Moving through uncertainty to reap the rewards

With the national media reporting news of public sector budget cuts on an almost daily basis, some people might think that carbon reduction might take a back seat and become less of a priority. However, this is simply not the case. The coalition government remains committed to action on climate change and the UK’s public sector must play its part.   

“I don’t want to hear warm words about the environment. I want to see real action. I want this to be the greenest government ever,” stated the Prime Minister, David Cameron.   

With public sector buildings in England alone being responsible for producing 19.5 million tonnes of CO2, equivalent to eight per cent of total non-domestic carbon emissions, action is critical.

It makes financial sense
And carbon isn’t just bad news for the environment. This carbon usage translates to a £2.6 billion annual energy bill for the public sector. At a time when the pressure is on the entire public sector to slash costs, it seems obvious that government departments, councils, schools, universities and hospitals should be looking to become more energy efficient and take advantage of the cost savings that can be made through carbon reduction.   

Other reasons behind the public sector’s ongoing focus on carbon include the coalition government’s introduction of increasingly ambitious carbon reduction targets, not to mention growing scrutiny from the media and other stakeholders.   

The rewards for the public sector, and therefore the taxpayer, are significant. The Carbon Trust’s public sector customers have identified potential net savings of £1 billion from energy efficiency projects. As well as financial savings, these same projects could reduce carbon emissions from public sector organisations by around 46 million tonnes over their lifetime. To put this into context, it’s roughly equivalent to London’s annual carbon output.

Carbon management measures
The public sector has been working hard to reduce its carbon emissions for some time now. At the Carbon Trust we are working with more than 2,700 public sector bodies, ranging from fire services, to local authorities and hospitals, to help them make significant cuts to their spending and carbon emissions.         

Successful carbon management measures taken include more energy efficient heating and lighting systems, improving buildings, encouraging changes in staff behaviour and evaluating travel policies.To date this group has already saved 10 million tonnes of CO2, with total net savings over the lifetime of the projects reaching £400 million.    

Her Majesty’s Government is also rising to the challenge. Within days of coming to office, the Prime Minister David Cameron committed central government departments to a ten per cent reduction in carbon emissions within 12 months. Since the beginning of August 2010, 18 government HQ buildings have been reporting real time energy consumption online.

Healthy competition
This new level of transparency has been supported by an energy efficiency competition for the 18 government department HQ buildings. Run in October 2010, the aim was for the buildings involved to cut their energy use in that month by as much as possible compared to September. The winner was the Department of Work and Pensions, which reported the largest reduction in average daily energy usage, with a fall of 22 per cent.    

Actions taken to deliver this level of saving ranged from the simple – switching off an unused chiller unit – to the practical – only turning on the air conditioning in the staff social club when it is in use. They also involved engaging employees in the initiative via the communications team and internal energy champions.

Barriers to overcome
So, the rewards of carbon reduction and energy saving are clear, but there are challenges to be overcome. At the Carbon Trust, we have looked closely at these barriers. For example, when projects do happen, there has often been a lack of monitoring to track their success. Therefore, it has been difficult for carbon reduction champions to show return on investment (ROI) and secure further rounds of funding, even if significant success has actually been achieved.   

Confusion is another issue. While the new government has introduced initiatives and regulations to drive a greener public sector, the change of approach required has resulted in a level of uncertainty and some activity being temporarily put on hold.
Some of the bigger changes include alterations to the Carbon Reduction Commitment (CRC) Energy Efficiency Scheme, which has shifted from being a cap and trade scheme with recycled revenues to all of the revenue going straight to government. We have also seen the end of the national indicator framework and comprehensive area assessment for local government.    

Central government organisations are tackling the Prime Minister’s ten per cent reduction commitment as outlined earlier, as well as looking ahead to the revision of Sustainable Operations on the Government Estate (SOGE) targets.    

Meanwhile the NHS is facing a fundamental change to parts of its structure following the publication of the Equity and Excellence White Paper.    

Primary Care Trusts (PCTs), often the primary driver in carbon reduction, are being abolished, with their functions transferred to other NHS Trusts, GP surgeries, local authorities and the private sector. This has resulted in the pause button being pressed on some initiatives as people wait to find out where and how the dust will settle and which organisation will now take up the mantle to drive forward carbon reduction across the NHS.    

The one area that remains fairly stable is higher education, where targets in the Higher Education Funding Council for England’s strategy and the Community Infrastructure Fund round two remain unchanged. However, the pressure on costs, as evidenced by recent student demonstrations, is likely to make financing energy efficiency projects even harder.   

And of course, over and above this uncertainty in policy direction, in times of austerity the necessary up front financial commitment needed has not always been forthcoming, despite extremely compelling business cases.

Support is at hand
But while the challenges are great, support is at hand. For example, the Carbon Trust is taking applications for its 2011-12 carbon management programmes, for which the deadline is February 15. The service provides technical and change management guidance to help public sector organisations of all types to identify practical carbon and cost savings. The aim is to reduce emissions under the control of the organisation. So for local authorities, this includes managing buildings, vehicle fleets, street lighting and waste, while for universities it might include running laboratories and heating swimming pools. Participating organisations are guided through a structured process that builds a team; measures the cost and carbon footprint; identifies projects, and creates a strong case for action to the executive.    

Of the organisations we have worked with on carbon management programmes to date, local authorities are expecting to see £367m of net cost savings over the lifetime of the carbon management projects they have identified; higher education institutions are expecting to save over £48m; while NHS projects are expecting to save about£153 million.   

There are many examples of organisations that have worked with the Carbon Trust to reduce carbon emissions and energy costs, and achieved significant success. Our work withover 2,700 NHS trusts, higher education institutions, schools, local authorities, central government organisations, police and fire services is helping them to significantly cut spending and carbon emissions. For example, Oxford City Councilset itself an ambitious target to cut carbon by 25 per cent and with the support of the Carbon Trust is achieving just that: “Working with the Carbon Trust has brought Oxford City Council real results. Our story shows real change is possible and we’d definitely encourage other organisations to follow our lead and reap the rewards,” said
Melbourne Barrett, executive director – City Regeneration, Oxford City Council.

Public sector energy management
There is no doubt that carbon targets will be a major challenge for the UK up to 2020 and beyond. By reducing carbon emissions, the public sector is in a strong position to set a positive example to private organisations and the general public. This can happen in two ways. Firstly by taking simple steps to improve carbon management within their organisation, as mentioned above. Secondly, by looking beyond their own organisation and encouraging green initiatives amongst businesses and the wider community. This can involve using buying power to generate broader demand for energy-efficient products and services.     

As we look at public sector priorities for 2011, actively managing energy and carbon must form an essential part of any efficiency strategy for every single public sector organisation – from the smallest local councils to the biggest NHS Trusts. Those organisations which seize the opportunity will not only make a real difference to their environmental footprint and how they are perceived within their community, but also to their bottom line.                     

The support is there to make these changes a reality, and the rewards arewell worth it.

For more information:
Web: www.carbontrust.co.uk