UK’s growing green economy worth more than £100bn a year, research finds | Environment policy

The UK’s green economy is going strong, with more than a million jobs, higher wages and nearly half a trillion pounds of investment in the pipeline, according to research by the country’s leading business organisation.

Worth more than £100bn annually, the net zero economy benefits the whole of the UK, according to CBI Economics analysis The Energy and Climate Intelligence Unit has been commissioned by the think tank, despite criticism seeking to scrap the UK’s net zero target.

Net-zero workers also enjoy higher wages; average in excess of £43,000 per year; this is around 11% higher than the national average of £39,000.

CBI chief economist Louise Hellem said: “Clean energy and decarbonisation are already an important and growing part of the UK’s industrial base. The UK has the expertise to build on this strength and capture even greater commercial opportunities across energy, manufacturing, services and supply chains.”

Approximately 308 thousand people are directly employed in business lines such as solar panel installation, home insulation, wind turbine manufacturing and electric vehicles. When supply chains and related jobs are taken into account, this works out to 1.1 million jobs and accounts for £105bn in “gross value added”, a measure of economic activity similar to GDP. This equates to around 4% of the UK’s economic output.

The report also stated that an estimated £455bn of potential investment in energy infrastructure is under way. These developments have been spurred by the government’s target to decarbonise the UK’s electricity by 2030 and, in the near term, strict targets for greenhouse gas emissions to reach net zero by 2050.

The research found that each worker in a net zero economy generates around £120,000 a year for the wider economy. This is around one and a half times the national average in terms of value added, at a time when the UK is struggling with low productivity.

According to the report, around 22,000 small businesses across the UK are taking action to reduce greenhouse gas emissions and increase renewable energy.

But the main right-wing parties, the Conservatives and Reform UK, want to scrap the net zero target and return to support for renewable energy. Former Labor prime minister Tony Blair also called for an end to net zero and a switch to fossil fuels instead.

Hellem made clear that moving away from net zero would be economically detrimental. “At a time when the UK must strengthen energy security and stimulate growth, the net zero economy is becoming central to the country’s future competitiveness,” he said. “The UK cannot afford to step back from a sector that already contributes £100bn to the economy and has huge potential for future growth.”

Sandra Bell, climate campaigner for Friends of the Earth, said: “Those calling for abolishing climate action clearly do not want what is best for Britain or for the millions of people struggling with the high cost of living, otherwise they would be scrambling to reap these huge rewards. Instead, they would prefer to keep us on the back foot in the global race to build a thriving green economy and lock us into dying industries.”

Employment in the North Sea, which Blair and right-wing parties have cited as a potential growth area, has been decreasing steadily for some time, with production from the basin rapidly depleting. Despite government support and an often favorable tax regime, around 200,000 oil and gas jobs have been lost in the North Sea since 2013.

Climate minister Katie White said: “As Britain faces another fossil fuel shock, the only way to protect homes and businesses is to accelerate electrification and clean, domestic power that we control. What businesses and communities are delivering across the country is a great British success story – cutting costs, improving homes, supporting British industry with well-skilled jobs and helping to protect nature at the same time.”

He added: “Some prefer to ignore the challenges of the climate crisis and leave the blame for climate change to our children, but this government believes in a simple British principle: protecting our country for future generations.”

Tuesday’s report is the fourth in a series by the ECIU and CBI Economics, which has previously found that the net-zero economy is growing three times faster than the rest of the UK economy. The estimates only take into account businesses and companies directly involved in the push for net zero. The wider green economy, which also includes other environmental sectors such as waste, pollution removal, water and nature, supports more than 600,000 direct jobs, according to the Office for National Statistics.