In this article for Development Asia, Asian Development Bank’s knowledge sharing portal, we draw on experience in Scotland, Latin America and Asia to demonstrate ways in which partnerships between the public, private and third sectors are helping minimise the disruption to education caused by Covid-19. We go on to identify four key lessons.
The Danish election of 2019 was widely seen as an environmental election – it brought to power the Social Democrats with the backing of three other parties that each saw the environment as a key part of their platform. Until the Covid-19 crisis and an effective political truce, this dominated relations between the parties of the “red bloc”. Now, as talk begins to turn to reopening and stimulating the economy, the rhetoric of the environment has returned. Morten Østergaard, leader of Radikale Venstre (literally translated as Radical Left, a social liberal party that is neither radical nor particularly left wing) has pushed the Prime Minister into agreeing that this restart of the economy should be green, and that the Government’s ambitions and promises around the environment must not be victims of Covid-19. She agreed.
Achieving the goals through CO2 taxes
What will that mean in practice? In December 2019 the Danish parliament passed a climate law officially binding the target to reduce CO2 emissions to 70% of their 1990 levels by 2030. How it tackles that target in new political and social conditions is currently under debate.
The Danish Economic Council (ØR) sees CO2 taxes as the most cost-effective way forwards, advising against any state spending on green growth, even given the current crisis.
Their argument is that taxes on CO2 create a positive spiral towards CO2 reduction, making CO2 heavy products more expensive for consumers and CO2 methods of production more expensive for producers.
The ØR does argue for a need to increase consumption in order to stimulate the economy. There has been evidence that individual savings in Denmark have markedly increased during the crisis, undoubtably having an impact on the real economy. In order to stimulate the economy in the short term, the ØR suggests lowering the tax on electricity. This would increase the disposable income for consumers, who will increase their consumption which will help get the economy out of the crisis, after which a CO2 tax can be implemented to begin the “positive spiral”. This, they argue, is the most efficient and cost-effective method of achieving both an economic recovery and the 2030 goals.
Back to Green Growth
ØR thinking emerged after Dansk Industri (Confederation of Danish Industry representing approximately 11,000 companies) published their own outline of a green recovery – “Denmark out of crisis – back to green growth”. This suggested a more interventionist approach from the Government, that would see the Government pump around 90 billion DKK (around £10.5.billion) into the economy, particularly directed towards green investments and infrastructure. The report suggested this would contribute around one-quarter of the 2030 CO2 reduction targets, as well as creating and supporting 30,000 jobs.
If various Covid-19 bailouts are included, the total cost to the government under DI’s plans would be around 150 billion DKK.
A multi-strand approach
These costs are spread across 70 different policy interventions, including 2 billion to kickstart infrastructure to support widespread use of hydrogen fuels where electrification is not viable, as well as carbon capture. The plan further suggests expanding the 2018 energy package that set a goal of constructing three new offshore windfarms, capable of generating 3GW by 2030. This ambition would be stretched to 5GW by 2030, and the original limit of 1850 onshore windmills would be lifted, and construction sped up, creating jobs. Beyond direct investments in environmental projects, there are others that have an indirect green effect.
The plan suggests the Government officially approves all 453 renovation projects currently in the queue from the “Landsbyggefonden”, an institution representing social housing organisation. Other than the obvious economic stimulus in the construction and crafts sector, such renovations could also reduce energy use by 30-40% for these residents. It’s also completely free for the Government, as the social housing organisations themselves cover renovations.
Enabling the regions
DI suggests a pool of 100 million DKK be created for the regions and municipalities to carry out their own projects to improve energy efficiency. A further pool of 200 million DKK should be set aside for the renovation and expansion of the cycle lane network. These are just a few select projects from a deep plan that includes others focused on digitalisation, but also on protecting Denmark’s status as an exporting nation.
DI promotes a vision of developing a proper stimulus package with a green tinge, if not a total green focus. There are other provisions to see funds stimulating public consumption, as the ØR did and infrastructure investments. For comparison, this stimulus would be slightly larger than the one following the 2008/9 economic crisis. The Social Democrats, being a minority Government, will undoubtably work towards pushing their stimulus package in an environmentally friendly direction. Concrete proposals from the red bloc parties are forthcoming and from there a consensus will likely start to emerge.
Governance in Denmark is fairly technocratic, with teams of economists likely hard at work in the various ministries forecasting the cost per tonne of CO2 and the outcome of that will likely define the limits within which the Government is willing to act. Covid-19 has shown the lengths that Danish politics is willing to go to tackle a crisis, how they balance Covid-19, economic recovery and CO2 targets will be watched with interest.
