The Welsh Government has an ambition of a net zero public sector by 2030. However, the current budgetary pressures in the Welsh public sector, and for local authorities in particular, will make realising this ambition particularly challenging.
In order to support the 2030 ambition, the Welsh Local Government Association (WLGA) is coordinating a climate change transition and recovery support programme, and asked WCPP to review the evidence on policies and approaches in other countries and regions concerning a local authority-led transition to net zero. Our review focuses on two main areas:
- How local authorities can prioritise action on climate change.
- Innovative financing solutions to support local authorities to transition to net zero.
In order to attract investment, local authorities need to have a strategy which outlines how climate change goals will be achieved, by when, and at what cost, prioritising actions to make the most of their limited resource and capacity. The Welsh Government’s public sector net zero ambition focuses on councils’ own operations (municipal emissions), which will require large amounts of upfront capital investment to decarbonise buildings and fleet, for example. However, local authorities may be able to achieve substantial emissions reductions at a lower cost by focusing instead on other emissions within their local area, such as those from residents and businesses. Successfully doing this will require sustained efforts in influencing other actors as local authorities tend to have less direct control of these emissions.
To finance the net zero transition, local authorities have typically relied on traditional methods in the past. Given the financial pressures on the Welsh Government’s budget and reduced capacity to lend via other routes, innovative forms of finance will now be needed to achieve the scale and pace of the 2030 ambition. We present examples of innovative approaches to access financing, including pooled investment opportunities by groups of local authorities, local climate bonds, and other possibilities not yet implemented at scale in the UK.
Sharing learning and best practice across local authorities will also be crucial in both areas in order to build capacity and support implementation of effective emissions reduction policies.