14.9.21
Climate Change

Decarbonisation and industrial strategy

Jobs at risk from inaction. As it meets for its annual conference, the TUC has published analysis that up to 667,000 manufacturing and supply chain jobs in the UK could be at risk if the government does not strengthen its industrial strategy policies. While ‘carbon leakage’ is generally used to mean the loss of jobs abroad because of tougher climate policies, the reverse can also occur: jobs can be offshored when industrial support policies are weaker than in other countries. Sectors particularly at risk include steel, cement, chemicals, rubber and plastic and glass manufacture. (Twitter thread.) 

  • Green recovery spending. In a separate report, the TUC has compared the UK’s climate spending with other leading countries. It finds that while the UK government is investing about £180 per person on green jobs and recovery, the USA is planning to allocate over £2,960 per person, Italy £1,389 and Germany £595. 
  • The Government’s Ten Point Plan. The UK government published its strategy for a ‘green industrial revolution’ in November 2020, aiming to mobilise £12 billion of government investment, and up to 3 times as much from the private sector, to create and support up to 250,000 green jobs.
  • Recommendations. The TUC is calling for an £85bn green recovery package to create 1.24 million green jobs. Its report also recommends the use of ‘local content’ requirements for energy projects and procurement; the establishment of a ‘Just Transition Commission’; and the introduction of a permanent short-term working scheme to protect workers facing industrial change.
  • Green skills. The Government’s Green Jobs Taskforce published its report on the skills needed for green jobs in July, setting out a range of measures needed to be taken by government, industry and the education sector to maximise the potential for high quality green jobs. 

Support for renewables. The Dept for Business, Energy and Industrial Strategy has announced its latest renewable electricity support scheme, the so-called ‘Contracts for Difference’ auction. With no cap on offshore wind, generous allowances for onshore wind and solar, and a £55m pot for innovative technologies including tidal and floating wind, it has been generally welcomed. Twitter explainer here

  • Wind turbine factory. The BEIS announcement came as planning approval was granted for a new wind turbine blade manufacturing plant in Teesside. The GE Renewables ‘mega-factory’ will open in 2023 and is expected to create over 2000 jobs in its construction and then to support over 2000 in direct employment and the associated supply chain. 
  • Renewable heat and home energy efficiency. Elsewhere progress is slower. IPPR has examined the gap between the number of home energy efficiency and heat pump upgrades currently being installed, and the number that will be needed annually by 2028 for a net zero strategy, as set out by the Climate Change Committee. The UK is installing fewer than 6% of the heat pumps needed, and less than 10% of the cavity wall, loft and solid wall insulation. (Greenpeace revealed that the UK comes joint last among European countries for heat pump sales.) IPPR advocates a new ‘GreenGo’ scheme to accelerate uptake.The National Audit Office recently criticised the Government’s Green Homes voucher scheme
  • Electric vehicles. The Government has announced that in England from next year all new homes will have to be built with electric car charging points. But the automotive industry has warned that this will do little to accelerate the uptake of electric vehicles (EVs) now. It has called on the government to provide incentives for new electric battery factories in the UK, with at least 2.3m charging points nationwide before the end of the decade. Full industry report here

High-carbon industry. Much of the discussion of green industrial strategy has been on supporting ‘green jobs’ in low-carbon sectors. An even bigger challenge is to decarbonise heavy industries which have high emissions and use fossil fuels in the production process - and also support large numbers of well-paid and often unionised jobs. In its report Mission Possible: Reaching net-zero carbon emissions from harder-to-abate sectors by mid-century the business-led Energy Transitions Commission outlines possible routes to decarbonise the cement, steel, plastics, trucking, shipping and aviation sectors, which together represent 30% of current energy emissions. Ana Musat of the Aldersgate Group outlines the opportunities that decarbonisation presents for heavy industry in a piece for BusinessGreen.

Green finance. The New Economics Foundation has looked at the role that the UK’s public finance institutions should play in the net zero transition. These include the UK Infrastructure Bank (UKIB) and the British Business Bank (BBB), which operate domestically, and UK Export Finance (UKEF) and CDC Group, which operate internationally. It recommends that the mission and supporting objectives of each is updated to align with a just transition to net zero and sets out specific reforms for reforming each institution’s mandate.

Weekly Updates

Inequalities and welfare

Childcare: unaffordable and unavailable. A survey of more than 20,000 working parents conducted by an alliance of organisations (including the Women’s Budget Group, Gingerbread, Mumsnet, Pregnant Then Screwed, the TUC, Maternity Action, the Fawcett Society, Working Families and the Fatherhood Institute) has found that 97% believe that childcare in the UK is too expensive and 96% that the government is not doing enough to support parents with its cost and availability. A third of parents said they paid more for childcare than their rent or mortgage. 

Childcare as ‘social infrastructure’. The Canadian federal government has published a comprehensive nationwide Early Learning and Childcare Plan. It describes childcare as “essential social infrastructure”, adding: “It is the care work that is the backbone of our economy. Just as roads and transit support our economic growth, so too does child care.” (For more on the concept of social infrastructure, see this Women’s Budget Group explainer.)  

