Special Report

UK to lag competitors in 2020 green jobs race

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There are growing opportunities for those wishing to pursue an environmental career. But several hurdles will need to be overcome if the UK is to significantly expand its green workforce by 2020, finds David Carr

Engineers moving wind turbine blades
Engineers moving wind turbine blades

The government claims 1.2 million people will work in green jobs in the UK by 2020 – about 4% of the workforce. Aiming for such a total offers something of a virtuous circle: jobs growth with a green flavour and rising job opportunities at a time of economic recovery. It is a lofty goal and meeting it would entail the creation of 400,000 jobs.

In a Guardian newspaper article in December, the chancellor, Alistair Darling was more bullish still. He said that with state backing, “green industries alone could support a further half a million jobs over the next decade”.

But can a near 50% increase in ten years be achieved? Many doubt it, citing skills shortages, an inadequate policy framework and a lack of political and financial will as significant barriers.       

Defining green jobs

Even defining green jobs is an inexact science. Their scope and nature have altered over time and will do so further as technologies, methods and tasks evolve. In 2006, about 400,000 such roles existed in the UK, comprising all those employed in producing environmental goods and services (ENDS Report 395, pp 9-10).

By 2008 on a wider definition, there were 881,000, according to research by Innovas and commissioned by the then Department of Business, Enterprise and Regulatory Reform (BERR) (ENDS Report 411, pp 32-35).1

Innovas defined green jobs as those involved in consultancy, the supply of pollution control equipment and the renewable energy and low-carbon fields. Roles in alternative power generation, greener transport fuels, building technologies, carbon finance and carbon capture and storage (CCS) were all included, widening the green jobs pool accordingly.

Together, they comprise jobs in the low-carbon and environmental goods and services sector. Last year, despite the recession, their numbers continued to grow, albeit at a slower pace (ENDS Report 416, p 11).  

But why draw the line there? Nowadays, many jobs have a green tinge, for example some in the financial services sector. While they took a hit last year (ENDS Report 408, p 9), the numbers employed as green or ethical fund managers, social and responsible investment (SRI) analysts and specialist financial advisers have grown in recent years, alongside rising demand for their services.

A number of other roles might be termed ‘pale green’. The 800 new jobs at Tesco’s Teesport distribution centre in Middlesbrough are illustrative. The centre’s location and on-site rail infrastructure means it will displace 12,000 lorry journeys annually, as sea-borne goods are transported inland by rail. The associated jobs would not usually be described as green, but they will arguably assist in furthering the wider green agenda.   

Recruitment consultants placing people in green jobs are in the same category. Their numbers are small but their influence is growing, according to Tom Hadley, director of external relations at the Recruitment & Employment Confederation, the recruiters’ trade association.

He also notes that green issues are becoming more mainstream and that there is a ‘greening’ of existing roles and a rising awareness of the green agenda among recruiters, particularly those in the engineering and construction sectors. These factors are all serving to widen, but blur, the definition of green jobs.  

Ben Cartland, associate at green recruitment consultancy Acre Resources, says much of the green job market’s evolution has occurred since 2003. Before then, the sector was largely technically focused, comprising professionals in consultancy, environmental engineering, corporate social responsibility (CSR) and environmental management systems.

“The market then began to change significantly,” he says. “With the advent of greater corporate engagement in tackling climate change, we saw a really interesting shift towards jobs relating to carbon reduction between 2003 and 2007.”

There was also a rising focus on CSR and sustainability issues at this time. The scope of CSR managers’ roles ballooned and the number of jobs grew. “By 2007, we had seen a significant shift in the sector,” adds Mr Cartland. “Organisations that were previously reticent were by then much more involved.” Greater shareholder pressure also had an effect and the CSR function moved from being a ‘nice to have,’ to an essential, potentially value-adding, one.

Clarity needed

Now greater clarity is needed so that an accurate estimate of the size of the green jobs sector can be established.    

