The low carbon economy: a great opportunity for the North

Posted by Nick Molho on 12th September 2016
First published in: businessGreen


Much has been said in recent months about the importance of bringing more investment to parts of the UK, such as the North of England, where economic growth opportunities have been less forthcoming than in other parts of the country.

Today, the Aldersgate Group published its latest report, Setting the pace: Northern England's low carbon economy, which illustrates how the low carbon economy is already bringing much needed investment to regions across the North of England, with 136,000 people now employed in the sector. It argues that a coherent national low carbon policy and more support by devolved authorities could help unlock further growth.

Early investment is already paying dividends

Low carbon investment in the North is wide-ranging. It includes projects as varied as Jaguar Land Rover's £5.8m investment in its press shop near Liverpool to support aluminium recycling, Nissan's electric car and battery plants employing over 2,000 people in Sunderland and the development of a low emissions industrial zone in the Teesside, scoping out carbon capture and storage technology (CCS) and hydrogen production. There's also the huge offshore wind investment by Siemens, Associated British Ports and Dong Energy in Hull, which will see up to 1,000 people directly employed in offshore wind blade manufacturing and an expected average of 1,600 people employed in the construction of offshore wind farm projects in the Humber out to 2020 at least.

This investment isn't just about conventional grey infrastructure. Yorkshire Water's peatland restoration in the Pennines and the intertidal wetland project in Alkborough, Lincolnshire are all about improving the region's natural resources, reducing the risk of infrastructure damage from flooding and supporting other key industries such as tourism. Considering that Yorkshire and the Humber and the North West of England were identified as the third and fifth biggest flood risk areas in the UK respectively by Flood Re, or that the Lake District generates over 16,000 tourism related jobs, these projects are far from insignificant.

Importantly, low carbon projects are bringing new investment to parts of the UK, which have seen limited economic opportunities in recent years. According to a recent report from the Joseph Rowntree Foundation, 10 of the 12 cities ranked highest on its index of relative decline are in the North of England.

This investment also takes place in a context where the low carbon sector is becoming an important part of the UK economy. A recent report from the Office of National Statistics showed that the UK's low carbon and renewable energy economy had a direct turnover of over £46bn in 2014, involving around 96,500 businesses across the country. There is scope for much further growth. With increased commitment worldwide to tackle climate change, as evidenced by China and the United States recently ratifying the Paris climate agreement, the international market for low carbon goods and services is going from strength to strength and was already valued at $5.5tn in 2015.


BEIS is well-placed to accelerate regional low carbon development

To ensure the North of England can increasingly benefit from these growth and employment opportunities, action is needed at both the national and local level.

Nationally, a detailed emissions reduction plan from the new Department for Business, Energy and Industrial Strategy (BEIS) will be essential in attracting further low carbon investment. This should set out how the UK intends to meet its target to cut emissions by 57 per cent by 2030 under the 5th carbon budget and how it intends to attract the private sector investment needed in energy efficiency, low carbon heat, power and transport infrastructure. A new strategy to support the development of carbon capture and storage technology, based on the learnings acquired in previous programmes, would also be welcome.

This needs to be coupled with concerted action at the local level. Devolved authorities need to more systematically identify and champion low carbon opportunities in their region and should be empowered to do so under the ongoing negotiation of devolution, city and growth deals. As shown by the significant investments recently made in renewable energy and engineering training at the Hull College Group, University of Hull and the University Technical College in Scunthorpe, greater co-operation between devolved authorities, the private sector and local educational bodies to equip the local workforce with the right skills is also essential.

BEIS Secretary of State Greg Clark has already recognised the importance of local action by turning his ministers into "local growth champions", so they can build relationships with Local Enterprise Partnerships (LEPs) in their respective regions. This is an opportunity to use the industrial strategy to emerge from this new department as a way of bringing low carbon investment to those parts of the UK that need it the most, whilst also helping the UK compete in the fast-growing global low carbon economy. These are two themes that are core to Theresa May's vision of a Britain that "works for everyone" and one that punches above its weight on the global stage.

The low carbon economy is bringing essential investment to the North of England and could do much to deliver Theresa May's future vision of Britain. Its continued growth deserves the full support of the new government and devolved authorities.