17 Jul Pressing The Accelerator On Green Growth Could Earn Up To £57 Billion For UK Economy By 2030
New analysis from the CBI has shown that making the most of 27 green growth ‘prizes’ could deliver a £37-57 billion boost to GDP by 2030, equivalent to between 1.6% and 2.4% of GDP.
But, as other countries make serious pitches for green investment, businesses fear that the UK faces a ticking clock and serious competition to realise these opportunities.
With policy direction and ambitious goals now locked-in, the CBI is proposing a series of measures to help the UK move urgently into delivery mode to secure investment, boost supply chains and create green jobs:
(1) Deliver a clear and stable policy environment to build business confidence.
- Accelerate major policy decisions to stimulate green markets on the supply and demand side, e.g. concrete timetables for phasing out gas boilers and advancing the CCUS cluster process.
- Implement a new compulsory Net Zero test for government policy making and work with the Office for Budget Responsibility to make the climate impact of major tax and spending decisions transparent.
- All political parties should put green growth at the heart of their manifestos ahead of the forthcoming General Election.
(2) Devise a comprehensive and competitive set of incentives to enable investment in the green economy.
- Review the tax system within the first year of a new government to ensure it supports the net zero transition – alongside considering a new tax credit designed to support and encourage green industries.
- Establish a Net Zero Investment Plan, identifying green investment gaps and policy with the intention of crowding in private finance.
- All parties should commit to a way forward on carbon pricing and future innovation funding designed to drive industrial demand for crucial green technologies.
(3) Drive efficiency and improved coordination of delivery mechanisms.
- Establish an Office for Net Zero Delivery to ensure consistent delivery across Whitehall departments, alongside new mechanisms to promote coordination between the UK and Devolved Governments.
- Incorporate green skills into existing training opportunities and create a statutory requirement for all schools and Further Education institutions to make young people aware of green career pathways available.
- Reform the planning systems for both local and major projects to enable faster delivery of green infrastructure, including financial incentives for communities that accommodate critical net zero infrastructure and ensuring all planning processes have a duty to support net zero transition.
- Speed up grid connections by replacing the current first-come first-served model with a system that better reflects project delivery milestones.
Rain Newton-Smith, CBI Director-General, said:
“If we needed any further proof that green growth really is the ‘economic opportunity of the 21st century’ then a potential £57bn boost to the economy provides just that.
“Not only does it offer hope for lifting the current economic gloom, but it can deliver a path to sustained growth for years to come – all while providing vital protection to our environment, improved energy security and increased prosperity across the country.
“With a pivotal General Election fast approaching, all parties should be on red alert for green growth and put it at the very heart of their manifestos.”
On the need to move at speed to realise those prizes, Rain said:
“The UK has always been an undisputed leader in the transition to net zero, allowing it to go further and faster than many other nations. It was the first major economy to sign net zero into law, has a strong track record on emissions reductions, and has a business community that not only backs the transition but is ready to seize the commercial opportunities available.
“But, in the wake of the US Inflation Reduction Act and similar moves in the EU, that position is now under threat. With competition for green investment heating up across the globe, the UK faces a race against time to claim the generous growth prizes on offer. That’s why we need decisive action – from government and business – to reclaim our place at the front of the queue.
“Given the tough fiscal environment, we may not be able to outspend the competition when it comes to attracting green investment, but I’m convinced we can outsmart it. Moving at pace to offer targeted incentives and deliver much-need confidence boosting measures is critical to success.”
Richard Blackmore, CBI Regional Director for the Midlands, said: “The Midlands is well placed to capitalise on growth in green industries. Opportunities like the world-first commercial fusion plant coming to West Burton show the scale of investment and highly skilled jobs that green growth can provide to communities and the wider region.
“With the right Government support, we need to go further to attract private sector investment in projects such as the Coventry Gigafactory to help decarbonise and truly reap the benefits of the green economy.”