Low-carbon infrastructure investment driving green economy 'success story'
- Published on Thursday, 30 August 2012 09:47
- Posted by Vicki Mitchem
The scale of the economic "success story" delivered by the UK's green businesses was highlighted today with the release of a major new report revealing how low-carbon industries are now among the UK's largest employers, accounting for almost 10 per cent of economic activity.
The new report from the Green Alliance think tank draws on a raft of official government figures to summarise the current state of the green economy, confirming that the sector was worth £122bn in 2011 and has been consistently growing at between four and five per cent since the financial crisis of 2008.
It also contrasts the 939,600 people regarded by the government as being employed in low-carbon and environmental jobs with other sectors, revealing that the green economy has a significantly higher workforce than the auto industry, which employs just over half a million people, and the telecommunications sector, which employs just 212,900 people.
Perhaps most significantly, the report uncovers figures from the Treasury's most recent infrastructure investment pipeline data, which show that the top 20 infrastructure projects planned for 2012-13 will deliver £23bn of investment, including £14.5bn of public investment, £7bn of public/private investment and just £1.4bn of public investment.
In contrast, high-carbon infrastructure accounts for just £3.1bn of projects, including £1.9bn of public investment.
"The biggest projects in the pipeline are in offshore wind, while there are also significant projects in public transport, nuclear, renewables and the fibre optic roll out," report author Alastair Harper told BusinessGreen. "The area where we are getting international investors to open up their wallets is in low carbon, and that is despite the negative language from some ministers and the investment barriers.
"All you are going to get with more road, gas and airport infrastructure is the same level of capital investment we've been bumping along with since the 1970s. In contrast, the green economy is about new projects that can attract new investment, and provide a source for exports."
The report also cites government figures showing the UK exported low-carbon and environmental goods and services to 52 countries in 2010-11, totalling £11.8bn, while delivering a green trade surplus worth £1bn from its six largest trade partners.
In addition, it quotes new research from Bloomberg New Energy Finance, revealing that "one third of all global asset finance investment in new energy deals between 2007 and 2012 received both legal and financial advice from the UK".
"People think the green finance sector is just to do with carbon trading, but it is much bigger than that," explained Harper. "We have a huge amount of green finance expertise centred on London. If a US bank is doing a deal with a Chinese wind energy firm to build an offshore wind farm in South Korea, there is a fair chance UK legal and financial expertise will be involved."
The release of the report comes ahead of a party conference season where green economic policy is expected to enjoy a high profile and could further fuel tensions within the coalition.
Green business leaders are concerned Conservative backbenchers, emboldened by the revelation chancellor George Osborne wants to establish the UK as a gas hub, will step up calls for a scaling back of green ambitions and an increase in fossil fuel investment.
In contrast, the Lib Dems are likely to seize on the Green Alliance report as further evidence that green policies can help drive the much-needed economic recovery, while Labour is also expected to crank up pressure on the government to address uncertainties over the future of the Energy Bill and the wide direction of low-carbon policies.