Alma Economics was commissioned by Leeds City Council, Hull City Council and Barnsley Council to explore the scope of using council tax and business rates to incentivise households and businesses in the Yorkshire region to invest in improving the energy efficiency of their properties.

The project assessed the feasibility of four broad classes of policy options, employing a mixed-methods approach. This included a detailed review of the existing literature on the adoption of energy efficiency measures and of past schemes. We engaged with businesses and residents in the region by means of a series of focus groups, capturing and analysing stakeholders’ opinions on barriers to energy efficiency and their expected benefits. For the same purpose, we conducted interviews with representatives from government and non-profit organisations. We then modelled the financial implications and the scale of the impact of each option, e.g. in terms of expected reductions in carbon emissions.

A final element of our approach was a legal analysis, assessing the legitimacy of every taxation option and providing recommendations to improve their feasibility, based on UK law. To the extent that a policy option was deemed viable, our research involved proposing the outline of a suitable pilot scheme.

Our tax study contributed to regional councils’ approach to incentivising energy efficiency and identified optimal options for policy interventions.