In a June 2009 report, Australian consultancy Connection Research called for a clear working definition.2 It found that different methodologies produced different estimates of the green jobs market’s size. One approach counts workers according to their stated occupation, another identifies green industries and counts all those employed in them as ‘green collar’.

In Australasia, these methodologies put the green jobs market at anywhere between 50,000 and more than 300,000; hardly an accurate indication of its magnitude. The problem would be compounded on a UK or global scale.
But however the UK’s green jobs market is defined, recession has slowed its expansion and in some areas jobs have been lost. Some in consultancy in particular have come under pressure.

But green jobs have weathered the recessionary storms better than many, as Mr Cartland explains: “We have seen green recruitment increase, even during the recession,” he says. “But what we have also seen is a decline in exploratory recruits. Instead, we’re seeing organisations undertake more defined recruitment.”

In addition, while demand has remained strong for high-skilled staff, what hirers are prepared to pay has come under pressure.

Mr Cartland also sees some indirect impacts of the recession. “Companies are looking to save money through a focus on energy efficiency, and this has led to a greater focus on jobs that can have an immediate impact on the bottom line. There has been an increase in demand for energy management roles, for example,” he says.

Medium to longer-term prospects

Once the recession has passed and the wider labour market recovers, green jobs prospects should strengthen further.

In the UK, and despite the perceived failure of the UN climate summit in Copenhagen (ENDS Report 419, pp 3-5 and p 55), much of the impetus will stem from the evolving low-carbon agenda; in particular the detail of the Low-Carbon Transition Plan, the Low-Carbon Industrial Strategy (ENDS Report 414, pp 40-41 and pp 43-44) and the Carbon Reduction Commitment (ENDS Special Report, May 2009).

Indeed, clean technology and renewable energy are tipped to be among the fastest growing sectors to 2020, according to an August 2009 survey of 307 UK business leaders, commissioned by the Department for Business Innovation and Skills (BIS). Almost half (43%) of those polled saw cleantech as the fastest growing sector by 2020.3

The low-carbon agenda will also impact some existing green roles. The environmental professionals polled in the IEMA-ENDS survey (see pp 4-11) were asked: “How do think your current role might evolve in the next five years and beyond?” Of the 277 responses from those in consultancies, or professional, scientific and technical services organisations, almost one in seven mentioned carbon, climate change, energy, renewables, the carbon reduction commitment (CRC) or green buildings as areas where their role may evolve.

But these, and similar issues, appear to have less influence on the evolution of roles in other sectors. For the 151 respondents to this question from manufacturing organisations, just 8% mentioned energy, carbon management, emissions or greenhouse gases.

Similarly, of the 130 respondents to this question from the construction sector, just eight mentioned carbon management, the CRC, clean technology or climate change. It appears there is some way to go before the low-carbon agenda becomes a major influence on the evolution of many existing roles in the wider UK economy.

As for new green jobs, while the UK government talks of 400,000 such roles being created, the potential growth at the EU level could be proportionately much larger, according to Paul Ekins, professor of energy and environment policy at King’s College London. He says up to six million jobs could be created across the bloc if taxes were shifted away from those on employment and profits towards those on pollution and resource depletion.

The figure was derived from modelling different scenarios of environmental tax reform across Europe and assessing the implications for employment. The conclusions are contained in a report from PETRE, a three-year research project led by King’s College, with partners in the UK, Germany, Austria and the Czech Republic, entitled Resource productivity, environmental tax reform and sustainable growth in Europe.4

At the global level, the prize is bigger still. Some 20 million new green jobs are in prospect, according to the Global Climate Network, an international coalition of thinktanks that includes the Institute for Public Policy Research (IPPR), the Center for American Progress, China’s Research Centre for Sustainable Development, the Energy and Resources Institute in India and Germany’s Wuppertal Institute for Climate, Environment and Energy.

In a report issued in December, Low-carbon jobs in an interconnected world, the network says the pursuit of low-carbon policies in eight of the world’s leading economies, including the UK, could create this many jobs by 2020.5

Andrew Pendleton, coordinator of the Global Climate Network and a senior fellow at the IPPR, said: “If the governments of these eight countries pushed ahead with strong policies to limit carbon emissions and invest in low-carbon energy, they would see very significant job creation and experience the social and economic benefits that go with it.”

