Bristol: The Mini-Stern for Cities: Justifying Investment

The City of Bristol hosted a workshop at the Cities & Regions Pavilion – TAP2015 at COP21 on Tuesday, 1 December.

Entitled “Economics of a Low Carbon City: Mini-Stern for Cities”, the session explored the most effective and efficient ways to decarbonize cities. In particular, it examined the Mini-Stern approach, which reviews the wide range of low carbon options available to cities so that they can decide which to prioritize.

Andrew Gouldson (Professor, University of Leeds) explained the basis of the original Stern Review. The review showed that, while there is a strong sustainability argument in favor of low carbon development, there is also an economic case for such investment. It showed that avoiding climate change impacts at a global level would cost 1-2% of GDP. Dealing with the impacts of climate change, on the other hand, would cost around 20% of global GDP. There is therefore a compelling case for low carbon investment.

The “Mini-Stern” approach, utilized in many cities and now commissioned by Bristol, attempts to show the economic case for investment at a local level – particularly in terms of cost-effective measures that deliver a rapid return on investment. Finding these actions allows cities to make a compelling case for low-carbon investment.

For each city, the “Mini Stern” approach examines around 100 options for low carbon development and assesses them from an economic standpoint. For example, 870 million leaves the Bristol economy every year through the payment of energy bills. Bristol would reduce its greenhouse gas emissions by 11.6% if it invested in all cost-effective actions around energy efficiency, and measures would pay for themselves in four years on average.

The review also examined the options in various sector. The domestic sector in Bristol offered the biggest potential for immediate investment, with 270 million of cost effective options. The biggest benefits would be from behavioral change, such as reducing standby consumption, turning off lights, and turning down heating by one degree.

Gouldson also explained that it is not only up to the public sector to deliver low carbon measures. New forms of cooperation are therefore required with non-state actors, including communities, NGOs and the private sector.

The Mini Stern review also offered a number of suggestions. These included an independent committee to advise Bristol on low carbon investment opportunities, and Intended Municipally Determined Commitments, to mirror the national process of INDCs.

Alex Minshull (Sustainable City and Climate Change Manager at Bristol City Council) explained that Bristol has developed a social investment fund for the city, allowing people to invest in a range of local projects. It has also created the Bristol Pound – a local currency that encourages support of local businesses.

Ben Wielgus (Senior Manager, Sustainability Services, KPMG) stated that the Mini Stern review gave organizations like KPMG the business case for investing – particularly for investments in energy efficiency, which are stable and predictable. He also noted that in the UK, cities are being granted more control over their budgets, which will allow them to, for example, spend some of their health budget on preventative measures like insulating homes and improving air quality. He concluded by stating:

“It is less ‘getting the money for investment’; the money is out there. It is more, ‘who is going to develop the projects’. The important thing is having someone who can take the idea through to a feasible, fundable project.”