36: The cost of Net Zero
Radical changes are needed to our infrastructure if we want to deliver a Just Energy Transition and meet our net-zero goals. But it’s not that simple.
Matt and Becky are joined by Dr Jo Patterson to discuss the stagnant costs of clean heating and making our homes more energy efficient. The incentive is just not there for most homeowners, our finance and policy instruments are outdated and ineffective. What we need now is something innovative incredibly local, as we hear from Rufus Grantham of Bankers Without Boundaries. Find us at www.localzeropod.com
Essential Reading:
Episode Transcript:
[Music flourish]
Rufus: From a neighbourhood perspective, if I’m going to put a solar battery system in and I do that in a single house, that might look like one thing. If I do it for a terrace of houses, I can create a local area energy system which is a much more effective utilisation of the assets I put in.
Jo: There are benefits to retrofitting those homes not only with regards to going towards zero carbon but also saving significant amounts of money on energy bills, improving the comfort of the home and also the general appearance of the building and lifetime.
[Music flourish]
Rebecca: Hello and welcome to Local Zero with Matt and Becky. In today’s episode, we’re going to be talking about money; the money we need to invest to make our homes and our buildings fit for the future.
Matt: So with our energy bills on the rise and the need to shift to heat pumps and other forms of clean heating becoming an ever-increasing priority, there’s a lot of work that needs to be done to make our homes both greener and more energy efficient.
Rebecca: Later in the show, we’ll be talking with our returning guest and fellow EnergyREVer, Dr Jo Patterson. Jo works at Cardiff University and she’s been working with local authorities in Wales to explore just what it means and what it costs to retrofit our homes to the sorts of standards that we now need.
Matt: We’ll also be chatting with Rufus Grantham. Rufus is the Global Head of Urban Transition Finance at Bankers Without Boundaries and he’s been leading some very exciting work looking at new financial instruments that might just hold the key to unlocking the money we need to transform our buildings.
Rebecca: And we’ll be doing our very best to bring the conversation back to a practical focus of what we can all do in our daily lives to influence change; from taking on civic responsibilities like voting or writing letters to our representatives to things that we can do in our communities and in our homes.
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Matt: As always, you can reach out to us at our dedicated Twitter handle. If you haven’t already, go find and follow us @LocalZeroPod to get involved with discussions over there. We had some really great chat and feedback from our last pod on community energy policy. Also email us at LocalZeroPod@gmail.com if you want to share some longer thoughts.
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Rebecca: So before we get into our discussion today, Matt, I think we should reflect back on what’s been happening over the past couple of weeks with the good, the bad and the plain old weird. So what has been on your radar, Matt?
Matt: Well, the news comes thick and fast. It doesn’t stop at Local Zero HQ. Let’s begin with the good news. Everybody likes the good news, so let’s start with that. I thought with all the bad press that some of the policies had, particularly decentralised renewables and solar... we talked a little bit about this on the last episode around community energy that the reduction in certain policies like the Feed-In Tariff saw the implementation of solar fall off a cliff, basically, during the mid to late 2010s but the good news is that it’s making a comeback and it’s a pretty big one. Looking over the last six years of putting solar on our roofs, not only on homes but also buildings, we’ve seen the strongest growth since 2015 in the last year. Last year, we saw 730 megawatts installed...
Rebecca: Wow!
Matt: ...and that’s just solar going onto our roofs. So it’s really starting to make a comeback and there are kind of three things that could keep this going over the next few years... well, particularly over the next few years but also the next few months. I should say what I’m going to talk about is in addition to gas prices going crazy. People are throwing stuff on their roofs to insulate themselves from that. The three things that are driving this is Future Homes Standard which is about making sure that new homes we build are as low carbon as possible. Two, we’ve seen an exemption on business rates which is often very boring but people were getting hammered for putting renewables on their roofs because it was classed as business income. The third is that government is going to be running their Contracts for Difference which is essentially a strike price or bottom price that will be provided for solar power. Solar is back in the game on that one. It was frozen out for many years. Yeah, really great news for solar. It’s back in the game. We expect this to go from strength to strength.
Rebecca: This is very, very interesting stuff because if we’re building new homes and we’re putting solar onto our existing buildings, of course, that can help with managing some of the load as long as we can balance it up. I can see that this could be a real positive thing with extra renewable generation. I guess the big challenge is going to be can we make sure that that generation is used locally rather than some of the challenges that we saw perhaps five or six years ago that started to emerge which was with the increasing amounts of solar and instead of using it locally or within their own homes, people were pushing it into the grid and getting money or getting paid for doing that. There are some real challenges then on the constraints of the grid and problems being introduced in local areas. We’ve got to think about how that goes hand-in-hand with how we’re then using that energy and whether it is getting used in homes or not.
Matt: And also, who can afford to do this? Solar panels still aren’t cheap. You’ve got to also be able to make the decision to put it on your own roof which means, ordinarily, that you own the property. So all the discussion we had on our community energy policy pod, which I strongly recommend people to have a listen if they haven’t already, talks to this. It’s about enabling everybody to access this and whether you’re rich, poor or whether you rent or you’re an owner occupier, it’s all fair game for everyone. So that’s the good news [laughter].
Rebecca: Always nice to start on the good news.
Matt: What follows the good news is invariably bad news though, right?
Rebecca: [Laughter] Yeah, absolutely and I guess is the opposite end of the spectrum of what you’ve just been talking about for a number of reasons but not only moving from the individual household level energy to let’s talk about some of the energy giants, namely BP, Chevron, ExxonMobil and Shell. There has been a new article published by academics in Japan and they’ve been looking at the records of these large companies. What we’ve seen in recent years is these companies, particularly Shell and BP, talking a lot more about climate, low carbon and transition. That’s been on their websites and in the media but also in their annual reports. Alongside that, there have been increasing pledges of climate-friendly action in their strategies. So being led by the media, we might be thinking, ‘Okay, we’re starting to see a transition in some of these big companies. This is exciting.’ But actually, what this news article and what the underlying peer review academic paper has found is that despite these claims, looking at the past 12 years of their data, they see that these claims don’t actually align with actions and that actions show that there is an increasing amount rather than decreasing amount of exploration for fossil fuels. So despite these claims, they are seemingly continuing their business model dependence on fossil fuels whilst making it more opaque [laughter], so really challenging.
Matt: Are you talking about the gap between ambition and action?
Rebecca: Who’s to say whether it’s ambition or simply spin?
Matt: Who is to say, Becky? [Laughter]
Rebecca: Who is to say? Certainly not me.
Matt: The authors of this paper maybe [laughter].