The impact of the Universal Credit cut. The Health Foundation has warned that the planned £20-a-week cut to Universal Credit and Working Tax Credit, due at the beginning of October, is likely to lead to poorer mental health and wellbeing for many people already suffering from poverty-related ill-health. People living in the 10% of areas with the highest share of Universal Credit recipients can on average expect to live nearly 8 fewer years in good health (59.8 years vs 67.6 years) than those living in the 10% of areas with the lowest share of UC recipients. The charity has conducted polling which shows strong public support for making the £20 increase permanent (51% of the UK public support; 22% against). 

  • Misleading claims. Speaking to the BBC the Work and Pensions Secretary Therese Coffey said that £20 a week “is about two hours extra work every week.. we will be seeing what we can do TO help people perhaps secure those extra hours.” In a Twitter thread the Financial Times’s Sarah O’Connor pointed out that this was misleading on several levels


Child poverty on the rise. In a new analysis of child poverty the Nuffield Foundation has found that more than one in three (36%) children in families with a child under five in the UK are living in poverty, amounting to 2.2 million children. For children in families with three or more children, this figure rises to more than half (52%). These figures are significantly higher than in 2013-14 (when they were 30% and 33% respectively). 

  • Causes. The Foundation’s report finds that this rise in poverty is largely the result of changes to the benefits system, including the ‘two-child limit’ and the reduction of in-work support, but also reflects the changing nature of work and family life, including the rise in insecure work and the growth of the private rental market.

Finance

Banking for SMEs. A new report for the All-Party Group on Fair Business Banking argues that, compared with other countries, the UK’s banking system ill-serves small and medium-sized enterprises (SMEs). It calls for a range of reforms, including removing regulatory and competition barriers for challenger banks, mutuals and Community Development Finance Institutions; providing pump-prime funding from big banks and dormant assets; and giving non-bank lenders access to cheap money to lend from the Bank of England’s Term Funding Scheme for SMEs. (Twitter thread here.)  


Big banks and environmental performance. Responsible investment watchdog Share Action has examined the environmental commitments of the leading European banks across eight critical climate and biodiversity-related topics, including net-zero, high-carbon disclosure, sector policies (relating to coal, oil and gas, shipping, and biomass), biodiversity, and executive remuneration. It shows that, while some banks are demonstrating leadership on specific issues, no European bank has a comprehensive plan to ensure sustainability across all topics. (Twitter thread here.) 


Scaling up social investment. Conservative MP Gareth Davies has authored a report for think tank Onward on how to expand the UK’s social impact investment market. The report finds that just £73m has been invested in ‘social impact bond’ initiatives against a target of £1 billion by 2020. The report puts forward a number of recommendations to refocus Government efforts to unlock investment at scale for businesses and projects that benefit communities and society in the UK, including replacing the under-used Social Investment Tax Relief with a new incentive for corporations to issue liquid social debt in the public markets and redirecting the Government’s £80m Life Chances Fund into a new social investment mutual fund managed by Big Society Capital. (Twitter thread here.)

Climate change and international cooperation

Fossil fuels non-proliferation treaty. On the eve of the UN General Assembly, over 2000 academics from 81 countries have delivered an open letter to governments demanding a Fossil Fuel Non-Proliferation Treaty to manage a global phase out of coal, oil and gas. Such a treaty would end new expansion of fossil fuel production in line with the best available science; phase out existing production of fossil fuels in a manner that is fair and equitable, taking into account the capacity of countries to transition; and invest in a transformational plan to ensure 100% global access to renewable energy. 


Climate change: a health emergency. In an unprecedented initiative, over 200 health and medical journals worldwide have published a joint editorial warning of the acute threat to health if the world exceeds 1.5C and continues to destroy nature. The editorial demands that richer nations do more to support those on the frontline of climate change in the most vulnerable countries. (Twitter thread here.) 


Fair shares in emissions reduction. A new peer-reviewed paper discusses what should count as a ‘fair share’ of international emissions reductions for different nations. It examines the fairness justifications offered in 168 nationally determined contributions (NDCs) to the 2015 Paris Agreement against the touchstone of principles of international environmental law. (Twitter thread here.)

Ownership

A Scottish public energy company? Delegates to the Scottish National Party’s annual conference have voted in favour of the Scottish Government setting up a national, publicly owned energy company. The SNP-led government has recently abandoned its plans for such a company. 


Community ownership. The Government has launched a new £150 million Community Ownership Fund to help communities across the UK own and manage local community assets, such as pubs, village shops and local sports grounds. Coops UK welcomed the announcement, particularly the use of ‘community shares’ by which community businesses can raise funds from the wealthy, without ceding local, democratic control. “This strategy could be vital in addressing some of the inequalities currently baked into the fund’s design.”


A UK ‘Marcora Law’? The UK Parliament held a debate last week on allowing workers threatened with redundancy the option of purchasing their company. As James Meadway of the Progressive Economy Forum explains, the model generally proposed is Italy’s ‘Marcora Law’, introduced in 1985.