London boroughs have adopted a variety of targets in respect of reducing council-generated emissions, though the majority have a target of net zero emissions by 2030. Many boroughs have also declared a climate emergency, and all will be making changes in their own local areas through climate action plans. The cost of London’s transition to net zero will require significant up-front capital which cannot be reached using only the existing financing systems.
London Councils, together with UK Core Cities and Connected Places Catapult, has established the 3Ci (Cities Commission for Climate Investment, formerly UKCCIC) to engage with all parts of local and regional government as well as the financial community to find investable solutions for our net zero challenges.
Phase 1 of the project involved publishing a report aimed to support the acceleration of net zero financing, particularly through the bringing together of private and public sector bodies to support decarbonisation of the UK’s core cities and London.
The report collected findings regarding the present opportunities and limitations for private finance to participate in city net zero transitions and develops recommendations for actions to enhance the scale of private sector involvement in the coming years. It found that aggregating projects by location would create a more attractive business case for investment.
Phase two began in October 2021 and will continue through 2022. Using £1.5m funding secured from HM government, the following five work packages have been designed and project partners procured for each of them:
i. Development of an outline business case
Undertake work to develop the financial, commercial and management case for a
place-based approach to Net Zero and develop an Instruction Guidance Document to support local authorities in financing Net Zero projects.
ii. Council capacity and capability analysis
Understand what capabilities are required within local authorities to design and
implement Net Zero propositions to understand the extent of this better and to match this against the capabilities and capacity required and the mechanisms for supplying it.
iii. Outline design of a Net Zero demonstrator programme
Scope out the case for a pilot programme that will support the development of
products and services relevant to the needs of the stakeholders, as well as provide commercial development support to the participants to ensure that they are ready to supply those products and services into the market.
iv. Needs assessment for a knowledge sharing platform
Undertake an assessment of the range of national platforms to understand the extent to which they can support knowledge and information exchange for a place-based Net Zero
programme and where appropriate make the case for change.
v. Knowledge sharing events
Management and delivery of the various marketing channels for the programme and a host of regional investor events as well as a Net Zero Summit in October.
Additional work is ongoing to develop a national net zero project pipeline. The research undertaken so far has shown that there are simply not enough identifiable, investment-ready and bankable Net Zero projects, constituting a single pipeline, to which private sector investors and project developers can commit time, effort and funding.
The pipeline of Net Zero projects reflects investment opportunities across six key infrastructure asset classes, namely commercial building decarbonisation, domestic building decarbonisation, renewable electricity generation, transport decarbonisation, waste management decarbonisation, and green infrastructure.
London Councils is coordinating the responses from the 32 boroughs and City of London. These will feed into the national net zero pipeline, as well as being used by regional organisations, such as the GLA, to collate projects eligible for other funding options.