What Is a Green Job, Anyway? – Measuring the Transition to a Net Zero Economy

UK Policy Net Zero

What Is a Green Job, Anyway? – Measuring the Transition to a Net Zero Economy

Posted on: 30th March 2021
Tim Lord
Associate Senior Fellow | Net Zero

Governments are always fond of trumpeting jobs statistics – and nowhere more than when it supports the narrative of a “Green Industrial Revolution”.  It’s not easy to find a major speech by an energy minister which doesn’t include a sentence proclaiming the jobs potential of the low carbon sector. But is the story really so positive – and are we measuring the “green economy” in the right way?

Perhaps the biggest shift in rhetoric and policy around the net zero transition has been to view the decarbonisation of the economy not as a drag on growth, but a driver of it.  And at macro-level, the UK provides a world-leading example – since 1990, we have grown the economy by around three quarters, while cutting emissions by almost half.

But that’s only part of the story.  What’s really happening – do we know whether the transition to net zero is really creating jobs in the economy? And what is a “green job”, anyway?

To help answer those questions, the Office for National Statistics (ONS) publishes annual data on employment and turnover in the “low carbon and renewable energy economy” – and on 29 March, the 2019 data was released. While ministers are usually fond of trumpeting the headlines, this year’s data in fact give a decidedly mixed picture on growth in the sector.

There is plenty of evidence that sustained investment in the low carbon transition can drive the creation of new jobs. But as the chart below shows, direct employment and turnover in the sectors covered by the ONS have been pretty stable over the last few years, and might have declined in 2019 – before the Covid pandemic hit.

There are two key conclusions we can draw from this data.

Lack of clear government policy in key areas is stunting growth in the green economy. The decarbonisation of the economy will only happen if government policy provides the framework for the required investment. But in a range of areas, such as the mass retrofit of our homes with energy efficiency and low carbon heating, policy has been stop-start – most recently evidenced by the cancellation of the flagship Green Homes Grant scheme.  If the government is to achieve its ambition of 2 million green jobs by 2030, it needs to put in place long-term policies which give the supply chain the incentive and opportunity to invest and grow.

We need to be more sophisticated in how we measure “green jobs” and the transition to a net zero economy.  By definition, the shift to net zero emissions is a whole economy transition – in essence, almost every job in a net zero economy is a “green job”.  But the statistics focus on a small number of sectors, with the vast majority of employment and turnover in areas such as energy efficient products, offshore wind and nuclear power. 

While these are of course vital jobs – and usually in highly productive sectors – they don’t reflect the full reality of the transition.  A heating engineer who installs heat pumps instead of boilers is still a heating engineer; a mortgage adviser who advises on green mortgages still work in the financial services sector; and a company director doesn’t suddenly start a “green job” when he or she incorporates a goal of net zero emissions in their corporate strategy.

The same is true in the industrial sector – where workers in steel and cement plants will still be steel and cement workers when producing their products with zero carbon fuels.

So we need a more sophisticated approach to understanding what the net zero opportunities and requirements are in each sector and each region, and to measuring our progress against them.

To do that, we need to broaden our focus from a limited number of sectors whose main focus is decarbonisation, to the whole economy.  The question should not just be “how many people are employed in sectors whose main focus is decarbonisation?”.  Rather, we should focus on: what does the net zero transition require in all sectors of the economy; where are the biggest growth opportunities; what skills do we need; and do we have comprehensive plans in place to enable the opportunities and skills requirements to be met? With its new Green Jobs Taskforce, and forthcoming Net Zero Strategy, the government has the opportunity to answer those questions.

While industrial strategy is out of fashion, this is an area where a strategic approach is essential – and a more sophisticated approach to defining the requirements of a net zero economy, and measuring our progress towards it, must play a central role.

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