ACE has for some time been working with Fossil Free North Yorkshire (FFNY) in their campaign to persuade the county council to move away from investing in fossil fuel companies to tackle climate change (see ‘http://acesettleandarea.org/sign-up-to-support-the-campaign-to-divest-from-fossil-fuels/ published 20 October 2020). As well as driving climate change, such investments also pose a serious financial risk to local pension holders with the former Governor of the Bank of England, Mark Carney, warning that investors face ‘potentially huge’ losses from climate change action that could make vast reserves of oil, coal and gas ‘literally un-burnable’. He is currently the UN Special Envoy on Climate Action and Finance.
Over the past couple of years FFNY has been lobbying the County Council’s Pension Fund Committee, which is part of the Border to Coast Pension Partnership, one of the largest pension pools in the UK, operating investment funds for their Partner Funds comprising eleven Local Government Pension Funds, to switch investments from fossil fuel companies to green infrastructure projects. Councillor Christian Vassie (pictured) is chair of City of York Council’s Climate Change and Scrutiny Committee, and also represents the City Council on the County Pension Fund Committee. Following last Friday’s meeting, which agreed to invest £450 million over the next five years on infrastructure, he gave FFNY the following statement.
‘I think we are now on the verge of seeing a new and more environmentally engaged local authority pension fund.
During the first year of my work as chair of City of York’s climate change committee, I realised three key things. The first is that we absolutely have to adopt a clear pathway to a zero carbon future – with quantified annual targets – and not carry on hoping that individual initiatives, however inspiring, take us to where we want to be. Secondly, we have to work with partners across the region – through the Local Enterprise Partnership (LEP) – and in particular with North Yorkshire Council. Thirdly, local authories cannot do climate change action or zero carbon futures to their cities/residents/businesses; we can only achieve if we work with all the other stakeholders.
We absolutely have to understand how our individual initiatives contribute to a zero carbon target. Switching to all electric buses, or fitting solar PV on 5,000 rooftops, or creating a new cycle network are all good but unless we know the percentage difference that they make to our carbon reduction target we are just playing at climate action. The challenge is very big and our actions fall woefully short of the target.
We need to work with North Yorkshire County Council because we share a collective ambition to create the country’s first carbon negative region. In my opinion this is currently little more than a fantasy but it is a basis for action, just as was City of York council’s declaration of a climate emergency in 2019. We don’t just have our pension fund in common. Through the LEP we have the potential to deliver new green infrastructure that can genuinely transform our future. That is why yesterday’s meeting is so important. The challenge is now on to identify those green infrastructure initiatives (locally/regionally and globally) that will deliver the energy transition.
Lastly, the local authorities cannot do this by themselves. City of York is now actively seeking to approve a zero carbon pathway by the summer. I am proud of the key role the climate change committee (with input from councillors from all parties) has played in persuading the executive to go down this path. But a zero carbon pathway brings with it a brutal lesson in the scale of the challenge. The climate change committee is advising the executive that the council cannot deliver a zero carbon York by 2030. We are advising the administration to insert commit to delivering a zero carbon council by 2030. Some will cry betrayal. My answer is that now instead of talking from the heart we are using our heads and facing up to reality.
If we sign up to a zero carbon council by 2030 we will have to, among other things, find a way to retrofit over 7000 council homes to passive house or near passive house standard. If each of those 7000 homes costs £30,000 to retrofit the total cost will be over £200 million. And that is, obviously, not all we will have to do. But the critical question is this; if we convert all those homes to zero carbon, and if all homeowners across York and the region do the same, will we actually reduce the carbon footprints of all those householders?
The answer is only ‘perhaps’. Which should be alarming.
You may be familiar with the Derwenthorpe development created by the Joseph Rowntree Foundation/Trust around 10 years ago. It was created to demonstrate how better built energy efficient homes would reduce carbon footprints. Only when they came to check the carbon footprints of the owners in 2015/16 what they actually discovered was that the family/owner carbon footprints were higher than average! The energy bills were down but the households were spending more on travel and shopping.
So this is crucial. Low carbon homes do not reduce carbon footprints unless the occupants get with the programme. If a household saves, say, £1500 on its heating bills and then simply spends the saving on shopping and foreign flights, the most passive house of all passive houses will achieve nothing! So the council in York might spend hundreds of millions retrofitting, plus the money it has already committed to build 650 new passive house council homes1 and achieve zilch. This would be tragic for all of us. Councils cannot do climate action to people, we have to do it with people.
I remain optimistic and passionate that we can deliver the energy transition but to get there we must all get constructive, get real and work together. Local authorities and community groups and businesses and residents. Above all, while knowing what is wrong with things is a start, we must really engage with what we need to do to deliver positive change; not doing things is nowhere near enough.
Like you I want to see the fund divest from fossil fuels but just as much as that I also wish us to invest in green infrastructure. I want us to create our zero carbon future. Pension funds have to make money in order to be able to pay their member’s pensions when the time comes. My hunch is that the committee members will be more able to abandon its fossil fuels holdings when they see that investing in the energy transition is the smart thing to do and that investing long-term in fossil fuels is not only morally wrong but also financially crazy. There are good signs that this is now happening.
On Friday 5 March North Yorkshire’s the pension fund committee agreed to invest £450 million over the next five years on infrastructure. This is an absolutely massive opportunity to move forwards. We must now work to identify those opportunities, particularly in our region, to create new green infrastructure and new green jobs. For me this includes, green hydrogen (using off-peak off-shore wind), transforming smart metering, renewable and geothermal energy, low carbon freight, new forests, and much more. I am excited about the year ahead.’
- Editor’s note: Details of Passive design for buildings may be found at: https://en.wikipedia.org/wiki/Passive_house
Councillor Christian Vassie is a Liberal Democrat councillor representing the Wheldrake Ward in York.