The UK green economy is on track to be worth less than 2% of GDP by 2050, according to the Tony Blair Institute For Global Change.
“Betting everything on green growth would therefore be a mistake and it must be a pillar of the UK’s growth strategy, but it cannot be the whole strategy,” it notes.
“To succeed, the UK must cultivate multiple engines of growth and not skew its strategy too heavily towards ‘green’.”
Even in a best-case scenario, green manufacturing is expected to employ around 425,000 people by 2050, fewer than the 700,000 people currently employed in grey industries.
As a service-dominated economy, it should come as no surprise that the UK’s greatest green growth and employment opportunities lie in green services – but even that would be ‘up to 4%’ of GDP, the Institute forecasts. This dovetails with an accompanying Oxford Economics report which found green financial services have the highest market share potential, from 5-19%.
The Institute white paper is likely to fuel debate around the UK’s decarbonisation drive to Net Zero, which is enshrined in law, at a time when the US is pursuing a fossil-fuel-first strategy and many developed and developing countries are continuing to pump out carbon emissions.
It recommends developing a unified digital platform to streamline access to government financial support, develop a network of ‘disruptive invention laboratories’ to foster cross-disciplinary breakthroughs and expand support for piloting and commercialisation of clean technologies.
An Industrial Strategy Board should be created and the Industrial Strategy Advisory Council ‘well supported’ along with ‘tsars’ appointed for each priority industry to oversee implementation and drive investment.
Despite being out of the EU, the UK should align its energy and climate policies more closely with Europe, it adds, and should develop an ‘AI-enabled trade assistant’ to help firms increase exports. The UK should also invest more in its Global Supply Chains Intelligence Programme.
Oxford Economics forecasts that low-carbon hydrogen production and distribution will only have 7% market uptake to 2030, but rises to 64% by 2050. Carbon capture utilisation and storage (CCUS) represents a ‘significant opportunity’ for the UK and is projected to be worth £11.7bn and employing 162,000 jobs by 2050.
