UK’s net-zero economy worth over £70bn, study finds

UK businesses helping to deliver net-zero emissions across the country are contributing £71bn in Gross Value Added (GVA) to the economy, which is more than twice the contribution of the energy sector.

That is according to a new report from the Energy and Climate Intelligence Unit (ECIU), which reveals that 840,000 jobs are supported by businesses in the net-zero economy, providing an average wage of £42,600, compared to the £33,400 national average.

These firms are also highly productive, generating £112,300 in GVA per employee, which is 1.7 times higher than the national average of £64,400.

Furthermore, the report shows that businesses in the net-zero economy are particularly productive in regions like Tyneside, South Yorkshire and North Derbyshire, but less so in London, suggesting that they are playing an active part in ‘levelling-up'.

“From insulation fitters to heat pump engineers and agritech pioneers, businesses in the net-zero economy are adding £70bn to the UK economy,” ECIU director, Peter Chalkley, said.

“The net-zero economy is addressing levelling-up and the UK’s productivity problem, but with the EU and 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 report goes on to explain how further growth of green jobs will require more redistribution from high-carbon to low-carbon jobs, and how significant upskilling will be needed, as the average skill requirement for a job in a carbon-intensive industry is 46% lower than for a net zero-related job.

Jobs related to net zero are also in high demand, and green hiring overtook non-green hiring for the first time in 2019 and continues to rise, according to the report.

This comes after separate research from Arup and Oxford Economic last month found that new green industries could be worth more than £8.2trn to the global economy by 2050, which would be equivalent to over 5% of the world’s GDP that year.

It identifies the contribution to GDP of electric vehicles manufacturing, renewable power generation, clean energy equipment manufacturing, renewable fuels and green finance, and also highlights substantial productivity benefits from the green transition.

Commenting on the findings, IEMA’s Deputy CEO, Martin Baxter, said: “This report demonstrates the huge financial benefit that green industries can offer the global economy, and underlines the crucial need for governments and organisations to invest in green skills and training.

“Every job must be greener if we are to tackle the climate and environmental emergency. Our recently launched Green Careers Hub will help anyone – from any sector or background – understand how they can play a role in the wider green economy.”

Learn more about IEMA’s Green Careers Hub here, and more about skills and training opportunities here.

Learn more about the state of the sustainability profession by reading findings from IEMA's recent membership survey here.