Are we ready? Navigating the green transition
Are we ready to capitalise on the economic opportunities of the green transition?
23 May 2024
5 minute read
CPP’s latest report, Are we ready? Navigating the green transition, explores the extent to which different areas are ready to capitalise on the economic opportunities of the green transition, based on the current skills profile of their workforces.
Key findings:
- The net zero transition may help ‘level up’ some poorer communities, but it is not a silver bullet: The report finds that while there are some post-industrial areas – including coastal Cumbria, Lincolnshire, East Yorkshire, coastal East Norfolk, and Teesside – with a higher concentration of workers with the right skills to build green industries – they are the exception, not the rule. The report also finds there is no correlation between areas that face high deprivation or low productivity, and areas containing workforces with high potential to transition into green jobs.
- Workers who could be most easily retrained into higher-paying, higher productivity green jobs tend to live in areas that are already wealthy: the report identifies the City of London, South Cambridgeshire, Cambridge, Wokingham, and Richmond upon Thames, as five of the areas best placed to train workers to develop green industries.
- But there may be hope for some poorer areas due to a “relative pay” effect for workers switching into green jobs: The report suggests that for some places – such as Nottingham, Blackpool, Barking and Dagenham, and Luton – there are more workers with green skills who might stand to earn a pay rise switching into green jobs, making it easier to develop green workers than in already well-paying areas such as inner London or Derbyshire’s manufacturing communities.
The report explores the structure of different areas’ labour markets and considers the extent to which the workforces of different parts of the country are ‘ready’ to transition into green industries. It does so by measuring how ‘similar’ non-green jobs are with different green jobs, mapping them across areas based on workers that are currently employed in non-green jobs. The report uses two internationally recognised categories of green job:
- Green increased demand – The impact of green economy activities and technologies can increase employment demand for some existing occupations. However, this impact does not entail significant changes in the work and worker requirements of the occupation. The work context may change, but the tasks do not. An example is the increased demand for electrical power line installers and repairers for energy efficiency and infrastructure upgrades.
- Green new and emerging – The impact of green economy activities and technologies creates the need for unique work and worker requirements, which results in new occupations. These occupations can be entirely new or ‘born’ from an existing occupation. An example would be solar system technicians who must be able not only to install new technology but also to determine how this technology can best be used on specific sites
The report concludes with five lessons for policy, based on our key findings. These lessons will be carried forward for reflection in our final report of this series, which will conclude with our final set of policy recommendations to navigate industrial transitions in an age of uncertainty:
- Lesson 1 - There will be no “one size fits all” for national policy in the green labour market transition. A place-blind national policy, for either innovative or ‘everyday’ green jobs, will benefit some places over others.
- Lesson 2 - Where the prospects for the green economy boosting productivity and good job creation in an area are less promising, industrial strategy should actively focus on other supporting areas to specialise in other high-value added sectors.
- Lesson 3 - Green jobs will not automatically bring the biggest benefits to the poorest communities. Overall, there is no link between high deprivation, low productivity and green job potential. Although, we do identify a small number of former industrial and poorer areas that may be well placed to capitalise on the economic opportunities of the green transition – such as such as Boston, Pendle, South Holland, and Copeland.
- Lesson 4 - Local wages matter. We cannot understand the green transition without understanding competitor employers in local economies. At a time of high or full employment in some local economies, we may need to focus on how we can better incentivise the reallocation of workers from non-green sectors to green sectors - even where that means making it harder for other sectors to thrive
- Lesson 5 - Higher levels of internal migration will matter for ensuring “green growth everywhere”. A successful green industrial strategy for the UK may need to think through how to better incentivise internal migration across regions and subregions, to fill local vacancies and develop the green industrial capacity of different areas.