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The net zero transition is not a silver bullet

Green industrial strategy could benefit some poorer communities, but it's no panacea for decades of underinvestment.

By Ross Mudie

This article was originally published as an edition of the Green Transition, New Statesman Spotlight’s weekly newsletter on the economics of net zero. See more editions and subscribe here.

The transition to a greener economy is one of the few big opportunities we have to level up the UK – or so we have heard. In the run-up to the general election on 4 July both of the main parties will argue that net zero could be pivotal to helping alleviate the UK’s persistent regional inequalities. The Labour leader Keir Starmer stated in a recent speech that “we can use the opportunity of clean energy to create jobs to deliver security and bring back hope to communities that got ripped apart by deindustrialisation in the 1980s”. But a new report by the Centre for Progressive Policy highlights that we might be wrong to assume that the economic opportunities of the green transition will be reaped primarily by poorer parts of the country.

Our report looks at where the country stands today on filling green jobs and where we need to be heading tomorrow. The “green skills gap” – the gap between the number of green jobs and the number of qualified workers available to fill them – is well known, and it is a binding constraint on the UK’s ability to develop green industries. Our analysis, which matches the skills of different “non-green” and “green” occupations based on how similar they are and maps this comparison across England and Wales, suggests that some parts of the country are far better placed than others to capitalise on the green transition.

We find that while there are some post-industrial areas – including coastal Cumbria, Lincolnshire, East Yorkshire, coastal East Norfolk, and Teesside – with a higher concentration of workers with the right skills to build green industries, they are the exception, not the rule. Indeed, there is no correlation between areas that suffer high deprivation or low productivity and areas with workforces that have high potential to transition into green jobs.

We also find that many workers who could be most easily retrained into higher-paying, higher-productivity green jobs tend to live in areas that are already wealthy: the report identifies the City of London, South Cambridgeshire, Cambridge, Wokingham, and Richmond upon Thames as five of the areas best placed to train workers to develop green industries.

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But there may be hope for some poorer areas. We also identify what we call a relative pay effect for workers switching into green jobs. This means, to put it simply, there are some places – such as Nottingham, Blackpool, Barking and Dagenham, and Luton – where there are more workers with relevant skills who could earn a pay rise by switching into green jobs. This might provide a greater incentive for workers in these areas to change to green jobs, compared to other areas with lots of already well-paid workers – such as inner London, or Derbyshire’s wealthier manufacturing communities. The silver lining is that there is an opportunity to support workers in these areas to switch into better paying, good green jobs, wherever we can.

What does this mean for UK policymaking?

While the net zero transition may help “level up” some poorer communities, it is not a silver bullet for resolving regional economic divides.

To realise the potential of the net zero transition to help tackle regional inequalities, policymakers must be aware that different areas are starting from vastly different positions. A new green industrial strategy is needed, but a “one-size-fits-all” approach will not work. An approach that is blind to the huge variation in workers’ skills across different parts of the country risks the benefits flowing disproportionately to communities that are already well off.

We also need to hear much more detail from politicians about how they plan to reallocate workers across industries to support the growth of the green economy. Doing this will not be easy – and tough choices remain around which workers will be prioritised, where they currently live and work, and how we might target support. But over the next decade these are choices the government will have to make.

In addition, policymakers will need to think more about internal migration between regions, so that we can properly match potential green labour supply with demand.

Lastly, green jobs may not secure the economic future of all places, so any effective industrial strategy should seek to boost other emerging industries where necessary. The CPP report, Are we ready? Navigating the green transition in an age of uncertainty, is the first in a longer research programme looking at the economic transitions Britain faces over the next decade.

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