The UK’s seventh carbon budget target has been confirmed: an 87% reduction in CO2 emissions between 2038 and 2042.
The government has committed to reducing carbon emissions reduction proposed by the Climate Change Commission early last yeara doubling of the net zero focus.
The budget level was chosen, the Department for Energy Security and Net Zero (DESNZ) said, because: Pacing is “the best choice” to reduce exposure to fossil fuel price shocks; it maximizes the benefits of clean energy; and it is in accordance with the Paris Agreement.
This comes as a report commissioned by CBI Economics’ Energy and Climate Intelligence Unit (ECIU) shows that Britain has around £455 billion of energy infrastructure under development with a capacity of 262 GW, including offshore wind, solar, hydrogen and energy storage.
CBI Economics is the economic consultancy arm of the Confederation of British Industry (CBI). In her foreword to the report, Confederation of British Industry chief economist Louise Hellem said: “The politics of net zero may be patchy, but the economic situation has never been clearer.”
There is no longer a political consensus in favor of net zero: the increasingly popular Reform UK party has an anti-renewable energy stance, something that the Conservative party has also adopted.
Reform’s energy policy is based on a platform that is skeptical of the need for net zero and borders on climate change denial. In a foreword to the CBI report, ECIU director Pete Chalkley pointed out that the concept of net zero just means that “you have to stop making the problem worse, otherwise you can’t stop climate change.”
He added that Britain is now more than halfway towards achieving net zero, thanks to the efforts of “more than a million British workers and more than 20,000 small businesses – the unsung heroes of the net zero economy”.
The net zero economy is now a ‘significant part’ of the UK industrial base
According to the CBI, the net zero economy generates around £105 billion in gross value added (GVA) and supports 1.1 million jobs. Within this, £36.7 billion and 308,000 jobs are directly attributable to net-zero businesses, with the remainder supported by supply chains and wider economic activity.
The 23,500 active businesses in the net zero economy directly contributed £36.7 billion to the UK economy, accounting for 1.3% of the UK’s total gross value added, more than the scientific R&D sector and the architecture and engineering sector.
Contrary to narratives that renewable energy is a source of profit for predominantly international conglomerates, the CBI found that of the companies included in the analysis, 96.4% (22,700 companies) are small or medium enterprises (SMEs).
According to the CBI, this “highlights the strong role of smaller companies in driving activity in net zero supply chains.” However, it is noted that there is a higher proportion of large companies in the sector compared to the wider business population, reflecting the presence of capital-intensive activities.
Employment and value creation in every region of the country
Investments are being made in the energy and climate transition across the UK. CBI found that the largest investments are concentrated in economic centers such as London and the South East. However, the relative importance of net zero to regional economies is greatest in industrial and energy-focused regions, including Scotland, Yorkshire and the Humber, Wales and the East Midlands.
In absolute terms, the largest concentrations of net-zero companies are in London (8,948 companies) and the South East (7,436 companies), followed by the South West (5,270 companies), the North West (5,048 companies), the East of England (5,043 companies) and Scotland (5,044 companies).
But again the concentration of net-zero related companies reflects regional specialties. Scotland stands out, the CBI said, with a higher concentration of net-zero activity than the national benchmark, followed by the North East and Northern Ireland.
Despite the differences, the CBI says jobs and value creation in each region are supported by the net-zero economy, and the regional roles are complementary.
While not directly addressing the rhetoric of anti-renewable political campaigns, many of the CBI report’s findings directly counter the talking points of populist parties.
Big opportunities in the UK’s net-zero economy
At the end of this month, industry representatives from across the renewable energy sector will gather in London for the Clean Power 2030 Summit. Organized by Solar Media, it is the premier stakeholder event on Britain’s journey to achieving clean energy by 2030, with a range of speakers from government, investors, developers and operators.
With the government expanding the benefits of pursuing renewable energy and the findings of reports such as that from the CBI, there are major economic opportunities in the UK’s clean energy sector, despite arguments from opposition political parties.
Tickets are still available for the Clean Power 2030 Summit. View the full agenda on the event website And book your ticket to attend. Our readers can get a 20% discount on tickets with the code SPP20.
