Sustainability superpower: UK can unlock more than £70bn of economic benefits and export £17bn of renewable energy a year
The race to net zero presents the UK with a once-in-a-generation economic opportunity, unseen since the discovery of oil and gas reserves in the North Sea in the 1970s, according to our latest research report.
We've uncovered that the UK could unlock more than £70 billion of economic benefits a year if it adopts a bold strategy of going “beyond net zero” to become a world leader in clean energy.
And becoming a “sustainability superpower” would create an additional 279,000 British jobs (and support a total of 654,000 British jobs) across clean energy industries.
Just as the UK became a major exporter of North Sea oil and gas during the 1980s and 1990s, Britain’s potential to generate huge amounts of clean energy would turn the UK from a net importer of energy to one exporting “vast amounts” of clean power, worth £17bn a year, to mainland Europe.
Thanks to its proximity to the Atlantic Ocean and competitive advantages in offshore wind generation the report found the UK can fulfil the Government’s ambition of becoming a “clean energy superpower” if it can turn its barriers to growth into enablers.
These barriers to growth, which could become enablers, include:
The report was written by former government economist Chris Walker for UKBCSD, in partnership with Prologis UK and Inspired Plc.
It highlights the potential rewards of sustained, aggressive strategy aimed at maximising the UK’s competitive advantages in generating clean energy.
The report analysed two competing scenarios facing the UK as it heads towards its current target of decarbonising all sectors of the economy by 2050.
It says: “Because we are in a global race with critical tipping points, one version of 2050 sees the UK becoming a world leader in the energy transition by attracting trillions of pounds of global private investment, innovating in key technologies and deploying them at an international scale to become a clean energy superpower. This is the ‘beyond net zero’ scenario.
“In another version of 2050, the UK lapses into clean energy mediocrity and stumbles along. This is the ‘near net zero’ scenario.”
In the “beyond net zero” scenario, the UK achieves economic benefits of £70.3bn a year by 2050 - not including the social value of reduced greenhouse gas emissions and averted climate change.
This includes an additional £36.4bn of Gross Valued Added (GVA) delivered by clean energy generation and a £17.0bn boost to the UK’s trade balance.
There would be a further £2.2bn of agglomeration benefits, while disposable incomes would see a £14.7bn bump as a result of lower energy prices.
The report finds the economic benefits of the “beyond net zero” scenario to be more than twice the £35.0bn benefits of pursuing the “near net zero” path.
The report says: “The UK’s strong competitive advantages in clean energy generation mean it is uniquely well positioned in the race to net zero which can deliver significant and sustained economic growth, raised productivity and increased exports.
“Other advanced economies will undertake similar journeys to the UK at the same time. For the UK to cement its leadership in tackling this challenge, crucial public policy decisions need to be taken, backed up by investment from private sector organisations to ensure that the UK makes and captures the necessary investment to capitalise on its strengths.”
The report includes a number of potential policy options to help fully exploit the UK’s clean growth potential.
These include:
Jason Longhurst, Chair of the UK Business Council for Sustainable Development, said: “It is now almost four years since Britain effectively fired the starting pistol on the global race to net zero by becoming the first major economy to set a net zero emissions target in law.
“Today, more than 90% of global GDP is covered by some form of net zero target.
“We commissioned this report to find out more about the opportunities which net zero can bring to Britain.
"The findings are clear. The UK can unlock more than £70 billion of economic benefits a year if we become a world leader in the race to net zero.
"We have the potential to generate huge amounts of clean energy which would turn the UK from a net importer of energy to a nation exporting vast amounts of clean power, worth £17bn a year, to mainland Europe.
"We believe this paper delivers an evidence base to enable our government to drive new incentives to transition, leverage in further private sector investment and position the UK as one of the world’s most investable markets for companies tackling the challenges created by climate change.
"Having fired the starting pistol on the race to net zero it’s now time for the public and private sector to work together to put Britain at the front of the field again."
