What does the UK’s Net Zero strategy mean for cities and regions?

Aerial view of homes in England

The UK Government’s Net Zero Strategy, released in October, further reinforced the critical role local government can play, by highlighting that 82% of emissions in the UK are within the scope of influence of their remit. Our work with Oxford City Council, who we consulted with in the analysis of the Strategy, demonstrated to us the ability local authorities have in leveraging the powers and levers that drive direct action, and enable wider action taken by local businesses and communities. The Strategy’s findings and conclusions should be a clear impetus for local government to increasingly play its role in supporting the UK’s mission to reach Net Zero, and strive fulfil its emission reduction commitments in the next decade. 

When assessed alongside the Heat & Buildings Strategy, the findings found in both these reports have significant implications for Cities & Regions, as they develop and implement plans to achieve Net Zero targets set as part of climate emergency declarations. Here we look at several key areas included in the Strategy that are moving in the right direction, as well as some of the challenges that still must be addressed if we hope to remain inside the 1.5C limit.  

Enabling local action on Net Zero  

Local government has a unique ability to engage at a grassroots level. The Strategy rightly recognises this and emphasises the importance of local climate action, while acknowledging there are still substantial barriers to overcome to enable place-based delivery on Net Zero.  

Encouragingly, it seeks to clarify how local and national action can work in tandem, with an ambition to provide resources, strengthen capacity, and build capability for local action, with key priorities identified for local energy, heat and buildings, local transport, and local green infrastructure.  

Through the establishment of a Local Net Zero forum there will be a much needed single and coordinated engagement route into government to discuss Net Zero policy and agree delivery roles and accountabilities. But it is essential that this renewed focus on local action fully acknowledges the immense scale of transition needed and empowers local government with sufficient resources and funding to overcome barriers and enable accelerated local action. The forum should embed Net Zero into local policies and decision-making processes within all layers of government, overcoming conflicting policies such as the tension between affordable and low carbon housing, and ensuring that local infrastructure investments don’t lock in high carbon assets that aren’t aligned with Net Zero targets.  

Tackling heat at the local level  

Heat is a truly local issue. An understanding of local factors such as building stock conditions, local grid constraints, proximity to waste heat sources, and the routes through which local communities can be engaged on this issue, is essential to determining the most cost-effective solutions for decarbonisation and fostering public acceptance. The Heat & Buildings strategy rightly highlights the importance of local area energy planning, continued investment in local government-led heat networks, heat network zoning, and local government's role in fuel poverty alleviation and public engagement. But to take this further and be fully realised, tangible action is essential to implement local frameworks for heat decarbonisation, backed by policies and funding commitments from UK Government.  

The Boiler Upgrade Scheme, which will support the installation of 90,000 heat pumps, along with the proposed Market Based Mechanism for Low Carbon Heat, which will place an obligation on suppliers to sell a certain number of heat pumps each year, both provide a strong market signal to heat pump suppliers and installers to prove that their technology can deliver. Such policies can drive supply chain growth and bring down costs, with potential for huge gains for this market should we decide on a highly electrified pathway for heat. The market has started to respond, with organisations such as Octopus Energy pledging to install heat pumps for the same cost as a boiler. 

Delivering a whole-systems approach to local energy  

The electrification of heat and transport, along with the increasingly decentralised nature of generation and storage, poses significant challenges for our energy system. Local authorities have a key role to play in coordinating action across electricity, heat, transport, and buildings to benefit from whole-systems and flexible solutions to decarbonisation.  

Whilst the Net Zero Strategy didn’t announce many new initiatives to support local energy, beyond a commitment to consider the most appropriate policy options to take Local Area Energy Planning forward, we urge local government to engage with existing initiatives such as the Industrial Strategy Challenge Fund (ISCF), the Network Innovation Allowance (NIA) and Network Innovation Competition (NIC). Project LEO (Local Energy Oxfordshire) is a leading example of a cross-sector collaborative project supported through the ISCF, delivering wide-ranging and innovative flexible energy trials across Oxfordshire. As trials pave the way for scaled implementation, regulation must incentivise investment in flexibility and funding is needed to deliver a skilled workforce capable of supporting people to change the way they interact with the energy system.  

Implementing place-based solutions to transport decarbonisation  

A significant part of the transition to Net Zero for cities & regions centres on enabling a shift to low-carbon and active travel. For example, Oxford plans to reduce road transport by 25% by 2030 through increases in cycling, walking and car sharing, enabled by initiatives such as the Zero Emissions Zone pilot and Connecting Oxford, a bold plan to transform the city’s transport infrastructure. This is a good thing.  

The Government has committed to place-based decarbonisation of transport, with reforms to local transport infrastructure funding, embedded decarbonisation principles in local transport planning, and the provision of guidance and support to local authorities to assist them to deliver measures on the ground. The policy announcements now need to be urgently transformed to local delivery plans to enable the widespread uptake of sustainable travel.  

