Will net zero really cost ten million jobs?
This post is by Jess Ralston, analyst at ECIU. This article was originally posted on ECIU’s blog
Growing new jobs and the skilled workforce to do them is an essential part of the net zero transition, and represents both a challenge and an opportunity. In the same way the internet has radically changed a swathe of jobs and sectors, and continues to do so, low carbon technology is already disrupting major industries. Elon Musk is having his day.
Reskilling, retooling and managing these upheavals is no small feat, but people’s livelihoods are on the line so every effort must be made. Last week brought what could be the beginning of a potential answer to the question of how to make an economy-wide transition as fair and equitable as possible, as Onward launched its new Getting to Net Zero Commission. In political terms this is about combining the government’s desire to ‘build back better’ with its ‘levelling up’ agenda.
This well meaning programme was launched with headlines warning of ‘staggering’ job losses, and an apparent threat to ten million jobs, concentrated in the Midlands and the North.
This figure raised more than a few eyebrows, representing more than a third of Britain’s workforce, surely this can’t be right?
But the headlines misinterpreted the detail. First, the report stated these jobs were at risk of ‘disruption’ not of being lost. Disruption can mean many things, including needing different levels of retraining and reskilling, moving between sectors with overlapping skills (such as offshore oil and gas to offshore wind) and changing from, say, a gas installer to a heat pump installer.
What is a ‘high emitting’ job?
A core tenet of Onward’s analysis is defining what counts as a ‘high emitting’ job, assuming that all jobs in “all the industries responsible for more than two per cent of annual greenhouse gas emissions” are high carbon.
This two per cent marker ensures that two of Britain’s largest workforces: those in ‘construction’ and ‘wholesale and retail trade’ are included in the findings (see the table below). Between them, these industries account for a workforce of around 5.5 million people; more than half of the headline number. (Wholesale and retail trade are categorised by the ONS in the same category as ‘repair of motor vehicles’. For clarity, we have not included the c.500,000 jobs in this subsector.)
In the move to net zero, construction will play an important role in readying the built environment. It will likely see opportunities grow; UK100 estimates that half a million new construction jobs will be required and the Local Government Association has highlighted how the industry will be crucial to meeting low carbon heat in buildings.
In retail, even at a push, it is hard to see how the sector will be dramatically affected by the move to net zero. This represents a significant skew on the analysis.
Excluding these numbers from the headline finding would lead to a c.55 per cent reduction in the number of jobs identified as ‘at risk’.
The impact is not as great as reported
Discounting construction, and wholesale and retail trade, from the analysis has a dramatic effect on the regional disparities reported.
Not only are the overall jobs affected reduced, as would be expected, but the difference between regions is also lessened (although the general conclusions remain valid).
Both absolute and relative differences between regions fall when trade and construction jobs are removed from the analysis (shown in the table below), suggesting that a significant proportion of these workforces are located in regions highlighted in Onward’s work.
However, the overall findings remain true, that employment that could be impacted by the net zero transition, largely in manufacturing, energy and transport, and these industries make up higher proportions of the workforce in areas outside of London and the South East.
This finding is crucial to the government’s levelling up agenda, and highlights the importance of the Getting to Net Zero Commission.
Not all jobs in high emitting sectors are high emitting roles
In addition, many jobs in the existing high emitting sectors are not actually in high emitting roles. Taking values at a sectoral level overlooks the very different roles that can be played within one industry, and again risks inflating headline findings.
In industries like manufacturing, electricity supply or mining, there are hundreds of thousands of jobs in subsectors that will benefit from decarbonisation – producing efficient products or generating low carbon energy, for example – partly counteracting those that will be disrupted, as well as millions in offices and warehouses that will face minimal disruption.
One good example of this is in the transport sector, where postal and courier services is included as a subsector. Employing over 260,000 people, or around a fifth of all those working in the transport sector. These jobs are unlikely to be disrupted by the net zero transition, compared with engine manufacture, for example.
Elsewhere, electricity generation includes jobs in clean energy infrastructure like operating offshore wind farms or managing transmission and the distribution of energy, and jobs in electricity trading. These roles are not the same as the operation of coal and gas power plants, yet they are all lumped into the same category.
The inclusion of construction in Onward’s analysis labours this point. Almost 800,000 jobs in the sector (over a third of the total) are deemed ‘specialist construction activities’ which includes the fitting of insulation in buildings, installation of solar panels, and low carbon heating systems like heat pumps. These jobs actually contribute to the net zero transition, and are only likely to be more in demand as we progress to 2050.
There will be inevitable challenges to the status quo
Onward’s new commission should help provide answers for some of the trickier aspects involved in tooling up Britain’s workforce as we move towards net zero. The importance of this work is mirrored in the number of groups, both inside and outside government, working on the very same area, ensuring that the benefits of the transition are spread around the country, and that costs do not weigh heavier on some than others.
So, no, net zero will not cost ten million jobs, but decarbonisation alongside other ‘mega trends’ such as demographic change and disruptive technologies, like AI, will bring inevitable challenges to the status quo. Our economy and society are constantly shifting, and how we predict, prepare and plan for the changes ahead will have real consequences for people’s lives. Change is a constant and we shouldn’t overplay or underplay its impact.