UK falling behind EU on green growth, says think tank
The UK is lagging behind its European counterparts in the shift to net zero due to a lack of industrial strategy in the green space, according to a new report by the Institute for Public Policy Research (IPPR).
Green goods and services contribute 4% to UK GDP, compared to 6% across the EU, 11% in Denmark and 11.5% in Sweden, the report found.
It also highlighted how UK public investment commitments into low-carbon technologies is among the lowest in the G7.
“The UK is at a pivotal juncture. While other nations are forging ahead in the global green race, the UK is moving into reverse gear,” Luke Murphy, associate director at IPPR, said.
“The absence of a robust green industrial strategy is not only a missed economic opportunity but a dereliction of our global responsibility in combating climate change. We must set a new course, capitalising on the green growth potential to spur job creation, innovation, and sustainable prosperity.”
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The UK has a lower percentage of people working in the renewable energy sector. If it had followed Denmark’s example and built up domestic manufacturing, the UK could have created almost 100,000 more jobs in wind industry, according to the IPPR.
It said the discrepancy stems from the interaction of public research, strategic investment, and industry coordination seen in other countries.
This US’s Inflation Reduction Act and EU’s responsive measures were in sharp contrast with the UK’s delay to the ban on the sale of petrol and diesel cars, deferral of the phase out of gas boilers, and the scrapping of energy efficiency standards for landlords.
The IPPR is calling on political parties to bring forward a green industrial strategy and raise public investment in net zero to maximise the economic benefits of the transition to a greener economy.
Call to action
The report comes just days after the European Central Bank (ECB) president Christine Lagarde, European Investment Bank (EIB) president Werner Hoyer and International Energy Agency (IEA) executive director Fatih Birol issued a call to action to accelerate the clean energy transition at a conference in Paris.
Lagarde said: “The green transition is a uniquely difficult policy challenge, because the stakes of failure are so high and yet the path to success is so complex.
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"But the answer is to follow through with the transition, which means understanding the challenges it entails and ensuring the costs are shared fairly. More needs to be done to foster the market for green finance, which would reduce risk premia and help lower financing costs.”
Hoyer said industries must be prompt and embrace change, or risk being left behind.
"Only massive and swift investment in net zero technologies will make sure that Europe remains an attractive place do business, a place where innovation thrives, where new ideas flourish, and wealth and jobs are created.”
Birol said: "Despite its large internal market, skilled workforce and world-beating research and development, we’re yet to see how Europe will put its ambitions into practice. Policymakers must take bold action, and soon, for the region to remain a global industrial power.”
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