Local government at the heart of a just transition

As the energy price cap rises today, CLES Senior Researcher, Ellie Radcliffe, reflects on her recent visit to the Apse Big Energy Summit and considers the role of local authorities in balancing climate and economic justice.

Nearly three years since three hundred local authorities began to declare climate emergencies, the removal of the energy price cap today arrives as the Big Six energy companies have recorded over a billion pounds of profits. This is just part of the picture, with oil and gas giants BP and Shell spending over £147 billion in stock buybacks and shareholder dividends since 2010 – seven times more than what would be needed to keep households’ energy bills at a manageable level.

“we need an approach to decarbonisation which changes the fundamental building blocks of economies”

Such profiteering hits to the heart of why we need an approach to decarbonisation which changes the fundamental building blocks of economies, making them work for ordinary people and our places, as well as the planet. At CLES, we advocate for community wealth building as a pathway towards this just transition, with local government at its heart.

It has taken time for national policy to catch up with the intent demonstrated by local government on climate change. Westminster only recently outlined how it views the role of local authorities, while councils are now working to turn their Climate Action Plans into reality.

“councils must enable a collaborative, multidisciplinary approach”

Climate and sustainability officers have become key players in implementing these changes and, attending the Apse Big Energy Summit on 8 and 9 March, I was fortunate enough to hear from many of them. What became apparent is that – while there was no lack of imagination, ambition or experience among the officers in the room – they face significant challenges. Most notably, officers recounted the barriers they faced in bringing others into the picture, including colleagues in economic development teams. Yet, if we hope to tackle the climate emergency, councils must enable a collaborative, multidisciplinary approach.

Environmental breakdown is an issue that permeates every element of our lives, and it should subsequently be factored into every element of council policy and practice. The issues of environmental breakdown and economic inequality, for example, are intrinsically connected. Both must be addressed if we are to achieve a just transition.

“4.5 million more households could be pushed into fuel poverty by the end of the year”

As a case in point, the cost of green technologies in the UK means only the most well off are able to afford them, with a significant risk that the UK’s net zero targets will be compromised by the government’s focus on the most affluent. Meanwhile we are witnessing the real time impact of rocketing domestic energy prices meaning that 4.5 million more households could be pushed into fuel poverty by the end of the year.

Clearly, there is a lot at stake if we do not bring action on climate and the economy together – further evidenced by the lasting impact of unjust transitions past. The experiences of deindustrialised communities – many of which are now the focus of the government’s levelling up agenda – demonstrate what happens when a transition is set in motion without concern for the social consequences of economic policy. The sheer scale of job losses in industries such as shipbuilding, textiles, steel and coal – and the absence of policy to manage this transition – left up to three million people unemployed between 1983 and 1986. The subsequent decline of former industrial towns and cities had immeasurable social and cultural consequences, still felt today.

With this in mind, as we seek to transition towards a greener future, we need an approach which ensures this shift delivers social and economic justice, not only for workers, but for people in those places which are suffering within the current system.

“municipal ownership of infrastructure […] can drive the profit generated back into the local economy”

Currently there are twenty-two separate funding streams local government can either access or are required to distribute which will contribute to the decarbonisation of our local places. We need to ensure that this investment sticks in our localities and delivers a just transition for our people. Community wealth building can help us to do that, by ensuring that – for example – the development of local retrofit supply chains circulate wealth back into wages for local people. Community-owned energy generation projects too, are known to deliver seven times more value back to the local economy than similar commercial ventures, and the public sector can act as a key procurer of this energy to support their development. Similarly, our recently published community wealth building energy transition toolkit demonstrated that municipal ownership of infrastructure, such as district energy schemes, can drive the profit generated back into the local economy – potentially using it to fund energy efficiency measures which could help tackle fuel poverty.

“we need to join the dots”

These are just some examples that demonstrate that a shift in ownership – from profit extracting big players to wealth circulating community-led organisations – is fundamental to a just transition in the energy sector. Other sectors, such as food, will also be essential in tackling environmental breakdown, and prioritising the creation of more generative solutions in these sectors will be critical in rewiring local economies so that they build community wealth. Climate officers have the technical expertise to identify those actions which will have the fastest and greatest impact on carbon reduction. But we need to join the dots to achieve a just transition. At a minimum, economic development practitioners should seek to work with climate colleagues to determine how to create green local economies that both build community wealth and support decarbonisation.

Ultimately, to deliver an inclusive economy hardwired for climate justice, everybody needs to pull in the same direction to rewire our economies so that we can move beyond carbon-fuelled growth.