26 Feb New report highlights that avoiding net zero in the UK is far costlier than taking action
The UK green economy delivered over £83 billion in gross value added (GVA) last year, representing a year-on-year increase of over 10%, despite the existing economic challenges. Opportunities for continued growth, facilitated by the mounting risk of inactivity, mean low-carbon industries are critical for policymakers.
Prioritising low-carbon industries was one of the key takeaways from the last report by the think tank Energy and Climate Intelligence Unit. The study listed over 22,000 businesses as part of the national net-zero economy. Sectors within the analysis include energy-efficient buildings, energy storage, low-carbon heating, pollution management, renewable energy generation, planning, waste management, carbon capture and consultancy. Collectively, these businesses generated over $83 billion of GVA in 2024, an increase from £71 billion in 2022.
CBI Economics determined that for every pound of this GVA, an additional £1.89 of GVA was generated within the wider economy. The economic benefits from this exceeded £157 billion. The study emphasised that people are more attracted to industries supporting the net-zero transition. The employees of the businesses assessed typically earned an average salary of £43,000, over £6,000 higher than the national average. The study showed that each role generated over £105,000 in economic value, 38% higher than the UK average. Many of these roles identified are outside of London, with the authors indicating how green growth could support the Government’s goals to financially support working people and accelerate the decarbonisation of the national grid. The West Midlands, Yorkshire & the Humber, and the South East were determined as hotspots, but jobs have been generated in all regions.
The report highlights how these industries will likely experience accelerated growth with the necessary support policymakers provide. The report suggests that if the UK fails to take this opportunity, it could lose out to competition overseas.
Chief economist Lousie Hellem of CBI explained that a green priority would deliver growth. At a time when business costs are under mounting pressure, the demand for capital investment and high energy prices are considered major economic impacts. Investing in clean technologies can strengthen competitiveness and enhance productivity. The chief economist believes this year represents a critical time where inaction will inevitably cost more than taking action. We are nearing a critical point of no return in delivering vital results for emissions reductions and energy security. Long-term sustainable growth is unrealistic without having a future supported by clean, affordable and secure energy.
The CBI report came shortly after a separate publication from the Tony Blair Institute for Global Change, which warned that the UK is on track to employ only 350,000 people by 2030, compared to the target of 2 million presented by the Conservative group. The Institute is encouraging policymakers to deliver a series of interventions to enhance the national green service industries and decarbonise the manufacturing base. The best green growth and employment opportunities are within green services, which could deliver up to 4% of GDP by 2030 and employ nearly 800,000 people.
The UK Government has launched a National Wealth Fund, with an initial sum of £7.3 billion in support to enable the decarbonisation of steelmaking and ports and prioritise low-carbon industries, particularly electric vehicles, batteries, carbon capture and green hydrogen. For every £1 of public investment, ministers hope to generate £3 of private investment in these industries.
Last year, the Institute for Public Policy Research (IPPR) warned that the UK could miss out on economic opportunities linked to the transition to a net-zero carbon future, mainly due to a lack of a definitive green industrial strategy. A ten-year industrial strategy has been formalised and is expected to be published in the coming months. While the UK Government has emphasised that net zero is critical, economic growth was considered the top priority. Some carbon-intensive projects could secure support if they yield clear economic benefits.
Environmental industry experts believe the UK must avoid presenting a choice between growth and environmental protection and instead prioritise the significant economic opportunities that building a cleaner future can bring.
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