Rebecca: If you’re looking at it from the purely academic perspective, they’re not talking about it from a spin; they’re talking about how there is a mismatch between what is coming across in the strategies and in the media versus what’s actually happening in the financial records of these companies. I think it’s important to note that these companies, since 1965, have been responsible for more than 10% of carbon emissions around the world, so this is not small. This is massive and I guess the big challenge is that whether it’s ambition or whether it’s spin, if their actions aren’t aligned with a clean future, we are going to have significant challenges in meeting global carbon emission reductions.
Matt: So the extent to which they follow up on their ambitions or their claims really does matter. Of course it matters. These are the oil giants but actually, when you put it down to 10% of global emissions since 1965, this matters. Every little bit matters.
Rebecca: Every little bit. Absolutely.
Matt: That’s one hell of a study. I think we’ve got a couple of weird ones as well. I say weird but I quite like this story and it was quite a cool story but it made me think about the actions that we can take in different places. This was all about the skiing industry which has notoriously been quite a dirty one in terms of emissions, biodiversity... you name it. It’s a very disposable lifestyle. Becky, you and I have been fortunate enough to spend time at these ski resorts.
Rebecca: Yeah, and I have to say that when you’re at these ski resorts, you don’t feel that way. You feel like you’re in the fresh mountain air, it’s in nature and it’s brilliant but actually, you’re uncovering something that is perhaps its dirty little secret.
Matt: Or an increasingly big one. There has been a push from some resorts to try and clean up their act basically and one of the resorts in France, which is a collection of four smaller resorts, is Serre Chevalier. They are attempting to produce 30% of all of their electricity themselves by 2023. Now the bulk of this they’re wanting to harness from a combination of solar, wind and hydro. It’s a resource-rich area here. You’re in the mountains. They have 300 days of sunshine a year and plenty of wind, as you and I know, Becky, when the lifts get shut. Also, they have many, many streams which they utilise for snowmaking and lots of power that the network is there to supply the lifts and supply the snowmaking machines. The network infrastructure is there and so it’s a bit of a no-brainer. The resources are there, the demand is there and the network is there to utilise. Now a question, and I may have already told you the answer [laughter], is how much energy consumption of these ski resorts is given over to grooming the ski pistes?
Rebecca: I do know the answer because you foolishly put it in the show notes which I’ve got right in front of me.
Matt: Okay, that’s not good quizmastery there.
Rebecca: [Laugher] But I will say that before I had seen this, I was thinking that there was a huge amount of other activity in the resorts. You’ve got all of the hotels. You’ve got a huge industry in there. So before I saw the answer, I probably would have been thinking maybe 30-40% but it’s not, is it, Matt?
Matt: 90% are all the big snow machines that you see crawling up and down at night with their lights on bashing the pistes. How they’ve calculated this, in this piece from The Guardian titled Future-proofed Piste – Sustainable Skiing, I’m not quite sure because it’s all about direct or indirect emissions. You’re quite right that much of the embodied energy relating to your average week skiing in the French Alps or wherever it may be is much bigger than that. If you were going to name the top three energy-rich activities, what would you say they are in terms of your skiing holidays?
Rebecca: My flight to get me there [laughter].
Matt: Exactly!
Rebecca: That is not insignificant. The heating of all of the buildings in the resort because it gets pretty cold and I’m sure there’s got to be something in there to do with the sheer quantities of alcohol that I know are consumed in ski resorts [laughter].
Matt: Yeah, and also the cheese. There are the sheer mountains of melted cheese that you tend to eat at these places. Anyway, you’re actually making me want to go skiing now [laughter] but also the lift infrastructure, so the running of that. So there are lots of important things... emphasis on eating and drinking locally in Serre Chevalier and running ski lifts more slow apparently. We’d have to fact check this.
Rebecca: I’m glad you’ve still got the ski lifts. I was worried you were going to say make everyone climb up the mountain.
Matt: Yeah, you’ve got so snowshoe up but apparently, it’s a minute longer on the lift. A lift normally takes you three minutes and if you were to increase that by a minute, it means 20% less energy consumed. There are other things like bashing the pistes less and use less artificial snow but the big one that you said is about transport, so how you get there. Actually, in this case, you can get the train all the way to this resort. Eurostar claims that if you get the train from London to Paris and then Paris to Briançon, you can take 13 journeys on it before you produce the same carbon emitted in just one flight.
Rebecca: Wow!
Matt: Anyway, a good news story but weird in the sense that it’s quite niche and especially niche if you like skiing which we do. I haven’t been for many years. Anyway, Becky, on to you. You’ve got one final one to wrap up with I think.
Rebecca: I do and this builds on something that I talked about in our last episode which was the Octopus Energy demand/response trial. Octopus Energy is running a trial whereby they are inviting their customers to try and reduce their energy consumption at the times when the grid is the dirtiest, so when we’ve got the most amount of coal generation. I am an Octopus Energy customer and I actually signed into this trial and now I can report back on some real experience. Two days ago, I got an email into my inbox that said, ‘We’re going to be having a window. If you can reduce your energy consumption by 40% between 4.30 and 6.30 tomorrow, click to sign in. If you can reduce it by this amount…’ – it told me by 40% and it gave me the corresponding amount in kilowatt hours. They said that they would give me that energy during that period for free.
Matt: Wow!
Rebecca: So I thought, ‘Let’s do it!’ I phoned my husband, we had a chat and we agreed to participate.
Matt: You shut everything down. You went into a complete lockdown or a blackout, yeah [laughter].
Rebecca: This was it. The first thing he said to me was, ‘What do we have to do differently?’ I said, ‘Actually, I don’t know.’
Matt: No TV, no food [laughter]… the lights are off.
Rebecca: This is the challenge. We decided not to run the washing machine or dryer during that time. He did actually have a load that was about to go in and so he said, ‘Okay, we’ll pause that and we’ll try and not to use the oven for cooking.’ What that actually did was turn us on to gas instead of oven, so perhaps an unintended consequence. Yes, we won’t use our electricity but we’ll use the dirtier fuel instead, so I’m not quite sure how that one panned out. Actually, it was really, really hard to engage in this because first of all, I just wanted to know what I could do. There was a bit of an information deficit there for me. The reality was that it was really, really hard because a lot of the things that we do at the time include preparing food and my kids need to eat at that time. They go to bed at 7 o’clock and so I can’t not feed them.
Matt: Actually, under a microscope, it points to aspects of our energy consumption which are flexible and those that are inflexible. This is where social science matters because it’s about the lifestyles and routines of each of our families or occupants of these buildings and that’s not standard. Your neighbours and my neighbours will have quite different demands at different times potentially and may be just more flexible or less flexible.
