The Azimuth Project
Birmingham Green Commission

The Birmingham Green Commission‘s Carbon Roadmap published in 2013 claims to be the world’s first study of carbon reduction potential and costs for a large number of existing mitigation techniques at this level of detail.

The roadmap covers the Birmingham and urban wider area (BUWA) which has:

  • population : 3m
  • economic turnover : £50bn pa.
  • energy bill : £5.1bn 2012, projected to rise to £5.64bn by 2022.

The main levers of concern are:

  • energy price increases
  • grid decarbonisation
  • cost effective measures
  • cost neutral measures
  • realistic potential

Energy and emissions reduction

The commission estimated that measures using existing technology and at zero net costs will lead to a 53% reduction in carbon emissions by 2027.

Energy reduction

  • energy bill (all measures) : 265% £1.3bn $810m pa. savings
  • interest rate : 8%
  • grid decarbonisation : 13% emissions drop
  • cost effective : 53% e.r.
  • cost neutral : 57% e.r.
  • realistic potential : 58% e.r.
  • all measures outcome : 16.1% emission reduction
  • investment needed : $8.1bn
  • annual savings : £1.3bn
  • payback period : 6.2 years
  • constant background economic growth, higher energy prices and grid decarbonisation : 35% drop in BUWA emissions 1990-2022
  • all measures jobs : 4,736 by 2027
  • all measures GVA growth : £251m pa.
  • all measures and energy exploitation : 35+16.1=51.1% emissions reduction

these are the levels of decarbonisation that could be achieved through the wider deployment of the technologies and other options that exist now.

Decarbonising on this scale and at this rate should be possible. The technological and behavioural options are readily available, the energy and financial savings associated with these are clear (even based on conservative assessments), the investment criteria are commercially realistic, and the deployment rates have been judged by the independent Committee for Climate Change to be challenging but still realistic. The economic returns on investment could be very significant indeed. Many of the measures would pay for themselves in a relatively short period of time, they would generate significant levels of employment and economic growth in the process, and if done well there may be a wider range of indirect benefits (not least from being a first mover in this field).The political and business case for very large investments in the low carbon economy is very strong indeed.

However, the transition depends on political and social capital as well as financial capital. The levels of ambition, investment and activity needed to exploit the available potential are very significant indeed. Enormous levels of investment are required, along with major new initiatives with widespread and sustained influence in the domestic, commercial and industrial sectors.

And, of course, we need to think about some major innovations, particularly in stimulating the supply of and the demand for major investment resources.

We need to think about innovative financing mechanisms, based on new forms of cost recovery and benefit sharing and new ways of managing risk.

And we need to develop new delivery mechanisms that can stimulate and sustain demand for investment in low carbon options by overcoming the many potential barriers to change.

the (global) low carbon and environmental goods and services sector has been estimated to be worth £3.2 trillion a year, to employ 28 million people worldwide and to be growing steadily through the recession (BIS, 2010).

City GHG emissions : 40-70% of total. 70% can be attributed to urban consumption (U HABITAT 20110).

the UK Government has adopted, legally binding targets of a 34% reduction on 1990 levels of greenhouse gas emissions by 2022 and a 50% reduction by 2027.

Three key aspects of the transition to a low carbon economy/society:

  • the scope to decarbonise national energy systems, for example through the incorporation of large scale renewables or new nuclear facilities;
  • the potential to deploy smaller scale renewables such as solar PV or micro-wind turbines; and
  • the potential for demand-side reductions through a range of technological and behavioural changes.

Applicable low carbon measures

we should stress that the data sets on which this analysis is based were developed to guide broad strategic decision making and as such they can only be seen to offer broad strategic insights. Further and more detailed analysis of the performance of all options is necessary to reduce levels of uncertainty before any specific decisions are taken based on this data.

The model has the following variables:

  • baseline trends
  • range of applicable low carbon measures
  • capital cost of each measure
  • operational costs of each measure
  • hidden and missing costs of each measure
  • energy savings per measure
  • financial savings per measure
  • carbon savings per measure
  • scope for deployment in BWUA
  • rate of deployment in BWUA
  • total costs and carbon savings
  • cost and carbon savings for different levels of investment decarbonisation.

Low carbon measures by sector

The Birmingham Mini-Stern report The economics of low-carbon cities (2014) gives cost-benefit (damage avoided) and carbon reduction estimates for carbon reduction measures.

For each unit of a measure the energy and savings in carbon and money costs are calculated including all lifetime, running and hidden or missing costs.

The wider effects of GVA are calcuated using standard multipliers from English Partnerships.

Domestic

The analysis shows that bigger domestic wind turbines (with FiT) are the most cost effective measure, but the aggregated carbon saving potential from this measure is relatively small across the BWUA. Renewable heat measures are estimated to have a large potential for carbon saving, with both ground source and air source heat pumps considered to be cost-effective over their lifetime.

