The Levelling Up White Paper makes explicit reference to the Net Zero agenda, stating that the transition “could have large and long-lasting effects on virtually every aspect of the economy, including jobs and skills, infrastructure and technology, and investment and innovation”.
While there are fears that this transition could impose a considerable cost both on society more broadly and also on those individuals and communities that are least able to bear those costs, there is also a very clear opportunity for a so-called “Green Industrial Revolution” to advance the leveling up agenda in profound ways.
Green transition
The impact can be profound in a number of ways. Firstly, the transition from fossil fuels to clean fuels can produce good-quality jobs in previously deprived areas. Research from the University of Michigan shows that there is a good crossover between the skills required to perform jobs in fossil fuel-based industries and to do jobs in renewable energy sectors.
For instance, they highlight how transferable jobs are in fossil fuel industries to those in renewable sectors. The research evaluated the career options for the approximately 80,000 coal-fired generator workers in the US in case of closure. The results showed that their skills are applicable in renewable energy industries, such as solar. They do find, however, that government interventions are necessary to direct solar investments toward former coal communities.
This was also evident during our research, where participants from deprived communities in France were given the chance to develop skills in vital renewable energies, such as solar power. Not only did these programs provide participants with valuable skills but the resultant solar energy also helped to provide clean, sustainable, and affordable energy to the local community.
Green jobs
The potential for the net zero economy to support deprived communities was reinforced by a recent report from the Energy & Climate Intelligence Unit. The report, which was based on data from the CBI, highlights that many of the 20,000 businesses currently operating in the net zero economy are spread throughout the United Kingdom. What’s more, the jobs provided by these businesses are high quality, with an average wage of £42,600. This compares to £33,400 for the average UK employee.
“The economic activity of these businesses brings substantial impacts across the UK,” the report explains. “Areas such as the North East, Scotland, Northern Ireland, and the South West have a higher concentration of businesses within the net zero economy, compared to traditional concentrations of activity in London and the South East.”
What’s more, the economic impact of the net zero economy was found to be stronger in each of the regions of the United Kingdom than it was in London. The net zero economy has proven to be highly productive, even in areas with historically low productivity. In the Midlands (East and West), for instance, it’s more than 2.5 times more productive compared to the regional average.
Constituency-level economic modeling reveals the potential for net zero hotspots throughout the UK, with the researchers identifying 20 areas where the net zero economy made a significant contribution to the local economy as measured by GVA. These include a number of areas covered by our own research.
“From insulation fitters to heat pump engineers and agritech pioneers, businesses in the net zero economy are adding £70 billion to the UK economy,” Peter Chalkley, Director of ECIU, explains. “Billions of pounds of private sector investments are being made in net zero with the hot spots of activity being outside of London in places like Tyneside, Merseyside and Derbyshire.”
Lack of skills
Recruitment agency Reed suggests that a lack of skills might undermine such efforts, however. They have recently launched Reed Environment to tackle the skills shortage in the sector.
The organization unveiled research emphasizing the pressing requirement for accelerated retrofit training and recruitment in the UK. According to their analysis, existing rates of retrofit recruitment must triple in order for the country to achieve its 2050 net-zero objective. Failure to enhance these rates would result in the UK falling short of its target for energy-efficient installations required to meet the net-zero goal until 2105, an additional 55 years beyond 2050.
The organization aims to establish one of the largest networks of green skills training providers in the UK, with an initial focus on delivering retrofitting training on a large scale and establishing a recruitment pipeline for retrofit workers. The potential impact of this expanded workforce is significant, as it could substantially reduce the carbon emissions associated with millions of UK homes, which presently account for approximately 20% of the country’s total emissions.
“The UK is in a race to reach net-zero by 2050. Meeting this target quickly is not only key to protecting the environment, but it is also a huge economic opportunity to create highly skilled jobs. A lack of skilled workers means we are currently falling behind,” the company explains.
“Nowhere is the UK’s green skills gap more apparent than in the retrofitting of our ageing housing stock. Currently, there is a serious shortage of retrofit training and recruitment pathways, meaning we are unable to embark on the retrofitting revolution that needs to happen. We need urgent action if we are to meet our net-zero targets and that’s why we’re launching Reed Environment to help address this problem.”