Rebecca: Yeah, and I think this also showing another big difference and that’s that right now in my home, my heating is gas-powered and my water heating is gas-powered and these are the big things. When you’re trying to shift your demand, there are certain things that require you to change your behaviour, like my laundry and my cooking. I have to actually change my behaviour and change my eating patterns or washing patterns but there are a lot of things where you could be more flexible and not even know it. Here’s the harsh reality. If I had electric heating, my water heater could be switched off that whole time and I probably wouldn’t even know it. If I had electric heating, like a heat pump, it could probably be switched off during that time and as long as my home was insulated, I probably could have pre-warmed my home and I wouldn’t have even known it.
Matt: Well, I was going to say there’s also a wider debate here. We’ve got our guests coming shortly but there’s a wider debate about whether this is an active or a passive decision. Your point about a heat pump, this is where the Internet of Things and smart homes comes in because your home can intelligently be communicating with those market signals and turning things on and off; so maybe putting on your dishwasher when you’re asleep at the cheapest time and you’re not having to sweat it. You’re not having to read your emails and then coordinate your life because your house will do it for you.
Rebecca: Yeah, exactly but I think for me, what fundamentally underpins a lot of this is that we can only take advantage of this sort of demand/response and shifting when we’re using things if we have homes that are capable of this and our homes are insulated and if we have the right sorts of technologies in them. Having homes that are fit for the future is something that is a huge challenge because in my home, I just haven’t got that right now.
Matt: And that is what we’re talking about today. We’re talking about how we get these homes fit for the future, who pays and how we can pay.
Rebecca: Exactly and it is not simple, it isn’t cheap and it’s a massive challenge. In fact, I think this is the perfect time to start to bring in our guests.
Jo: I’m Dr Jo Patterson. I’m a senior research fellow at the Welsh School of Architecture in Cardiff University.
[Music flourish]
Rebecca: Well, Jo, it’s so nice to have you back on the pod. I think this might be your third appearance on Local Zero. I know when you’ve come on before, we’ve been talking quite specifically about skills, buildings and really focusing in on specific topics but one thing that’s been on a lot of people’s minds... mine right now as I sit here. I’m sat here in my home in Glasgow. I’m quite lucky in that I’m in a fairly well-insulated home and I’ve got double-glazed windows but I’m still sat here with a heated blanket around me and absolutely shivering. I think what’s clear for a lot of people is that if we’re going to reach net zero and we’re going to do it in a way that lets people live in homes that are warm and comfortable and where they’re not paying thousands upon thousands for their energy bills in the future, something needs to be done to transition our built environment; our homes, our buildings, our offices and our workplaces. I know that this challenge of trying to make our buildings fit for the future is something that you are quite passionate about and something that you’ve been working on for a while now.
Jo: That’s right. The Low-carbon Built Environment Team at the Welsh School of Architecture have spent quite a lot of time over the last ten years retrofitting existing housing, particularly focusing on houses that are most in need and that are occupied by people most in need. That’s those living in social housing. Our research has included combining demand reduction solutions which include energy efficiency measures like external wall insulation, loft insulation and replacing boilers for heat pumps where necessary but also combining that with renewable energy supply and energy storage to try and optimise a whole-house energy system. Through our research, we’ve retrofitted more than 30 homes. That research has shown us that there are benefits to retrofitting those homes not only with regards to going towards zero carbon but also saving significant amounts of money on energy bills, improving the comfort of the home and also the general appearance of the building and lifetime.
Rebecca: I think I’d love to live in one of those homes actually [laughter]. Shall we talk about the benefits? You mentioned significant savings on the bill. Let’s actually start to think about what this really means in terms of numbers because what you outlined there in terms of insulation... I know it’s not just loft insulation but it’s all sorts of insulation and getting your windows double-glazed... anybody that’s looked at that will see the hefty price tag that it comes along with. Even starting to shift out your boiler, despite the fact that there are some incentive schemes, again, it’s not something that most people can afford. Are we looking at savings off the bill that can come anywhere near compensating for the outlay? Give us an indication of what somebody might need to shell out to transform their maybe quite traditional end-of-terrace house like I live in into something that actually could be much nicer, warmer and cosier to live in.
Jo: It is still expensive and as much as we’d like to think that it isn’t, I think going towards net zero costs a lot. You’re looking at around £40-50,000. An air-source heat pump on its own, which obviously the government is promoting now, costs about £15,000 to buy and install. Even with the £5,000 grant that’s available, that’s still three times more expensive than a traditional boiler which, when you’re making that choice, is very difficult to justify spending three times more than what you would normally spend on a gas boiler. It’s very expensive.
Rebecca: We shouldn’t kid ourselves. I mean £50,000, for some homes in some parts of the country, that’s a third of the cost of a home or a quarter of the cost of a home.
Jo: Exactly, yeah.
Rebecca: It’s not insignificant. How are you dealing with that challenge in the work that you’re doing? I’m particularly interested because I know your focus has been on social housing or working with social landlords as well.
Jo: One of the things that we’ve always tried to encourage social landlords to do is to look at their programme of maintenance. If they’re due to re-roof a house or they are about to carry out a programme of external wall insulation, it’s about combining other measures with those maintenance programmes so that the cost for them isn’t seen to be so large. For example, if you were about to re-roof a house, you’d put a PV panel on at the same time. You don’t have scaffolding costs. If the PV panel is the actual roof, then the price of the panel and the roof... they see the overall cost as less of an addition to what they would normally be spending. So it is slightly easier to justify that extra money...
Rebecca: To be being smart about when we’re implementing it.
Jo: ...but it’s still a lot [laughter].
Rebecca: It is a lot and I guess what you’re saying is you don’t need to be necessarily shelling it out in one go but perhaps the order in which you’re doing things is important and there will come a time when you need to have an outlay in your house, so it’s about being smart around doing that. With some of the other clean technologies that we’ve adopted in our homes, whether it’s PV, storage systems or even the electric vehicles that might be on our driveway, we’re seeing the costs of buying one of those decreasing over time. We’re seeing new and different sorts of business models. Are you seeing the same sort of thing when it comes to talking about energy efficiency and what we actually need to be changing in the home here or are you seeing some challenges around how these costs are stagnating?
