UK urban centres that 'go green' will see a return on investment in between four and eight years, says report

A new study into the economics of decarbonising cities has found that UK urban centres that 'go green' will see a return on investment in between four and eight years, while cutting their energy bills by billions and creating thousands of new jobs, reports GreenWise.

 The research, The Economics of Low Carbon Cities, believed to be the first of its kind in the world, was conducted by the Centre for Low Carbon Futures and looked at the Leeds City Region, an area that encompasses Leeds and the whole of West Yorkshire, including York and Harrogate.



Taking into account rising energy bills and other economic factors, the study found that by investing in energy efficiency and small-scale renewables across households, public and commercial buildings, industry and transport, the Leeds City Region could see its carbon emissions cut by more than 40 per cent by 2022 and cut its energy bill by £1.71 billion a year.



This level of decarbonisation would cost £13 billion to implement, but would pay for itself in seven and half years, while creating annual savings for the lifetime of the measures, the study found. 

There would be major economic benefits too, with the creation of almost 10,000 jobs over the next 10 years and £442 million per year in GVA growth.

The report also looked at smaller scale investments, concluding that a £5 billion spend on 'cost effective’ low carbon measures would pay for themselves over their lifetime and would cut Leeds City Region’s annual energy bill by £1.19 billion, paying back the investment in just over four years.



'This research demonstrates that investing in low carbon solutions now is not only financially possible but also makes absolute economic sense,' Centre for Low Carbon Futures director Jon Price said. 

According to the study, around 10 per cent of city scale GDP leaves the local economy every year through energy bill payments – and it forecasts that this will grow substantially in the next 10 years.

But by investing one per cent of GDP in green measures over 10 years, the study found that the energy bill of a city could typically be cut by 1.6 per cent of GDP every year. 

'The business case for major scale investments in energy and carbon management is very strong,' Lead author Professor Andy Gouldson at the University of Leeds said. 'If local government can underwrite early stage investments, as is happening in some places, then major flows of private sector investment can be secured.

'Investments can come from institutional investors such as pension funds, or in the near future through the Green Deal, the Green Investment Bank or Energy Company Obligations. The direct economic reasons for securing investments from sources like these are strong enough – but the wider economic, social and environmental benefits make the business case even more compelling.

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The findings from the two-year study will be used to push ahead with a major green investment programme by Leeds City Council, which is committed to 40 per cent cut in its carbon emissions by 2020.

'There’s been a feeling in some quarters that […] in difficult times we’ve got to forget about 'nice to do’ things like tackling climate change,' Leeds City Council chief executive Tom Riordan told the Yorkshire Post. "What this report demonstrates very clearly is that rather than being a 'nice to do’, this is a 'must do’ for an economy which wants to become more competitive and at the same time help its poorest people into jobs and to cope with very difficult and stretching financial conditions.'



Commenting on this week’s report, Craig Bennett, Friends of the Earth’s director of policy and campaigns, said: 'Times are tough but by working with businesses to invest in cost-effective measures like home insulation, clean energy and better public transport, cash-strapped councils can help local people make huge savings on their energy bills – and create thousands of new jobs.'