Co mb ining pub l ic an d pr ivate i nvestmen t i n n et-zer o
COMBINING PUBLIC AND PRIVATE INVESTMENT IN NET-ZERO by Alex Kazaglis, Director of Vivid Economics
ONE YEAR AGO, THE UK BECAME THE FIRST MAJOR ECONOMY TO PASS NET-ZERO EMISSIONS INTO LAW.
To be a basis for growth in the longer
Since our work has been published, this
term however, jobs must be in areas
is a priority that has been reiterated by
where there are displaced workers. In
several reports, including the Energy and
the UK context, this means investment
Climate Intelligence Unit in the UK and
In recent days, however, the Government’s
opportunities that can boost the
the IEA globally.
statutory advisors, the Committee on
economic recovery of underperforming
Climate Change, have reported that
regions, such as by creating decent green
2. Investment in nature and biodiversity
government actions fall well short of what
jobs in those areas.
is a vital part of the UK recovery, including investing in rural employment and
is required to meet net-zero. A green stimulus package could help fill that gap
Many jobs are better suited to existing
adapting to adverse climate effects and
and deliver an internationally credible net-
market mechanisms and private-sector
impacts. This includes projects that lead
zero plan (vital in the context of hosting
delivery, rather than a stimulus effort.
to carbon sequestration and biodiversity, as well as flood management which
the COP26 conference in 2021) as well as generating economic activity (at a time
There are low-carbon sectors where
contributes to rural sectors. Our research
of recession and economic dislocation). A
private investment can deliver the levels
shows that investments in parks will
green stimulus could also help rebalance
of deployment required. For example, low-
reduce health costs, reduce air pollution,
pre-existing regional inequities, through
cost onshore wind can proceed through
and improve many other aspects of urban
investment in areas of the UK where there
the market. Industrial energy efficiency
life.
is underemployment.
can also proceed through the market but only if regulations are enhanced.
Vivid Economics’ recent work, A UK Investment Strategy: Building back a resilient and sustainable economy, set out priority areas for investment that also
Taking these factors into account, our report identified £30 billion annual
deliver against the net-zero agenda.
net-zero investments (combining
Key areas for investment are those that
generate economic activity before
support employment and economic
2030.
activity. While there are already over 460 000 UK jobs in low-carbon businesses
public and private) that would help
The five priority areas that emerged are:
and their supply chains, a further 200 000 jobs that could be supported
1. Investment in green buildings can
in the next 10 years. But not all jobs are
support the most jobs in the short run and
the same – the timeline and location of
provides societal and resilience benefits.
jobs are important. Over the short term,
The green building sector has a total
it is important that jobs boost overall
annual investment need of £12 billion and
economic activity. Fortunately for many
this will support at least 85 000 direct
large inf rastructure projects, jobs and
jobs in green retrofitting by 2030. For
economic activity are generated during
energy efficiency building retrofits, there
the construction phase.
is a skill overlap with current construction jobs, but low-carbon heating requires maintenance and installation engineers to upskill f rom gas boilers to heat pumps.
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