Calculating the Cost of Net Zero

Higher Education Providers (HEPs) have grappled with one significant question – “What is achieving a net zero carbon state going to cost?”

Despite the significant focus and activity that has gone into climate change in the sector in recent years, with  Higher Education Providers making significant inroads into specific efforts to adapt and considering the road to net zero, to date there has been no consistently used and understood means of knowing the likely overall cost of achieving carbon targets for each institution. With no overall estimate of cost, HEPs have found it difficult to incorporate long-term sustainability planning into their usual financial and strategic planning mechanisms. 

Higher/Tertiary Education membership associations AUDE (the Association of Higher Education Directors of Estates), BUFDG and the EAUC (the Alliance for Sustainability Leadership in Education) have launched a new Cost of Net Zero Calculator tool, together with a report ‘The Cost of Net Zero’, which sets the new tool in context, and has been delivered by Energise (a sustainability consultancy supporting organisations and sectors to collaboratively address their carbon footprint by providing expertise and tools) with additional funding from the Department for Education.

The new Cost of Net Zero Calculator aims to give a standard means of answering this crucial question, and in doing so unlock investment funding for the many actions that are needed. This is urgent if the sector is to play its part in the national and international effort to halt climate change.

The accompanying report, called ‘The Cost of Net Zero’ and published today together with the calculator, helps us all understand the context, the scale and the nature of the task.

• The overall estimated cost of achieving net zero for the entire sector is £43.8bn (made up of £37.1bn for Higher Education and £6.7bn for Further Education)
• Of this, £29.1bn is within the supply chain, £8.8bn within the built environment and £6.1bn within the category of travel/transport
• Given such widely different types and scales of HEP within the sector knowing the average cost to an institution can only take us so far. Nevertheless, that average cost is determined as £124.9m
• This report follows the January publication of the ‘Accelerating towards net zero’ report from the same partnership group led by the Royal Anniversary Trust, and shares methodology with the earlier report.

Four documents are available for you to use.

1. The report 'The Cost of Net Zero'

2. The tool (in an Excel spreadsheet form) 'Cost of Net Zero Calculator'

3. A worked example of the calculator in an HE setting

4. A worked example of the calculator in a FE setting

While this tool is a starting point, it will provide clear information that organisations need to adopt a long-term investment approach and arrange sustainable and reliable funding. Working with stakeholders including the Department for Education and devolved governments to unlock investment from the widest possible range of sources is one of the desired outcomes of this project.

For members of AUDE, BUFDG and the EAUC, the report makes clear the relative cost level and estimated carbon reduction achievable within each of the three categories of supply chain, built environment and travel/transport, together with specifics on what will need to be done, or how to influence our supply chain partners in delivering change.

A free AUDE webinar on 13 July, to which members of all the participating associations were invited, introduced the tool and focus on the estates and sustainability aspects. 

A free BUFDG webinar on 28 September focused on the financial aspects, and included a walk-through of how the tool can be used in practice.

Partner group spokesperson comments

Karel Thomas, BUFDG Executive Director: ‘Universities are facing competing demands for increasingly scarce financial resources at a time when investment in a low carbon future is a priority. Accessing sources of finance will be much easier with a good story backed by evidence of need and purpose, and this tool gives universities and colleges a good start to understand the challenges of, and options for financing a sustainable future. Finance and procurement colleagues are looking forward to working with sustainability, estates and facilities colleagues using common sector methodology and agreed numbers.’

Jane White, AUDE Executive Director: ‘University estates directors not only have a means to calculate the overall likely cost of bringing the estate to net zero carbon, but a checklist of the kinds of activity that will need to be prioritised. Within the built environment category of emissions, this includes energy efficiency projects, fuel switching, decarbonising catering operations, low carbon heating solutions such as district heating, and more. As society changes we must lead that change, for instance in our support for lower carbon cost transport, electrification and the decarbonisation of the electricity supply. For those who haven’t yet started down this path, this is a good place to start, including for those who don’t want the expense of external consultancy support. For those that already have a map of where they are going and how much it will costs them this will help them sense check along the way. And that all HEIs should be thinking about being in this together and sharing their wins and losses.

Fiona Goodwin, EAUC Deputy CEO: ‘So what next? What to do as a result of this publication? Firstly you now need to be using the SCEF tools to estimate your current levels of carbon emissions and set a target for achieving net zero if you haven’t already. Today’s publication and calculator unlocks a whole flow of subsequent actions – financial planning, property and fleet planning, and much more. You’ll understand decarbonisation as a long-term financial commitment as never before, and therefore be able to factor this into financial and strategic planning in a new way. You’ll be able to scenario model – what difference would a 2050 target make in comparison to a 2040 date, for instance? A set of structured carbon reduction opportunities and a database of measures for you to choose from will support planning. And at the headline level you’ll have a high-level estimated cost figure for achieving net zero, and many of us have had no such thing before.’

Simon Alsbury, Energise, Co-CEO: ‘Energise is very pleased to deliver this project which is the first of its kind for the sector, with the principal purpose of supporting Universities and Colleges to improve their planning in this area. With input from various stakeholders and an expert advisory group, this project allows the expected cost of Net Zero to be understood through the report and provides a 'cost of carbon' calculator tool to support individual institutions to understand the cost of decarbonisation and develop a strategic level financial plan. The tertiary education sector has a significant role to play in the journey to Net Zero, by reducing its own environmental footprint, helping to develop new climate solutions through research, being a driver of collaboration/innovation across the economy, and acting as an advocate for climate action. Therefore, we hope this project will not only help an incredibly vital sector move closer to Net Zero, but also help to accelerate our national progress towards a Net Zero future by 2050.