Wellbeing Economy Governments partnership: annual engagement report

2. Policy Labs

Policy Labs are the platform through which officials from each WEGo government can share experience and expertise. They provide a forum for officials to engage in practical exchange on specific policy areas, technical details and shared interests. Policy Labs are held regularly throughout the year, typically comprising of a presentation from one or two government(s) followed by a productive discussion involving all member governments.

2.1 Just Transition (New Zealand, October 2023)

New Zealand presented on its Southland Just Transitions. This is a programme of work to help Southland reduce its dependency on a its aluminium smelter. The smelter directly employs about 1,500 people (about 1.5% of the region’s population), generates a substantial share of regional GDP, uses 13% of New Zealand’s electricity supply, and has a substantial environmental impact (both from CO2 emissions, and other pollutants).

A key first step of the programme was to create a Regional Leadership Group (made up of business and community leaders, worker representatives, iwi (indigenous peoples), local government and central government) to identify a shared objective for the programme. This group identified its goal as to “…help Southland build its economic, environmental and social resilience through and beyond the planned closure of the New Zealand Aluminium Smelter in December 2024”. Useful elements of this goal included its comprehensiveness (economic, environmental and social), its constructiveness (build resilience, rather than stop something (some were concerned central government wanted to close the smelter)), and its specific time target (this helped narrow the focus of the programme which could otherwise be dragged into wanting to address every foreseeable issue the region might face).

Beyond this – while maintaining good governance practice to ensure coherence and hold members to account – the Group focused on identifying options for diversifying the Southland economy toward activities that held economic, environmental and social promise. This was a very important aspect of the programme. Without something to transition to, transitions are unlikely to occur. Presented with the options of the status quo or unemployment, communities will almost always choose to not change. Key initiatives of the programme are to diversify regional employment through the establishment of open ocean aquaculture, diversify wholesale electricity demand through the establishment of a hydrogen industry (Southland has substantial potential for increased renewable electivity generation), and support for businesses and communities to adapt and make the most of these new opportunities.

2.2 Just Transition (Finland, October 2023)

This policy lab focused firstly on the climate driven transition. In Finland there is a specific focus on justice, driven by a new Climate Change law (2022) which requires that climate policy plans are evaluated in terms of justice. This is important as the effects of mitigation measures, and the effects of climate change itself, are not distributed evenly as some regions have better opportunities to react to these changes. The second presentation covered the efforts taken by Finland’s government to incorporate behavioural insights into policymaking to create more effective and just sustainability transitions, with a focus on collaboration, experimentation, and citizen engagement.

Presentation 1: Climate Driven Transition and Justice: Insights from Finland and the Science Panel for Climate

The Finnish Climate Change Panel consists of 15 independent scientists that have been appointed by the government to advise on Finland’s climate policy. They were requested to conduct a two-year project on climate policy justice – gathering insights through a citizens’ survey, experts’ workshops and examining academic research. They have released several publications – discussion papers drawn from academic literature and workshop discussions that describe how to evaluate justice in climate policy.

In evaluating justice, it is important to consider the mix of policies, rather than looking at individual policy instruments, due to the broader combined impacts – one may have a mitigating effect for specific groups. Injustice cannot be avoided altogether with climate policy due to trade-offs, but unjust impacts can be compensated, both in monetary terms and support (e.g., retraining people). Education and communication can also advance justice – some injustices are misconceptions.

One main policy recommendation in the report is to look beyond the costs and benefits to different geographic and temporal scales. Another is that climate policy is not the only domain causing injustices and it cannot solve these on its own.

For more information, please see:

Finnish Climate Panel - www.ilmastopaneeli.fi

Presentation 2: Does a Behavioural Insights Approach to Policymaking make the Sustainability Transition more Just?

Elements of FINBEPOL's work include: developing behavioural awareness in central government; being involved in ministry-led projects and policy preparation; co-designing with stakeholders and people impacted by policies; integrating behavioural approaches in administrative processes and policy planning; and facilitating the use of research-based knowledge.

FINBEPOL is involved in various projects, such as: training legislators on using a behavioural lens in the legislative process; public administration reform to reduce excessive frictions in everyday services; and creating space for cross-sectoral work, research, and interaction. The team is also working on projects to strengthen democracy and trust, including experiments to encourage voting among young people and exploring new local democratic and participation models. Other ongoing projects include a reform of conscription and call-up events, citizen engagement in foreign and security policy, and training for finance and debt counselors.

For more information, please see:

Behavioural Science Activities | Finnish Government - https://valtioneuvosto.fi/en/behavioural-science-activities

2.3 New Deal for Business Group (Scotland, December 2023)

This policy lab focused on Scottish Government work relating to engagement with the business community in Scotland, which aims to improve the working relationship between government and business. It is acknowledged that government and business objectives will not always align, however a close relationship will allow for a better dialogue, ensuring that businesses are informed early in the policy process. This will also support business involvement in achieving the vision of a Wellbeing Economy, which is set out in Scotland’s National Strategy for Economic Transformation.

The New Deal for Business Group was established by the Scottish Government in light of the need for a strong government and business relationship. This relationship should help to create a mutually beneficial environment that supports a fair, green and growing economy, improves business confidence and investment and, in turn, supports sustainable finances to tackle poverty and support our communities.

