IPPR and REA: Up to 1.6 million new jobs could be created though green Covid-19 recovery

Policymakers have repeatedly faced calls to make energy efficiency a larger focus within climate strategies

In a new report published today, the progressive think-tank warns that up to 2.1 million Brits could file for unemployment within the next five years – equivalent to 10% of the workforce – without strong policy support for industries driving the transition to a low-carbon, more socially equal nation.

The figure is similar to that raised in recent research by UK 100 and the Grantham Research Institute on Climate Change and the Environment.

But the IPPR is, ultimately, optimistic, concluding that strong policy support for building retrofits, low-carbon heat, social care, health care and public transport could minimise job losses, creating 1.6 million roles on a net basis.

The Institute’s ‘transforming the Economy after Covid-19’ report, published today (2 July), states that 560,000 full-time equivalent roles could be created in the energy efficiency and low-carbon heat sectors. For this benefit to be realised, the UK Government would need to roll out a large-scale energy efficiency scheme centred around homes; publish its low-carbon heat roadmap and include a requirement for all buildings to be ready to transition to heat pumps or hydrogen boilers; and embark on a mass zero-carbon social housing project.

A further 700,000 net jobs could be generated across the health care and social care sectors and 230,000 in the transport space, through investments in hydrogen and electric railways; electric buses and walking and cycling infrastructure. Support measures for transport should prioritise the poorest households and the regions which are currently the least connected, the IPPR argues.

Further pockets of job creation could be realised through nature restoration (around 46,000 roles); support for technologies like hydrogen, battery storage and carbon capture and storage (CCS); digital infrastructure investment; research and development and reskilling and education.

For the full extent of these benefits to be realised, the IPPR concludes, the central UK Government and devolved Parliaments must introduce a new requirement for all key policy decisions to be stress-tested in line with net-zero and net-benefits for nature. Sector-specific roadmaps to net-zero must also be produced as a matter of urgency and a net-zero and just transition delivery body created to oversee their delivery.

The IPPR is also calling for the creation of a UK national investment bank with a remit to funnel finance in ways which will avert the climate and nature crises. Once the Brexit transition period is complete, many British businesses and projects will not be able to secure funding from the European Investment Bank (EIB).

“If the Prime Minister really wants to emulate Roosevelt’s ‘New Deal’ then the government must significantly increase investment beyond what has been promised so far,” IPPR associate director Luke Murphy said.

“We urgently need to make substantial investment to insulate the nation’s homes, upgrade our public transport network and plant trees and restore nature. We can’t afford to wait for this: now is the time.”

Murphy is alluding here to Boris Johnson’s ‘build, build, build’ speech, delivered on Tuesday (30 June). In the speech, he laid out the basics of the UK’s recovery package, which fell short of many green groups’ expectations. Further details are due to be revealed by the Treasury in the coming weeks.

REA recommendations

Also releasing a policy briefing on the green recovery this week is the Renewable Energy Association (REA), which represents almost 500 organisations across the generation, distribution, storage, education, R&D, energy efficiency and maintenance spaces.

The REA’s green recovery paper makes a string of recommendations across four key areas, all designed to boost employment and GDP while spurring the national transition to net zero. These areas are low-carbon electricity and homes; low-carbon heat; low-carbon transport and the circular economy. In each area, the REA outlines measures which would create benefits immediately (within 12-18 months) and in the short-term (18-36 months).

Low-carbon electricity and homes receives the most coverage of the four focus areas. The REA is urging an additional £2bn of investment to bring up to 20GW of renewable generation online; a large-scale heating and energy efficiency retrofit scheme for housing; a national reskilling initiative for workers in the oil and gas sector; and greater investment in domestic battery production.

To complement these measures, the REA recommends reforming the tax system – particularly business rates and VAT – to help businesses build strong financial cases for clean energy generation, energy storage and energy efficiency.

The above measures alone would create 176,000 net new jobs while reducing business and domestic energy bills and generating a net economic value of £7.5bn, the REA concludes.

Recent research from McKinsey similarly concluded that for every $10m (£8m) invested by a Government in energy efficiency, 77 jobs could be created. For investment in renewable generation technologies, the figure stands at 75 jobs. In comparison, funnelling $10m into fossil fuels would create just 27 jobs.

It is no longer enough to support a net-zero economy in rhetoric alone, we must ensure that renewables are at the core of the recovery if we are to achieve the just and inclusive society the Government has been referring to,” REA chair Dr Nina Skorupska said.

Sarah George

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