support for small-scale The Renewable Energy Strategy heat and electricity technologies in homes and buildings; Low Carbon Transition Plan Procurement of green products and services by the public sector
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Issue Quote Source Renewables Obligation The Renewable Energy Strategy Ensuring appropriate incentives for new electricity grid infrastructure and removing grid access as a barrier to renewable deployment; Exploiting the full potential of energy from waste , by discouraging the land filling of biomass as far as is practical. The least cost delivery of the renewable energy goals for 2020 might require approximately… 30% of the UK’s renewable energy to come from bio-energy (energy produced from the direct or indirect combustion of biomass material such as energy crops, wood and waste, and biogas) across the heat and electricity sectors (in addition to bio-energy in transport). The main ones that are of most interest and importance to the Low Carbon Industrial Strategy London region are low carbon: Vehicles, Construction & Energy, Efficiency, IT, ICT and Electronics , Aviation , and Carbon Trading with the associated Business and finance sectors .
Business services Climate change will bring in commercial opportunities as well UKCIP09 as threats Businesses that have global markets or suppliers will probably be affected by climate change in other countries Although the impacts of climate change are uncertain, they can be managed like any other business risk Planning ahead is often more likely to lead to cost-effective adaptation than responding to changes as they happen Lawyers, accountants, management consultants, architects and engineers will all need to advise their clients on the ‘reasonably foreseeable’ impact of climate change. Those who do not change their business model will find that
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Issue Quote Source opportunities will be missed.
Supply chains of growing sectors, such as low carbon energy, The Mayor’s Adaptation Strategy and in the sectors providing business services such as finance, consultancy and business advice. Growing business opportunities in waste minimisation, re-use, recycling and recovery Embedding climate change adaptation into the core activities of businesses Economic instruments Economic instruments Securing the Future - The UK’s Sustainable Development Strategy, 2005 Carbon price The Stern Report Action Today to Protect Tomorrow: The Mayor’s Climate Change Action Plan (February 2007) Building a low carbon economy – the UK’s contribution to tackling climate change, 2008 Securing the Future - The UK’s Sustainable Development Strategy, 2005 Environmental tax/subsidies Building a low carbon economy – the UK’s contribution to tackling climate change, 2008 Skills and training Skills and training are seen as a major area with the Low Carbon Industrial Strategy identification of relevant and focused support to support the above areas being of paramount importance. Renewable energy is seen as requiring far more support than is currently available. Education and awareness raining programmes to ensure
development of skills Action Today to Protect Tomorrow: The Mayor’s Climate Change R&D capabilities Action Plan (February 2007)
Towards a Low Carbon Economy – economic analysis and Protection of ‘green jobs’ and the number of ‘green evidence for a low carbon industrial strategy, 2009 businesses’ Transport the least-cost option is likely to entail a major contribution Building a low carbon economy – the UK’s contribution to tackling from… the increasing application of electricity to surface climate change, 2008 transport from 2015
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Issue Quote Source Planning system Helping the planning system to deliver, by agreeing a clear The Renewable Energy Strategy deployment strategy at regional level similar to the approach established for housing Supplement to PPS1 Planning and Energy Act, 2008 Working with the London Boroughs and Central Government Prospectus for London, the Low Carbon Capital to accelerate the planning regime for low carbon projects.
Finance Smaller firms and households are envisaged to have better The Stern Report access to capital While larger firms facing problems such as long return periods The Stern Report and lack of credibility in the carbon markets. Provision of financial incentives for low carbon businesses Prospectus for London, the Low Carbon Capital Collaboration with London Boroughs and National boroughs Prospectus for London, the Low Carbon Capital as well as the private sector to gain firm financial commitments and ensure that financing is put in place to deliver low carbon opportunities.
