Local government from all corners of the globe gathered in Copenhagen earlier this month to discuss the role that councils, cities and mayors can play in tackling climate change.
The result was a declaration asking that the successor to the Kyoto Treaty recognise the vital role that local government plays and thereafter work closely with local government to implement carbon reduction plans.
The UK is leading the world in two important areas of climate change. We are the first country in the world to have legally binding emissions reduction targets and we are the pioneers of carbon trading for medium-sized organisations (including upper tier local authorities). The LGiU recognise that carbon trading is an important tool for councils to reduce their emissions and ran a seminar at the Copenhagen Conference which shared the learning from two schemes we are currently supporting in the UK. The two schemes are called Carbon Trading Councils (CTC) and Carbon Trading Yorkshire (CTY).
In both of these pilot trading schemes, carbon is real but the money is virtual. Participants submit a baseline of carbon emitted which is then capped and as the year progresses they monitor their emissions and trade accordingly. CTC involves just local authorities, while CTY includes the public and private sector. One of the participants in CTC is Cardiff Council and their leader Rodney Berman gave a detailed and honest appraisal of the council’s experience of virtual carbon trading and explained how the trading formed part of a wider strategy to become a ‘Carbon Lite city’.
At the end of the conference a commitment was agreed that local authorities should position themselves as leaders in carbon trading. It’s important to recognise that for many of the countries represented at the conference, carbon trading is not the favoured method of reducing emissions and only in the UK are councils considered as participants. In many parts of the world councils see themselves as the beneficiaries of cash generated by trading schemes.
So it is fair to say that many of the international representatives were surprised that local government in the UK was so actively engaged in a virtual carbon trading scheme. The reason for this is not an Anglo Saxon penchant for exploring market solutions in any moment of spare time, but the impending mandatory legislation the Carbon Reduction Commitment (CRC).
CRC comes into force in April 2010 and will apply to all organisations that have half hourly meters and consume more than 6000 MWh per annum. So all large local authorities will be in, as will universities, hospitals and police authorities. To accommodate the impending legislation the LGiU has expanded our virtual scheme to what is now called Carbon Trading Public Sector (CTPS) and includes more than 100 organisations. This scheme starts next month and there will be trading over six months so that the project will be completed before the CRC starts.
Already there are important lessons emerging from the pilot projects. First and foremost is data quality. Nearly all the organisations in CTC thought that they had pretty good energy data. However, trading requires an organisation to know its position at a particular time so that it can decide to buy or sell. Old or inaccurate data is worse than useless.
Other key lessons were that carbon trading cannot be the preserve of one individual. Not only is it important to understand energy management but also finance, risk, regulation and legal compliance. Organisations who participated in CTC like Cardiff Council have established teams at the highest level to manage compliance and reduce emissions.
For local authorities the current big headache is schools. School emissions will be included as part of the council’s baseline data. However, there is only a requirement for schools to report annually. Given that in one CTC council schools make up 80% of its baseline emissions this is clearly unsatisfactory. Either the law needs to be tightened up or councils will have to negotiate agreements with their school governors.
For many, carbon trading is a complicated burden on public sector organisations. It is complex but the reason the government favours it is that it pushes decision making beyond a never ending treadmill of ever more expensive cuts in emissions. If another organisation down the road can cut the same amount of carbon for half the cost then surely that has to be the better option.
The logic of carbon trading is that it is a mechanism for finding the most economically efficient way of reducing emissions. Added to this is the fact that local authorities have a performance indicator to reduce per capita carbon emissions – NI 188. These two drivers have led the LGiU in partnership with Carbon Action Yorkshire to develop a website that facilitates carbon trading at the community level. Community Carbon Trading (CCT) will begin its pilot phase in September and while we already have interest from some local authorities, we are keen to hear from any others who wish to participate.
So where next? The June gathering in Copenhagen was merely the precursor to the main talks in December, which also will be in Copenhagen. The LGiU will be representing our members at the summit and by then we hope to announce an international version of carbon trading councils. For the first time cities as diverse as Edmonton, Rio and Birmingham could be helping each other with carbon reduction strategies, trading ideas as well as carbon.
Dr Andy Johnston is head of the LGiU’s Centre for Local Sustainability