The net zero sector has grown by 10% over the past year – adding £83bn to the UK economy, a new study suggests.
Employment in green businesses and industry has also climbed 10%, supporting the equivalent of 951,000 full-time jobs (2.9% of total UK employment).
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The study – commissioned by thinktank the Energy and Climate Intelligence Unit (ECIU) – found for every £1 of value generated by the net zero economy, an additional £1.89 was created in the wider economy.
It comes as the government increases efforts to meet a legally binding goal to cut greenhouse gas emissions to zero overall (that’s net zero) by 2050.
Some Conservative and Reform MPs have criticised net zero, electric cars and renewables, suggesting efforts to curb climate change are to blame for higher energy bills and the deindustrialisation of Britain.
But the report, with analysis from CBI Economics and the Data City, suggests the UK’s net zero economy is a significant driver of growth, innovation, and productivity.
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Where is the growth happening?
Renewables, electric vehicles, low carbon heating, recycling and green finance are all part of the net zero sector.
Small and medium businesses with fewer than 250 employees are the main drivers of growth, and salaries are 15% higher than the UK average (£43,100, compared to £37,430).
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Regions beyond London and the South East are where the net zero economy is growing significantly, the report found, boosting some of the country’s most deprived areas.
The West Midlands, Yorkshire and the Humber, and southwest England were the largest contributors, each more than 5% of the national total, while Scotland’s net zero economy has grown by 21.3% since 2022 – now worth £9.1bn.
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Tyne and Teesside was also highlighted as a hotspot thanks to a £1bn Nissan electric vehicle project, which includes a gigafactory for next-gen batteries. It’s creating 6,200 jobs.
London and the South East are still leading the way, with £16.2bn and £13.1bn of green investment respectively.
Overall, the sector attracted £23bn of public, private and foreign direct investment – and each full-time job generated £105,000 in economic value, well above the UK average, the report found.
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Tory leader Kemi Badenoch has described herself as a “net zero sceptic” and her voting record shows she has largely opposed efforts to reduce greenhouse gas emissions.
She has also voted against banning fracking and called net zero targets “arbitrary”, saying they would “bankrupt” the UK.
The Conservatives’ manifesto from the 2024 election, when Rishi Sunak was leader, said the party was committed to a “pragmatic and proportionate” approach to net zero by 2050.
It said the party would invest £6bn in energy efficiency over three years to make one million homes warmer.
Reform has said it would impose taxes on the renewable energy sector and wants to scrap “net stupid zero” targets.
The party blames net zero policies for higher energy bills and deindustrialisation in the UK and believe green initiatives will make “zero difference to climate change”.
Deputy leader Richard Tice called renewable energy a “massive con” and promised Reform would recover subsidies paid to wind and solar companies.
‘You can’t have growth without green’
Energy Secretary Ed Miliband said the findings showed “net zero is essential to growth, a strong economy, and money in working people’s pockets”.
Making Britain “a clean energy superpower” will provide “energy security, good jobs, and investment in our communities”, he added.
Louise Hellem, chief economist at the CBI, said “there are huge emerging markets for green technologies that the UK must capitalise on”.
“It is clear, you can’t have growth without green,” she said.
