Carbon Offset Fund

Introduction

Cambridgeshire Horizons (on behalf of Cambridge City Council, Cambridgeshire County Council, East Cambridgeshire District Council, Fenland District Council, Huntingdonshire District Council, and South Cambridgeshire District Council) have commissioned a study into the potential for a carbon offset mechanism for Cambridgeshire.

Cambridgeshire has set ambitious targets for reducing CO2 emission and adapting to a changing climate. To meet these, substantial investment in low carbon infrastructure (for example renewable energy and energy efficiency measures) is required. A carbon offset mechanism could form part of Cambridgeshire's approach to securing this investment. This is a way of collecting investment from a range of different sources, including developers and private investors, which can be used to fund infrastructure that will reduce greenhouse gas emissions.

Carbon offsetting as a concept has been subject to some mistrust due to a perceived lack of accountability. A Cambridgeshire carbon offset fund would overcome this concern by investing in community-scale projects, clearly demonstrating emissions reduction in the local area. A robust structure and open accountability would be crucial to the success of any such fund.

In principle, it could provide investment in low carbon infrastructure where it is most urgently needed, during a time of stretching emissions targets and reduced public funding. A local mechanism of this sort has the potential to influence national policy on allowable solutions and demonstrate how the transition to low carbon lifestyles could be achieved.

On 20th January 2010 a consultancy team led by Element Energy was appointed to deliver the initial study examining options, possible benefits, and risks to a carbon offset mechanism for Cambridgeshire.

The overall aim is to provide Cambridgeshire public sector partners with a strategic overview of available options for setting up some form of Carbon Offset Fund, and advise which, if any, of the options will present real advantages over a 'do nothing' approach. The overview will include consideration of legal, economic, political and governance issues, as well as setting out the potential relationship between a Carbon Offset Fund and existing systems.

The consultancy team will produce a report in late spring 2010, which will be discussed by Local Councillors from all six Local Authorities in order to decide what the appropriate next steps should be.