Mark Dickinson, CEO of Inspired PLC said:
“Working with over 3,500 businesses on a day-to-day basis to manage their defence against the energy crisis and facilitate their journey to net-zero, we see first-hand the desire within the corporate businesses of UK PLC to make a difference, but also the need for governmental support and incentives, to unleash this potential.
This report makes clear the economic benefits that are available for the country if the combination of the private and public investment can be enabled to realise the opportunity to become a global leader in sustainable development.”
Paul Weston, Regional Head of Prologis UK, said: “This landmark report makes plain the scale of the opportunity that the UK has – alongside the relatively small window that we have to act.
“It is vital that we seize the opportunity, not only for the economic gains - and potential new jobs - but because being a global leader in clean energy will also bring huge societal and environmental benefits.
“We need to make many steps on this journey, but some are relatively small - such as providing a supportive environment for large-scale rooftop solar arrays.”
You can download the report HERE
Dr Manoj Joshi DL is the new Chair of the Bradford District Economic Partnership.
Dr Joshi will be championing the economic potential of the district, leading on clean growth, and working with partners to develop a new economic strategy. He brings extensive experience across a broad range of leadership roles and has been the Board Director of Bradford Breakthrough. He has held many high-profile local roles in the civic affairs, business, faith and charity sectors. These followed a 27-year career in pharmaceuticals and health care, including as a Business Development Manager for AstraZeneca. Read more here
The UN Sustainable Development Goals have become a touchpoint for those in the sector that are working to create nature-based solutions as a means to tackle the climate and biodiversity emergencies.
In order to achieve this, the built environment sector needs green skills in the right places. The Landscape Institute’s aim, through the work of its members, is to protect, conserve, and enhance the natural and built environment for the public benefit. Green skills will play a central role in this greener recovery and shift towards a nature-based economy, and the landscape sector already holds many of the skills that are needed.Read more here
The construction industry exists to give humanity an environment in which to thrive, and there is no doubt that we have risen to that challenge. Unfortunately, typically there is no action without consequence and what is abundantly clear is that in pursuit of our goal the buildings and infrastructure that we have delivered have had a significant impact on our natural environment.
This needs to be addressed, otherwise the advances we have made will soon be reversed.Read more here
“Clean Growth” is becoming something of a buzzword – but if you want to know what it looks like in practice, the best answer might lie in a former water treatment works five miles north of Bradford.
Esholt is shaping up to be the UK’s largest Clean Growth testbed. The 500-acre site, set in natural woodland, was the subject of rapid industrialisation in the early 20th century, with huge concrete settlement tanks embedded into the landscape. Over time, advances in water technology saw the operational footprint shrink and large tracts of the site left redundant.Read more here.
This week marks six months since COP26 brought 200 world leaders to the United Kingdom to discuss climate change.
As we all find ourselves living through the largest cost of living crisis for 30 years, years whilst watching the horrifying fallout of Russia’s war in Ukraine, I find myself reflecting on the challenges we all face.
An inconvenient truth about net zero is that, however important it may be, it cannot be the only thing that matters. Read more here
“The findings of the IPCC report demand actions, not just platitudes. Businesses have the innovation, tech and capabilities now. UKBCSD members are proving this every day.
“Businesses do not need world leaders to provide short-term, one-off funding to incentivise the transition to net zero, but a road map which enables businesses to invest trillions of dollars in the long-term change of our global economy.
“The barrier to change is the lack of a sustainable economy – we’re not talking about levelling up but enabling sustainable change.”
The UK Business Council for Sustainable Development is calling for:
1. A reward-based transition to net zero with no VAT charged on green energy use or sustainably created materials, fast-tracking environmentally friendly buildings and projects through the planning system and green taxes which are lower for companies which reach targets to transition away from carbon faster.
2. A clear and consistent set of outcome-based targets for businesses which enable regulators to legally determine who is meeting their commitments to transition to net zero. These targets should be based on the UN’s 17 Sustainable Development Goals.