The New Deal for Business Group, which is intended to be short-term in nature, has representation from employer and sector representative organisations (trade bodies), cross-sector organisations, local government, large/medium/small business (including B-Corps) and economic academics. The group focuses on five key themes, with a sub-group set up for each, and its recommendations have been published, along with a timeframe of actions (implementation plan).

We want to work in partnership with business as we transform our economy, drawing on the knowledge and expertise of businesses of all different sizes in different sectors and across business models. Therefore, one of the sub-groups is on the theme of businesses’ role in building a Wellbeing Economy. Its work resulted in a set of recommendations, building upon the Business Purpose Commission report, that include: developing a simple description of the Wellbeing Economy that is meaningful to business; identifying key metrics to help businesses understand the impact of their actions; and identifying ways for business-led activity to better showcase the benefits of contributing to the Wellbeing Economy transition.

A Wellbeing Economy Expert Advisory Group (WEEAG) has also been established to guide the Scottish Government on its transition to a Wellbeing Economy, focusing on the implementation challenges and mainstreaming efforts. Some members of the WEEAG also sit on the New Deal for Business Wellbeing Economy sub-group to help create linkages between work on the Wellbeing Economy and business engagement.

For more information, please see:

• Business: New Deal for Business Group - gov.scot (www.gov.scot)
• Wellbeing Economy Expert Advisory Group - gov.scot (www.gov.scot)
• Business Purpose Commission - Prosper

2.4 Introduction of a Default 20 Miles per hour Speed Limit (Wales, December 2023)

This policy lab focused on the Welsh Government’s introduction of a default 20 miles per hour (mph) speed limit on restricted roads across Wales in September 2023. Wales was one of the first countries in the world to pass a law changing the speed limit on restricted roads to 20mph. Restricted roads are roads usually found in residential and built-up areas where there are lots of people, have streetlights on them, and historically had 30mph speed limits. By decreasing speeds on roads, the 20mph policy aims to improve the quality of peoples’ lives. This change was made to reduce collisions, save lives, reduce injuries, encourage more people to walk and cycle in communities, and make streets safer for people in Wales. This policy is supported by evidence from around the world.

The Welsh Government’s assessment shows that reducing speeds to 20mph could result in an average increase of one minute per journey, balanced against saving up to 9 lives and preventing up to 98 serious injuries each year.

The implementation of the 20mph speed limit has cost around £32 million. Research undertaken by public health practitioners and Edinburgh Napier University suggests that the estimated reduction in casualties each year from the introduction of the 20mph default speed limit in Wales, could provide around £92m in prevention savings. This includes, but is not limited to, reduced impact on the National Health Service and emergency services. Other savings included are human costs and lost output (including future lost earnings). It does not include the potential wider health benefits of people walking and cycling more.

A default 20 mph limit and a smooth driving style, can help avoid unnecessary speeding up and slowing down, saving fuel. Accelerating up to 30mph can take twice as much energy as speeding up to 20mph. It is hoped that lower speed limits may encourage more people to choose active ways to travel and there will be fewer polluting cars on the roads.

Data published in July 2024 shows reduced casualties on 20/30mph roads since the introduction of 20mph in September 2023 (though road collisions data can be volatile and long term trends will be used within the Monitoring Framework).

The Welsh Government is in the process of commissioning an evaluation of the 20mph policy. This will include a value for money assessment that will assess the costs and benefits of the policy to the Welsh economy.

For more information, please see:

• Introducing default 20mph speed limits | GOV.WALES
• Introducing 20mph speed limits: frequently asked questions | GOV.WALES

2.5 Differential Impacts of Trade (Scotland, May 2024)

Scotland’s Vision for Trade (a trade policy strategy published in January 2021) outlines the role of international trade in the economy and sets out the principles that guide Scotland’s trading relationships. “Wellbeing” is one of these principles. Scotland’s Vision for Trade recognises the differential impacts of trade and commits to taking steps to better understand and address these. This work is the key mechanism by which trade policy can feed into a wellbeing economy.

Work to date has focused on building an evidence base on the impacts of trade in Scotland. This has involved:

• a stakeholder roundtable held in June 2022, focusing on Scottish businesses and differential impacts;
• a series of international engagements to learn from other governments (Brussels roundtable, January 2024);
• a data mapping exercise (compiling a catalogue of existing data sources in Scotland to identify any gaps in understanding);
• a project to model economic impacts of EU-exit and UK FTAs;
• engagement with the Centre for Inclusive Trade Policy on ‘Jobs in Trade Database’ Project.

As above, the Scottish Government are taking forward a project to understand the differential impacts of trade policy changes on the economy in Scotland, and how these affect people (both as workers and consumers). In terms of the approach taken to understand differential impacts, a granular trade model (gravity model) and a macroeconomic (CGE) model are used, linking in supplementary data on employment and spending.

A Fraser of Allander Institute (University of Strathclyde) project is exploring the differences between trading and non-trading firms in the UK (who they employ, in terms of characteristics and locations) and whether data on the purchases of these trading and non-trading firms can be used to provide valuable insight into supply chains (whether these are within the UK), and the employment supported by these supply chains.