Introduction

A Climate fund for the NW of England that would raise money to invest in local carbon mitigation and sequestration projects.

Objectives and target audience

The project was seeking to identify the potential for development of a carbon compensation scheme, similar to Kyoto-style off-setting, although outside the strict criteria of the EU Emissions Trading Scheme and allowing emissions reductions project to take place in NW England. The target audience for contributing to the fund is public and private organisations and individuals interested in compensating for their carbon emissions. Ultimately the target audience for the fund will include a wide range of organisations implementing climate change projects.

Financial Resources and Partners involved

The North West Development Agency has funded an initial feasibility Study (£17.5k) and a development of a business plan (£76k). The main investment decision to pump-prime the Climate Fund of £1.6m over three years from 2009 has now been approved. Other key partners involved were Manchester is my Planet and representatives from the other 4 sub-regions in the North West, and the consultants employed to undertake the work.

Process

After discussions between the NWDA and sub-regional partners, a brief was devised for the initial feasibility work. This was undertaken by Creative Concern and identified that further detailed business planning was required.

This commenced in late spring 2008, under a new contract awarded to a consortium of consultants. It explored a range of key issues including:-

• Operational and organisational plan
• Financial and business planning
• Preferred legal status
• Project scoping and criteria (recipient projects concerning climate change mitigation and sequestration)
• Market testing
• Private sector support
• Marketing strategy
• Sub-regional and regional governance
• National policy context
• Auditing carbon savings

The final report was then submitted to the NWDA for an investment decision which was approved in autumn 2008.

The award of the contract for delivery of the Climate Fund was made in November 2008, with set-up expected in the first quarter of 2009.

Results

The results of the business planning process demonstrated that there is market appetite for compensating for carbon emissions through a regional climate fund. It also identified significant interest amongst not-for-profit organisations in seeking funding for carbon mitigation and sequestration projects.

A contract to deliver the Climate Fund was awarded by the NWDA in November 2008. Set up due to take place in the first quarter of 2008. This first allocation of grants to projects is expected in spring 2009.

Critical Success Factors / Challenges

The effective management of consultants by the NWDA and partners has been very important.