How net zero push is impacting Britain’s economy – including some nice salary bumps

The Rise of the Net Zero Economy: A Cornerstone of UK Growth

The net zero sector in the UK has experienced remarkable growth over the past year, expanding by 10% and contributing a staggering £83 billion to the economy. This growth has not only bolstered the nation’s financial health but also created significant employment opportunities, supporting the equivalent of 951,000 full-time jobs. These jobs account for 2.9% of the UK’s total employment, underscoring the sector’s role as a major driver of economic prosperity. The study, commissioned by the Energy and Climate Intelligence Unit (ECIU) and analyzed by CBI Economics and the Data City, reveals that for every £1 generated by the net zero economy, an additional £1.89 is created in the wider economy. This multiplier effect highlights the sector’s profound impact on overall economic activity.

As the UK strives to meet its legally binding target of achieving net zero greenhouse gas emissions by 2050, the net zero economy is proving to be a vital component of this ambition. However, the journey has not been without its challenges. Some politicians, particularly from the Conservative and Reform parties, have criticized net zero policies, arguing that efforts to curb climate change are responsible for rising energy bills and the deindustrialization of Britain. Despite these criticisms, the report provides compelling evidence that the net zero sector is a key driver of growth, innovation, and productivity.

Regional Growth: A Catalyst for Economic Transformation

The growth of the net zero economy is not confined to London and the South East. Instead, it is transforming some of the UK’s most deprived regions, offering fresh opportunities for investment and job creation. Areas such as the West Midlands, Yorkshire and the Humber, and southwest England are emerging as significant contributors to the sector, each accounting for more than 5% of the national total. Scotland, in particular, has seen remarkable growth, with its net zero economy expanding by 21.3% since 2022 and now valued at £9.1 billion.

One of the most notable success stories is the Tyne and Teesside region, which has been bolstered by a £1 billion Nissan electric vehicle project. This initiative includes a state-of-the-art gigafactory for next-generation batteries, creating 6,200 jobs and cementing the region’s reputation as a hub for green innovation. Meanwhile, London and the South East remain leading contributors, with £16.2 billion and £13.1 billion of green investment, respectively. The sector as a whole has attracted £23 billion in public, private, and foreign direct investment, further reinforcing its importance to the UK’s economic landscape.

Political Debates: Net Zero in the Crosshairs

While the net zero economy is thriving, it has also become a focal point of political debate. Critics, including Conservative and Reform MPs, have expressed skepticism about the benefits of net zero policies. Tory leader Kemi Badenoch, for instance, has described herself as a "net zero skeptic" and has consistently opposed efforts to reduce greenhouse gas emissions. She has voted against banning fracking and dismissed net zero targets as "arbitrary," arguing that they could "bankrupt" the UK. Similarly, Reform has called for the abolition of "net stupid zero" targets, blaming green initiatives for higher energy bills and the decline of industries.

However, the report challenges these assertions by demonstrating that the net zero sector is a cornerstone of economic growth and innovation. It argues that efforts to combat climate change are not only necessary but also beneficial for the economy. The Conservative party’s 2024 manifesto, under former leader Rishi Sunak, struck a more pragmatic tone, committing to a "pragmatic and proportionate" approach to achieving net zero by 2050. The manifesto included plans to invest £6 billion in energy efficiency over three years, aiming to make one million homes warmer and more environmentally friendly.

Expert Insights: Why Net Zero Matters

The findings of the report have been met with enthusiasm by experts and policymakers who view the net zero economy as indispensable to the UK’s future prosperity. Energy Secretary Ed Miliband has hailed the sector as "essential to growth, a strong economy, and money in working people’s pockets." He emphasized that becoming "a clean energy superpower" would not only enhance energy security but also create good jobs and stimulate investment in local communities.

Louise Hellem, chief economist at the Confederation of British Industry (CBI), echoed these sentiments, highlighting the vast potential of emerging markets for green technologies. "It is clear," she said, "you can’t have growth without green." Her statement underscores the interconnectedness of economic progress and environmental sustainability. As the UK continues to navigate the challenges of climate change, the net zero economy is set to play an increasingly vital role in shaping the nation’s future.

Small and Medium Businesses: The Unsung Heroes of Net Zero

Behind the headlines about billion-pound investments and regional growth, small and medium businesses (SMEs) are driving the net zero revolution. These businesses, often overlooked in discussions about major infrastructure projects, are proving to be the backbone of the sector. SMEs with fewer than 250 employees are responsible for much of the growth in the net zero economy, offering higher-than-average salaries and creating Thousands of jobs. Workers in the sector earn 15% more than the UK average, with typical salaries reaching £43,100 compared to the national average of £37,430.

This success is not limited to any single region. From innovative green finance startups in London to renewable energy projects in Scotland, SMEs are leading the charge in diversifying the UK’s economy and reducing its carbon footprint. Their contribution is a testament to the agility and creativity of smaller businesses in adapting to the challenges and opportunities of the net zero transition.

Conclusion: A Path to a Sustainable and Prosperous Future

The net zero economy is not just a response to the climate crisis—it is a powerful engine of economic growth, innovation, and job creation. As the UK continues its journey toward achieving net zero by 2050, the evidence is clear: this sector is delivering tangible benefits for communities across the country. From boosting investment in deprived regions to creating high-paying jobs, the net zero economy is rewriting the narrative about what it means to transition to a greener future.

While political debates about the merits of net zero policies continue, the data speaks for itself. The UK’s commitment to reducing greenhouse gas emissions is not only essential for meeting its climate goals but also for building a more prosperous and sustainable economy. As experts like Louise Hellem remind us, growth and green go hand in hand. The net zero economy is not just a moral imperative—it is a recipe for success in the 21st century.