The green recovery
Government measures to revive the economy
should build on the UK’s existing industrial strengths and
skills base, generate employment and offer significant
multiplier effects while being mindful of the long term
shape of the economy. They should also unlock private
investment, level up ‘left behind’ regions, and deliver a
wide range of co-benefits such as improved public health.
They should also align with the Paris Agreement targets and
delivery of net zero emissions.
Four priority areas for UK government action
that would meet these requirements are:
-
Redesigning the transport system
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Making UK buildings fit for the 21st
century
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Delivering a clean power system
-
Supporting nature and creating a circular
economy.
Below we set out the specific policy,
spending and tax measures that need to be delivered in
unison in each of these areas to maximise the economic,
social and environmental benefits of the post-Covid
response.
All four of these priority areas should be
viewed as intertwined, with successful action in one area
being dependent on actions happening in the others. Our
future homes not only need to be highly insulated to be
warmer, more efficient and cheaper to run, but they must
also support the clean power transition by having solar
panels on the roof and using power for renewable heating.
Our future electric transport system will be as dependent on
an upgraded, smart and flexible grid as it will be on
offshore wind and solar generation; and in return, more
electric vehicles (EVs) will help provide extra storage
capacity for renewable energy. Transitioning our power
generation to renewables will give us clean electricity that
can not only power our homes, offices and industries, but
also be used to produce green hydrogen that will keep our
power system running when there is no sun or wind and will
help tougher-to-reform sectors such as shipping and steel
clean up their footprints. All relevant government
departments should therefore work together on these
priorities in a coordinated way, and they should be
approached together as a whole – with a just transition to a
fair and sustainable future as the guiding principle.
Unless otherwise specified, all
recommendations below are applicable UK-wide, with
responsibility for delivery sitting with the Westminster
government or devolved nations as appropriate.
Levelling up
In the wake of the Covid crisis, hundreds of
thousands of people across the UK could lose their jobs as a
result of the necessary restrictions on economic activity
and the shrinking of many sectors. At the same time, a
successful green recovery will create a huge number of new
skilled jobs across the country in a range of emerging and
expanding low carbon industries. These new jobs could help
secure the long term economic security of thousands of
households, while boosting GDP, increasing private
investment and tackling the climate emergency. However, many
of those at risk of unemployment at present are in sectors
that require few formal qualifications and offer little
in-work training. Therefore a proactive approach is needed
now, with support for significant reskilling and training in
order to help the workforce transition, to increase incomes
and to boost productivity.
As part of this, devolved nations, city
mayors and local authorities should be empowered to design
and deliver just transition strategies that fit with
specific local and regional needs. They should be given
extra powers and resources to work with unions, trade
associations and business groups such as the Confederation
of British Industry to aid skills development, retraining
and local investment – especially in places where many
people are employed in carbon-intensive industries or their
support industries. For example, while a faster transition
to EVs through a phaseout of new petrol and diesel cars and
vans by 2030 could deliver employment growth to the auto
industry compared to a later date, 11% of current jobs in
the sector are specific and non-transferable. A specialist
programme of retraining and reskilling in EV
assembly and manufacture will be
required to address this issue. Similarly, growing numbers
of skilled workers from the oil and gas sector are already
being reemployed in sustainable industries – for example,
over a third of the offshore wind industry’s marine
engineers used
to work in oil and gas. However,
significant specialist retraining and re-skilling of oil and
gas sector workers with less transferable skills will now be
required at pace, especially in the wake of the oil price
crash and thousands of associated job losses that are now
forecasted. Over the next three
years, as a starting point, the proposed Shared
Prosperity Fund of £2.16 billion
per year should be at least doubled to support tailored just
transition programmes
of this kind.
The government should also explore delivering
a new green jobs and training guarantee programme, as recently
proposed by the Social Market
Foundation. This would ensure that those who cannot
otherwise find employment after the lockdown get a job and
are paid at least the national living wage. 20% of the
working week could be spent on training and education, with
a particular emphasis on placements that help fill the low
carbon skills gap in key areas such as home insulation, as identified
by the Committee on Climate Change last
year.
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