Green growth and city deals – or “you really cannot have your cake and eat it”.

Mancunians will be interested in a new report called “Green cities: using city deals to drive low carbon growth.”

It has been produced by “Green Alliance” a well-established think tank, currently emphasising its work on the economy. Green Alliance’s “partners” are a decidedly motley collection of the good (The Cooperative, WWF, Greenpeace) and the well, not so good (BP, Shell, Asda/Wall-Mart, Coca Cola and PepsiCo, BAA, Npower and E-on…).

The report is about the “City Deals” agreed by the 8 English “Core Cities” (Birmingham, Bristol, Leeds, Liverpool, Manchester, Newcastle, Nottingham and Sheffield). These deals are a government initiative that trade greater local autonomy for delivery of economic growth.

First, let’s look at the model that this is part of:

In its report “Unlocking Growth in Cities”, the government says:

“The Coalition Government is taking tough and decisive action to equip Britain for long-term success by restoring health to the public finances and confidence in the economy through a balanced approach led by private sector growth. But this growth will not occur in the abstract. It will be created in individual places where people and businesses work, trade and innovate. Our cities have a crucial role to play……. Cities, therefore, are the engines of growth and will be critical to our economic recovery. …….. In the current economic context, the stakes are high: city leaders will need to take bold and decisive action to attract the private sector investment that is so critical to our urban economy. Cities need strong, visible leaders who are able to articulate a convincing economic vision for their area and take the decisions necessary to make this vision a reality. They will need to think innovatively about tackling barriers to growth and act relentlessly in the pursuit of this aim.” (our emphasis)

So the model of city deals is not green growth – the government proposals mention the word ‘green’ twice, and ‘climate’ and ’emissions’ not at all.

But the Green Alliance is promoting something a little different – green or low carbon growth. Now in our work, Steady State Manchester has been very clear that within a steady state ‘right size’ economy some sectors will grow (in order to reduce carbon intensity and resource use) and other sectors will shrink. Overall, though, the economy as a whole cannot grow – must not grow. We review the evidence on this, and find there are three key problems.

a) growth leads to increased emissions and resource use,

b) all previous attempts to “have our cake and eat it” – to have growth while reducing resource throughput – have failed, there is no evidence yet that it is possible, and

c) increased energy efficiency leads to rebound effects that undo the improvements made, unless there is a properly managed approach to avoid this through things like resource and energy caps. (e.g. money saved on heating houses may well get spent on cheap flights, resulting in no carbon “saved”).

The Green Alliance seems to be unaware of all this – or perhaps merely unwilling to acknowledge it. Their report headline is: “Green cities: using city deals to drive low carbon growth”, and there is nothing in the report to indicate they have understood the distinctions and evidence referred to above. (They aren’t alone, sadly, but that’s another story – evidence-based policy is a distinctly endangered species – if it ever evolved in the first place.).

However to give credit where it is due, in relation to an agenda of selective growth their report does a partly useful job in reviewing these 8 city plans in terms of a low carbon future.

They helpfully summarise Manchester’s plan:

”Governance: led by the Greater Manchester combined authority, made up of 11 local authorities and operating since April 2011.

Finance: setting up a £1.2 billion investment fund to be spent on GVA [gross value added, a local version of GDP – SSM] generating activities; Manchester will ‘earn back’ up to £30 million per year in tax from the resulting growth, which will be a significant contribution to the fund. [This is the Faustian pact that locks our region into the growth model, as we’ve previously noted – SSM]

Investment: establishing an investment framework to align funds and prioritise expenditure in line with economic priorities.

Skills: creating an apprenticeship and skills hub to place apprentices with SMEs and pilot a skills tax incentive.

Business support: strengthening the business growth hub, which integrates trade, investment and business advice, supporting job and GVA increases.

Inward investment: attracting more high value inward investment, with more support from UKTI.

Low carbon: establishing a low carbon hub with a plan to reduce emissions by 48 per cent by 2020 and developing investment projects via a new joint venture company.

Housing: creating a housing investment board and fund to bring local and national resources together more strategically, developing 5,000 -7,000 new homes by 2017.

Transport: working with the DfT on a package of transport proposals including devolution of local transport majors funding and the Northern Rail franchise and bus improvement measures.”

And their verdict? We reproduce what we think are the key passages below.

“…Although progressing low carbon ambitions is clearly an important part of Manchester’s deal, it is not included up front in the overviews of economy and strategy. But it has a strong, low carbon focus and is probably clearest among the cities in the intention to build a strategic relationship with government.

Manchester also makes links between low carbon and other sections of the deal. The investment framework section mentions a pipeline of 70-80 projects ready for investment and notes that this includes low carbon projects. The deal’s transport section features the carbon reduction and employment benefits of the local sustainable transport fund submission, which include an estimated 900 additional jobs by 2015. Other transport aims focus on buses and trains, although they are not specified as being low carbon.

Manchester has an ambitious and detailed climate change strategy, but missed the opportunity to frame its city deal’s pursuit of growth with its stated vision of pioneering a “new model for sustainable economic growth based around a more connected, talented and greener city region” by 2020. The two will need to be integrated if the climate change strategy’s aims are to be met.

The city’s local transport plan aims to maximise the potential for economic growth while creating lower carbon travel patterns. In the longer term there are plans to set targets for reducing transport emissions via a modal shift, fuel efficiency and new infrastructure. The city deal does not obviously conflict with this, but clearer links between the two sets of ambitions will need to be made in the delivery phase….”

So while the report from Green Alliance is flawed, and stuck within the paradigm of impossible sustainable growth, there are still some helpful insights on the “disconnects” in Manchester’s plan.

We agree that there is insufficient integration between the city’s economic strategy and its low carbon aspirations – but we think the problem is more fundamental than Green Alliance seem to think. As we have said before, we are in an unplanned post-growth economy. We need to move smartly (quick and clever) to a planned steady state society with an economy of the right size. We have set out some of the policies and actions that can help innovative Manchester lead the country and the world in doing this. If you want to find out more, and want to get involved in turning ideas into reality, please get in touch – via steadystatemanchester@gmail.com.

Mark Burton

13th January, 2013