Jo: There are still huge challenges from what we’ve experienced. We have been going out to tender to procure the technologies that we’ve been installing and what we’ve found is that things like batteries and PV panels, their efficiency or the performance of the products has improved but the actual price hasn’t come down very much at all over the last five to six years. In many ways, that’s a good thing because obviously, the reliability, the warranties and everything like that are more trustworthy, so the people buying those products can rely on them to be more reliable over a longer period of time. They still have to pay a similar amount out for the products and maybe the next step is for the prices to come down. We’ve actually gone out to tender yesterday and we’ve had a few refusals where people have had large requests for PV panels and batteries to be installed and, therefore, they’re reducing the geographical area that they want to cover because they’ve got enough demand in that geographical area. The other thing is that the supply chains are really limited as well. For example, there are limited amounts of batteries in the country and so that is going to be another limitation until supply chains widen again.
Rebecca: Yeah, absolutely and in our last episode, we were also hearing just about the sheer lack of people able to deliver some of these jobs...
Jo: That’s right.
Rebecca: ...and perform the services that you need to transform the buildings into these real fit-for-the-future homes. It’s brilliant that you’ve been doing this. Did you say you’ve been doing it for about 30 homes?
Jo: We’ve retrofitted about 30 homes over just less than ten years.
Rebecca: Looking forward, obviously, that number has got to grow [laughter].
Jo: Yeah, it’s a tiny drop in the ocean as to what we really need to be doing but from our experiences, there are a lot of challenges that we really have to face full on and one of those is the skills and who is going to do all of this work. The supply chain for that is not ready at all.
Rebecca: Presumably, another major challenge is just finding the money. Where is the money going to come from?
Jo: Exactly, yeah. Who is going to pay for it and how can they justify it? I think when there’s evidence to demonstrate how they can justify it... again, like I said, it’s not only about zero carbon. It’s about an improved built environment more generally; so improved internal conditions, improved temperatures, more consistent temperatures and just a better, nicer looking house from the outside or from the inside. That makes a big difference to people’s wellbeing and quality of life. I think factoring in those co-benefits is incredibly important into that decision-making process.
Rebecca: Ultimately, I guess what we need are some really innovative and new models to make that happen, new forms of data that underpin it and new forms of models that unlock that finance.
Jo: Absolutely.
Rebecca: Brilliant. Thanks, Jo.
[Music flourish]
Matt: Fascinating chat there with Jo Patterson about what’s required to retrofit our homes for net zero and the costs associated with that. Now because not all of us have the money to do this ourselves, we’re going to have to look at other ways to bring the money forward and to raise the finance to fund these retrofits. Now we bring in our next guest who is a finance expert and who is going to tell us a little bit about how we can cover the cost of this retrofit.
Rufus: Hi, I’m Rufus Grantham. I work at Bankers Without Boundaries for a not-for-profit sustainable finance advisory firm and I head up our Urban Transition Finance and co-head our UK business.
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Rebecca: Welcome to the show, Rufus. It’s great to have you here today. Maybe you could just start by telling us a little bit more about Bankers Without Boundaries. I’ve heard of Engineers Without Borders and Doctors Without Borders, so Bankers Without Boundaries is definitely a new one to me. Tell me a little bit more about what the organisation does and how you got involved with it and with looking at this finance in the context of urban energy transitions.
Rufus: So BWB (Bankers Without Boundaries) was set up about eight or nine years. It was set up by an ex-hedge fund manager who had gone to work for the Prince of Wales to set up the Rainforests Project. The basic concept was that you have some big problems facing society that often sit somewhere with the public sector that could do with some finance advice. You have a whole bunch of people in the financial service industry who have got finance knowledge and it’s about bringing those two together. We’re a not-for-profit and we effectively operate a consulting model. We’re also FCA regulated (Financial Conduct Authority) and so can raise finance. Really, we sit in that gap between sources of capital and funding and projects and often, these are projects that historically, under the public sector, have been grant-financed because they’re small enough to do that. The problems are now at a scale where that doesn’t work and so how can you start to employ some of the bits of private sector finance into those issues. A lot of that is about switching project design away from a grant-funded model to an investment model. If it’s an investment model, you need returns and how do you make that work.
Rebecca: What you’re talking about is great for us to be exploring today. We’ve just been chatting with Dr Jo Patterson and she was telling us all about some of the challenges involved in retrofitting homes, so this kind of urban transition that’s a big part of our getting to net zero. Reflecting on some of the work she does, which is no doubt funded by grant finance, it’s a very small number of homes and it’s unbelievable how expensive that is. You can see the real limitations of grant finance. She was talking about a home at a time. Clearly, this is a huge scale problem because we’ve got this across all of our cities and all of our towns. It’s not like it’s just constrained to Glasgow or Wales where she was talking about. Can you perhaps give us an indication around some of the size and the scale of the challenge that we’re really talking about here?
Rufus: Yeah, absolutely. There are 29 million homes in the UK. Obviously, the typology and quality of those buildings varies hugely and so the amount of money that you would spend to get it to net zero varies hugely. There’s effectively a population curve of spend. The Climate Change Committee and the Sixth Carbon Budget talks about an average spend of £9,000 per property. That, to be fair, doesn’t include any energy generation and is based on a deployment out to 2050. They’re assuming reductions in costs over that time period and a little bit of time value of money. I think the Scottish Government talks about £12,000 per property. I put out a LinkedIn sort of hive-mind post just before Christmas. I’m not a technical expert and I’m not a built environment person. I’m a banker. I suggested that maybe £25,000 was the right price and got roundly shouted down that that was way too low. Talking to the London Borough of Camden, they talk about an average potential cost of £50-60,000. There are lots of numbers out there. I think there may be, in some cases, some political pressure not to make the problem look too big possibly but the reality is the numbers are big. I think when you start to talk to practitioners of deep retrofit, and we do that as well and we do hear these £30-, £40-, £50-, £60,000 numbers, there is a possibility that they’re not looking at the average point of the population curve but they’re looking at the harder to abate bit. That’s one possibility. The other point that feeds into that is what your target is. The Climate Change Committee says that the target is actually EPCC across the UK which is not net zero. If you want to get to net zero, there’s more to do than that. There is a debate about whether you include capital costs of generation; so solar battery, typically. That makes the bill bigger but it changes the economic profile quite dramatically. It’s not just about how much money you spend but also what energy savings you deliver from that.
Matt: Some of the numbers you’ve thrown out there I recognise in terms of what I’m trying to do, what I’ve already spent and what I ultimately will spend. It’s certainly at the higher end of that. What I wanted to ask is about the extent to which we need finance instrument solutions here because we’re in this position where energy prices are escalating, there’s a growing incentive for people to do something to reduce their energy bills, whether that’s through microgeneration and displacing what they bring into their homes from the grid or to reduce their overall energy consumption by improving levels of energy efficiency and do more with less. Obviously, you need the money to capitalise on that opportunity, i.e. to retrofit and pay it yourself. Where are we in that? The state of the UK’s household finances has changed a lot. We’ve got a cost of living crisis. We’re on the back of Covid anf employment is fluctuating. What’s your take on where we’re at and the ability to pay it for ourselves?