Behaviour This can be corrected with policies on regulation, information The Stern Report and financing, labelling and certification. The report recommends policies including information and Building a low carbon economy – the UK’s contribution to tackling encouragement climate change, 2008 Behavioural change will result in financial savings and a Action Today to Protect Tomorrow: The Mayor’s Climate Change better quality of living. Action Plan (February 2007)
Sustainable Consumption and Transform the UK economy to one based on low carbon Securing the Future - The UK’s Sustainable Development Strategy, Production production and consumption 2005 Opportunities for business will arise from growth in the Low Towards a Low Carbon Economy – economic analysis and Carbon and Environmental Goods and Services sector evidence for a low carbon industrial strategy, 2009 (LCEGS) Opportunities in the supply chains of growing sectors, such as low carbon energy, and business services including finance, consultancy and business advice.
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Issue Quote Source Sustainable communities Critical to determine the communities are positively affected Securing the Future - The UK’s Sustainable Development Strategy, by the changes 2005 Climatic effects of climate high summer temperatures will become more frequent UKCIP09 change very cold winters will become increasingly rare winters will become wetter and snowfall is set to decrease throughout the UK; Relative sea levels are set to rise around most of the UK shoreline. Flood defence is necessary
Priority Sectors (for London) Primary areas for GHG reduction : Waste, building efficiency Prospectus for London, the Low Carbon Capital (residential, public and commercial) transport (ground Action Today to Protect Tomorrow: The Mayor’s Climate Change transport and aviation sector, especially in light of the runway Action Plan (February 2007) expansion), and decentralised heating
Primary areas for economic opportunities of climate change: • Sectors providing business services such as finance, Prospectus for London, the Low Carbon Capital consultancy and business advice
• Knowledge and R&D to supply skills and innovation for building low carbon energy supply industries (and to support govt. funding initiatives e.g. for retrofitting)
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Appendix C - Stakeholder Consultation
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THE STAKEHOLDER CONSULTATION
As outlined previously, the stakeholder consultation comprised a combination of workshops and individual interviews. This section outlines the key themes emerging from the consultation.
Interviews
We held a total of 18 interviews with stakeholders from the academic community, London Boroughs, NGOs, trade associations, renewable energy consultancies, other public bodies and private sector organisations.
Some of the key specific points emerging from the interviews are as follows:
• Academic community: the academic stakeholders held the view that adaptation is key and that London needs to take leading role. A particular requirement is to upskill the existing workforce to enable the city’s extensive building stock to be retrofitted. These stakeholders also identified the need for the academic community and the private sector to collaborate regarding the skills needed and the provision of courses and training to meet that demand. They also highlighted that cultural differences between Boroughs can be a challenge in terms of planning and priorities. A more community-based approach is required in terms of adaptation initiatives and providing information on low carbon programmes to individuals.
• London Boroughs: Borough representatives supported the stated ambition for London to lead the low carbon economy, but felt that the city is in danger of losing out. There is a need to streamline the policy environment as a plethora of bodies are involved (LGA, GLA, etc). They emphasised that the creative industries can play a crucial role in delivering communication to the public on key issues and therefore drive behavioural change. Borough stakeholders also agreed that adapting and retrofitting are London’s biggest issues. They discussed the need for a more diverse economy and a more locally-focused approach. Sustainable transport was also cited as key, but this requires further investment and local development.
• NGOs: NGO representatives felt that local authorities should lead by example. Planners, in particular, need to be more involved and engaged in the low carbon agenda. However, greater capacity and skills are needed, along with financial investment to enable longer-term thinking. New products are being developed, for example solid wall insulation, but the market is not well developed nationally (and the situation is worse in London). The city’s ethnic diversity is a challenge in terms of driving buy-in and engagement, and a more community-based approach is required. London is also losing out in terms of leadership on sustainable transport. New York was seen as a potential rival to London in terms of carbon trading and the city will need to work hard to retain this leadership.
