Download 6. Themes for Environmentally Sustainable Economic Development

Manchester City Council
Economy Scrutiny Committee
Item 6
20 June 2012
Manchester City Council
Report for Information
Report to:
Economy Scrutiny Committee – 20 June 2012
Subject:
Themes for Environmentally Sustainable Economic Development
Report of:
Deputy Chief Executive (Neighbourhoods)
Head of Environmental Strategy
Summary
This paper follows a discussion at a previous meeting of this committee following
presentation of a report that provided an overview of the concept of ‘Steady State
Economics’. The committee requested a further report which identified key themes of
environmentally sustainable economic development, providing a summary of these
key themes to promote discussion that will lead to the development of a strategy
promoting these themes of work within the framework of the Council’s economic
policy and the Greater Manchester Strategy.
Recommendations
Members are recommended to note the contents of the report.
Wards Affected:
All
Contact Officers:
Name: Vicky Rosin
Position: Deputy Chief Executive (Neighbourhoods)
Telephone: 0161 234 4051
E-mail: [email protected]
Name: Richard Sharland
Position: Head of Environmental Strategy
Telephone: 0161 234 3232
E-mail: [email protected]
Name: Michael O’Doherty
Position: Head of Climate Change: Buildings & Energy
Telephone: 0161 234 4789
E-mail: m.o’[email protected]
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Manchester City Council
Economy Scrutiny Committee
Item 6
20 June 2012
Name: Angela Harrington
Position: Head of Regeneration
Telephone: 0161 234 1501
E-mail: [email protected]
Background documents (available for public inspection):
The following documents disclose important facts on which the report is based and
have been relied upon in preparing the report. Copies of the background documents
are available up to 4 years after the date of the meeting. If you would like a copy
please contact one of the contact officers above.

Prosperity for All: The Greater Manchester Strategy. AGMA, 2009

The well-connected, quality of life region. Sir Richard Leese, The Smith
Institute, 2010.

Greater Manchester Climate Change Strategy, AGMA, 2011

Greater Manchester Low Carbon Economic Area Delivery Plan, AGMA, 2010

Job Creation in a Low Carbon Economy, Manchester City Council, 2010

Manchester- A Certain Future, Manchester’s stakeholder climate change
action plan, 2009

Manchester City Council, Climate Change Delivery Plan, 2010

Mini Stern for Manchester, Deloitte, 2008
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1.0
Introduction and Background
1.1
This paper sets out three key themes of environmentally sustainable economic
development, summarising current plans and work programmes that are in
operation in the City and Greater Manchester, and identifying challenges and
opportunities for further development.
1.2
One of the priorities of the Greater Manchester Strategy (GMS) is to achieve a
rapid transition to a low carbon economy. This priority is developed in the
Greater Manchester Climate Change Strategy (GMCCS) approved in 2011,
and is reflected in part of Greater Manchester’s ‘Deal for Cities’ agreement
with Government to develop Greater Manchester as a ‘low carbon hub’. These
issues will be incorporated in a consultation on a ‘refreshment’ of GMS which
is scheduled for July 2012.
1.3
The Council's approval of Manchester - A Certain Future in 2009, set out the
climate change challenges and issues for the city and approval of the
Council's own 'Climate Change Delivery Plan' to 2020, outlined strategic
actions to make the Council an 'exemplar local authority', animating its
leadership role in the city by addressing its own performance.
1.4
In the context of the GMS, the Council’s own strategies emphasise the
importance of continuing to grow the city’s economy and reducing the city’s
carbon footprint in ways that will contribute to, rather than reduce, our
commitment to growth. These strategies form part of a process of evolution
and transformation towards a low carbon economy that is taking place
nationally and internationally as well as locally.
1.5
The term 'environmental sustainability' refers to a wider range of issues than
solely carbon reduction. It encompasses several areas of environmental
strategy: action on climate change; protecting and promoting biodiversity;
resource productivity. Climate change strategy is addressed at GM, City and
Council levels by approved strategies, though those for the City and Council
are less focussed on climate change adaptation than the more recently
approved GMCCS. The Council's Biodiversity Strategy and recently increased
recycling targets complement Manchester - A Certain Future, but there is
scope to develop our strategies on other areas of resource productivity,
including water and waste. There is also scope to undertake further work,
anticipating and addressing 'sustainability risks' including the impact of ‘peak
oil’, and issues of food and energy security arising from climate change
impacts elsewhere in the world.
1.6
Three key themes can be identified that address both of these strategic aims:environmentally sustainable or ‘green’ jobs and skills; environmentally
sustainable or ‘green’ business; environmentally sustainable or ‘green’
investment. These themes are summarised in sections of this report below.
1.7
In keeping with a process of transformation, organisations, projects and
processes will have large or small parts to play and will be at different stages
of development at any one time. This is particularly the case with the journey
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towards a culture of sustainability and a low-carbon economy where everyone
has a part to play – and it is reflected in all three themes. There are
businesses and jobs whose primary focus is sustainability, because they are
engaged in the low-carbon or environmental goods and services sector; there
are businesses and jobs who increasingly recognise that this is new growth
area for them to move into; and there are businesses and individuals who
have made the decision to be early movers in their own industry, whatever
that may be.
2.0
‘Green’ Business
2.1
Business in the green economy can be viewed as being part of one of three
segments, whose role, needs and potential are discrete enough to warrant
separation:-
2.2

