UK green economic growth ‘unspectacular’ despite 30% boost

The UK is at risk of falling behind other countries on its green economy ambitions, despite growth in jobs and turnover across low carbon industries, a London-based economic thinktank has warned.

Increased turnover for low carbon heat and electricity businesses were among the top contributors to the UK’s 31% low carbon economic growth in 2021, according to figures just released by the Office for National Statistics (ONS).

Despite the growth, a leading thinktank has called on the government to invest more and demonstrate greater ambition.

“Today’s ONS assessment shows that the UK risks falling behind in the global green race, just as our allies and economic competitors such as the United States are unleashing significant interventions to boost their economies and accelerate towards net zero,” said Luke Murphy associate director of thinktank IPPR.

The ONS’ release shows turnover and employment estimates for the low carbon and renewable energy economy (LCREE) are both at their highest level since the first comparable figures were produced in 2015. Turnover increased by 30.8% to £54.4 billion between 2020 and 2021.

The ONS recognised some of the increase for that period could be attributed to the economic recovery seen after the Covid-19 pandemic and subsequent restrictions in 2020. However, the ONS release adds that “this [Covid-19 recovery] is not likely to be the whole picture”.

Employment in the same period grew 16.4% to 247,400 full time positions. More than half of these roles (56%) were in energy efficient products, while low emission vehicles and infrastructure sectors saw the biggest boost of jobs rising from 21,400 to 36,500 over the year.

Employment growth correlated to turnover with the most jobs available in energy efficient products (138,000). The most significant increase on roles was across low emission vehicles and infrastructure where the number of full-time equivalent positions jumped 71% to 37,000 roles. In 2021 there were 40,000 people working in low carbon electricity, up 2% year-on-year, while the number of low carbon heat careers grew 44% to 16,600.

The IPPR welcomed growth in the low-carbon economy generally, but described the past decade as “decidedly unspectacular”.

“Before the UK falls out of the race altogether, the UK government needs to step up public investment, offer longer term and more ambitious policies from energy efficiency to clean transport, and back them with a serious green industrial strategy. Failure to do so will see the UK fall behind economically and undermine our progress towards our climate goals,” Murphy said.

However, Pete Chalkley, director at the Energy and Climate Intelligence Unit (ECIU) found more cause for optimism: “With all the talk of the UK’s growth problem among politicians, a sector of the economy jumping by a third in a year should be a source of optimism.

“The net zero economy is most pronounced in levelling-up areas like Teesside, Merseyside and the Humber with jobs paying on average around £10,000 more. Given the US and EU are now in an arms race to claim green industries, the question is does the UK have a plan to compete?

“The UK’s electric vehicle industry grew significantly over this period, but jobs are on the line if we fail to move with the times. We’ve been left with a rusting car industry once before.”