The Azimuth Project
the economics of low carbon strategies for the BWUA

The economics of the city’s strategy was assessed in a mini-Stern report named after the principal author of the UK government’s 2006 report on the economics of climate change.

The Potential for Carbon Reduction – Investments and Returns

The conclusions were that – compared to 1990 levels – BWUA could reduce its carbon emissions by 2022:

  • 10.8% through cost effective investments that would pay for themselves (on commercial terms) over their lifetime. This would require an investment of £3.6 billion, generating annual savings of £954 million, paying back the investment in 3.8 years but generating annual savings for the lifetime of the measures.
  • 14.9% through cost neutral investments that could be paid for at no net cost to the BWUA economy if the benefits from cost effective measures were captured and re-invested in further low carbon measures. This would require an investment of £6.1 billion, generating annual savings of £1.1 billion, paying back the investment in 5.3 years but generating annual savings for the lifetime of the measures.
  • 16.1% with the exploitation of all of the realistic potential of the different measures. This would require an investment of £8.1 billion, generating annual savings of £1.3 billion, paying back the investment in 6.2 years but generating annual savings for the lifetime of the measures.

Impacts on Future Energy Bills

  • We calculate that the 2012 energy bill for the BWUA is £5.15 billion per year, but we forecast that this will grow to £5.64 billion by 2022 – a £490 million increase in the BWUA annual energy bill.
  • With investment in all of the cost effective measures, this £490 million increase in the annual energy bill could be cut by £954 million, (194% of the projected increase) saving £464 million.
  • With investment in all of the cost neutral measures, it could be cut by £1.15 billion (235% of the projected increase) saving £660 million. With investment to exploit all of the realistic potential, it could be cut by £1.3 billion (265% of the projected increase) saving £810 million.