Author – Christopher Edgar has been working with Caledonian Economics since 2019. Christopher is currently completing an MSc in Economics at the University of Copenhagen and graduated with an MA in Economics and Politics at the University of Edinburgh. Within the field of Economics, he has particular interest in Economic Development, Growth Economics, Public Finance/Tax policy, and also Game Theory. Other interests lie in Politics and Public policy, the Charitable Sector, and Languages.
OUR REPORT ON THE SMART CITIES EVENT, DEN HAAG, July 2018
In 1950, around 70% of the world lived in rural areas and 30% in cities. By 2050 these percentages will have reversed (UN World Urbanisation Prospects, 2014). Much of this growth and shift will be in developing economies. It is said that if everyone on earth lived a typical Western lifestyle, our ecological footprint would be so large that we would need four planets to live on!
As our world’s population grows and becomes more urban, we must become much more efficient and ‘smart’ about how our cities function.
Last week I took part in the 8th edition of the annual Smart City Event in the Hague, Netherlands. The use of smart technology and big data is already evident in the Netherland’s energy, waste and transport systems, health & social care provision and in its prison service.
Delegates and speakers from governments, business, academia and knowledge institutions shared and discussed their perspectives on what makes ‘Smart Cities’ and whether the term is meaningful.
One speaker, Oualid Ali, President of the Futures Cities Council asked a searching question: what is the alternative to being a ‘Smart City’? An ’Intellectually Challenged City’? Ali noted that digital technology and data are nothing without innovation and ideas from people. His preferred term is “Future Cities” with the focus being on innovation, digital or otherwise.
When the jargon is stripped away we are left with the principles of sustainable development, within which ‘smart’ or digital solutions move cities toward our overarching goal of sustainability. There are huge opportunities for cities to gather and use data to reveal patterns of use and behaviour in order to improve the efficiency and effectiveness of our buildings, transport and flows (waste, water, energy). Being ‘Smart’ is about making these flows more efficient and sustainable for the benefit of the City’s people.
City development is not a simple topic which can be easily labelled. As we saw during the conference, the possibilities for innovation are endless. However, here are the top five questions cities should ask as they strive to become ‘Smarter”:
- Do you really understand the needs of business and citizen? There is no single blueprint to make Smart Cities. Does your approach consider challenges facing your particular city (perhaps energy, waste management, mobility, or safety) and understand what your citizens consider to be a ‘good city’ to live? A top down ‘government knows best’ approach rarely works.
- Are interests aligned? Are you bringing your public sector, businesses, academia, consultants and civil society together with a goal of knowledge sharing and learning best practices from others? Ingenuity and a culture of openness is needed if you are to move toward a city that is fit for the future. Organisations such as C40 Cities support this approach at an international level.
- Big data means big security – are you ready? The implications of gathering and storing vast quantities of data and the importance of cyber security cannot be an after-thought. Do you understand the levels of risk involved, are they at the fore, how good is your understanding of legal and regulatory frameworks?
- How will you get everyone over the digital divide? How will you cater for citizens who cannot access digital data and technology, perhaps because of health, status or poverty? Such citizens risk becoming marginalised, perpetuating urban inequalities.
- How will you pay for it? The public sector will be a key enabler, but what blend of public and private financing will be required? How will you structure the blend to fit your context and the initiatives you wish to pursue, minimising risk and maximising benefits? An element of ‘’spend to save” will usually be needed to realise long term efficiencies and cost savings, and you should reflect appropriate timeframes in your upfront financial analysis.
Interest in ‘Smart Cities’ has grown rapidly and is now central to urban policy, planning and development. But do ‘Smart’ or ‘Future’ cities’ offer a panacea to development and the challenges our cities face today?
Of course not, but these concepts reflect a direction of travel towards a world where we tackle the challenges of population growth, climate change and resource shortages. More efficient, sustainable cities will better serve the people who live in them today and in the future.
Written by Lynne-Marie Thom who leads the Smart Cities, infrastructure and local economic development activities at Caledonian Economics. She has a background in financing and implementing national infrastructure projects. She worked with Scottish Government to develop the 2015 National Infrastructure Investment Plan including the Digital thematic component, and has helped deliver infrastructure at national, municipal and local levels, using a variety of innovative funding mechanisms to target development of growth-enabling infrastructure.
The ‘One Year Review’ of e-sgoil, written by our Education Specialist Bruce Robertson and Director Martin Finnigan, has been published by Comhairle nan Eilean Siar, (Western Isles Council). Our review documents the remarkable success of this initiative which takes Smart Cities concepts and applies them in a rural Smart Islands context.
Careful data gathering and analysis, reliable communications infrastructure and technology-literate teaching staff have opened up new curriculum and pedagogical opportunities throughout the islands.