But he added that policymakers should focus on creating markets for new technologies, rather than being distracted by predictions of the job numbers such measures might create.

The report also warned that the benefits of action on climate change and the associated jobs growth could be forfeited if the debate continued to focus on the costs of action. It called for three things: sufficient financing to ensure that workers are in a position to benefit from the low-carbon transition; effective policy frameworks that stimulate low-carbon technology markets and create jobs; and support for workers in high-carbon sectors, allowing them to remain in work while they retrain or gain assistance in moving to the low-carbon economy.

Within the 20 million total, 10.5 million jobs could be created in India, in wind, solar and biofuels, through successful implementation of the government’s National Action Plan on Climate Change, says the report. China stands to gain 6.79 million jobs if government targets for wind, solar and hydro power are met, while 1.9 million extra low-carbon jobs are in prospect in the US.

But the study suggests the UK would see the creation of only 70,000 new jobs, through the further development of offshore wind power. The report deems this to be one of the UK’s most significant sectors for low-carbon job creation. But it warns that a favourable policy framework is required if the manufacture of turbines in the UK, and the jobs growth that this would bring, is to occur on any significant scale.

Moreover, with overseas companies winning the lion’s share of the contracts in round three of the development of the UK’s offshore wind capacity, it is doubtful whether even this 70,000 target can be reached. While UK companies may benefit from supplying the winning consortia with finance, consultancy and installation and other services, it seems clear that not many of the turbines will be built in the UK, particularly given Vestas’ closure of its Isle of Wight plant last year (ENDS Report 415, p 4). This places the forecast of 70,000 new jobs in some doubt.
 

Barriers to jobs growth

And, amid potential global growth of 20 million new green jobs, whether the UK can secure its wider target of 400,000 by 2020 is also doubtful. Several barriers exist and unless they are cleared, the UK will be left behind more nimble competitors in the green jobs race (ENDS Report 409, p 11). Skills shortages, an inadequate policy framework and a lack of political and financial will are all likely to hold the UK back.

Skills shortages will prove to be one of the toughest barriers to overcome, placing a brake on the pace of green jobs growth in the UK (ENDS Report 418, p 4). They will intensify most in the energy and climate change sector, according to Acre Resources’ Mr ­Cartland. He cites energy managers with building management experience as one particular skill set likely to be in short supply. And, without a large inflow of staff from overseas, finding the engineers with the technical skills needed to drive the renewable energy agenda forward will be difficult, he says.

Alistair Hutson, director of energy risk management at consultancy Utilyx, agrees. He says meeting the 2020 renewables targets will be difficult because the UK lacks sufficient skills to build and install capacity. “It’s the core science, technology and engineering skills that are needed,” he says, “but we have a skills shortage in these areas anyway and thinking that we’re suddenly going to find all these extra engineers is pie in the sky.”

There is a similar problem in the nuclear sector. And given the lack of nuclear engineers in the UK under 50 years old, the problem will only intensify. “There are thousands of engineers required for decommissioning, never mind new build,” says Mr Hutson. The successful development of clean coal technology will also need engineering skills of the type the UK lacks, he adds. As a result, much of the associated jobs growth is likely to occur abroad.

A number of bodies have already warned of the looming skills gap. In its report, Engineering our future,6 National Grid said it could put the brakes on the transition to a low-carbon economy. It described engineering as “an invisible industry” that is failing to attract sufficient career interest among young people.

Given engineering’s central role in addressing the climate change and energy challenges, Steve Holliday, chief executive of National Grid, said the report’s conclusions made for “extremely worrying reading”. He added that the coming ‘energy revolution’ required a pipeline of talent, without which meeting the 2050 emissions reduction target and the 2020 renewable energy target would be difficult.

