House of Commons - Green Jobs and Skills - Environmental Audit Committee

Green Jobs and Skills - Environmental Audit Committee Contents

3 Where are the green jobs?

32) New employment opportunities will be created as the UK becomes a low-carbon economy, particularly in the sectors highlighted in the Low Carbon Industrial Strategy. Currently the workforce does not have the capacity to deliver the energy saving measures or changes to renewable energy supply or transport that will be needed.[27] The Government's understanding of where these jobs are needed is limited.

33) The UK environmental goods and services (EGS) sector is growing. In 2004 the sector had a turnover of around £25 billion, and accounted for around 400,000 jobs in some 17,000 companies. Government projections suggest that the UK EGS market will grow to £34 billion in 2010 and £46 billion by 2015 with employment growing by at least 100,000 over the same period.[28]

34) Where this growth will occur is unclear. Targets have been established for generating renewable energy. These provide a basis for forecasting employment and growth in this sector. The TUC believes that in order to meet our 2020 renewables targets, we are likely to see a ten-fold increase in jobs in this sector as a whole, from around 16,000 positions now to 133,000 to design, manufacture, install and operate these new technologies. In the period to 2020, onshore and offshore wind farms together are likely to generate over 80% of the 38.5GW of installed renewable electricity capacity. The TUC say up to 36,000 direct new UK jobs could be created in the wind energy sector. The Government's forecasts are more optimistic. They state that renewable energy could provide £100 billion worth of investment opportunities and up to half a million jobs in the renewable energy sector by 2020. A report published in March 2009, estimated that the wind power manufacturing sector was worth £11.5 billion in 2007/08 and employed almost 87,500 people. Dr Gordon Edge, director of economics and markets at the British Wind Energy Association, believed the value of the wind industry to be roughly a tenth of this estimate, employing just 5,000.

We are somewhat surprised at the level of activity ascribed to our sector in the UK[…] We are struggling to work out how they could come up with such a large figure.[29]

35) The Minister for Further Education, Skills and Apprenticeships said that having a more industrial activist approach to low-carbon industry relies on having good intelligence and evidence of what is on the horizon.[30] The sectors that are expected to grow, and where jobs will be created, must be clearly signalled in order to plan for the low-carbon transition. Skills delivery bodies need this information to plan their strategies and investors want confident predictions about growth. The disparity between government estimates and those from other bodies creates uncertainty about the potential of new low-carbon industries and some distrust of the Government's policy. The Committee on Climate Change's report to Parliament and the Low Carbon Transition Plan provide a good starting point for setting out clear expectations about where new jobs will be needed. To inform its activist approach the Government should build on the work of the Committee on Climate Change and the Low Carbon Industrial Strategy to reassess the number of new jobs that will be created in the move to a low-carbon economy and provide more robust data on where these jobs will come from and why.

Job Displacement

36) The transition to a low-carbon economy will inevitably affect existing jobs. The UK cannot base its future economic growth on activities that are carbon intensive. Jobs will have to move from carbon-dependent sectors to low-carbon sectors as economic growth shifts. Industries which will be most affected are the producers of carbon-dependent products or services, like car manufactures or non-renewable energy producers. Industries that produce products or services with high embedded emissions (e.g. steel making) will need to reduce the carbon footprint of their goods, while industries that produce carbon-dependent products (e.g. petrol car manufacturers) will need to diversify and change their products. In all sectors new jobs to help business adapt to a changing climate will be required. Job losses are not inevitable but the requirement for companies to be less carbon intensive is. Failure to do this will incur ever increasing costs as the carbon market and carbon reduction commitment take effect.

37) Certain parts of the UK are dependent on carbon-intensive industries. These communities could suffer a large net loss of jobs. The Government's strategy must take this into account as jobs might not be created in the same geographical location.

38) The German government recently published a report on the wider impacts of renewable energy policies on the German economy, which shows that the new jobs created in the renewables sector outweighed the jobs lost elsewhere in the economy.[31] In the US, research in California has estimated that almost 1.5 million jobs were created across the economy between 1972 and 2007 as a result of household energy efficiency measures.[32] In contrast, a study funded by the European Commission found that under some economic scenarios the net effect on jobs in the UK energy sector could be negative.

39) The TUC called for greater monitoring of this displacement of jobs.[33] Links can be drawn between different sectors or regions so that employment opportunities are made available to those areas that suffer greatest job losses. There are also links between the skills used in new and old industries that provide a route for redeployment of the workforce. The BWEA have noted similarities between the experience and skills required in the offshore oil and gas industry and the offshore wind industry.[34] This experience could be used to help develop new industries in areas where job losses could be expected.

40) It is not clear to us that Government has a coherent approach to how to deal with this economic displacement. It is important that they reflect on how employment in new and traditional sectors will be affected Regional Development Agencies (RDAs) are in a position to provide some assessment of this regional and sectoral displacement. The Low Carbon Industrial Strategy makes reference to collaboration between RDAs and other partners but does not detail how this will happen. Strategic cooperation between RDAs is all the more important because by April 2010 the nine Regional Learning and Skills Councils will be dissolved and the work of developing regional skills strategies will be taken on by the RDAs. RDAs currently lead on a wide range of initiatives to secure environmental and social benefits together with economic development for regional communities. Typical examples of innovative approaches in low-carbon sectors include:

(1) Yorkshire Forward's carbon capture and storage partnership. The partners include a consortium of 25 energy and industrial companies, local agencies, the TUC and unions.

(2) The South West RDA's support for a Green Workplaces partnership in the region.

(3) Three Greater South East RDAs have established Low Carbon Economy as an established priority.

