UK’s net-zero economy grows by 9%

28/02/2024

The UK’s net-zero economy grew 9% last year while delivering higher paid jobs than average and attracting billions of pounds in private investment, analysis by CBI Economics has uncovered. In a new report, the researchers explain how businesses in renewable energy, energy storage, green finance and recycling provided £74bn in gross value added (GVA) in 2023, despite national GDP growth of just 0.1%. The analysis also found that jobs in the net-zero economy are highly productive, generating £114,300 in economic activity, which is more than one and a half times the UK average of £72,550. They are also better paid by almost £10,000, with the average net-zero salary being £44,600, compared to the national average of £35,400. Interestingly, ‘battleground’ constituency seats in England and Wales – defined as one of the top 50 most marginal Conservative seats – are three times more likely to be a net-zero economic hotspot. “Thousands of jobs depend on net zero in constituencies right across the country, including many key battleground seats,” explained Peter Chalkley, director of the Energy and Climate Intelligence Unit, which commissioned the report. “The question now is will political parties provide the leadership, stability and investment needed to generate further growth or shy away from the global race for net zero.” Around two-thirds of the top 25 net-zero hotspots, and half of the top 50 net-zero hotspots in England and Wales, are classified as key electoral battlegrounds heading into the general election. Some areas with particularly high concentrations of net-zero activity are among the most deprived in the country, for example, Hartlepool, Nottingham, Redcar and Cleveland. The analysis also found that net-zero businesses received £279m of public InnovateUK funding, and £12.3bn of private investment, during 2021-2022. For example, 2022 saw £1.5bn invested in the low-emissions vehicle sector, compared with the £1.4bn that went to the biopharmaceutical sector. However, the researchers warned that, without further investment and policy stability, the strength of future growth in the UK is in jeopardy as the US and EU compete to attract and develop clean industries. “We call on the chancellor to establish a ‘net zero investment plan’ to identify green investment gaps and implement policy aimed at crowding in private finance,” said Louise Hellem, chief economist at the CBI. “That’s one of many levers the government can pull to support businesses in doubling down on green growth – but there are many more. We hope this report kickstarts a wider conversation about how the UK can realise those opportunities.” Learn more about IEMA's Green Careers Hub, which provides businesses and individuals with all the information they need on green skills and potential career pathways, here: Home - Green Careers Hub Image credit: Shutterstock