The government needs a hard-headed approach to green growth
Wind turbine farm at Bothel, Lake District, Cumbria, UK (incamerastock / Alamy Stock Photo)
4 min read
Net-zero has become a political fault line.
Reaction to the recent industrial strategy report from the Tony Blair Institute (TBI) shows how polarised the debate has become. Sceptics cite the challenges of delivering green growth as a reason to abandon it, while advocates avoid engaging with trade-offs for fear of undermining their cause. Pragmatic policymaking is lost in the noise.
But industrial strategy is about making choices. With limited resources, the government must decide which industries have the best potential to drive future prosperity. This means tough calls on where to invest and where to step back.
The government is right to champion green jobs, but it must be clearer about where these jobs will be and avoid overselling a manufacturing revival
Governments overseas are already re-evaluating their approach to climate policy. The US is withdrawing from the Paris Agreement, and Argentina may follow. Elsewhere, shifts are more subtle but still significant – for example, the EU’s Omnibus package to cut red tape is likely to dilute hard-won corporate sustainability regulations. These changes reflect both economic pressures and the politicisation of green policies.
This polarisation carries serious risks. Rising net-zero scepticism threatens to delay investment, slow decarbonisation, and weaken long-term economic resilience. Without policy certainty, businesses will hesitate to invest in green technologies, raising the risk of a disorderly transition that increases costs for firms and consumers alike.
At the other extreme, uncritical advocacy risks misallocating resources, wasting public funds, and may fuel a backlash when promised jobs and growth fail to materialise. The question is not whether net-zero should be pursued – it must be – but how to do so in a way that is credible, investable and built to last?
Green growth must be a pillar of the UK’s growth strategy. The global energy system is transforming at an unprecedented pace, and every government must have a plan to navigate it. Net-zero is not a niche policy – it is an economic shift that will shape the industries of the future.
New analysis from TBI and Oxford Economics shows that if the UK fully capitalises on the transition, green sectors could be worth almost six per cent of GDP and employ 1.2 million people by 2050. By 2030, our analysis suggests up to 600,000 new jobs could be created – similar to the government’s own projections.
But these gains are not guaranteed. Without a change in approach, the UK is more likely to see only modest returns worth just 1.6 per cent of GDP and 350,000 jobs by 2050. This is not a reason to abandon green growth – it is a call to action to get policy right.
That means focusing on the right sectors. As the latest report from the UK’s Climate Change Committee highlights, certain technologies – like hydrogen for home heating – will play little role in the UK’s transition. The government must stop funnelling resources into weak economic bets.
The green jobs narrative must also reflect economic reality. While green manufacturing matters, the biggest employment opportunities – up to 800,000 jobs by 2050 – lie in green services, where the UK has a competitive edge.
Meanwhile, green manufacturing, like all manufacturing, is becoming more efficient and less labour-intensive over time. Even in a best-case scenario, green manufacturing is expected to employ fewer than 425,000 people by 2050 – less than today’s carbon-intensive grey industries. The government is right to champion green jobs, but it must be clearer about where these jobs will be and avoid overselling a manufacturing revival.
Finally, green growth must be part of the UK’s wider growth strategy, but not its only pillar. The transition presents major opportunities but, on its own, it cannot deliver the scale of economic revival the UK needs.
The UK is also lagging in key green sectors, such as electric vehicles, and cannot afford to put all its eggs in one basket. The government must cultivate multiple engines of growth linked to other structural shifts, particularly the technological revolution.
For too long, UK industrial strategy has suffered from zigzag policymaking and poor execution, with strategies barely outlasting the political cycle. The government must break this pattern with a hard-headed, investable plan that confronts difficult trade-offs and avoids lurching between boosterism and scepticism.
Get it right, and the UK can carve out a competitive advantage in the industries of the future. Get it wrong, and it will fall behind in the global race for investment.
Lindy Fursman is director of climate and energy policy, and Thomas Smith is director of economic policy, at the Tony Blair Institute for Global Change
PoliticsHome Newsletters
Get the inside track on what MPs and Peers are talking about. Sign up to The House's morning email for the latest insight and reaction from Parliamentarians, policy-makers and organisations.
