UK has the largest green skills gap in Europe - report

Green Deal jobs like insulating this ceiling are going to decline. So much for the Greenest Government Ever.

The UK has been singled out for having skill gaps in more occupations in the green economy than eight other EU countries.

A new study also says that demand for such skilled workers is highly dependent on environmental regulations and subsidies, and governments need to do more to integrate their energy, environment and skills policies.

The shift to a green economy will not only generate new jobs, but will also change the scope and character of existing jobs. Demand for energy auditors, electricians, solar PV installers, sheet-metal workers and insulation workers is forecast to rise in most of the eight countries in the study.

These occupations, which require medium-skill levels, have more growth potential than higher-skilled occupations, which employ fewer people, the report says.

The UK, Germany and Finland are three out of the eight countries that predict future increases in the number of jobs across the widest range of occupations.

But the UK lacks the appropriate skills more than any other country, and is blamed for introducing changes to legislation (along with the Netherlands) that are expected to reduce demand for energy auditors, solar PV installers and insulation workers.

Ministers have suggested that the introduction of the Green Deal will increase employment in two of these sectors. But the Energy Bill's own impact assessment reveals that the number of insulation installations could actually reduce under the Green Deal from previous levels, which will cut the number of jobs in these sectors.

The research comes from Green Skills and Environmental Awareness in Vocational Education and Training, a report from the Institute for Employment Studies (IES) prepared for the European Centre for the Development of Vocational Training (Cedefop), which looked at nine different job roles (see below) in eight EU member states: Germany, Greece, Italy, Hungary, the Netherlands, Slovakia, Finland and the UK.

The need for consistent regulation

It recommends several policies that will help businesses take advantage of opportunities in the transition to a greener economy, and ensure the availability of appropriately skilled workers.

The most important of these is consistent regulation and sustained investment over a prolonged period of time, to ensure that the markets for these products and services become self-sustaining. Secondly, financial incentives need to be phased out gradually to prevent dependency on state funding and to avoid ‘shocks’ that could cause businesses to fail and jobs to be lost.

But it's not just a matter of legislation, the report says. Businesses and private consumers need to be better and more actively informed of the benefits of investment in energy-efficient equipment, systems, products and services, through better marketing and information, advice and guidance from governments.

Generally, the occupations in which job numbers are predicted to increase are in renewable energies, the environment and new technologies, while they are predicted to decline in sectors worst affected by the recession, such as construction.

In the last three years there has been an increase in the number of jobs for insulation workers and electricians and, in relative terms, for nanotechnology engineers and environmental engineers.

The data also show stable or slightly increasing demand for sheet-metal workers and refuse collectors. Only in the cases of solar photovoltaic installers and transport vehicle/energy auditors does it appear that employment has contracted.

Gaps in learning provision

One of the main gaps in learning provision is for insulation workers and solar PV installers.

The UK was especially picked out for having employers who lack experience of transparency in the content and quality of training in solar PV.

In their survey responses, learning providers across the eight states said they were enthusiastic to change the content of curricula to meet new demands. However, action has been rather piecemeal and reactive so far, although less so among those providing tuition for new occupations such as energy auditors and solar PV installers.

All states were criticised for not doing enough to steer unemployed workers, young people or disadvantaged groups into the target occupations. It said there are very few examples of this kind of project, which could do a lot to help the long-term unemployed.

It recommends also revision of existing curricula, qualification standards and training programmes, and the promotion of green career opportunities hand-in-hand with the raising of their status in society. The occupations most crucial to the green economy, like energy auditors, environmental engineers and insulation workers, are not necessarily known to people as career options.

The sectors examined are:

• nanotechnologist, engineering technologist and environmental engineer as examples of high-skilled occupations
• 
  energy auditor, transport vehicle emissions inspector, insulation worker, electrician, solar photovoltaic installer and sheet-metal worker as examples of medium-skilled occupations
• 
  refuse/recycling collector as an example of a low-skilled occupation.

Low carbon and environmental industries defy the recession: official

On the road to success: alternative fuels power the most growth in the UK green economy.

Eat your heart out, George Osborne. The UK's low carbon, environmental goods and services sector grew by 4.7% in the last year, adding £5.4 billion to the economy.

Growth is led in particular by the increasing use of alternative fuels such as biofuels, wind power, building technologies and heat pumps.