The Aldersgate Group has also flagged up the skills gap. Responding in December to the Environmental Audit Committee’s report, Green jobs and skills,7 the group’s chairman, Peter Young, said the findings mirrored those of its report, Mind the gap: Skills for the transition to a low carbon economy (ENDS Report 418, p 4).

He said the skills gap represented a major barrier to the government’s low-carbon targets being met and called for concerted action to address it. “The UK must urgently develop the skills base across the economy to ensure it can compete with the likes of Germany and the US in key low-carbon markets,” he said. “This is essential to create the new jobs for the economic recovery and vital for long-term competitiveness.”

The IPPR, in its report, The future’s green: jobs and the UK low carbon transition also warned that without action on skilling the workforce to make them ‘climate ready’, the UK would be ill-equipped to compete in the low-carbon economy (ENDS Report 418, p 4).

But IPPR’s head of climate change, Simon Retallack, said something of a ‘chicken and egg’ problem exists. “Employers do not want to spend money training their staff with low-carbon skills until they are sure that government is serious about taking action to meet its climate change targets,” he said.

“But government cannot be confident in meeting targets if the workforce does not have the right skills to compete in a low-carbon global economy.” He urged the government to take the lead in addressing this problem, by ensuring all adult skills training contained a ‘low-carbon’ element.

And despite policy action in some areas, there is a sense the UK has missed the boat in others and failed to secure first-mover advantage. A lack of political commitment has been blamed. “The government has missed a trick,” says Mr Cartland. “It has missed opportunities for the UK to establish itself as a leader and has fallen behind others, such as Germany with respect to wind power and Spain and Italy in solar.

“On the manufacturing side, the UK has a long history as a manufacturing country, but chances here have been missed,” he added.  “Vestas, for example, has gone to America.”

There is also serious doubt as to the depth of the government’s commitment to nurturing ‘green growth.’ The impetus behind a job-creating ‘green economic recovery’ appears to have floundered already, swept aside by the short-term approach of a government keen to see economic growth of any colour this side of a general election (ENDS Report 416, p 11).

And, while billions have been spent propping up the banks, funds have been in short supply when it comes to actively supporting green industries. A ‘quantitative easing’ in the number of job losses at Vestas’ Isle of Wight plant through some form of government support would not have gone amiss and would have lead credence to claims of government backing for green industries.

Instead, jobs were lost, in precisely one of the modern, green, high-value-added manufacturing sectors that the government says it is seeking to nurture.

More widely, just a small percentage of the UK’s fiscal stimulus was attached to ‘green’ initiatives, in contrast to countries such as South Korea that have ploughed far greater sums into green fiscal stimulus measures.  

That said, the Low Carbon Transition plan and Low Carbon Industrial Strategy, and their associated potential for jobs growth, were welcomed by many. Trades union body TUC welcomed the Low Carbon Industrial Strategy, but urged the government to ensure that the required training needs were met. TUC general secretary, Brendan Barber, said: “By leading the way and not simply leaving the shape of the UK’s greener future to the whims of the market, ministers have shown how they intend to help firms and the UK workforce move into the new low-carbon era.”

But he added the caveat: “If UK companies are to compete successfully, there is no alternative other than for them to become the best in the new low-carbon technologies and they will need a highly skilled workforce to do so.”

Others have expressed disappointment. Manufacturers’ organisation EEF’s chief executive, Gilbert Toppin, described the Low Carbon Transition Plan as “a small step forward when we needed a giant leap”. He feared much of the growth in emerging green industries, and the jobs that go with it, would gravitate towards countries with clearer long-term commitments, bypassing the UK.

In addressing the obstacles, the EEF called for a clearer government framework. In Manufacturing. Our future,8 it called for the sector to be placed at the centre of a more diverse and durable UK economy. It argues that a strengthened manufacturing base could provide solutions to challenges such as climate change.

Mr Toppin said: “Manufacturing must play a bigger role in our economy if we are to meet the challenges facing us over the next decade. It can be a major player in addressing climate change.” He concluded: “The government must set out its priorities for the technologies and markets we need to develop and the steps it will take to help the UK succeed in them.”