Towards a Low Carbon, Climate Resilient Economy

1. Towards a Low Carbon, Climate Resilient Economy Andy Gouldson, Nesha Beharry-Borg, Helen Harwatt and Niall Kerr, SRI, Leeds Johan Kuylenstierna, John Barrett and Corrado Topi, SEI, York Lynne Frostick, Tim Bellerby and Renji Remesan, Hull

2. Project aim: To develop a plan to accelerate and manage the costs of the transition towards a low carbon, climate resilient regional economy.

3. Project overview

4. WP 1 � Mitigation - Specific objectives Enhance understanding of current and future implications of climate policies for businesses in the regional economy. Develop clearer visions of what the low carbon regional economy will look like and implications for key sectors and businesses. Explore different transitions pathways � options as businesses move towards the low carbon economy. Understand scope for regional and local policy to accelerate and manage costs and competitive implications of the transition.

5. Stages 1: Baseline survey of business perspectives and expectations � where do they think they�ll be by 2020, will they meet the targets, what are the key drivers and barriers to investing in low carbon options? 2: Choice experiment of the factors shaping investment in low carbon options � under what conditions will businesses invest, could these conditions be improved to accelerate and manage the costs of transition?

6. Baseline survey

7. Baseline survey

8. Preliminary findings: Baseline survey

9. Climate Science Accepted but Carbon Targets Incredible! Very high levels of confidence in climate science (60% high or v high, 9% low or v low) Credibility of government targets for 2020 is an issue (25% high or v high, 36% low or v low) Credibility of government targets for 2050 is even more of an issue (20% high or v high, 47% low or v low)

10. Committed, Confident but Capitally Challenged! Energy management given a fairly high priority by the board (34% high or v high, 13% low or v low) Lots of confidence in the economic opportunities (65% high or v high, 7% low or v low) High degree of buy-in across organisations (44% high or v high, 20% low or v low) But access to capital is an issue (24% high or v high, 40% low or v low) As is access to management time (19% high or v high, 38% low or v low)

11. Small Steps Are What We�ll Take! High awareness of the technologies that could be applied (55% high or v high, 13% low or v low) And a high level of willingness to change (43% high or v high, 13% low or v low) The prospects for incremental change are very good (63% high or v high, 3% low or v low) But the prospects for radical change are much lower (18% high or v high, 34% low or v low)

12. It�ll be a Learning Experience! Prospects for organisational learning are excellent (88% high or v high, 2% low or v low) Professional networks play a key role in learning (53% high or v high, 9% low or v low) But learning within sectors is lower (35% high or v high, 25% low or v low) And learning within the local area is lower still (23% high or v high, 39% low or v low)

13. Expected up-take of low carbon options

14. Projected energy savings (1)

15. Projected energy savings (2)

16. Projected energy savings (3)

17. Stage 2: Choice experiment Explores whether businesses would invest in low carbon options under different conditions. Respondent considers a range of investment options � each associated with varying levels of cost, risk, disruption, impacts on management time and on reputation and energy savings. How sensitive are investment decisions to variations in these key variables? Under what conditions will businesses invest in low carbon options?

18. Choice experiment scenario: Your organisation owns an office building. It houses 30 employees and has an energy bill of �5k per annum. It has a building energy management system and an employee engagement scheme already in place. Under what conditions would you invest to reduce its energy use/carbon footprint?

19. Choice experiment: example card

20. Preliminary findings: Choice experiment

21. Basic model using 99 responses: Near-decent model fit (R2 0.28, decent = 0.30 and above). All factors were significant at every level except risk which wasn�t significant at low level. Most significant factors: 1st energy and carbon savings; 2nd impact on reputation; 3rd cost; 4th risk, 5th time. Respondents are willing to pay for energy/carbon savings and impact on reputation but not for risk and management time. Less averse to invest on low risk options than medium risk options. Less averse to invest on low management time options compared to medium management time options.

22. Mini Stern project Funded by DECC through the Leeds City Region Low Carbon Framework pilot. Aim to clarify the business case for transition (c.f. Manchester study) An economic assessment of the costs and benefits of different pathways towards a low carbon economy. Key components - assessing and managing: - costs of compliance and understanding sectors at risk - costs and benefits of capacity building - developing a business case for local support - benefits of compliance and ensuring the capture of investment flows in the low carbon goods and services sector within the region

23. Going forward: data collection Aim for 200 respondents � minimum. Event at the University of Hull � April. Other targets: MBA programmes at Yorkshire Universities; stall/slot at business conferences (March); Masters studies; CO2 Sense involvement. June end date for data collection. Possibility of doing a similar choice experiment on adaptation.

24. Going forward: dissemination 4 journal papers scheduled over the next 12 months. Policy brief. Conferences. Third sector involvement � further disseminate and increase research impact.

25. Conclusions Making good progress � lots more to do. Plans in place for further data collection and dissemination. Preliminary results showing interesting findings.