Rufus: I don’t think we should be doing this at the individual household level. We’re talking about neighbourhood-scale, coordinated action which is the model that we’re currently working on and we’ve got base funding to try and build a demonstrator of that. I’ll come back to that model later. If you think about it from the individual householder perspective, is there an economic incentive? Will I get my money back? If that is in place, can I actually get access to the capital? Do I have the credit capability to borrow the money? Do I want to do it because it’s a pain in the neck? It’s managing a building project in your own home. It’s dusty and it’s disruptive. All of those things are a challenge. You’re absolutely right. Average energy bills in the UK were about £1,200 for a combined energy bill. Depending on who you listen to, they’re going to be about £2,000. There are 29 million households and we were collectively spending £35 billion a year on gas and electricity to heat and power our homes.
Matt: There are suggestions, Rufus, that that may go higher still again with the October price cap. There are suggestions this week around up to £3,000 potentially.
Rufus: Well, if it’s £2,000, it’s about £60 billion. If it’s £3,000, it’s about £85-90 billion. There’s a big chunk of spend that we can redeploy to help fund this. I think there are some problems with doing that though. One, if you don’t include generation... if you think about a fabric first and heat-source replacement model, you dramatically reduce the carbon emissions of a property. You do not dramatically reduce the cost because the unit cost of power for electricity is about 4 or 5 X the unit cost of gas. Your input energy requirement drops significantly. The CCC talk about a 16% average reduction of an energy bill. On old energy bills, that would be about £200. If you believe the £9,000 capital number, which I think most people struggle with, that’s 45 years to get your money back with no return.
Rebecca: Wow!
Rufus: That brings us to another problem which is if we imagine all homeowners are rational economic animals...
Matt: So just like Becky and I [laughter].
Rufus: ...a 45-year return with no return – do the maths – it’s going to be 60-70 years if you want a low-level return. We’ll be dead. Our investment horizon as individuals isn’t long enough. There’s a real mismatch between the investment time horizon of decarbonising your property. I’m ignoring the other benefits that flow in terms of a more comfortable home, getting rid of damp and what may be causing damp.
Rebecca: You’re also talking about the £9,000 estimate and Matt was saying earlier to me that just to do his windows could cost £35,000. The reality is if we’re at a higher limit, what are we talking about then? Is that 200 years? It’s nuts, right?
Rufus: If you put a solar battery install in which on the average home will maybe add £6-7,000 of capital cost, you’re then talking about a much more significant cost reduction. Obviously, that hugely depends on the typology and everything else but potentially, the order of magnitude is 60, 70, 80% reduction in bills. That’s much more significant and so although you’re spending more money upfront, the return characteristics still change. You’re still talking multiple decades and for most people, that’s not the way people think about investing their money. There’s another problem here which often, I think, gets overlooked which is that this debate is often anchored in a conversation about wealthy middle-class people who own their own house, have 30, 40, 50% equity in that property and can call up Lloyds or Santander and say, ‘I’d like to borrow £30-40,000 to do my windows please,’ and borrow the money. If you look at the UK as a whole, a third of residents are either in social housing or private rental. Of the two thirds who are owner occupiers, a third of those are over the age of 65 and can’t access mortgage finance. You’ve now got two thirds of two thirds who are owner occupiers under the age of 65 which is just under a half. In that group, you have people who bought on the Right-to-Buy scheme, have no credit and can’t borrow money. You have people who have just recently bought their first property and are at 95% loan to value and are up to the eyeballs in debt anyway. They can’t borrow more money. I have a house with lots of equity in and a mortgage but I can’t increase that mortgage because I no longer work in finance and earn enough money to do that. That kind of group of able-to-pay owner occupiers who could do this if they wanted to is not nothing but it’s not the majority by a long shot.
Matt: So, Rufus, there’s an unspoken crisis here with regards to net zero. Often, access to finance is the point here but this is around credit ratings, capacity to take on board additional credit and if we’re already maxed out as a nation or, as you say, those lenders don’t see us as fit lendees, then we’ve got a real problem because we can’t access the funds to take those actions that we need for net zero.
Rufus: Yes, exactly and you then layer on the fact that, as I’m sure you’re discovering, Matt, it’s quite complicated. What do I actually do? There aren’t very many net zero retrofit companies you can go to who will do all of this. You’ve got to talk to a window company. You’ve got to go and talk to someone to do your insulation and talk to a heat pump provider or should you get ground-source? It’s complicated. Is it the most effective way to get 29 million householders to become retrofit experts in their own property? That doesn’t strike me as a particularly efficient way of doing that. You asked about numbers and I didn’t give you hard numbers. If you just do the maths... on the CCC numbers, that’s a £261 billion bill to retrofit the UK which is £9,000 times 29 million. If you look at the Scottish Government numbers, it’s about £350 billion. If you look at the £25,000 number that I used, which lots of people think is too low, it’s three quarters of a trillion. If you look at the £50,000 number that you referenced, that’s £1.5 trillion. These are big, big, big numbers. Now in the context of that, we’ve got a £60-90 billion energy bill that we’re all collectively paying which we can potentially harness. You touched on the fact that there’s a housing affordability crisis and we’ve got a cost of living crisis. The approach in the UK and, to be fair, in every other country that we have looked at – and we work globally and particularly across Europe – there is a combination of policy and subsidy. Ultimately, it’s the individual asset owner’s responsibility and we’re going to use policy to force you and we’re going to use subsidy to encourage you. That’s a carrot and stick approach. We’ve done it with cars. We’re going to phase out diesel cars. We’ll do it with gas boilers at some point. We will stop you being able to raise mortgage finance on an EPC D or below property. We’ll stop you selling or renting an EPC D or below property. We’ll create reasons to force people to indebt themselves. Again, if that’s viewed through a lens of the middle-class suburbs, maybe that’s fine but you’re effectively attaching the cost of retrofit to asset value and when the average house price in London is £600,000, the impact of that is very different from the Northeast of England where the average house price is £160,000. We did some back of the envelope and slightly Mickey Mouse maths that suggested that the average London homeowner would need to spend about 30% of their equity to retrofit their home. In the Northeast of England, it’s just over 100%. Let’s take an entire region where we know we have levelling up issues and push them into negative equity. There’s a hugely regressive potential of that approach and so we have to be looking at a way of doing this that recognises that we can’t just force it on to individual borrowing. Even if we all could borrow the money, it’s an incredibly regressive approach.
