The UK must learn from US to deliver green growth

Posted on 20 March 2023

According to the think tank, the IPPR believe the UK could fall behind in the race towards net zero investment if we fail to change national policies.

The UK Government must learn from the considerable certainty and political stability provided to cleantech investors and green businesses in the US via the Inflation Reduction Act (IRA) if it intends to maintain momentum with delivering a competitive, net-zero economy. The IPPR states that the UK faces a $30 billion gap in annual public investment between now and 2030 if it is to achieve its climate and nature goals, warning that ministers must focus on specific targets to deliver net zero emissions and reverse biodiversity loss with structured policy measures and funding programs.

According to figures highlighted in the IPPR report, clean energy businesses in the US have announced over 100,000 new jobs since the IRA was passed, as investors worldwide take advantage of the billions in tax incentives and subsidies for clean energy tech and low carbon infrastructure. According to the IPPR, the surge of green jobs in the US is significantly higher than the increase of new clean energy jobs in the UK over the last few years. There are concerns within the UK business and investment community that several core green industries could fall behind the accelerated developments in the US and the EU.

In response, the IPPR urges the government to use the IRA and the EU response in the form of the Net Zero Industry Act as a blueprint for delivering a long-term framework capable of securing investment for the future. The IPPR calls for an industrial policy focusing on the climate and nature crisis and levelling up the nation, highlighting that the north of England is a suitable place to lead the net zero transition because of its industrial and infrastructure background.

Luke Murphy, the associate director for energy, climate, housing and infrastructure at the IPPR, believes the UK government should focus on public funding and delivering stability for private investment to enhance the green economy. The UK faces several challenges ranging from inequality, energy security, climate and natural crises. These factors will directly impact the UK’s transition to a more sustainable economic future.

While competitors overseas are implementing public investment and applying industrial strategy to take advantage of the opportunities of the net zero economies, the UK government must respond similarly. Murphy believes we should scale up public investment and create a structured strategy to deliver a progressive, fair and green economy.

The think tank has the support of many businesses, politicians and green organisations calling on the Government to create bold policies and funding commitments that accelerate the net zero transition and reduce the risk of infrastructure investment moving overseas. The UK chancellor has acknowledged the potential competition to the UK from the IRA and the proposed policies in the EU and China. The budget is anticipated on supporting the green economy, unveiling measures for $20 billion of investment in carbon capture and clean energy technologies and nearly $1 billion for low-tax investment zones across the UK designed to support green growth, tech, life science and creative industries. 

Furthermore, the government has been discussing plans for a revised energy security strategy, focusing on accelerating investment in new nuclear capacity and small modular reactors. It’s expected that the Government will deliver a new version of the net zero strategies this month. Some industry groups remain concerned that the government’s plans require more effort, with the automotive and steel industries warning critical action is needed to create investment in clean technologies.

A recent YouGov survey found that 84% of 2,000 adults in the UK believe the government should provide additional support for property insulation. The survey is supported by a coalition of charities driving energy efficiency and renewable electricity. MP Chris Skidmore and net-zero representative explain that expanding popular measures like upgrades to our homes is the most effective way to reduce bills, protect properties and achieve net zero.

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