The Low Carbon Economy

This chapter sets the context in which the present study of the opportunities and challenges presented by the transition to a low-carbon economy is undertaken. It outlines the significance of a low-carbon economy and the benefits associated with the green growth. The theme of sustainability transitions is explored at the beginning of the chapter and is used to frame a number of key scholarly debates about the scope and direction of sustainability initiatives at the national, regional and organisational levels. The chapter provides a brief overview of the book chapters outlining their contribution to the academic and professional debates in the relevant fields. The chapter concludes with emphasising the importance of leadership for sustainability at various levels. It calls to widen the remit of sustainability initiatives associated with the transition to a low-carbon economy from a narrow view of cost-cutting measures to broader initiatives that strengthen competitive success and organisational strategies towards sustainability.

With increasing recognition of the issue of global climate change, greater attention is being focused on governments’, businesses’ and consumers’ behaviour in order to develop more sustainable ways to satisfy society’s needs. This transition is gradually evolving throughout all global economic systems. With this in mind, this chapter proposes a conceptual framework to support the analysis of low-carbon initiatives at national and regional levels. It explores the literature on sustainability transitions and identification of relevant factors that affect the transition of economies towards a more sustainable way to produce and to consume, while the chapter concludes with a review of regional innovation systems that serve as a catalyst for sustainability transition.

This chapter charts the shift from sustainable development policy drivers, through the emergence of climate policy and its impact on public service managers, to the more recent development of low-carbon policy. We also explore the relationship between local business, the local political ‘regime’, the national and European political ‘landscape’ and implications for local actors in the East Midlands; arguing that while low-carbon policy might be more in tune with political realities than attempts at wholesale reductions of carbon emissions, it has brought into question the viability of existing carbon reduction targets. In doing this, we explore the tensions between the ‘grand challenge’ of climate change, the difficult details of policy implementation and the pragmatic reality of business practice.

This chapter examines the increasing shift towards behavioural economics in the analysis of environmental policy and practice and the extent to which the approach can be applied at the micro level within organisations rather than at the global or national policy level. The aim is to assess the impact and importance of applying the behavioural economic approach in relation to organisational and business-level practices to achieve improvements in environmental policy targets. The chapter provides a practical guidance to SMEs on how to choose between different strategies drawn from this approach, based on an evaluation of the benefits, costs and ease of implementation. Most national and global environmental policies, such as cap and trade carbon markets, are based on the economic model of rational behaviour. Behavioural economics, by contrast, models irrational human behaviour based on psychological models and human bias. Governments are now using the behavioural economic approach to design ‘nudge’ policies to promote more environmentally desirable outcomes. Some evidence of the impact of behavioural nudges within organisations is available, but clear practical guidelines on how to implement them are sparse and limited to local initiatives. This chapter will identify a range of practice changes based on behavioural economics to help SMEs to achieve their own environmental targets or to cut business costs while improving environmental targets. We rank these practices on a range of measures to help SMEs to choose appropriate practice or policies to reduce carbon emissions and other environmental damage.

This chapter provides in-depth insights into small- and medium-sized enterprises’ (SMEs) organisational practices and strategies in the context of the transition to a low-carbon economy. The focus is drawn towards the importance of SMEs’ role in the development of markets for low-carbon products and services as well as their contributions towards a decarbonised economy (DECC 2008, 2011, 2013). A range of case studies presented in the chapter illustrates strategies adopted by SMEs towards achieving advantage in their respective industries through green and/or low-carbon innovation and organisational practices towards sustainability. The chapter explores the complexity of the challenges and opportunities presented by the transition to a low-carbon economy in the UK and internationally. The chapter concludes by developing a range of recommendations towards strengthening SMEs’ potential to ensure their competitiveness and their continuous pivotal role as an economical and social force in transition towards a low-carbon economy.

Companies implement carbon management systems for a plethora of reasons: to reduce costs, to respond to regulation or supply chain pressure, to manage risk or for altruistic purposes. Equally, there is a myriad of carbon management systems available, such as life-cycle analysis (LCA), economic input–output analysis (EIOA), hybrid models and footprint measures. This chapter provides an outline of some of the most popular methodologies in current use to highlight alternative approaches to managing carbon within individual firms and the wider supply chain. It suggests approaches for both first-time adopters of carbon management systems and for those who have already started on the path to measuring their carbon impacts.

This chapter examines the influential role third sectors and universities play in meeting the low-carbon challenge. We examine the importance of these sectors to the UK economy but also the varied roles they play in creating awareness, educating, enabling, and collaborating with others to achieve lower carbon emissions. Environmental third sector organisations (TSOs) are said to influence behavioural changes of the public towards low-carbon initiatives, while they can also inform and influence policies and legislations. Universities, while similar to TSOs in terms of educating others on low-carbon issues, have a threefold role: they need to have a sustainable campus, they are change agents in educating others and have an important role in collaborating with industry and policymakers in meeting the low-carbon challenge.

This chapter explores the nature of leadership for sustainability and questions whether there is a currently sufficient leadership capacity to have any realistic chance of accelerating the shift to a low-carbon (and ultimately green) economy. It mines empirical research from a variety of (disparate) literatures for useful insight into the type of leadership that could support our efforts to make this shift and highlights some of the ‘actionable’ concepts emerging from three largely discrete disciplines: socio-technical transitions, place-based (or civic) leadership and systems’ leadership. Finally, it argues that the new and distributed leadership skills and qualities required to support this system-wide innovation requires a strategic approach to building leadership capacity in cities and other localities that embrace the political, public service, community and business sectors (Hambleton and Howard 2012).

This concluding chapter brings together a number of key themes discussed throughout the eight preceding chapters of the book. It outlines the need to understand the sustainability transitions and associated changes at various levels and in diverse contexts to a greater depth. It calls for greater attention to the ‘green’ skills development agenda in supporting transition to a low-carbon economy in which universities occupy a prominent position. The growth-enabling approach to low-carbon and ‘green’ organisational strategies is outlined as a ‘balanced’ answer to a traditional focus on cost-cutting initiatives often associated with a low-carbon orientation. The authors argue that collaborative action and leadership for sustainability are enabling and essential ingredients of successful sustainability transitions, including the transition to a low-carbon economy.