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Net zero: A five-point guide for cities

Climate change is fast becoming a key strategic objective for cities. But how can cities transition from aspiration to action and overcome the challenges of achieving net zero? Here are five things we learned during our recent webinar.

Steven Matz, RICS Content Specialist
7 April 2022

Laying the foundations for achieving net zero

“Cities are one of the most complex systems humans have ever devised. To change the behaviour of cities in a fundamental way, we have to understand the constituent elements. And we have to then see how to leverage change within each of those elements, as well as across the scope of the whole system.” explains Langdon Morris, Senior Partner and Co-founder, InnovationLabs.

Adopting an integrated systems approach can help cities successfully transition to net zero, believes Langdon. He advocates a seven-point roadmap [1] based around:

  • Governance & policy
  • Urban design
  • Infrastructure: Food, energy and water (FEW) nexus [2]
  • Infrastructure: Energy
  • Infrastructure: Data science
  • the Circular economy
  • Innovation at scale.

“Such a framework allows cities to design, prioritise, and put in place foundations that enable the policy changes that enable changes in behaviours,” he says.

The social side of net zero

“Achieving net zero is intrinsically linked to tackling economic and social issues, and many of the actions taken to address climate change also have co-benefits for local issues”, says Emma Ashcroft, Associate Director, Cities & Regions, The Carbon Trust. This includes fuel poverty, economic growth, job creation, and air quality improvement, for instance. In addition, these co-benefits can be measured as part of a net zero action plan, generating not only further political support but also funding support, she says.

Pre-COP26, the UK Cities Climate Investment Commission (CCIC) identified a net zero investment cost of £208bn for the UK’s twelve largest cities.

Steve Turner
Director, UK Cities Climate Investment Commission, Connected Places Catapult

The development finance problem

Without finance, little can be achieved, says Steve Turner, Director, UK Cities Climate Investment Commission, Connected Places Catapult. “COP26 saw a number of initiatives led by financial institutions rather than national government, which is a step in the right direction”, he says. “Pre-COP26, the UK Cities Climate Investment Commission (CCIC) identified a net zero investment cost of £208bn for the UK’s twelve largest cities. An eye-watering amount and clearly beyond the public purse to fund, and a situation that’s likely to be similar globally”, adds Steve.

Despite the vast sums involved, project finance, or the finance to fund capital projects, is not the problem. There is ample finance available from green bonds, investment funds and other sources of finance. It is on the development finance side - the ability of cities to bring projects forward for investments - where the difficulties lay, explains Steve. “Identifying the right projects, detailing technical requirements and packaging the proposal, with risks mitigated and revenues calculated, is beyond the skill set of many authorities”, he says. In the UK, CCIC is working with the country’s twelve largest cities to aggregate needs, for example electrical vehicle infrastructure, to facilitate collective, rather than individual, conversations with financial institutions. This is designed to make the investment process much easier for both cities and investors.

Overcoming investment gaps

The cherry-picking of investments presents another challenge for cities. “Investments in a solar or wind farms are much more attractive propositions for investors than retrofitting neighbourhoods”, comments Steve. This can leave cities with net zero investment gaps. For example, a blended finance model that uses revenue generated from renewables to finance and subsidise some of the hard to abate aspects such as residential retrofit could offer a solution, he says.

Creating a data and analytics platform across the city or region is a critically important factor.

Langdon Morris
Senior Partner and Co-founder, InnovationLabs

Data and standards

Data and analytics underlie all the policy initiatives that we might choose to develop to meet net zero targets, comments Langdon. The problem for policymakers is that the available data is held in different and incompatible databases, making it difficult to ascertain which actions provide the most benefit for the least cost, he says. “Creating a data and analytics platform across the city or region is a critically important factor.”

Another issue is the lack of a commonly agreed definition for net zero. The terms net zero and carbon neutral are often used interchangeably, even though they technically mean different things and represent different levels of ambition, says Emma.

The Carbon Trust uses a working definition of net zero for cities aligned to the Science Based Targets initiative. This adheres to a 1.5-degree carbon reduction trajectory, defines the emission sources covered, and aligns to the GHG Protocol for cities, a global protocol for how to assess emissions for a city or a region.

Furthermore, the Trust stipulates that remaining hard to decarbonise emissions can only be offset through greenhouse gas removals and not avoided emissions. This helps to ensure that the action plans developed are genuinely ambitious and represent the leading edge in terms of achieving net zero.

When it comes to consistency in reporting carbon emissions, this is being pioneered through ICMS 3 [3], (International Cost Management Standard, third edition), a coalition of some 50 organisations, explains Ken Creighton, Director of Thought Leadership and Public Affairs, RICS.  “ICMS 3 brings much needed transparency and cross-border comparability of embodied and operational carbon across the life cycle of construction projects” he explains.  

[1] A copy of the roadmap can be downloaded from The Net Zero City Book - Roadmap

[2] The FEW nexus is relatively new area of scientific thought that looks at the interrelationship between these three fundamentals.

[3] Further information about ICMS3 can be found here: https://www.rics.org/uk/upholding-professional-standards/sector-standards/construction/icms3/

Achieving net zero: A best practice guide for cities