The UK Government must centre green growth at the heart of its economic strategy. That was the clear message from business leaders at London Climate Action Week 2024.
At ‘Growth on the Ballot: Investing in Britain’s Green future’, E3G hosted a panel of business and finance thought leaders. The event focused on what levers the new government must pull to deliver long-term, sustainable, resilient growth to the UK. We explore some of the key takeaways below.
1) Green is the UK’s best opportunity for growth
The UK green economy is growing far faster than the rest of the economy – expanding by 9% compared to just 0.1% overall growth in 2023. We have significant natural advantages where it comes to the development of new clean technology and the UK is still benefiting from first mover advantages in key sectors such as offshore wind and green finance. It’s also a desirable sector for any government to support, with many opportunities and high-paid jobs across the UK.
“The UK green economy is already 12% larger than the Welsh economy and growing fast – last year it grew by 9% while the rest of the economy flatlined”
Louise Hellem, Chief Economist, CBI
2) There is a wall of private capital waiting to be deployed for Net Zero – but low market confidence in Government delivery is stifling investment
Whilst the previous government’s ambition has faltered on net zero, in the UK private sector ambition has remained consistently high. However, confidence in the UK’s trajectory is far too low. The new government must meet business ambition and rebuild confidence across the economy in the UK’s trajectory. This is the critical step to unlocking capital for green growth.
“The pensions sector alone could provide half of the green capital required for the net zero transition”
Bruno Gardner, Head of Climate Change and Nature, Phoenix Group
3) Consistent ambition setting from policymakers will be key to reset the narrative
Businesses base their plans on targets and future policies that governments set. As a result, they have been hamstrung in recent years by policy flip flops. The new government must reset the narrative on net zero and lay out consistent, economy-wide, plans (broken down by sector) to give businesses the certainty they need to plan their futures.
“Stop the churn, we need certainty to know what you can invest in for 10 years. Stability is key, stability of people and stability of plans.”
Tanisha Aggarwal, Co-Chair of Labour in the City
4) A whole-of-economy net zero investment plan is the biggest opportunity for the new Chancellor to mobilise green investment at scale
Getting the UK back on track for net zero requires significant investment. In many cases, the government can unlock this capital without spending millions from the public purse. However, to invest, financiers need to see a stable project pipeline. Achieving this requires bold action from Government to rebuild market confidence in UK Net Zero. This requires a whole of economy plan from government to set the path forward and de-risk investment.
“The government needs to take action to rebuild market confidence. A clear economy-wide plan and sector roadmaps are first steps to providing the certainty that the market craves.”
Bruno Gardner, Head of Climate Change and Nature, Phoenix Group.
5) Successfully driving the net zero transition will directly benefit real incomes across the country
The net zero transition has an added benefit in that it directly improves people’s livelihoods across the country. Renewable energy deployment and energy efficiency upgrades bring lower bills, new industries bring long-term jobs (with 1.6 million green jobs estimated by 2030) and being at the cutting edge brings massive foreign investment. The co-benefits of green investment make it desirable far beyond its potential as an economic growth opportunity.
“The first phase of the transition was largely out of sight, but wider decarbonisation will impact on people’s lives and livelihoods more directly.”.
Kisha Couchman, Deputy Director of Policy, Energy UK
6) Inaction is expensive, there is no time for delay
We are in a global competition for the investment we need to grow. The more we delay, the more opportunities for growth slip through our fingers. The Aldersgate Group estimates that failing to support industry and react to international competition could wipe £224bn off the UK economy by 2050.We need to act now and fast to cement our leadership and bring the significant advantages it will bring for UK economic growth.
“Every delay costs us opportunities and makes the transition more expensive later on.”
Louise Hellem, Chief Economist, CBI
Read more about unlocking private finance.
About London Climate Action Week
London Climate Action Week (LCAW) harnesses the power of London for global and local climate action. Founded by E3G with the Mayor of London in 2019 and in its 6th edition, LCAW is a key moment in the global climate calendar and the largest independent climate week in Europe. Follow #LCAW2024 for the latest events taking place between the 22 to 30 June 2024.
