The UK’s green economy contributed $71bn in Gross Value Added (GVA) last year according to a major new report from think-tank the Energy and Climate Intelligence Unit (ECIU). Greater Manchester has been identified as a net-zero hotspot in the UK.
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. Many of these ‘hotspots’ are located in cities and regions which have been the focus of levelling up discussions in recent years, given their historic industrial activity.
None of the hotspots, in terms of jobs and/or GVA, are in Greater London. The South West also loses out.
The report shows that in Greater Manchester, the net-zero economy contributes nearly 5% of the area’s GVA. It shows that across the city-region there is a significant investment by local businesses to transition to net zero. For example, a £21 million net zero operational tech hub is nearing completion at Manchester Science Park.
Stockport stands out as a particular constituency of high net-zero activity with just under 17% of the area GVA supported by the net-zero economy. Stockport has seen huge investments made by the local council, such as securing funding for a £4.44 million investment into Cheadle Eco Business Park, to support the local net-zero economy.
When looking at the number of full-time equivalent jobs in the green sector, the top hotspot in 2022 was Greater Manchester, which boasted more than 26,770 roles. Thames Valley came in at a close second, with more than 25,600 jobs. Other job hotspots include Hampshire (18,900+ jobs) Leeds and Yorkshire (17,400+ roles) and North-East Scotland and Shetland (17,100+ roles).
The report identifies net zero sectors and details that, by expanding related sectors, even greater benefits could be unlocked, including in regions most in need of levelling up.
Of the sectors that the report describes as being part of the ‘net-zero economy’, renewable energy planning is the largest, accounting for around 40% of the 20,000 businesses covered in the analysis.
Other major sectors by business and employee count include recycling and waste management and renewable energy installation and maintenance. The businesses covered in the report span all parts of the value chain, from raw materials to consultancy and service-based firms. There is also a mix of SMEs and large businesses.
The report emphasises that the growth of these industries is not guaranteed by the fact that the UK has a legally binding net-zero target for 2050, given its failure to support that target with watertight policies for the near term and medium term. It highlights that venture investment in the net-zero economy has grown by 30% since 2019, but that investors may well choose other markets in future if there is more of an enabling environment.
As ECIU director Peter Chalkey says: “The net-zero economy is addressing levelling-up and the UK’s productivity problem, but with the EU and the US investing heavily in clean technologies, the question now is will the UK keep up or try to stick with industries of the past?”
The ECIU frames delivering net zero as an opportunity for the Government to deliver its ambitions on levelling up and on improving productivity. As such, it encourages readers in the policy space not to let immediate economic challenges and the need to deliver long-term climate planning be framed as two disconnected issues with separate solutions.
On productivity, the report reveals that the net-zero economy generates an average of £122,300 in GVA per full-time employee – 1.7 times higher than the national average. The figure is even higher in the East Midlands and West Midlands. It also confirms that creating net-zero jobs can be a route to better-paid jobs, with wages across the UK’s ‘net-zero economy’ in 2022 averaging £43,620, compared to the UK average salary of £27,756.
On levelling up, the ‘net-zero economy’ is s 24% more concentrated outside of London, when comparing the share of a region’s GVA contributed by the net-zero economy.
Former Business and Energy Secretary Dame Andrea Leadsom says: “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.”
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 recently warned that the UK risks squandering a £4.3bn opportunity between now and 2030 if it loses the global cleantech race.
To learn more about how your Greater Manchester business can join the journey to net zero, reducing your energy bills and carbon footprint, visit Bee Net Zero for free, impartial guidance.