According to the CBI, the UK stands to lose £4.3bn by 2030 as European markets respond better to the opportunities presented by the transition to net zero. Amy House, Director of Green Economy, urges decision makers to help reverse this worrying trend.
The Green Growth, the UK is Falling Behind report, released by the CBI in January 2023, states that UK government spending on climate change sits at just 1.2 per cent of GDP. This is below the World Bank developed economies benchmark, four times lower than Germany, and half of France’s spending.
The report also found that in the past two years production in major markets, like electric vehicle assembly, batteries and hydrogen, has fallen whilst other European markets thrive.
The data in this report is deeply concerning as we know the green tech sector plays a crucial role in growing the UK economy and is expected to create around 700,000 jobs over the next decade. In addition, with the 2050 net zero target moving closer, we know that decarbonising our homes, workplaces, travel, and energy systems requires £350-400 billion investment if we are to deliver this in time.
Barriers to green tech adoption linked to finance, complexity of technology and lack of knowledge of the process
Demand in the green tech sector is stimulated by policy change, rather than the market. At a recent Chartered Institute of Management Accountants event, we polled over 200 financial leaders on their journey to net zero to understand their barriers to growth. 65 per cent lacked the finance or investment to deliver, 38 per cent found the tech too complex and 29 per cent were unsure where to start. But demand for heat pumps and insulation rose by 312% last year.
More incentives are needed for businesses to start and deliver their low carbon transition. We know that there is a will to act, but the barriers must be lowered if we want more businesses to start allocating budgets and resources to deliver. Programmes are available to support this, including the Growth Company’s own ‘Journey to Net Zero’ Journey to Net Zero, and whilst Green Economy is uniquely placed in delivering business support specifically for green tech sector growth, there is generalist business support that is fully-funded across the UK via the Local Enterprise Partnership Network.
More support is needed to stimulate demand for green tech and empower local leaders to grow their local supply chain
At Green Economy, we have delivered business support to the sector in Greater Manchester over the past decade, offering one-to-one support, skills development and, crucially, market connections between the sector and business buyers. This infrastructure has helped to grow the biggest green economy outside of London and the South-East and has been funded, in part, thanks to the decentralised budget that Greater Manchester has enjoyed since electing a metro-mayor. But this is not the picture in all regions of the UK, and some areas are yet to understand the capability and potential of their own green economy.
Our leaders must look at stimulating demand amongst business decision makers while simultaneously demystifying and increasing confidence in the technologies that will deliver net zero. Here at Green Economy, we are well placed to support this opportunity and would invite any leaders looking to move this conversation into action to speak to us about how we do this.
