Evidence of Success: Low Carbon Regional Economic Strategy

Date of the report

2 January 2009

Author of the report

Advantage West Midlands

Purpose of the report

In December 2007 Advantage West Midlands (AWM) produced on behalf of the West Midlands, a new Regional Economic Strategy: ‘Connecting to Success‘. Hailed as a landmark strategy, ‘Connecting to Success‘ has been formally recognised as the UK’s first low-carbon economic strategy and has established AWM as a leader amongst the regions. This summary document explains the process that AWM embarked upon with its partners to produce the UK’s first low-carbon economic strategy. The purpose of this report is to share the steps AWM took and lessons it has learned in developing ‘Connecting to Success‘ so that others can build on the example set in the West Midlands. The aim is to inform both regional policy makers so that they can build on this evidence base and national policy makers so that they can learn from this approach.

Relevance to the region

The remit of the West Midlands Economic Strategy (WMES) definition was deliberately focused upon growing the economy while reducing carbon and did not encapsulate the broader sustainable development agenda. Although there are currently no regional targets for carbon reduction and each region will contribute differently to national targets, AWM used the carbon targets established in the UK Climate Change Act as a guide for the new economic strategy. Regional saving represents 20-28% reduction below 1990 levels in regional CO2 emissions. However, this is slightly below the UK target of 26-32% reduction by 2020. This shortfall in emission education potential was labelled ‘the carbon gap’. Figure 2 on p.7 shows the challenge facing the region to reduce emissions by 26-32% by 2020 and identifies supplementary regional actions that would help address the carbon gap. A low-carbon economy is not just about reducing carbon, but also about improving productivity, which is particularly important to the West Midlands region. Figure 3 on p.8 shows the £10 billion output gap between the region and the UK average, which is due to generally low levels of productivity across all sectors. Structural causes of the output gap can be addressed by promoting diversification within the economy and encouraging new business formation in more high-value sectors. AWM believes that a key aspect of the efforts to close the regional productivity and carbon gap should be the new business opportunities of the low-carbon economy. This is an opportunity that the West Midlands is extremely well placed to exploit. In addition, many low-carbon actions such as resource efficiency, lean manufacturing and flexible working will act to improve productivity while opportunities presented in the recycling and home insulation sectors can tackle economic inclusion.

What SWM liked

We liked that this report summarised a range of evidence commissioned to inform the development of the WMES. We liked that it had a clear definition of the low-carbon economy and set out the steps that make business sense, such as improved efficiency and productivity. It focused on areas that partners can make a difference by incorporating the key prioritised policy criteria and actions within the strategy and delivery framework (p.19-31). This prioritisation based on the business case has helped move debate away from climate change and towards the business case based on reducing costs and improving productivity. There is also a useful analysis of economic sectors contribution to the regional economy and the risks and opportunities from carbon reduction agenda (p.9-10).

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Evidence of Success:Low-carbon Regional Economic Strategy

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