Empowering people to act  

The Climate Change Committee estimates that over half of the emissions reduction needed to achieve the 6th carbon budget involves people making low carbon decisions, ranging from the technologies used and consumption patterns for heating and mobility through to dietary choices. It’s vital that we bring people with us as we accelerate the mission to Net Zero, with meaningful engagement, so that individuals understand the benefits and are empowered with the information they need to act. Local authorities are closely connected with their local communities and should be empowered to deliver impactful and long-term engagement programmes, including through citizens assemblies, engagement campaigns, and cross-sector partnerships.  

Oxford City Council is leading the way in this area, being the first UK city to host a Citizens Assembly on climate change, forming the Zero Carbon Oxford Partnership, a cross-sector coalition of leaders from across the city committed to achieving a Zero Carbon Oxford by 2040, and more recently launching its “Oxford to Zero” campaign to engage residents on the individual actions that will support the transition.  

Councillor Tom Hayes, Deputy Leader, and Cabinet Member for Green Transport and Zero Carbon Oxford, Oxford City Council, said:  

“Achieving Net Zero is crucial to stave off the worst of climate change locally and globally, and we are all responsible for making a difference. In Oxford, our scientific experts are clear about the need to tackle climate change, and the Zero Carbon Oxford Partnership that I chair is a coalition of enthusiastic employers dedicated to creating a Zero Carbon Oxford by 2040 or sooner. 

“We welcome all efforts to address the climate emergency and councils such as Oxford want to support the Government to deliver the Net Zero Strategy. You can’t tackle the climate crisis without councils and citizens just like you can’t play tennis matches without a tennis racket. The Local Net Zero forum will allow us to share all that we’ve learned as councils. We encourage the Government to strongly engage with local authorities to make a success of the forum — the science is clear that we need to cooperate more not less to get to zero.” 

Where more needs to be done 

Despite such positive development, there of course are challenges and areas that need to be progressed further, if we’re to fully harness the potential of local government. 

  • Firstly, the Strategy lacks ambition on energy efficiency policy, and there is a major challenge presented by the lack of sufficient funding and incentives for energy efficiency retrofit, especially for the able-to-pay and owner occupier market. Local authorities are well placed to play a central role in the delivery of energy efficiency retrofit, which should be coupled with policies on heat pumps, enabling a whole-building approach that delivers an optimal balance of demand reduction and renewable heat supply measures. An expanded and long-term successor to the Green Homes Grant Local Authority Delivery scheme would enable local authorities to play a leading role in domestic retrofit.  
  • The Strategy lacks a deliverable plan to scale up delivery to meet the target of installing 600,000 heat pumps a year by 2028, and more funding, incentives and market signals are needed, such as shifting green levies from electricity to gas. The initial funding of commitment for 90,000 is a start, but a clear plan on how to scale this is needed.  
  • The Government has also committed to continuing investment in hydrogen heating through trials and pilots, leading to major strategic decisions on whether there is a role for hydrogen in heat by 2026. But positioning hydrogen as a solution on the horizon for decarbonisation of heat in buildings is acting as a barrier to short-term action on heat pumps, with landlords and homeowners deciding to wait rather than invest. We require clarity in the immediate term.  
  • The Net Zero Strategy doesn’t go far enough to support local authorities with public engagement. The UK Government should develop a detailed plan for engaging the public, placing local authorities at the heart of the design and implementation of behaviour change programmes. Mass participation in the Net Zero transition will only be achievable if such activity is community-led, meets the needs of people, and includes a fair distribution of the costs and benefits between government, businesses, and individuals.  

What’s next for cities and regions? 

Within the context of COP26, and the increasing public consciousness and global awareness around achieving Net Zero, we broadly welcomed the government’s Net Zero Strategy and the recognition of the critical role that local government should play. Councils’ as we know have significant influence across both their owns estates’ heat and buildings as well as local energy, transport, green infrastructure and public engagement. But much more is needed to enable local authorities to realise their potential to deliver local action and accelerate the mission to Net Zero.  

We urge local government to continue to press ahead with activity to deliver against their Net Zero targets, including a focus on central government engagement, particularly the Department for Business, Energy & Industrial Strategy (BEIS) on the Local Net Zero Forum, to ensure this realises its potential. In addition to this, Local Area Energy Planning and Heat Network Zoning is needed to identify strategies for reducing emissions and decarbonising heat, and quickly. Greater engagement with residents naturally needs to be stepped up, as well as engagement with DNOs to help plan the whole system changes required. And finally, as ever, we urge government to implement long-term funding models, so that continuity can provide a stable and consistent plan for implementation.