This compares to the growth rate for the UK economy as a whole in the same year of 0.7%. The Chancellor had been expecting growth of 2.3% in 2011.

In his Autumn Statement last year he famously described green policies as a "burden" and a "ridiculous cost" to British businesses. He predicted that “businesses will fail, jobs will be lost, and our country will be poorer" as a result of them.

In fact, the exact opposite appears to be the case. In 2010-11 the value of sales in the sector reached a total of £122 billion compared to £116.8 billion in the previous year.

Jobs in the sector are up 2.8% on the previous year to 939,627. The report says “This is the first really positive sign of employment growth in the sector since the recession in 2008".

The figures come in a report from the Department for Business, Innovation and Skills, which also shows that the UK comes an overall sixth in the world in the low carbon and environmental goods and services sector, and sixth in 18 of the 24 sub-sectors identified. It follows the US (at £645bn), China (£435bn), Japan (£205bn), India (£205bn), and Germany (£140bn).

The six sub-sectors where the UK is not sixth are: carbon finance, where it comes second in the world, alternative energy (8th); geothermal (7th), photovoltaic (7th) and wave & tidal (5th).

Growth in the sector in the UK has been consistent in the last few years: £4.8bn or 4.3% in 2008-09 and £4.7bn or 4.3% in 2007-08.

Looking at the number of companies in the sector, this is also increasing, albeit slowly. In the last year it was 51,682, up 0.1% on the previous year, but the year before that there was a drop of -1.2% and no growth the year before that, at the start of the recession. However, these companies are employing more people.

Looking more closely at the sub-sectors, the largest growth is found in alternative fuels (15%), building technologies (12%), wind (11%), alternative fuel vehicles (11%) and heat pumps (9%) (mistakenly called geothermal in the report).

The highest year-on-year increase in growth rate is for carbon finance, followed by wind, wave & tidal, carbon capture & storage and photovoltaic.

Export of UK expertise in this area is becoming increasingly valuable. At £11.8 billion and up 3.9% on the previous year, this represents 2.5% of the value of Britain's exports for that year. 58% or £6.9 billion of this total is accounted for by alternative fuels, building technologies, photovoltaic, wind and water/ waste water.

Globally, sales in 2010-11 were £3.3 trillion, an annual increase of 3.7%. Of this, low carbon sales formed 48% of the total at £1.6 trillion, compared with renewable energy at 31% or £1 trillion, and environmental goods and services at 21% or £0.7 trillion.

The countries with the fastest growth in this sector are predominantly from the developing world: the Philippines (39%), Ukraine (16%), Pakistan (15%), the Czech Republic (13%), Saudi Arabia (13%), Turkey (13%) and Brazil (12%), mostly because they are starting from a lower base.

The report says that growth projections in the sector as a whole demonstrate a steady and sustainable trajectory, with annual forecasts increasing from 3.9% to 4%. Renewable energy shows the highest level of growth at 4.5%, with environmental services lowest at 3.4%.

The sub-sectors that are forecast to have the highest global growth rates for the current year are predicted to be carbon finance at 9.2%, additional energy sources at 9.1% and wind power at 5.2%. The lowest growth rates would be for nuclear power at 2.1%.

″All business should be green businesses″ says the Business Department

The head of a team at the Department for Business, Innovation & Skills, which leads Government work on how to develop the green economy, has said that "being green doesn't mean being anti-business, but pro-business".

Chris Pook, head of the new Green Economy Team at BIS, was addressing critics of Government policy who are concerned that the long term benefits of investment in the green economy are not worth the short term costs.

Speaking at the Low Carbon Communities for Future Growth conference at the QEII Centre in London today, Pook said that all business had a crucial role to play in the transition to a green economy, in developing jobs, skills and growth in environmental goods and services (EGS) and across the board.

Unusually, for nowadays, he quoted the Stern Review, commissioned by the Treasury under Gordon Brown but now archived on their web site, in which Nicholas Stern famously pronounced that the costs of doing nothing are far greater on the long term than investing now.

The Green Economy Team works with Local Enterprise Partnerships on low carbon/green innovation, green infrastructure, stimulation of supply chains and green low carbon clusters.

Over 80% of the 60,000+ companies identified as working in this sector are SMEs, and 30% are in manufacturing. BIS forecasts their growth rate as a staggering 45%.