Low-carbon environmental goods and services (LCEGS) – these are the
companies, and parts of their supply chain, whose products and services exist
specifically to meet the needs a low-carbon sustainable economy . These
include environmental consultants, combined heat and power manufactures,
LED light companies, recycling businesses and companies who develop,
manufacture or assemble aspects of green technology. This is a high growth
sector; with exports almost double the value of imports with China as the key
market place. It also includes the environmental ‘specialists’ within larger
businesses and public sector organisations.

LCEGS support sectors – these are the companies who install and enable the
uptake of LCEGS, this is often a growth area of an existing business and
covers everything from new developments in critical infrastructure to
construction companies moving into building retrofit. It also includes
professional services particularly legal and financial as well as architects,
designers, civil engineers and other consultancy services.

LCEGS customers – this is the largest group of businesses and organisations
and is in effect all companies and organisations not covered by the above two
groups. These companies have the opportunity to grow their business,
employ more staff and reduce their cost through the adoption of LCEGS: as
‘customers’, they will grow the ‘green’ economy by generating demand. For all
these organisations, aspects of the ‘green’ economy are associated directly
with savings and efficiencies: DEFRA undertook work in 2011 which indicated
that national annual cost savings of £24bn are available at no cost, rising to
£60bn if savings with up to a two year payback are adopted.
Resource Efficiency – The Council’s Environment Business Pledge, helps to
identify companies who can be supported through the North-West wide
ENWORKS programme. ENWORKS and the Pledge provide support
mechanisms for beginning to establish environmental sustainability principles
in business through improvements in resource efficiency. 1,800 companies
have been involved in the Pledge of which 600 were further supported by
ENWORKS, creating savings of 8,000 tonnes CO2 and creating over 100 new
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jobs since January 2009. This activity also stimulates local demand and helps
to grow the market for LCEGS companies supporting their development.
2.3
Procurement – The Council can strongly influence the growth of 'green'
business activity by increasing demand through its procurement policies,
which tendered £430m of business in 2011/12. The sustainable procurement
strategy adopted by the City Council is delivering in terms of local economic
benefit; jobs for Manchester residents and spend (up to 84p in every £1) recirculating in the GM economy.
The Council's current procurement policy is, environmentally, one of the
strongest of Councils in GM, incorporating 10% of assessment on
environmental criteria for all tenders over £30k. Research indicates, however,
that only 43% of Council procured businesses are reporting on and acting on
the reduction of CO2 emissions. This figure could be substantially improved by
combining procurement and training programmes and consideration could be
given to further evolving our policy, perhaps developing models like that used
by the Environment Agency which includes basic environmental performance
amongst its minimum requirement for all tenders.
2.4
The Council’s Travel Change Service promotes active travel to more than120
Manchester based organisations, including large businesses, SMEs and
hospitals. This work encourages sustainability by encouraging more cycling,
generating advice on travel planning and links to electronic journey planners
such as walkit.com.
2.5
Project Development – By developing and supporting projects with
specifications that include environmental sustainability, the Council is creating
demand for LCEGS products and the work of LCEGS support sectors as well
as promoting sustainability as a core value of economic development. This
includes large projects such as the Building Schools for the Future
programme, the Council’s refurbishment of the Town Hall Extension and
Central Library, the new Co-op headquarters and the proposed heat network
in St Peter’s square. It also includes design considerations in strategy,
planning and development and in the approach to service design and
development at neighbourhood level.
3.0
Green’ Jobs and Skills
3.1
Paragraph 1.7 identifies different types of businesses, all of which require
different types of ‘green’ skills from the labour market. LCEGS businesses
require specific technically qualified employees such as in the PV industry.
Other businesses are being drawn into the LCEGS sector and increasingly
recognise the benefits of ensuring a basic understanding of environmental
sustainability across their organisation. The development of a sustainable GM
economy is therefore reliant on the primary, secondary, Further and Higher
education sectors as well as the vocational training and apprenticeships, being
geared to the needs of the ‘green’ economy.
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
Due to the nature of LCEGS companies the skills needed are often higher
level in STEM (Science, Technology, Engineering and Mathematics) subjects,
as well as in apprenticeships. The latter route offers an alternative to post-18
higher education although it is not widely understood. To realise this
opportunity careers advice needs to understand and articulate the
opportunities of a low-carbon career.

LCEGS support sectors – this is often the re-skilling of existing staff so that
they can meet the needs of these new and growing markets. If the demand is
great enough and/or the rate of growth is fast enough new entrants will be
drawn into the market including apprenticeships. The LCEA board is working
on skills for the retrofitting of the built environment driven by both the green
deal and the requirements of building regulations and other policy drivers.