The potential of this approach to extend from schools into vocational and higher education has been demonstrated, and the impact on Cosnadh (employment), Cánan (language), Cultar (culture) and Coimhearsnachd (community) is clear.
The report assesses progress against the funding objectives, describes the transformational business model, and identifies the current and potential economic impacts.
The e-sgoil model is inexpensive, efficient and scalable. It is applicable in remote, rural and dispersed communities regardless of location. The report is can be downloaded here.
The Asian Development Bank has published our article on Scottish Education PPP models and how they could be applied in the bank’s sphere of operations. In this blog we:
- look at reasons why PPP is less widely adopted as a development model for education infrastructure compared to other sectors such as energy, transport and utilities;
- consider the benefits that wider adoption of PPP could bring;
- describe innovative structured that have been developed in Scotland; and,
- suggest how they might be structured and deployed in the region.
The full article can be accessed on Asian Development Bank Blog.
On October 9 and 10 2017, Martin Finnigan participated an inter-institutional seminar on Control and Monitoring of PPP Contracts, at the invitation of Ministry of Economics and Finance of the Government of Uruguay and the British Embassy.
Presenting alongside Dr. Patricia Benavente (Peru) and Inspector of the Contract of UPPL No. 1 Bernardo Vidal (Uruguay), I delivered two sessions that explained the relevance of the Scottish PPP experience to Uruguay.
The event was attended by over 50 professionals with an interest in PPP in Uruguay including central government agencies, service delivery bodies, investors and funders.
I developed a theory of the forces the drive the evolution and development of PPP in an economy, and noted how managing a PPP pipeline demands the ability to adapt to foreseeable changes in the external environment, and cope with unexpected ones.
I also identified lessons we have learned in Scotland over 20 years of PPP, and interpreted these in the Latin American context. Finally, I presented our report on the management of operational PPPs in the social infrastructure sector.
How often do we see a project that breaks genuinely new ground?
E-sgoil is not just another distance learning package. It seeks out situations where location is at the root of a mismatch between the demand for – and supply of – education. Then it asks how technology can be used to address the mismatch. It takes Smart Cities concepts and applies them in the Smart Islands context.
Developed in the Western Isles with the vision of “Placing the Periphery at the Centre”, e-sgoil is finding applications across Scotland: helping address shortages of specialist teachers, delivering Gaelic language courses in places where it was not previously feasible, broadening the curriculum in small island schools, and enabling students of all ages to study courses up to postgraduate levels in the workplace or close to home.
Caledonian Economics helps Local Authorities, Health Agencies and National Government develop and deliver excellent PPP projects. We work at all stages of the PPP process: PPP strategy development, business cases, financial modelling, transaction support, Operational PPP performance improvement, rescue of distressed projects, and Public Sector training and capacity building.
Many of the projects we have supported have been open and operating successfully for ten years or more. The senior public sector officials who have been responsible for these projects are uniquely experienced to comment on the most effective approaches to long term management of PPP projects.
We spoke to ten of these public sector professionals, asked about their experiences, and discussed what advice they would give to new projects, now and in the future.
In our new report on Operational PPP projects, we ask seven key questions about the effectiveness of PPP Management, and identify important lessons. You can read what we found out in our new report by downloading it here: Caledonian Economics Report on Operational Projects.
Senior public sector officials from central government departments in Beijing and several Chinese provinces including Jinan, Guangzhou and Hebei have taken part in our PPP Masterclasses this month. This follows events we have run previously for government officials in Latvia and Uruguay and of course many training and development events in Scotland.
Our bespoke events draw from a menu of knowledge areas that covers all financial and commercial aspects of Public Private Partnerships. They provide an ideal opportunity to learn and share expertise that equip participants will skills to develop robust projects which deliver real social and economic benefits.
Our Event Leaders include some of the most experienced PPP practitioners in the world. This professional team has worked at every stage in the PPP development process including sectoral strategy development, feasibility and planning, transaction support, operational performance improvement, and rescue of distressed PPP projects.
Please contact us if you would like to know more about how we can help you shape better projects.
Scotland and Uruguay have much in common including a strong ethic of equality and social justice.
As Uruguay begins a programme of school PPP projects, Martin Finnigan was invited by Sunny Sky Solutions to give his thoughts on what this charming Latin American country might earn from the Scottish experience.
Click here to read more.
Escocia y Uruguay tienen mucho en común, incluyendo una fuerte ética de igualdad y justicia social.
Mientras Uruguay comienza un programa de proyectos APP escolares, Martin Finnigan fue invitado por Sunny Sky Solutions a dar sus pensamientos sobre lo que este encantador país latinoamericano podría ganar de la experiencia escocesa.
Haga clic aquí para leer más.