New research from the North East and Yorkshire sets out how local authorities can put a price on carbon emissions and better integrate climate change in their everyday decision-making and service delivery.  

Councils across the country have ambitious Net Zero targets but financial considerations and limits on resources and capacity often create obstacles to securing approval for the projects necessary to meet them.  

Research funded by the Hub on behalf of the Hull and East Yorkshire Business, Growth and Skills Hub puts a financial value on the carbon emissions of local authority investments and service delivery in terms of the potential impact of climate change on their communities and future costs of decarbonisation – making it easier to make a case for Net Zero investments. 

The Internal Carbon Pricing System model outlined in the report by report by independent experts Anthesis,  aims to: 

“Provide the justification for approving greener projects… (where) the value of spending results in decarbonisation which would ultimately be more costly to undertake later… promoting better decisions now to avoid the cost of issues that are currently externalities.  

“Those externalities are the cost to decarbonise at a later date (and)… the financial impact of climate change on lives and livelihoods in the region”. 

The research outlines two key concepts: 

• Carbon Pricing, which includes the cost of carbon emissions – such as the impact to communities and businesses of the local effects of climate change – in the capital expenditure approval processes.  

• Carbon Insetting, where funding for these projects or other climate change mitigation interventions could be secured through local authority procurement processes or operational budgets. 

The report also sets out how, by giving ownership of these processes to council finance teams, “it is also more likely to result in carbon considerations being embedded within day- to-day functioning of the organisation”  

The research will lead to a pilot program linked to Hull City Council’s capital program and future implementation could be adopted by East Riding of Yorkshire Council too.  

Hub Manager Karen Oliver Spry said: 

“As the report sets out, carbon reduction projects are viewed favourably by local authorities, but finance remains the most important consideration. It’s often hard for officers to demonstrate how councils can make a return on their investments in Net Zero, and that can make it difficult to secure internal approval.  

“This research sets out potential approaches which can demonstrate how these sorts of investments can actually pay from themselves – and we look forward to learning from the results of the Hull pilot”.  

You can read the research itself Hull East Riding ICP Insetting Phase 1 Report and watch the recording from the launch webinar here – Putting Net Zero on the Balance Sheet – North East & Yorkshire Net Zero Hub (neynetzerohub.com)