• Private sector: business representatives emphasised the need for a more ‘streamlined’ regulatory environment. Government policy and regulation is certainly required, but a balance needs to be struck between policies that enable action versus that which stifles innovation. There was agreement that business can provide
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solutions, but too much policy can create uncertainty. The private sector also needs to be brought on board at the earliest stage of policy development, particularly regarding carbon. London is in a unique position given its transport links, infrastructure and status as a global financial centre. There was also a need to create a ‘critical mass’ of projects in order to drive investment by the larger financial houses, or opportunity to develop an investment fund to aggregate small projects. The refurbishment of building stock should be a key priority. There is also need for clarity on what a ‘low carbon London’ means.
Workshops
Four half-day workshops were held with stakeholders, with each workshop focusing on a specific stakeholder group: London Boroughs, other public sector representatives, the private sector and skills/academics.
As set out in Appendix A, many of the stakeholders at the workshops found it challenging to articulate the economic challenges and opportunities for London in terms of moving to a low carbon economy. Attendees tended to focus on climate change impacts (both in terms of mitigation and adaptation) without necessarily identifying the economic focus inherent in these. The various comments made and messages from the workshops are outlined in the table below:
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Economic Challenges Economic Opportunities Priority Areas Identified
Workshop A Regulation Green and blue space Challenges: innovative policy, knowledge (London Education planning/tourism/amenities/use of transfer to local business Boroughs) Cost outdoor space Strain on services Product/technological innovation Opportunities: leading by example, setting Demand for new skills and expertise scene for innovation Procurement systems
Workshop B Public understanding Localising economies and production Challenges : funding, procurement, skills, Spaces (not just buildings) Pan-London skills academies political will, ‘fog’ of initiatives (Other public Addressing transport, retrofitting Consumer education and advice sector) Opportunities: carbon markets, R&D, retrofit, carbon ‘capacity’, new transport systems, community engagement
Workshop C Behaviour change Behaviour change Challenges: Infrastructure Infrastructure -Inadequate energy production capacity (Private Transport systems Transport systems -Accreditation standards for businesses sector) Health risks Health risks -Structural issues for finding and developing Energy costs Energy costs right skills and upskilling -The need for a cultural shift -Councils don’t offer recycling to businesses
Opportunities: -London as a hub in terms of finance/investment, knowledge base, and design of SME carbon trading scheme -Smart Meters -Accreditation standards for businesses -Auditing carbon impacts -Application of cross sector/transferable skills
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Economic Challenges Economic Opportunities Priority Areas Identified
-Waste and recycling for SMEs -Recycling commercial waste (83% businesses involved in green waste; 39% involved in energy efficiency) -Bio-diesel from cooking oil
Workshop D Green roofs, drainage, grey water Challenges supply –Getting new tech. to market/ to scale (Academic/ Local food –Lack of pan-London awareness of other skills sector) initiatives e.g. centres for excellence in London
–Lack of understanding of benefit of renewable energy to commercial outfits –Lack of confidence in whether carbon trading will mitigate climate change –Problem convincing private sector landlords –Uncoordinated curriculum for school ambassadors to be successfully implemented
Opportunities Low carbon tech: Ground Source Heat Pumps, Solar Hot Water Boilers, Carbon Capture and Storage, Waste to Energy Sustainable Buildings: –London could be world leader in sustainable buildings and retrofitting –Buildings Energy Efficiency Programme/Home Energy Assistance Programme –Pay as you save –Use of recycled materials & new cement Skills: –Sector skills councils funding for low carbon
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Economic Challenges Economic Opportunities Priority Areas Identified
technologies –Opportunities include the handyperson scheme & on-line learning Creative industries + design: –Mass media / main streaming (of low carbon technologies) –Human scale of low carbon change –Learn from public health campaigns (smoking / seat belts)
