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Can low-carbon investment drive a northern renaissance?

Power button - Aldersgate Group

•   Report puts sustainability at heart of 'Northern Powerhouse'
•   Regional green success stories highlighted 
•   Government may be warm to the idea—author

The Northern Powerhouse, the Government's move to boost prosperity and opportunity in the North of England, has endured uncertain times of late. A change of leadership and Britain's pending exit from the EU has cast some doubt on the direction of the initiative, but more recently, Prime Minister Theresa May has intimated that plans remain intact

Now, the Aldersgate Group, an alliance of businesses and political and civil society organisations, has made the case for sustainability to be at the heart of a northern economic boost with its new report Setting the pace: Northern England’s low carbon economy. Alex White, the group's Policy Officer and co-author of the study, answered our questions. 

Lots to build on

If the North is going to prove a bastion for local low-carbon growth, it stands to reason that there's plenty already going on, with room for development. This certainly seems to be the case, as White explained: 

“The North is host to a wide range of low carbon investments, from offshore wind blade manufacturing by Siemens in Hull that will employ up to 1,000 people directly, recycled aluminium investments by JLR near Liverpool, ultra-low emission vehicle manufacturing by Nissan in Sunderland, to Yorkshire Water’s investment in restoring peatland in the Pennines to reduce flood risk to local infrastructure. 

“This demonstrates that the North has already started to take advantage of the opportunities from a low carbon economy.”

Aldersgate Group infographicDelivering the goods

The North generated 136,000 jobs in the low carbon goods and services sector in 2013. With an industrial history and geography suitable for big renewable energy projects, the infrastructure is there to seize local opportunities, given the right support, says the report. But what makes this investment so important in the national context?

White said: “The UK’s low carbon sector saw employment grow by 12% between 2010 and 2013 and delivered a gross value added of over £46bn. The low carbon economy can be especially beneficial to the North – 10 of the 12 most declined cities in the UK are in the North, according to the Joseph Rowntree Foundation – but this is an economy-wide opportunity.”

Stable support

Big opportunities tend to require significant support to see them realised, and the report sets out a number of policy recommendations at national and local level to build on the successes of low carbon projects to date. It's all about consistency, said White:

“Above all, a clear and stable national low carbon policy landscape is needed to deliver the UK’s climate targets on time and budget. The government must publish a sufficiently detailed emission reduction plan setting out how it intends to meet the 57% emission reductions to be delivered by 2030. A well-formed emission reduction plan can drive greater private sector investment in low carbon solutions including energy efficiency measures and low carbon heat.”
    
“Local and national government should better account for the importance of the natural environment in supporting economic activity and protecting businesses and communities from risks to infrastructure such as flooding and supporting the tourism industry – the National Flood Resilience Review released by the government last week demonstrates just how important this is. This should be accompanied by forward looking planning rules to ensure that any new infrastructure development is fit for purpose for the long term and resilient to the impacts of climate change.”

Green growth's human touch

In news that doesn't come as a surprise here at Energy Saving Trust, the report highlights that stronger local collaboration and personal touch should not be underestimated in the push towards this green and prosperous vision. White explained:

“At a local level we need more regional champions of the low carbon economy, with devolved authorities and local communities considering low carbon economy opportunities whenever possible. For example, collaboration between local government, the private sector and educational bodies can help to deliver skills training to equip local workforces with the tools they need to work in these new and growing industries.” 

 

READ MORE OF OUR BLOGS:

What is the fifth carbon budget and what are the UK's next steps?

The future of energy efficiency in the UK: Energy Saving Trust CEO explains

 

Will the Government back this vision?

Of course, government buy-in is crucial now as Northern Powerhouse plans become clearer – but recent departmental changes offer clues as to where priorities may lie, said White:

“The merger of the Department of Energy and Climate Change (DECC) and Department of Business, Innovation and Skills (BIS) into a new Department of Business, Energy and Industrial Strategy (BEIS) suggests that the government may be serious about realising the benefits of a low carbon economy. 

“In particular, the Secretary of State Greg Clark and the Minister for Climate Change and Industry, Nick Hurd both have demonstrated a strong understanding and positive attitude towards the low carbon economy.”

Indeed, Greg Clark has gone on the record to say that the North is 'where the modern world was brought into being. A well-spring of innovation that changed the course of history' – strong words indeed, and ones that were not missed by the report's authors. 

There is certainly a localised flavour to the newly-merged department. White explained:

“New ministers at the Department for Business, Energy & Industrial Strategy (BEIS) have been appointed ‘local growth champions’ – Nick Hurd is responsible for Leeds City Region, Humber, York and North Yorkshire and Sheffield, amongst others. This all indicates that the government is in a strong position to drive forward this agenda.”

Brexit blues?

The UK's decision to leave the EU has cast some uncertainty on many areas – not least the future direction of low-carbon policy, and business access to markets. With the three regions that make up the North all voting to leave the EU, what does this mean for the road ahead?

White said: “This (referendum voting in the North) has partly been seen as a reflection on the fact that people in these regions feel left behind in terms of jobs and investment. A recent report from the Joseph Rowntree Foundation found that groups who have been left behind were most likely to vote for Brexit.

“A sustainable industrial strategy is essential to support the balanced economic growth that is even more necessary post-Brexit. Low carbon investment presents an opportunity to those regions of the UK that feel left behind – ongoing investment creates a pipeline of projects, which allows a supply chain to build up and creates ongoing jobs for local residents. Government at both local and national level should prioritise investment in low carbon infrastructure as a win-win solution.”

Reasons for northern optimism

Investors require certainty – and this is something that is in relatively short supply right now. But big decisions will be made soon enough, and the report makes clear that there are plenty of positives to be found as matters come to a head. White added:

“Brexit has created some short-term uncertainty which may lead to an investment hiatus. On the other hand, Brexit has also presented an opportunity for the new government to ensure that investment in the growing low carbon economy is being directed towards the North. That is why we call upon local Mayors, businesses and communities to become climate champions and identify opportunities for low carbon growth in their local areas.”

Follow @AldersgateGrp for updates. Share your thoughts with us in the comments below, or tweet @EnergySvgTrust.

Gary Hartley is Energy Saving Trust's expert blogger. He has extensive experience researching and writing on a number of topics, with particular expertise in sustainable energy, policy, literature and sport. As well as providing regular blog content, Gary has also been published in numerous magazines and journals.

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