Rebecca: I’m really interested to hear a little bit more about this shift from individual to neighbourhood and I just want to sort of summarise. I’m hearing a lot of the key challenges and it seems that the financial instruments that we have right now, which are targeted at the individual level, are clearly problematic. In my home, we’re talking about improvements that we want to make and right now, I’d love to think about insulation. I’m struggling with what I can borrow. You probably would class me as in the middle classes. I own my own home and I have a decent income but I’m in a similar situation to you. I have no money that I can borrow and anything that I want to do... I have a bathroom that’s falling to pieces. I have wood that’s coming off and leaks that have been going on. So much of the time, I’m in fire-fighting mode in terms of what needs maintenance and the opportunity to invest is something that doesn’t even come up on those cards. Maybe you can share a little bit about what a different approach could look like because evidently, making everybody an expert and making everybody want to do this and then finding a way that gives everybody the potential to do this, which clearly can’t happen in a lot of regions, is problematic. What does better look like?
Rufus: Better looks complicated and needs testing. I wouldn’t, in any way, say we have the solution but we have the outlines of what could be a solution is how I’d put it. There is a real positive here as well which is when we’re talking about returns just now, we’re talking about economic returns. Will my energy bill go down? It’s not just energy bills. If you put external wall insulation on a building, you don’t have to point the brickwork and so there are maintenance cost savings as well. We’re talking about cash-based monetisable savings. That isn’t the entire impact of doing this work. If you do this work, particularly if you do it collectively street by street, neighbourhood by neighbourhood or city by city, you generate a whole bunch of other impacts as well. There’s huge job creation. We reckon 25-30% of the spend on a broad retrofit programme goes straight back to the Treasury through VAT, corporation tax through the supply chain, income tax and national insurance for people employed in the supply chain. There are avoided benefits from taking people out of unemployment and so there’s an immediate payback to the Treasury from doing this work as well but it’s not just that. There is very, very clear evidence of the linkage between poor quality housing and healthcare outcomes. There’s very clear linkage with educational attainment. If you took the economic value created by renovating, improving and reducing the energy footprint of our built environment, I think you can make an argument that you do this from an economic standpoint nationally; not from a green carbon perspective but because you will create value for the country by doing this work. The problem with the individual approach is that if me doing my bit of insulation of my property collectively with lots and lots of other people in the area reduces the long-term healthcare provision costs for my community, that doesn’t help me with my mortgage funding. We’re not harnessing those co-benefits, which is what we collectively call them, to drive this work. That’s one piece. The other piece is this is complicated stuff and it’s much better to collectivise the expertise required to do it. Also, the economics are poor. How can you improve the economics? Mass procurement and do it at scale. If you do five streets in one go, you’re buying heat pumps at a scale that gets you a much better price than buying them individually. The other advantage of thinking about it from a neighbourhood perspective is you can be much more systemic. If I’m going to put a solar battery system in and I do that in a single house, that might look like one thing. If I do it for a terrace of houses, I can create a local area energy system which is a much more effective utilisation of the assets I put in. You get a better energy saving per pound of CapEx effectively. I might not put individual heat pumps in per property. I might create a ground-source heat pump network to provide heat to a group of houses. Your capital efficiency improves if you start thinking more systemically. There’s one final piece that comes out of this idea of doing things at a neighbourhood scale and orchestrating at a neighbourhood scale which is while you’re there, the marginal cost of doing other things that that community wants and needs goes down. Don’t dig the road up three times to do gas, water and broadband. Dig it up once to do everything. We’re going to do all of the buildings. What could we do between the buildings at the same time? We could plant green infrastructure. We could put in EV charging infrastructure. So you start to change things. All of these things are moving the bill up and they’re all adding more costs but you start to move this away from a technocratically-defined energy system approach to effectively what becomes regeneration and reinvestment. You can sell that to communities in a very different way than windows, heat pumps and insulation.
Matt: So, Rufus, if I can follow-up on that... trying to reduce the costs through things like digging once, economies of scale... that makes sense. I also completely take your point that we need to be framing retrofit in a way that we encapsulate all of the benefits that are saved, whether it’s healthcare or, as you say, educational attainment and jobs. These needs to be factored into the cost and benefit of these things. If we go back to the beginning of the discussion which was about access to finance... if I can crudely divide the nation into able-to-pay and unable-to-pay for retrofit, it’s problematic but if we can just run with that for that moment. I think with the unable-to-pay, it’s probably almost a simpler approach in the sense that we can see that as something that needs to be dealt with by state intervention and subsidy. It’s the able-to-pay, some of which are sitting on a raft of savings. There were some crazy numbers that came out during the first lockdown and the amount of debt that people cleared on credit cards. They weren’t spending because they weren’t going out in lockdown and the amount of money that they invested into upgrading their homes... not energy, I might add, mostly. How do we unlock that money? Middle-class suburban semi with 2.4 kids and two cars on the drive. How do we get them? What financial offerings are going to nudge them in the right direction?
