Oxford Program for the Future of Cities Part 1: New business models for low-carbon cities

Abstract: This research explores the impact of policy measures to deliver a low carbon economy (both near term and more extensive policy change) on the development of new business models for low carbon cities. Buildings account for around 47% of UK Carbon emissions (including both residential and non-residential buildings, and including space conditioning, lights and appliances and equipment). The current policy framework will not be sufficient to deliver a 60% or 80% reduction in carbon emissions, and the policy framework is expected to see substantial change in the next decade and beyond. Our current set of technological solutions for heat light and equipment will need to change to achieve such large reductions. Possible policy measures and technology scenarios were explored in the Building Market Transformation programme undertaken at the Environmental Change Institute. The programme resulted in more than 80 published papers. As a consequence of policy changes and alongside technology changes, the business landscape which delivers and manages solutions for the built environment is likely to undergo major re-organisation, with existing organisations changing their business models and processes, as well as the creation of new business models. It is this opportunity and need for new business models which the proposed research will explore. Since two thirds of commercial space and a quarter of residential space is rented or leased, new business models may change the relationship between landlord and tenant, one that has been largely unaltered for many decades. It may include financing low carbon refurbishment off balance sheet. Solutions will be different for low carbon electricity and heat and different for different technologies. One new model is leasing out roofspace for PV, where roofspace has not previously been part of a separate lease. New business models may not solely exist in the commercial sector. They may exist as partnerships between the private sector and the public sector, and even at the intersection of the private sector and civil society. It is important to capture all of these areas.