Friday, January 21, 2022

Regional disparities already arising in nascent green jobs market

The transformation to a net zero economy is feeding through to the employment market, accounting for 1.2% of total advertised jobs, equating to 124,600 new jobs, for the year to July 2021. However, disparities are already arising in how the transition to greener jobs is affecting different parts of the UK.

These findings come from PwC’s Green Jobs Barometer – a first of its kind analysis, tracking movements in green job creation, job loss, carbon intensity of employment, and worker sentiment across regions and sectors.

Currently the proportion of new green jobs is small, but each new green job generates a further 1.4 jobs (rising to 6 jobs for sectors closely aligned to the energy transition), through increased demand for goods and services in the supply chain. This figure should also grow as the UK accelerates efforts to transition to net zero. Nevertheless, the scale-up will need to intensify to meet Government targets of two million green jobs by 2030.

Moreover, work is needed to ensure the green jobs transition doesn’t exacerbate regional inequalities. The West Midlands, Yorkshire & the Humber, Northern Ireland and Wales are the lowest ranking regions across all aspects of the Green Jobs Barometer. Scotland and London are the top performers.

Kevin Ellis, Chairman and Senior Partner at PwC, said: “Jobs are getting greener and this is cause for optimism, but evidence is needed on the level and distribution of these opportunities. Left unchecked, green employment will grow in the most fertile spots, but not necessarily where they’re needed most.

“Our research indicates where support and investment needs to be targeted. Green jobs in energy, utilities and manufacturing sectors have a greater knock-on effect on employment, generating further jobs. Likewise, regions including Northern Ireland and Wales may see a disproportionate rise in green energy and jobs, given their current  reliance on carbon intensive fuels. By acting now, we have a massive opportunity to rebalance the economy and ensure a fair transition.”

The research highlights workers’ fears about the impact of the net zero transition, with 5% expecting their job will disappear during the net zero transition, which would equate to 1.7 million jobs. PwC’s analysis suggests this figure is likely higher than the eventual reality, as many jobs will be easily repurposed for a green economy, and will be easily surpassed by new green jobs – creating a Net Jobs gain. Some sectors will clearly be impacted by job loss more than others. The sectors with the biggest share of sunset jobs are electricity, gas, utilities and waste. The latter provide support and advisory services, which can be more easily transitioned to other sectors.

Regionally, the largest relative impact of job loss will be felt in Scotland (9.4%) and the East Midlands (8.1%), in second place for sunset job losses – driven mainly by relatively high concentrations of workers in mining, manufacturing and utilities sectors, where the risk of job loss is greater than other sectors. The research also shows the East Midlands has an above average sentiment score on the environmental friendliness of their jobs.

Matt Hammond, Midlands Region Leader, PwC added: “The research highlights the Midlands must address with speed the impact of a net zero economy. The West Midlands is amongst one of the poorest performing on the index among England’s regions, placing 9th on the index out of 12, with the East Midlands in 7th position. The East Midlands is also in second place for sunset job losses – driven by relatively high concentrations of workers in mining, manufacturing and utilities sectors.

“The impact of the net zero transition will be profound and there is a very real risk that people and communities could be left behind. The focus shouldn’t just be on the number of jobs at risk, but where they are concentrated, both in terms of industries and communities.

“It is incumbent on all of us to ensure that a reduction in economic opportunity is not the legacy of the green transition. Green jobs must not become elite jobs. With targeted policies, investment, and training, and collaboration between government, business and education providers, a green future can be a future of employment for everyone.

“It is however encouraging to see the commitment from the West Midlands Combined Authority, Midlands Local Enterprise Partnerships and City Councils in building a greener economy, transportation and skills development in this area, through various green strategies and net zero and carbon neutral commitments.

“This includes the aspirations for the Birmingham 2022 Commonwealth Games, which will be the first ever carbon neutral Games and will also provide employment opportunities and upskill the workforce in the region. As well as transportation  initiatives such as the £22 million Future Transport Zone – which is trialing ground-breaking projects such as mobility credits and demand responsive bus services and the proposed gigafactory to build batteries for electric cars in Coventry.”

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