Manchester has a city wide group which is working to drive up the number of
apprenticeship opportunities and the number of young Mancunians accessing
them. Awareness is growing through initiatives such as the recent
Apprenticeship Revolution but more to do to promote with young people, their
parents and schools.

In addition to STEM skills and up-skilling of existing craft trades there is a
much broader need to ensure all employees have an understanding of the
green agenda and the role they need to play in realising its economic, social
and environmental benefits. In the medium term this will require all courses to
incorporate relevant modules so that trainees are literate of and able to act in
a way which helps their employer achieve their green objectives. This will
range in complexity from the very simple to the challenging e.g. enabling
catering staff to make smart choices around menus to incorporate seasonality,
to ensuring that financial advisors are able to understand and explain to clients
the inherent risk when investing in carbon intensive businesses or low-carbon
start ups.

Greater Manchester Chamber of Commerce has recently submitted a bid
under the Employer Ownership of Skills, which is designed to give more
control to businesses in the types of training offered to them. This proposal
has low carbon skills incorporated into it, and if successful will provide an
opportunity to engage directly with employers as commissioners of skills
provision they need from a range of providers.

Employer Ownership of Skills and GM Employment and Skills Partnership
together with the skills aspects of City Deal give us the best chance of
influencing provision in GM to ensure that low skills levels is not a break on
the economy, more residents benefit from the economic growth created and
low carbon skills can be developed /embedded in the skills system.
Carbon literacy - The Council has part-funded the establishment of a basic
carbon literacy standard for all residents, employees, students and pupils
across the City. Currently being piloted in 44 organisations including
Manchester-based businesses, the Council and both Manchester Universities,
the aim is for everyone in the City to have one days basic training within three
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years. The Council is involved in the pilots and a programme for elected
members and a programme for officers is being planned following a formal
launch of Manchester Carbon Literacy in the autumn.
4.0

Manchester Schools are developing their pupil’s environmental skills and
knowledge through Enterprise. Many high schools encourage pupils to be
innovative and creative when learning about climate change and
environmental issues. Enterprise workshops and events are becoming more
popular in schools as pupils learn about business success. For example
‘Fairtrade’ through an enterprise project enable our future work force to learn
about ethics, global issues, as well as successful trade and development of
the green economy.

Schools are starting to look at green jobs through their careers departments.
They are providing opportunities for their pupils to learn about renewable
technologies, learning that design and manufacturing can widen to ‘green
technology’ and that creative and media skills can contribute to the green
economy through innovative designs and ways of working. Schools take part
in many initiatives including Eco-Schools, which educate the whole school in
environmental issues to give them the skills, enthusiasm and knowledge to
take with them through life. Schemes such as Bike to Work are on offer to
school staff to help them stay in employment, and travel to work at low cost
and sustainably.
Green Investment
As part of the Deal for Cities GM has agreed to work with the Department of Energy
and Climate Change (DECC) on the development of a Low-Carbon Hub, This
includes the creation of a Joint Venture with UK Green Investments the new Green
Investment bank to develop low-carbon projects in GM. Consultants have been
appointed and are working with GM stakeholders to develop a pipeline of investable
low carbon projects.

Despite Government changes to Feed in Tariffs (FiT) for Solar PV schemes,
which have undoubtedly reduced investor confidence in the market for renewable
and low-carbon energy generation a number of schemes have been delivered
in Manchester, including over 600 units on Northwards Housing properties. Whilst
lower FiTs will reduce the number of large scale PV schemes, there will continue
to be an increase in microgeneration as part of whole house retrofit schemes, as
well as low carbon heating projects, stimulated through the new Renewable Heat
Incentive.

Low-Carbon Buildings – The Green Deal will launch in October 2012, together
with a new market subsidy: the Energy Company Obligation (ECO). Green Deal
seeks to unlock private investment in both domestic and non-domestic buildings.
This will be achieved by funding energy efficiency measures at no up-front cost to
the consumer, through a loan which is linked to the electricity meter rather than
the individual. The loans are repaid over time (up to 25 years), based on
projected savings in energy bills. AGMA is developing a business case to take an
active role in Green Deal in GM: kick-starting a GM focused approach over 3
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years that will help our poorest households, improve our coldest homes, and drive
both short and long term economic opportunities and benefits for local businesses
and individuals. The City is implementing a low-carbon buildings and energy
strategy, gaining a better understanding of the energy performance of its
remaining buildings and developing a programme of minor and major retrofit
activity, coupled with programmes of behavioural change for staff and building
managers.

5.0
Heat networks – A number of heat network opportunities are being explored
across GM, driven by both private and public sectors. In Manchester for example,
Manchester Metropolitan University has plans to introduce a heat network across
its Birley Fields campus that is due to be developed, whilst Co-op are making a
similar investment within their new NOMA development. Manchester City Council
is in discussion with private sector partners to explore potential for a heat network
driven by Combined Heat and Power systems, to link the Town Hall complex and
other new and existing buildings surrounding St Peters Square.
Recommendations
Members are recommended to note the content of this report.
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