How much does climate and energy policy cost decentralised governments?

Message by Consultancy.co.uk (25 January 2024)

Consultants from Improven and Andersson Elffers Felix (AEF) are currently carrying out a collaborative reassessment of climate and energy policy costs. This project aims to provide an up-to-date picture of the financial impact of the energy transition on decentralised authorities for the period 2025 to 2030.

The study is a follow-up to an earlier similar track in 2020, which at the time mapped the costs of the Climate Agreement. Then, too, the Public Administration Council was the client.

Now, three years later, the results of the previous study are being revisited. For instance, decentralised authorities such as municipalities, provinces and water boards have more knowledge and experience of what is involved in implementing climate and energy policy, as well as the costs involved.

The aim of the project is to determine a concrete amount needed to implement climate and energy policy. The Public Administration Council processes the findings and then in turn advises the government on how to finance municipalities, provinces and water boards.

But how do you tackle such a vast and complex issue? To find out, we talked to Rob van Zeeland and Eric Wubs - they are both part of the joint project team working on the hefty task.

The process of recalibration

"We work according to the five pillars of the Climate Agreement: Electricity, Built Environment, Industry, Agriculture and Land Use and Mobility," Van Zeeland explains. "The tasks are formulated for each pillar, giving us a detailed picture of the work required."

Wubs: "We also examine the extent to which national plans affect the tasks of decentralised authorities. In addition, we map investment costs within municipalities, focusing on the impact of these costs."

Starting point was the existing list of tasks from the initial calibration of Andersson Elffers Felix in 2020. Of course, the landscape has changed a lot since then.

"Indeed, and so we looked extensively at changes, including the amount of time spent on a particular job," Wubs points out. "We presented experts, both from outside and inside the municipalities, provinces and water boards with the tasks, asking whether they are still correct and what, if anything, has changed."

Applying the right scope is one of the complex elements within the process, Van Zeeland reveals. "The trick is to really only map tasks that are new and related to climate and energy policy. An example: we did not include stimulating people to use bicycles in the climate and energy policy, because the construction of bicycle paths is already an existing task. After all, this was already happening before the Climate Agreement."

In their cost estimates, consultants Andersson Elffers Felix and Improven encountered all sorts of complex issues. "Because you have to be very concrete in the estimates. Because how much exactly does installing charging stations in a particular residential area cost?" wonders Van den Bosch aloud. "Of course that can be traced, but being very detailed is essential here."

The second phase of the recalibration exercise involves in-depth studies. "In these, we examine the actual need for people, expressed in full-time equivalents (FTE) for specific tasks. We also ask what investments will be made, which will not be recouped immediately," Van Zeeland said.

"An initial estimate is then incorporated into a survey sent to all relevant authorities," he says. "In doing so, we ask for validation and substantiation of our estimates. Can the decentralised authorities recognise themselves in our estimate? An important addition we want to make is an interpretation of the figures, so that it is clear to everyone how we arrived at a certain amount."

Next steps

The survey has now been sent out and closed, and the consultants are currently in the analysis and reconciliation phase. An important deadline follows next month, as the final report will be sent to the client on Friday 16 February. By then, the Public Administration Council will have a fully revised estimate showing how many FTEs will be involved in implementing the energy transition.

Van Zeeland stresses that the final recommendation is of course much more than a single big number to consider. "There are so many dynamics at play in decentralised government and so much variety between different agencies. We will include this variation in our recommendation. The more important it is also to formulate a balanced opinion."