GROWING UK'S NET-ZERO ECONOMY IS A £70BN LEVELLING UP OPPORTUNITY
UK's green economy contributed to over £71bn in GVA last year.
That is according to a major new report from Energy and Climate Intelligence Unit (ECIU). Produced in partnership with CBI Economics and Datacity, the report identifies dozens of net-zero ‘hotspots’ across the UK, where low-carbon industries are primed to grow and already account for 4-7% of GVA.
These hotspots, similar to the potential Zero Carbon hub sites, are all located in cities and regions which have been the focus of levelling up discussions in recent years, given their historic industrial activity. In terms of the current level of GVA provided by the so-called ‘net-zero economy’, Leicestershire and Warwickshire come out on top, with 7% of GVA in 2022. North-East Scotland and Shetland comes in second, with 6.5% of GVA.
In terms of full-time job generation, Greater Manchester reigns on top, with 26,770 jobs created by expanding their net-zero economies. Other hotspots for new full time jobs include Thames Valley, Hampshire, Leeds, Yorkshire, North-east Scotland and Shetland, all boasting over 17,000 new full-time jobs.
Of the sectors which report as being part of the Net-Zero economy, renewable energy planning is the largest, accounting for around 40% of the businesses covered in the analysis. Other major businesses include Recycling and Waste Management, Renewable Energy Installation and Maintenance. There is a healthy mix of large businesses and SMEs involved in all stages of this new and developing Net-Zero economy throughout the UK.
What about the future?
It should be made aware that the report does emphasise the UK having a Net-Zero target of 2050 does not guarentee business growth, given its failure thus far to support watertight policies for the near-term and medium-term.
“The net-zero economy is addressing levelling-up and the UK’s productivity problem, but with the EU and US investing heavily in clean technologies, the question now is will the UK keep up or try to stick with industries of the past?” - ECIU director Peter Chalkey
On productivity, the report puts forward that the Net-Zero economy generates an average of £122,300 in GVA per full-time employee, nearly double the national average. The figure is even higher in areas such as the East and West Midlands, potential locations for Zero Carbon Hubs. Average pay within this sector is also higher, at roughly £43,620, compared to the UK average of £27,756.
The Net-zero economy is 24% more concentrated outside of London, with opportunities for levelling up particularly strong in Scotland, which is targeting Net-Zero by 2045. Scotland also benefits from areas of favourable wind and hydropower generation locations, as well as the potential for Carbon Storage.
“The growth of new green industries in the UK, with the potential for global exports of technology and know-how, together with the need to phase out traditional fossil fuel use, offers great opportunities for green jobs, growth and ‘levelling up’ right across the UK. Unleashing private sector investment by freeing up planning and creating the right market structures is imperative to growing our £70bn net-zero economy further.” - Former Business and Energy Secretary Dame Andrea Leadsom
The next UK Budget is due to be unveiled in mid-March. Chancellor Jeremy Hunt has stated that supporting low-carbon industries, along with tech and life sciences, will be crucial to ensuring a more innovative and stable UK economy in the long-term and to levelling up. He has said that the Budget will act as a ‘Growth Plan’ for these sectors, detailing new measures to bridge skills gaps and encourage further private investment.
The CBI has also recently warned that if the UK loses the global Cleantech Race, it could risk squandering up to £4.3bn by 2030.