Other options that are cost effective but that have relatively small carbon savings relate to the adoption of more efficient appliances. Solar PV (with FiTs) has a relatively small carbon saving potential at the BWUA scale, but reducing household heating levels by one degree has a very significant level of cost-effective carbon saving potential, as does the wider deployment of energy efficient lighting and investments in loft insulation cavity wall for the oldest and least well insulated houses. The biggest aggregate carbon savings in the domestic sector relate to reducing household heating levels by 1 degree and insulating solid walls. Investments in solid wall insulation are not cost effective but as part of a package of measures could be considered cost neutral over their lifetime.

Cost effective opportunities

  • There are £450 million worth of cost-effective, energy efficient and low carbon investment opportunities available in the domestic sector in the BWUA.
  • Exploiting these would generate annual savings of £395 million a year.
  • At commercial rates, these investments would pay for themselves in under two years, whilst generating annual savings for the lifetime of the measures.
  • If exploited, these investments would reduce BWUA carbon emissions by ? TBD.

Cost neutral opportunities

  • There are £1.5 billion of cost-neutral, energy efficient and low carbon investment opportunities available in the domestic sector in BWUA.

  • Exploiting these would generate annual savings of £508 million a year.

  • At commercial rates, these investments would pay for themselves in three years, whilst generating annual savings for the lifetime of the measures.

  • These investments would reduce BWUA carbon emissions by ? TBD.

  • jobs : 2,202

  • indirect benefit : £104m GVA.

Commercial

Cost effective opportunities

  • There are £675 million of cost-effective, energy efficient and low carbon investment opportunities available in the commercial sector within the BWUA area.
  • Exploiting these would generate annual savings of £206 million a year.
  • These investments would pay for themselves in 3.3 years, whilst generating annual savings for the lifetime of the measures.
  • If exploited, these investments would reduce BWUA carbon emissions by 3.7% by 2022, compared to 1990.

Cost neutral opportunities

  • There are £1.4 billion of cost-effective, energy efficient and low carbon investment opportunities available in the commercial sector within the BWUA area. — Exploiting these would generate annual savings of £292 million a year. — Collectively, these investments would pay for themselves in 4.83 years, whilst generating annual savings for the lifetime of the measures. — Collectively, these investments would reduce BWUA area carbon by ? TBD.

  • jobs : 1,794

  • added GVA : £75m pa.

Industrial

Cost effective opportunities

  • There are £564 million of cost effective, energy efficient and low carbon investment opportunities available in industry in the BWUA area.
  • Exploiting these would generate annual savings of £124 million a year.
  • At commercial rates, these investments would pay for themselves in 4.5 years, whilst generating annual savings for the lifetime of the measures.
  • If exploited, these investments would reduce BWUA area carbon emissions by 2.8% by 2022 compared to 1990.

Cost neutral opportunities

  • There are £1.17 billion of cost neutral, energy efficient and low carbon investment opportunities available in industry in the BWUA area.

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

  • Collectively, these investments would pay for themselves in 9.9 years, whilst generating annual savings for the lifetime of the measures.

  • Collectively, these investments would reduce BWUA area carbon emissions by 4.2% by 2022 compared to 1990.

  • jobs : 920

  • added GVA : £66m pa.

Transport

The analysis shows that certain types of hybrid vehicle type can be cost-effective as well as also offering large carbon savings. All of the public transport and demand management options analysed in the BWUA context were not cost effective when assessed only on carbon terms – they could of course be cost effective in other terms, i.e. at reducing congestion. They were also estimated to have the potential to save much less carbon than improving the carbon performance of the private vehicle stock. Overall the introduction of bioethanol and biodiesel to the transport fuel supply was considered to offer the largest carbon saving for the BWUA, and this option is also predicted to be close to being cost-effective.

Cost effective opportunities

  • There are £1.9 billion of cost effective, energy efficient and low carbon investment opportunities available in the transport sector in the BWUA.
  • Exploiting these would generate annual savings of £228 million a year.
  • These investments would pay for themselves in 8.3 years, whilst generating annual savings for the lifetime of the measures.
  • These investments would reduce BWUA carbon emissions by 1.5% by 2022, compared to 1990.

Cost neutral opportunities

  • There are £2.0 billion of cost neutral, energy efficient and low carbon investment opportunities available in the transport sector in the BWUA.
  • Exploiting these would generate annual savings of £230 million a year.
  • Collectively, these investments would pay for themselves in 8.8 years, whilst generating annual savings for the lifetime of the measures.
  • Collectively, these investments would reduce BWUA carbon emissions by 2.1% by 2022 compared to 1990.

Total investments needed

Cost effective opportunities : £4.62bn

References

category: carbon, action