UK’s growing green economy worth more than £100bn a year, research finds

More than a million jobs, higher wages, nearly half a trillion pounds in investment in the pipeline – the UK’s green economy is powering ahead, according to research by the country’s leading business organisation.

The net zero economy, which is worth more than £100bn a year, benefits all of the UK, according to the CBI Economics analysis commissioned by the Energy and Climate Intelligence Unit thinktank, despite critics who want to abolish the UK’s net zero targets.

Net zero workers also enjoy higher wages, topping £43,000 a year on average, about 11% higher than the national average of £39,000.

Louise Hellem, chief economist for the CBI, said: “Clean power and decarbonisation are already a significant and growing part of the UK’s industrial base. Across energy, manufacturing, services and supply chains, the UK has the expertise to build on this strength and capture even greater commercial opportunities.”

About 308,000 people are employed directly in businesses such as solar panel installation, home insulation, wind turbine manufacturing and electric vehicles. When their supply chains and related businesses are taken into account, this reaches 1.1m jobs, and accounts for £105bn in “gross value added”, a measure of economic activity similar to GDP. That equates to nearly 4% of the UK’s economic output.

An estimated £455bn of potential investment in energy infrastructure is also in the pipeline, the report found. These developments have been spurred by the government’s target of decarbonising the UK’s electricity by 2030, and stringent goals on reducing greenhouse gas emissions in the near term, to reach net zero by 2050.

Each worker in the net zero economy generates nearly £120,000 a year for the wider economy, the research found. This is about one-and-a-half times the national average for adding value, at a time when the UK is struggling with low productivity.

About 22,000 small businesses around the UK are engaged in activities based on the push to cut greenhouse gas emissions and boost renewable energy, according to the report.

Yet the main rightwing parties, the Conservatives and Reform UK, want to scrap the net zero targets and row back on support for renewable energy. Tony Blair, the former Labour prime minister, has also called for an end to net zero and a push for fossil fuels instead.

Hellem made clear that turning away from net zero would be economically harmful. “At a time when the UK must strengthen energy security and drive growth, the net zero economy is becoming central to the country’s future competitiveness,” she said. “The UK cannot afford to step back from an industry already contributing £100bn to the economy and with huge future growth potential.”

Sandra Bell, climate campaigner at Friends of the Earth, said: “The naysayers calling to dismantle climate action clearly don’t want what’s best for Britain or the millions of people struggling with the cost of living, otherwise they’d be pushing to reap these huge rewards. Instead, they’d prefer to keep us on the back foot in the global race to building a thriving green economy and locked into dying industries.”

Jobs in the North Sea, which Blair and rightwing parties have cited as a potential growth area, have been steadily declining alongside the output of the rapidly depleting basin for more than a decide. About 200,000 oil and gas jobs in the North Sea have been lost since 2013, despite government support and a favourable tax regime for most of that time.

Katie White, minister for climate, said: “As Britain faces another fossil fuel shock, the only way to shield households and businesses is by accelerating electrification and clean, homegrown power that we control. What businesses and communities are delivering across the country is a great British success story – bringing down costs, improving homes, supporting British industry with good skilled jobs whilst helping protect nature.”

She added: “Some would rather ignore the challenge of the climate crisis and leave our children to pick up the bill for climate change, but this government believes in a simple British principle – safeguarding our country for future generations.”

Tuesday’s report is the fourth in a series by the ECIU and CBI Economics, which have previously found that the net zero economy was growing three times faster than the rest of the UK’s economy. The estimates only take account of jobs and companies that deal directly with the push for net zero. The wider green economy, which includes other environmental sectors such as waste, pollution remediation, water and nature, accounts for more than 600,000 direct jobs, according to the Office for National Statistics.