The Economics and Financing of City Scale Retrofits

What is the most effective and efficient way to decarbonize a city? There are hundreds of low-carbon options available, and although they present a significant opportunity to reduce energy bills and carbon footprints, there is often a lack of reliable information on their performance, creating uncertainty that can be a major barrier to action.

In an attempt to address this problem, the authors conducted a city-scale mini-Stern Review in the Leeds City Region. They started by examining the cost- and carbon-effectiveness of a wide range of options that could be applied in households, industry, commerce and transport. They then explored the scope for the deployment of each measure at the city scale.

The review then identified the business case for major investments in low-carbon options at the city scale, examining the investment needs and payback periods associated with different levels of decarbonization. It also considered the wider economic implications of such transitions – with a particular emphasis on the opportunities for job creation in the low-carbon and environmental goods and services sector.

The study highlights the presence of very significant and commercially viable opportunities for decarbonization at the city scale, but it also highlights significant challenges and the need for innovations in several areas. To push the debate forward, the chapter concludes by proposing ten key steps to deliver major scale investments in low-carbon cities.

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