Rufus: One, if you take the unable-to-pay sector and you say that we’re clearly just going to have to fund that through state funding, that will bankrupt the country. The numbers are too big. You can think of that from an individual building perspective but when you multiply it up, the numbers just get out of control in terms of scale. The only way social housing companies can take on more debt is by moving their rent up which goes entirely against their whole reason for being. That doesn’t really work either. So there’s a challenge that the numbers are too big and if we are going to pay for this entire problem ourselves either through tax or through individual savings, the numbers are too big. What we are proposing is that you can have the same model for both able-to-pay and unable-to-pay. If national government finance and individual payment are the two current pots of money that we’re thinking about balancing between, can we unlock a third pot of money? The UK pension fund industry manages £2.4 trillion. You’ve then got the insurance companies that run their own assets. That pool of capital is looking for super long-term returns because their liabilities are long-term. They pay pensions out over decades and they want to invest their assets to create an income over decades to match that outgoing. That part of the finance industry, in particular, is very focused around investing responsibly, having impact, generating impacts beyond return and it’s incredibly frustrated that there isn’t a way to do that at scale. If we can find a model to tap into that, I think that can partly unlock that and that’s the work that we’ve been doing. In a nutshell, what we are looking at doing is creating a vehicle at a local level and aligned with local government and funding that vehicle with the money needed to pay the entire bill. I’ll come back to that magic money tree stuff. We’ll come back to where that money comes from in a moment. It’s about going into a neighbourhood which is maybe 500 or 1,200, that order of magnitude, and designing with that community what they’re going to do, which is the technical spec of the built environment piece, but it’s also what community assets we can put in that support a 15-minute city type model that also acts as an incentive for that community to come together and do this whole thing? You’re creating a Trojan horse regeneration programme in which you do retrofit. You don’t ever mention retrofit. This is about investing in communities. You can imagine a participatory process about what that money might go on. Do we put a co-working space in? Do we have a new community centre? Do we look at childcare facilities and a playground or something within the package that the community particularly wants? You deliver that at no cost to anyone living there from this funded vehicle. We think that starts to unlock the engagement issue. I don’t have to borrow money. I don’t have to pay but clearly, that feels somewhat made up. Where do we get the money from? The model, and this borrows from the Pace model in the US, is a property-linked contract to capture the energy saving. If I’m an average household and I’m paying £2,000 per year in gas and electricity today, this neighbourhood decarbonisation vehicle comes along with the local government which co-designs this model with me, pays for all this stuff, plants trees down my street, makes my house much more energy efficient, replaces my gas boiler and puts in some great assets in the community at no cost to me. My energy bill stays at £2,000 afterwards but whereas, before, my combined bill had £1,000 to the gas company and £1,000 to the electricity company, it now has zero to the gas company. Probably, your gross electricity bill is going to be £1,600 now but because you’ve got a solar battery installed in the neighbourhood, that comes down to, let’s say, £500. Pick a number. I then also have now a £1,500 community net-zero comfort fee. My bill is the same before and after. That community fee collected on bills goes into that vehicle and creates an annuity income stream for that vehicle. It’s property-linked, so if I move away, I walk away from it but it’s also indivisible from the property. I can’t negotiate it when I buy and sell a house. It’s almost like a ground rent. You could decide in particular areas we’re going to leave some of that saving with the residents because we have a particular fuel poverty issue and we want to directly target that but you don’t have to in the model. The model is agnostic to that. That 30-40 year annuity income stream can be sold to a pension fund. They will buy that from you for a low return and that, we think, could potentially pick up 30-60% of the capital bill.
Matt: Wow! That’s energy performance contracting as I know it. My did my PhD on this many years ago but, as you say, it’s the investors who are seeing the savings but for the customer journey and for that household, as you say, they’re paying the same bill but they have an upgraded home and an upgraded community.
Rufus: Yes.
Matt: They’re living a better life or we hope with no upfront capital cost.
Rufus: Absolutely. That’s the idea. Now when you run the numbers and do the modelling, you can’t fund 100% of the capital through that model because the savings just aren’t big enough and the capital numbers are too big. It’s not £9,000; it’s more like £50,000. There’s only part of the capital stack that you can sell on to the pension fund and the pension funds are not looking for huge returns. The credit risk of this income stream is very low. It’s utility bill payments. Capitalising it even at 2-3% yield is not going to cover the capital bill and so you have a funding gap that you have to plug from somewhere. We’ve conceived of that in two buckets. This has to be essentially grant-financed. This has to be money that comes in that doesn’t get paid back. We think of that in two buckets. One we think of as traditional government funding. The government already is spending on heat pump subsidies. It’s already funding tree planting. It’s funding economy recovery. You repurpose some of that money into this vehicle to pay for those outcomes because you are generating employment, you’re generating healthcare benefits and you’re generating biodiversity improvements in terms of how you’re planting the green infrastructure, etcetera. We think there’s also another bucket. This kind of aggregated model doing this at scale allows you to engage with another group of what we’ve called outcome-seeking grant funders. This could be a really eclectic group of organisations. It could be quite small-scale. You could have a local charity very focused on fuel poverty alleviation in a particular district that is prepared to put money in in order to deliver savings to people who live in that place or wanting to drive better housing quality for particular communities.
Matt: Community shares, for instance, Rufus. You could have a community-owned charity raising funds from the community to invest in this neighbourhood approach and they would see a long-term return.
Rufus: You could also have abundance-style community bonds where people can co-invest and actually get a financial return. You need to split those two. One is a financial investment where a community could raise money to invest and get the return. They’d get part of their energy saving back effectively for that money going in or you could have a charity that’s putting money in and doesn’t want the money back but is delivering outcomes in terms of better quality housing, better healthcare outcomes and better educational outcomes.
Matt: Just on the individual point, Rufus, this is a different way of thinking about us investing in retrofit. Instead of homeowners investing in our homes, it is everybody investing in a community, neighbourhood-by-neighbourhood, retrofit scheme and the way into that might be community investment.
Rufus: We know people don’t really want to do this and, on average, everywhere globally, people aren’t excited about retrofit. It’s improving but they’re not excited about it. Our starting point is residents paying nothing and there’s a lot of conversation about house owners. There’s often less conversation about residents as the clients. They’re the people who this is being done with and improving the lives of. Our starting point is they pay nothing. They pay through the energy saving and that comfort fee over time but they’re not borrowing any money. There’s no indebtedness at an individual level but there are other impacts that we think you could monetise. For example, and this is happening already within one narrow domain, if you plant green infrastructure in an urban environment, you change the way that the water system works. You’re delivering less clean water into the energy system. If I’m a water company, that reduces my operating costs, it reduces the depreciation of my assets and it reduces my capital investment programme, so I’m prepared to co-contribute into that programme to offset those costs. We’re seeing water companies co-investing with local government around tree planting. You put in a layer of water company investment. The one that we think could be potentially quite impactful... if you think about this operating at a whole local government level, you’re reducing significant carbon. If you can get that accredited and it becomes a source of carbon credits, you then have a really strong narrative. HSBC, headquartered in Birmingham, stop offsetting in Brazil (I don’t know if they are) and offset in your local community. Natwest, headquartered in Edinburgh, buy your carbon credits locally by offsetting in your local community. You then have a layer of carbon credit purchase which is effectively grant-financed. You’re getting money into the pot that you don’t have to pay back with cash. You’re paying it back with the carbon reduction.
Rebecca: When, presumably, there’s a big incentive here as well for the network companies. A lot of the changes we’ve been talking about, particularly electrifying our heating system and electrifying transport, are going to have a massive impact on our electricity networks and we need to significantly upgrade them. Is there also the opportunity to repurpose some of that and really look quite holistically at it? You talked about the potential for creating these local energy systems with local assets that could be managed in more local ways. Presumably, this is going to have a massive impact on our entire network.
