CBI: UK's green recovery could generate £700bn economic boost by 2030
The Confederation for British Industry (CBI) has launched a major new campaign uniting business in the push for a green recovery from Covid-19, claiming that this could bring £700bn of economic benefits for the UK this decade.
Called ‘Seize the Moment’, the campaign has been kick-started with online resources outlining the CBI’s policy and business vision, updated in line with the UK’s commitments to levelling up and to net-zero by 2050.
The trade body’s net-zero vision rests on the foundation of a decarbonised power system, in which low-carbon generation and flexibility services are scaled up in tandem. Learnings from the power sector must also be applied to industry, transport and buildings. Benefits from these actions will be visible on a national stage, the CBI states, with the UK poised to secure a growing share of exports in the electric vehicle (EV), hydrogen, offshore wind and carbon capture and storage (CCS) sectors. The finance sector would also benefit, through boosted green bond issuance, carbon trading and carbon offsetting.
It warns that, despite the Government’s long-term commitment to net-zero, the full benefits of the transition won’t be realised – or fairly shared – under current policy frameworks. The campaign is calling on Ministers to ensure that the net-zero strategy, which will set interim, sector-specific ambitions, is ready before COP26. It is also calling for the creation of a cross-Government Procurement Taskforce, to ensure that financial incentives are joined up across departments and that technologies with high decarbonisation and export potential are supported.
To this latter point, the CBI specifically wants to see a commitment for the UK to host seven gigafactories by 2040. The UK currently has none; the first facility is due to come online in Coventry by 2025.
To the point on incentives, the CBI has expressed particular disappointment in the Government’s handling of domestic energy efficiency improvements and is calling for a replacement for the failed Green Homes Grant. The Heat & Buildings Strategy is due imminently but has faced months of delays.
Aside from decarbonisation, the vision outlines five additional “prizes” for business and society from a socially just and green recovery. These are innovation, globalisation, thriving regional economies, inclusivity and improved health and wellbeing. The CBI prices the collective benefit of these ‘prizes’ at £700bn this decade.
For this benefit to be fully realised, the CBI has outlined five sweeping policy priorities. These are changing the requirements for all regulators; developing regional and national economic ‘clusters’ using sector-specific expertise; unlocking finance for green growth and delivering long-term clarity on tax. This latter point has also recently been raised by Green Alliance and MPs on the Public Accounts Committee.
The CBI is hoping engage 700 businesses to put the vision into practice by the end of 2021. Its advisory group for ‘Seize the Moment’ includes representatives from the likes of Microsoft, Unilever and BT, and will convene its first update reports this October.
CBI director-general Tony Danker said the vision has “deliberately” been developed to couple social progress and the low-carbon transition with economic and business benefits, allaying assumptions that these areas are siloed.
Danker said: “Our workforce demands better of us. Our customers judge us by the values we keep. And our investors rightly assess us through environmental, social and governance (ESG) frameworks.
“The pandemic has demonstrated two new facets of business that I am extremely proud of: our humanity and our role as problem solvers. Some critics have felt business was a social problem to be solved. But we are learning that business is uniquely well placed to solve social problems.”
On net-zero specifically, he added: “ Decarbonising our economy is a planetary imperative, we can use our transition to net zero to create green jobs, to find sustainable solutions and sell them to the rest of the world.”
Funding boost for the low-carbon transition
In related news, the Department for Business, Energy and Industrial Strategy (BEIS) has launched a £166.5m pot that will be used to back low-carbon technologies for application in energy-intensive sectors including manufacturing.
Issued as part of the £12bn Ten Point Plan for a Green Industrial Revolution, the package will be allocated to technologies including CCS, green hydrogen production and distribution, and specific systems that reduce emissions for the manufacturing, steel, energy and waste sectors.
£60m will go to hydrogen; £37.5m to CCS; £16.5m to the Industrial Energy Transformation Fund and £8m to circular and energy-efficient manufacturing schemes. The rest of the funding will be used to establish a new ‘Industrial Decarbonisation R&I Centre’ at Heriot-Watt University and a new ‘Transforming Foundation Industries R&I Hub’ at Cranfield University. Collectively, these centres will engage with hundreds of partners, including innovators, external academics and local businesses.
BEIS said in a statement that the industries backed by the new funding are primes to create more than 60,000 green jobs. The Ten Point Plan’s overall ambition is to support up to 250,000 jobs.
“Today’s major cash boost – targeted at our most polluting industries - will encourage the rapid development of the technologies we need to reign in our emissions and transition to a green economy, one that reduces costs for business, boosts investment and creates jobs,” Energy Minister Anne-Marie Trevelyan said.