Climate change influencers: The role of public/private collaboration in delivering net-zero
Over 300 councils have declared a climate emergency, that's nearly nine out of 10. All are in the process of developing their low carbon strategies to meet the Government's target of net-zero greenhouse gas emissions by 2050.
Local authorities are custodians of large swathes of real estate, manage transport fleets and influence procurement of more than £55 billion of goods and services. Their work and services touch on everyone’s lives in some way, either directly or indirectly.
So they have a pivotal role to play in the battle to minimise climate change and reduce carbon emissions, but they can’t do it alone. What role should council’s play, and where should the private sector step in?
Local Government Association research shows the work already being done by councils. They’ve installed 17,000 electric vehicle charging devices, spent £40 million on flood defences and £125 per person on environmental services.
Will and influence
"There's a massive will on the part of local authorities," says Amardeep Gill, Partner at Trowers & Hamlins.
"There are big levers that can be pulled that can fundamentally change the way that CO2 emissions are controlled, and a lot of those levers do sit within the public sector sphere of either direct control or influence."
The argument for local authorities leading the way is strong, except there are three big barriers: Funding, legislative and regulatory frameworks and staffing resources.
"We can't forget local authorities have had 11 years of substantial financial cuts," says Paul McDermott, Partner at Trowers & Hamlins.
And, as Gill points out, local authority ambitions for cutting greenhouse gas emissions are predicated on a pot of cash that doesn’t yet exist.
To give a sense of scale, the overall funding required to deliver net zero in the UK is estimated to be £1.4 trillion by 2050, according to the Climate Change Committee.
Need for a framework
Local authorities can have a huge influence at a local level, but that needs unlocking at a national level.
McDermott says: "There needs to be a national planning framework that sets out how the UK gets from here to net zero. The Government's Net Zero Strategy which was published in October is only the start of that process.
"It needs to set out what central Government will fund, what will be supported locally and actions which won’t be funded by the public sector. It needs to cover a broad spectrum of areas including planning, transport, building regulations and skills."
This, he says, will give local authorities and the private sector the confidence to make investment plans and strategic partnerships. The market needs certainty that rules won’t change or that public sector funding streams won’t suddenly be turned off.
Long term planning that is consistent is particularly important given the sums that need investing to deliver the required changes. This means it needs to be a framework that transcends political colours and election cycles.
The framework needs to unlock adequate resources so that local authorities have appropriate staffing levels to deliver what is needed. For example, councils have a huge influence on the private sector through their procurement programme, but that requires well-staffed and appropriately skilled procurement teams.
Giving the market certainty through a framework with defined public sector funding streams, would open the door to a powerful public/private collaboration. This will not only help the UK meet its climate change targets but unlock a big commercial opportunity.
Institutional investors are under increasing pressure to make green investments. The Government recently announced sustainability disclosure requirements for big businesses, which means they must set out the environmental impact of businesses they finance.
Their funding model is generally long-term investment, protecting their assets and delivering a safe return.
McDermott says: "They have money to invest, and one of the things the national framework has to do is to encourage cooperation between public and private sector. It needs to enable local authorities to access those private funding streams to support decarbonisation."
There is also a commercial opportunity to create new industries and high skilled jobs in areas such as clean energy generation and storage, green transport and carbon reduction technology.
According to the Local Government Association, in 2018 there were 185,000 full-time workers in England’s low-carbon and renewable energy economy. It estimates this could rise to over 1.18 million by 2050.
Gill says: "Green technology and green businesses are an obvious way to deliver carbon reductions, but that needs collaboration between the public and private to deliver those sustainable solutions.
"It's potentially a form of public-private collaboration that we haven't seen in the UK before."
And McDermott agrees: "This is a once in a lifetime opportunity for UK PLC. China's investing hundreds of billions of pounds in this technology because it makes commercial sense."
He says the private sector are willing participants in the journey to net zero, and setting out a framework that harnesses that willingness is achievable. So, while local authorities have an important role in delivering climate change mitigation – and adaptation – at a local level, it can be most influential if supported on two sides by central Government and the private sector.
All eyes are on the Government post COP26 to see how it plans to meet the net zero target and gives local authorities and the private sector the certainty and support they need.