How the green economy is rebalancing UK inequalities

‘Levelling up’ is a favourite phrase of the Conservative government. (Or at least it was under Johnson. Hard to tell these days.) In theory, levelling up is about rebalancing the economy across the regions, ensuring that nobody is left behind – a “plan to transform the UK by spreading opportunity and prosperity to all parts of it”, as the White Paper put it. How seriously the government takes this is an open question, but the good news is that one of the most powerful tools for rebalancing the economy is the emerging green sector.

A report from the Confederation of British Industry and the Energy and Climate Intelligence Unit has analysed the geographical spread of the ‘net zero economy’. That’s a broad term for a bunch of business sectors, including low emissions vehicles, sustainable building, green finance, renewable energy and energy storage, and companies working in waste and agriculture. Altogether it’s about 20,000 companies of various sizes, which support a total of around 840,000 jobs.

They found that there are ‘hotspots’ where there is a greater concentration of net zero businesses, and these include some economically marginalised regions such as the North East, Northern Ireland and the South West. There are some hotspots in wealthier areas too, but green sector enterprises are often creating jobs in regions where they have been most needed, tapping into existing industrial skills and infrastructure. Just for a change, “the net zero economy is not centred around London”, says the report. Instead, it has “great potential as an opportunity for regions across the UK to boost growth and reduce regional inequality.”

The report also found that green jobs are higher paid than the average, and that workers are more productive. The productivity of British workers is an enduring conundrum for policitians and economists, but the green sector creates 1.7 times more value to the economy than the average.

Until fairly recently, talking about the green economy was large theoretical. We could make predictions and projections about it and what it might achieve. It’s only in the last decade or so that it’s really begun to scale up to the point that economists can study its effects. And so far, it’s making a positive impact, creating opportunities in the parts of the country that need it most. We can lean into that as a political priority, and purposefully direct investment towards the regions.

While it is always fair to ask questions about ‘growth’ and who is benefitting from it, there’s no question that there are regions that need more of it. Distribution matters, and so it’s encouraging to hear that “environmentally sustainable economic growth, for example the development and scaling of renewable energy, is beneficial in distributing economic activity across the UK.”