41) The Government has not yet carried out research in the UK to assess the likely impact of decarbonisation on existing industries and jobs. The Government should undertake research in partnership with trades unions, employers and Regional Development Agencies to gain a broader understanding of the impact of any job displacement resulting from the move to a low-carbon economy and to develop strategies to mitigate these effects.

FAIR TRANSITION

42) Significant periods of economic restructuring in the past have often happened in a chaotic fashion. Many individuals and communities in the UK are still adapting to the shift away from industrial production over the last 30 years. Trades Unions have argued for a 'Just Transition' to a low-carbon economy that fairly distributes the costs and benefits of policies across the economy.[35]

43) There is currently a very active debate on the prospects for green jobs in the United States of America. Here an emphasis is placed on ensuring green jobs contribute to the social and economic sustainability of low income groups and deprived communities. This is visible in the work of the Apollo Alliance ("a coalition of business, labour and environmental groups championing green employment"), the Blue-Green Alliance ("a coalition of unions and environmental groups, led by the United Steelworkers and Sierra Club"), and Green for All ("a national organization dedicated to building an inclusive green economy strong enough to lift people out of poverty"). Green for All was founded by Van Jones, author of The Green Collar Economy, and President Obama's "green jobs czar".

44) One of the aims of focussing green jobs on low income groups is to build support for environmental policies among ordinary working people. Van Jones has said:

The green economy is not just a place where affluent people can spend money. It is fast becoming a place where ordinary people can earn money. In fact, the only part of the U.S. economy that is growing—the only part of the economy that can grow, long-term—is the green part. So the green wave's new products, services, and technologies could mean something important to struggling communities: the possibility of new green-collar jobs, a chance to improve community health, and opportunities to build wealth in a sustainable way. […] Working people will have a powerful incentive to support a green-growth agenda as long as green partisans embrace broad opportunity and shared prosperity as key values.[36]

45) Kevin Brennan MP, Minister for Further Education, Skills, Apprenticeships, said the Government is putting together a Just Transition forum to address the provision of jobs during economic transition.[37] The Government needs to do more to link its policies on tackling poverty and unemployment with the green agenda. The forthcoming DWP White Paper provides an opportunity for the Government to embed this thinking within its employment policy.

Quick Wins

46) The Aldersgate Group, a coalition of businesses, environmental groups and individuals, call for a street-by-street home insulation programme for social housing that would "create thousands of jobs, develop low-carbon skills and re-invigorate the construction sector during the recession".[38]

47) The Committee on Climate Change stressed the importance of improving energy efficiency in homes and recommends that the Government begin a more comprehensive programme. They provided estimates of the benefits:

Energy efficiency in homes could be improved by 35% by 2020 with an ambitious program of improved insulation (e.g. covering 10 million lofts, 7 million cavity walls and 2 million solid walls), the installation of 12 million energy efficient condensing boilers, and major improvements in electrical appliance efficiency.[39]

48) The Federation of Master Builders drew on research carried out by the Environmental Change Institute at the University of Oxford to show that building firms, product manufacturers and suppliers could stand to tap into a new market worth between £3.5 billion and £6.5 billion per year if the UK developed policies, skills programmes and financial incentives to upgrade our existing housing stock to make it greener and more energy efficient.

49) We have consistently called for greater investment in a national retrofitting programme to make homes and buildings more energy efficient. Such a programme could sustain employment in local communities throughout the country, and could develop the skills and supply chains required in what will be a long-term growth sector.[40] The UK will not achieve our carbon goals without significant action in retrofitting housing, and ensuring sustained activity in this area would cut emissions, reduce fuel poverty, and enhance the UK's energy security. At the same time this is an opportunity for the construction sector to tap into this market and bring about up-skilling and new job opportunities. This is particularly important for small businesses during an economic downturn. The Kirklees Council's Warm Zone, an energy saving refurbishment partnership with Eaga, has created 80 full-time jobs and saved approximately £1 million a year on household energy bills. The overall economic benefit to the area is calculated at over £50 million.[41]

50) The Government's Heat and Energy Saving Strategy focuses on retrofitting existing housing stock, but while it is a step in the right direction we fear it is unlikely to achieve the full potential of combining carbon emissions reductions with employment growth. There are 26 million homes in the UK and 85% of those will still be in use in 2050 (when the Government has set the target to cut emissions by 80%). The FMB estimated that to achieve these targets 24,000 homes would need to be converted per week until 2030. At the present there is not sufficient capacity in the workforce to do this.[42]

51) We recommend that the Government immediately and substantially increases the scale and speed of its programmes to improve the energy efficiency of existing buildings, and make this the UK's number one priority for green fiscal stimulus. The Government must ensure that a workforce is developed to enable the work on energy saving to be carried out and that it is equipped with all the necessary skills.

27 Ev 71, Q292, Q317 Back

28 TUC, A Fair and Just Transition-Research report for Greening the Workplace, July 2005 Back

29 ENDS Report 411, April 2009, pp 32-35 Back

30 Q345 Back

31 Federal Ministry for the Environment, Nature Conservation and Nuclear Safety, Renewable Energy: Employment Effects, 2006 Back

32 Roland-Holst, Energy Efficiency, Innovation and Job Creation, Centre for Energy, Rsources and Economic Sustainability, University of California, 2008 Back

33 Q100 Back

34 Ev 69 Back

35 TUC, Touchstone Pamphlet 3, A Green and Fair Future: For a Just Transition to a Low Carbon Economy, 2008 Back

36 Van Jones, The Green Collar Economy, New York: Harper Collins, 2008, pp 54-5 Back

37 Q393 Back

38 Ev 14 Back