Rufus: Yeah, both on the suppliers and the network operators. I know that Energy Systems Catapult is doing quite a lot of work around the level of coordination between local government action on net zero and the DNOs and the network operators. There could probably be more cooperation than there is currently and they’re trying to move that agenda forward. I think that’s really important; this whole question about distributed generation and the resilience that builds into the energy network. I think there’s also a really interesting angle here from the energy suppliers. Being an energy supplier is a terrible business model. You’re trapped between a wholesale energy cost and regulated price you can sell energy at and you get squeezed. The margin of the energy suppliers is very low as we’ve seen with a huge number of them going out of business over the last six to 12 months but those are the same companies that actually could be really well-placed to manage the infrastructure that we’d be putting in place. You’re talking about building out solar battery heat pump networks around communities. There’s an interesting conversation about does that sit in a community investment company-type structure. Where does long-term ownership revert? Given we’re talking about a 30-40 year return profile, you’re going to need to replace solar panels. You’re going to need to replace batteries. You’re going to need to replace invertors. There is a maintenance cycle around that which will have to come out of that saving return and be modelled in. It can’t all go to supporting capital. Someone needs to take on that contract and manage those assets and I would argue the energy suppliers might be really well-placed and it’s a much better business for them.
Rebecca: Shifting from selling kilowatts to actually selling services. I mean this is a very transformational idea what you’re proposing. It’s no longer about the incentives and the policies acting as the carrots and the sticks at the individual level but it’s an entirely different model. Do we need to see big changes in the policy environment to enable this to happen? We’re two years into the decade of action. 2030 is sitting there and looming ahead of us. What has to change to enable this sort of model to happen?
Rufus: I think there is a significant policy shift required but I suspect it’s quite fragmented. It’s lots of little changes in lots of different systems that tend to be thought of in isolation. I think there is a really big shift required in the way that we think nationally about funding these things which tends to come down in very technocratically-siloed domains. Let’s put in place a heat pump subsidy scheme and do that nationally. If I’m a gas boiler fitting firm in Dudley, the fact that there’s a bit more national demand for heat pumps is not very useful to me. I need significant concentrated demand in my local area to take the plunge to repurpose my firm to be a heat pump firm with the training required, etcetera. We know there’s a huge supply chain response required to make this work. You need that kind of local drive and I think one of the real problems is that often the funding channels to do this kind of work come in funding calls. You can make a call for an insulation programme but if you say, ‘We’ve got a programme that’s got solar. It’s green infrastructure and it’s community investment,’ there is no one place to go to for funding. So it’s thinking about how we fund this stuff and the role that the UK Infrastructure Bank could play in that. I know some of that thinking is going on. The work that we’re doing is currently funded by BEIS (Department for Business, Energy & Industrial Strategy). I know that there is thinking going on about how to make that work but I think there’s a step before that which is what we’re proposing is very different and is complex because it is not doing things in silos. It’s bringing those silos together which we’ve traditionally not been very good at. We need to move beyond ideas to proving this and doing it and that’s actually what we’re currently doing. There’s an organisation that’s been formed in the UK called the UK Cities Climate Investment Commission. It was formed initially by Connected Places Catapult, London Councils and Core Cities, so the 11 largest cities in the rest of the UK. That membership is now expanding out quite rapidly across the whole of the UK. We need to run a demonstrator. We need to have a go at doing this and work out what the problems are because you’ll only find the policy problems as you run into them one by one and then feed those back into central government to say, ‘Look, this is blocking. We need to change this to move forward.’
Matt: Of course, you’ve got the policies to encourage institutional investors to shift investment in lower carbon, to divest and what have you. We’ve talked a little bit about that in previous episodes. Rufus, there’s a lot of food for thought and quite a transformational way forward there. I’m very excited to hear that and I’ve taken a lot away from that. Before we close out, what we like to do is just pause and reflect on what the purpose of the pod is which is about to encourage and profile personal and local action to tackle climate change. We’d like just to ask you really, and be as broad or as specific as you like, about what you think people can do today to start making a positive change in terms of tackling climate change and the adverse effects of that. That can be anything. You’ve got the soap box. What can our listeners do?
Rufus: I always find this question tricky because it always comes back to the idea of individual responsibility and this is collective and it is collective at a local level but it’s also collective at a national level. It needs to be enabled nationally. There’s all the obvious stuff personally. Don’t eat as much meat. Don’t go on planes. Don’t drive a petrol car and all that sort of stuff. I’m very aware that there’s a level of privilege that sits behind the ability to make those choices many times and they’re not always available to everybody. I think collectively, if you are lucky enough to live in a community that does have access to do this, I would argue it’s much better to get together and think about how to do this collectively at a systemic level and you’ll chip in your £20-, £30-, £40-, £50,000 if you have access to that capital because you could run this kind of net-zero neighbourhood approach privately as a community. It’s a big undertaking because it’s not a small thing. It’s not putting in a bit of insulation, draft-proofing your windows and all the stuff that we all should be individually doing. I think what you can do is create that community linkage that can apply some pressure to local government. That’s not to say that local government isn’t doing this stuff. We talk to a lot of UK local authorities. There are some phenomenal people working in those organisations trying to do this stuff, often while trying to do eight other jobs without any funding. That’s where I think this enabling piece from national government is required. I think also, frankly, the financial services community could come together and part-fund this because creating a huge investment opportunity for the financial services community to fund the business development of that or part-fund the business development of that would not be unreasonable I don’t think.
Matt: I really like your point about you can’t take collective action for a collective problem without a collective. I think that’s an interesting point. Rufus, thank you so much. I’ve really enjoyed that chat.
Rufus: My pleasure.
Rebecca: Yeah, it’s been absolutely brilliant and absolutely enlightening. For me, it’s been incredibly positive because I often get quite despondent when we start to talk about some of these issues and some of the finance because it seems to always be focusing on the problems. Although it’s complex, I feel like you’ve brought a really interesting and innovative solution that can help move us forward. Absolutely brilliant to talk with you today.
As always, please do get involved in our discussion if you’re interested in talking about or engaging in what we’ve been talking about on the show or if you’ve got any thoughts about what you might like to hear from us for future shows. Do please go find and follow us @LocalZeroPod on Twitter and get involved in the discussions, gives us a shout out or even reach out if you want to come on the pod. We’re always looking for exciting people to chat with about local solutions to climate action. If you are like me and cannot constrain your thoughts to 140 characters, email us at LocalZeroPod@gmail.com. We will be checking that if you want to share some longer thoughts but for now, I think all that’s left to do is to say thank you to Rufus, thank you to Jo and thank you to everybody that’s been listening. We’ll see you next time. Bye.
Matt: Thanks, good-bye.
Rufus: Thank you.
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