3. World leaders to commit to creating national laws based on the UN’s Sustainable Development Goals at COP26.
Quality, honesty and trust – this is what future growth must be based on
Forty invited guests joined UKBCSD for our annual Westminster dinner, kindly hosted by Melanie Onn MP, Shadow Housing Minister, at the House of Commons. UKBCSD Chief Executive Charles Roach chaired the evening, thanking sponsors, Baytree LLP and CBC Building Control for their ongoing support, before introducing Melanie Onn.
“It’s a pleasure to be discussing sustainability in UK industry” said Ms Onn.
“This is not just about issues of the environment but about unlocking long term economic growth.” She referred to historic examples of social sustainability, notably Saltaire in Yorkshire, saying that too much development has since been about quick profit. “We need to rediscover sustainable development in the UK. We must look at a variety of housing types with renewed vigour. Garden Towns must capture the essence of the community, we must understand the genuine nature of grass roots planning, where local people are part of the solution, not at the bottom of a ‘top down’ approach to delivery.”
Although Brexit was never far from anyone’s mind, Melanie Onn was careful not to mention the ‘B’ word, instead alluding to it, “We have a huge housing shortage, but also a shortage of builders, supplies and labour, particularly over the next few years. There is a real issue of build quality; two in five people would rather live in an old house than a new one because of quality. So we need to start rebuilding confidence in the industry, build the housing market sustainably and build skills. People want to see businesses with a greater sense of responsibility.”
Charles Roach endorsed this, asking how we – as an industry – can communicate in a different way so that trust becomes the automatic response, the rule rather than the exception. He then introduced UKBCSD director Chris Carr, Managing Director of Carr & Carr Builders and national board member of the FMB, Council Member of the NHBC and National Council member of the CITB.
With a wealth of experience as an SME housebuilder, he admitted that housing developers and sustainability don’t usually go hand in hand.
“But what I like about this organisation is that it is run by the business and public sector on a business-like footing… it’s not a dirty word to make a profit. But what we all want is to have a larger sustainability footprint for our councils and businesses. As organisations we need to work closer together with the partners in the room - share our expertise and good practice. Learn from each other.
“For a start, I know the housing industry could learn so much more from the commercial sector. They are light years ahead when it comes to energy efficiency.”
Chris focused on conditions for growth, saying we first need to know our assets, which can either constrain or release potential, whether these be infrastructure, economic drivers, employment and skills, market capacity, utilities or investment. Clarity of our current potential is critical and a clear vision going forward, a shared aim with positive outcomes.
So, what must the UK do to flourish? Over the next decade or so the industry must look at more joint ventures and partnering schemes, with all parties being honest and transparent for this to work.
“What it is about, is ensuring we are smarter in our approaches, from supply to skills, the development mix and build,” said Chris.
“We must look at offsite construction, MMC and smart construction. We must be energy secure, which is where residential can learn so much from our commercial developer colleagues.
“We need advance investment in infrastructure and resources, both public and private and we need more investment in utilities. The SME housing sector, which was once responsible for building so many of the country’s new homes, needs more development funding as the high street banks have stopped nearly all the funding to building companies with less than a £5million turnover.”
Chris concluded by noting a greater willingness from local and national government, to engage with the private sector, with elected members understanding many of the problems and what parts of the structure have broken down.
“They are open to positive suggestions or, as I call it, ‘solution opportunities’. The FMB, with which I am very involved, has now become the first port of call when Government would like to engage with the housing sector and especially the SME/micro developers. I want UKBCSD to be the first port of call when Government would like to engage with the larger development sector. This organisation is about maintaining quality and I’ll take quality over quantity any day.”