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Emerging themes
A number of themes emerged from the consultation process as a whole, including the following
• Taking leadership on an issue: there is an opportunity for London to take a leading role on a low-carbon issue. Transport and renewable technologies were cited by a number of stakeholders as particularly relevant examples
• Addressing the planning system: the planning system is in need of reform, in terms of engagement, capacity building and pan-London collaboration. Stakeholders recognised that this is a wider systemic issue, but one that would need to be addressed if a low carbon future for London is to be realised
• Upskilling the workforce: there is an urgent need to ‘upskill’ the existing workforce, particularly regarding retrofitting London’s building stock. This could have several additional and interlinked economic benefits including reducing unemployment, skilling school leavers and strengthening the city’s skills base, which would in turn attract further investment into the city
• Taking a community-focused approach: engagement on the low carbon agenda and its opportunities should happen at community level. A number of stakeholders reiterated that a blanket, pan-London approach will not work given the economic and cultural diversity of the city. These stakeholders expressed a view that, given that London is a connection of ‘villages’, a community or village-centric approach should be taken (this could be within or across individual Boroughs). This would enable London’s diverse economy to develop and grow
• Simplifying procurement: several stakeholders recognised a need to simplify the procurement/bid process, whilst also building a whole life costing approach into it, rather than just focusing on ‘value for money’. Again, there was recognition that this is a wider systemic issue, but a vital one for embedding longer term thinking into economic and policy decisions
• Leading the way: leadership in its wider sense will be key to London’s success in moving to a low carbon economy. This leadership is not only in terms of Boroughs, or on a particular issue (e.g. transport), but also in terms of overall political will and engagement. A longer-term view (beyond simple parliamentary or council terms) is imperative.
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Workshop and Interview Attendees
Workshops
Workshop A: Wednesday 30 th September, 9.30-12.30 – Borough Representatives
Joe Baker LB Barking & Dagenham
Naomi Baker LB Southwark
Fiona Booth LB Lambeth
Andrea Franca LB Sutton
Tom Hemming LB Haringey
Ajit Matharu LB Hounslow
Simon Mills City of London
Carolyn Seymour LB Waltham Forest
Workshop B: Wednesday 30 th September, 2-5pm – Other Public Sector
Penny Bramwell GOL
Chris Church Community Environment Associates / Chair of London21
Paul De Zylva Friends of the Earth
Darryl Newport Sustainability Research Institute, UEL
Darren Shirley National Energy Action
Stefan Trinder Transport for London
Ann-Marie Wimshurst Metropolitan Police Service
Workshop C: Thursday 1 st October, 9.30-12.30 – Private Sector
Gillian Econopuly London Chamber of Commerce and Industry
Hannah Holdroyd Federation of Small Businesses
Deborah Owens GOL
Dave Pickering National Grid
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Workshop D: Thursday 1 st October, 2-5pm – Academics / Skills Bodies
Kirsty Balmer London Sustainability Exchange
Gayle Burgess London Sustainability Exchange
Vince Glover Summit Skills
Will McFarland London Sustainability Exchange
Kirstin McIntosh LDA
Iain McNab GOL
Elinor Blair Defra
Jonathan Pettit Lantra
Dennis Moynihan Thames Gateway Institute for Sustainability
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Interviews
Name Organisation Location
1. Lord Julian Hunt UCL By phone
2. Tom Cumberlege Carbon Trust Face to face
3. David Fell Brook Lyndhurst Face to face
4. Andy Deacon Energy Saving Trust Face to face
5. Professor Tony Day London Southbank University Face to face
6. Joanne Wade Impetus Consulting By phone
7. Frank Wingate West London Business By phone
8. Samantha Heath London Sustainability Exchange Face to face
9. Cllr Sean Brennan Leader of Sutton By phone
10. Annie Sheppard Chief Exec, Southwark By phone
11. Rob Fox and Judith London First By phone Salomon
12. Rob Whiteman Chief Exec, Barking & By phone Dagenham
13. Jonathan Garrett Balfour Beatty By phone
14. Simon Houghton- Tate & Lyle By phone Dodd
15. Steve Burton St. Albans Capital By phone
16. Matthew de Villiers Greenstone Carbon By phone
17. Jonathan Walker Great Portland Estates By phone
18. Kegan Lovely BoA/Merrill Lynch By phone
Page 87 Final