Following a Roundtable event hosted by Burges Salmon, Place, Pace and Productivity was the theme for the launch of the garden communities report by UKBCSD and our partners, LDA-Design. The Roundtable panel had agreed three strategic directions for further research by UKBCSD, which were detailed in the report which focused on delivering differently. The resulting three propositions offer practical ways to shake up the planning and development culture that could so easily fall into the trap of delivering more of the same:
1.Infrastructure First Planning initiated by a Planning Pilot, supported and promoted by the government to demonstrate how we can align infrastructure and land use planning activities to enhance delivery
The discussion focussed on delivery and this timely report presents a case for delivering differently if we are to achieve the aspiration of creating sustainable places, fulfilling the livelihood and lifestyle needs of future communities. Our guest speaker for the evening was Lynda Addison OBE, an experienced practitioner whose tenacity in bringing forward one of the earliest garden village concepts, was tempered with caution as we have yet to see a new Garden settlement delivered in the UK.
The dinner guests welcomed the report, recommending additional priorities for action crucial for promoting certainty for all stakeholders:
Accessible = Sustainable: priority must be given to accessible locations, to avoid inhibiting sustainability.
Take the people with us: community engagement is critical but collectively we have a poor track record of doing this, with some appalling quality in the past. We must improve communication, delivering fearless, non-adversarial engagement with people.
Accentuate the positives: a commercial strategy for Garden Communities is needed that articulates the benefits for people and society (akin to what David Attenborough did for Plastics)
Culture Change
It was agreed that Planning should be ‘professionalised’, giving more power to officers and a greater, holistic focus on delivery. This must address where we want to be hence collaborative working across disciplines is critical, to give credible, transformational delivery.
One coherent voice
The launch guests agreed that bringing the Business community closer to Government on this agenda, is an important next step for UKBCSD.
We wish to extend our thanks to the following organisations for their contributions to the debate at this Launch event:
Anglian Water
Ardmore
Axis Land Partnerships
BSRIA Sustainable Construction Group
Burges Salmon
CBRE
Caledonian Modular
Carr Development Consultancy Ltd
Cornwall Council
Engie UK & Ireland
Federation of Master Builders
Garden Cities Development CIC
LDA-Design
Longhurst Group
Ministry of Housing Communities and Local Government
Town & Country Planning Association
UK Regeneration
Delivered in partnership with
Post Budget comment – Climate change challenge
Mitigation should be about pledging real investment commitments, today
5th November 2018
It is disappointing that, despite last month’s publication of the IPCC Report on Global Warming, the Chancellor chose not to drive through proposals to help mitigate against Climate Change, in the Autumn Budget. This, after some of the world’s leading scientists and government representatives warned us that global warming will exceed 1.5 °C as early as 2040 in their report on the impacts of global warming.
In recommending aggressive mitigation strategies to stop more carbon from entering the atmosphere, the UN Intergovernmental Panel on Climate Change (IPCC) stated that otherwise, even the sum of all existing pledges to cut carbon would still see rises in global average temperatures of 3°C by 2100.
The solutions presented are bold and challenging; carbon capture and storage demands the use of natural climate solutions but despite its enormous potential (capable of delivering over 30% of the emissions reductions needed) delivering such solutions at the pace and scale required will consume resources and investment at an unprecedented level.
We cannot address the climate change challenge without investment in new technologies and solutions and; these commitments must also be seen as being complementary and necessary, rather than competitive alternatives, to those that currently exist.
One particularly damaging competitive alternative lies in the construction industry; we currently have a situation where ‘smart construction’ is not subject to zero rate VAT. By adding the standard 20% VAT, any aspirations the Government has towards truly sustainable development will evaporate. The Chancellor could have achieved an easy win by ensuring zero rate VAT and signalling the Government’s intent to towards greater carbon reduction. Meanwhile, smart construction investment and its ability to contribute towards the creation of thousands of climate resilient homes and commercial buildings, will be hampered for more months, possibly years.
But get this right and sustainable development solutions such as this, underline UKBCSD’s support of climate-resilient development which can facilitate transformational changes in both approach and commitment necessary for achieving the IPCC’s ambitious mitigation and adaptation targets. Limiting the risk, impact and scale of global warming outlined in the report, whilst a challenge for securing society’s future welfare, is worth pursuing by all of us.