"Sustainable growth is based on creating our energy and economic security," he said, "but the value of the environment is not often recognised by business or planning, meaning that we consume beyond the limits of resources."

The contradiction, he said, is that "a growing economy is the only way to secure the change".

But the impact will vary from sector to sector, and so "a strong sectoral perspective is required to understand how the impacts of investment fall across the economy".

There are some easy winners, and he quoted DECC's cost-benefit assessment MACC curve which shows, for example, that CERT, local travel and community energy saving are in this category but at the other end of the curve, the Renewable Heat Incentive (RHI), zero carbon homes and decarbonising car transport requires greater investment up front.

Under the Green Deal, for example, it will be the insulation and construction companies who will experience the greatest benefits, while the Energy Market Review and carbon price floor will help new renewable and nuclear generators, he said.

It is energy-intensive industries and tax and bill payers who have been complaining loudest about the cost of low carbon policy, but Pook said that the cost to them will still be less than the future cost of doing nothing at this point.

"In fact, the energy-intensive industries like steel and chemical sectors have a key role to play in the transition to a green economy, in, for example, providing the materials we need," he observed.

"If we were to source instead our raw materials abroad, it would result in a higher carbon footprint and it would be worse for the economy.

"The low carbon goods and services sector needs to capitalise on the growth opportunities presented."

BIS is fostering the Green Investment Bank and other government initiatives that will bolster the growth of the supply chain capability.

Pook said that BIS is talking to representatives of the different sectors and using economic levers such as the extra ￡1bn available under the Regional Growth Fund announced by the Deputy Prime Minister last week and the Catapult project to develop offshore renewables.

Pook acknowledged that setting out in greater clarity what materials and goods are to be required both from public procurement and as a result of legislation, helps industry to prepare for the future.

Green Deal

Also speaking at the conference, Phil Wynn Owen, Director General of International Climate Change and Energy Efficiency at the Department of Energy and Climate Change (DECC), said his department had been inundated with lobbying by manufacturers of energy efficiency equipment anxious to get on the approved list for funding under the Green Deal.

DECC officials are drawing up an eligibility list now.

Under the Green Deal, repayments of loans to investors ("like Kingfisher and supermarkets", Owen said) for energy efficiency work are "attached to the electricity meter" and must adhere to the 'Golden Rule'.

This rule is that costs of measures taken to save energy don't exceed the cost savings over time.

The worry is that the return on investment required will mean that many savings which ought to be made, won't be.

In response to questioning, Owen said that because of the Golden Rule, DECC "have to draw the line somewhere". which is tantamount to an admission that the eventual measures may not be up to what is required to limit carbon emissions and lift 2.5 million households out of fuel poverty.

Long payback measures like Solid Wall Insulation on hard-to-treat properties are intended to be covered and financed by the Energy Commitment Obligation, but the Association for the Conservation of Energy is convinced that this will leave thousands of homes missing out on measures that could reduce their bills.

Osborne's pale green budget offers crumbs to the green sector

Chancellor George Osborne's first budget was billed as a “budget for growth", but the green shoots of recovery could have been stimulated to rise much faster. It offers crumbs to the green sector while doing nothing to tax pollution or wean the UK off oil.

Budget 2011 contains limited measures for funding investment in green technology, and for meeting the skills and enterprise gap perceived in not just the green sector but other sectors necessary to help Britain compete in a global economy.

These general measures include 21 new enterprise zones, new export credits, a technology and innovation centre, nine new university centres, doubling the number of university technical colleges to 24, an increase in work experience schemes and apprenticeships, as well as £100m of investment in new science facilities, income tax relief on enterprise investment schemes rising from 20% to 30%, and an increase in small companies' research and development tax credit to 200% in April and 225% in 2012.

On to the specific environmental measures.

Planning reform

In planning, there will be a new presumption in favour of sustainable development, so that the default answer to development is ‘yes’ to planning applications, although what this means in practice is yet to be defined.

Planning decisions will be localised about the use of previously developed land, removing nationally imposed targets while retaining existing controls on greenbelt land.

Surplus military land will be auctioned off for housing. This means that 20,000 new low carbon homes should be built by 2015, the budget says.

Mr Osborne announced a 12 month limit on considering planning applications, including appeals, as part otherwise yet-to-be-specified measures to “streamline the planning applications and related consents regimes removing bureaucracy from the system and speeding it up”. It's unsure what this means for local accountability.

Green Investment Bank

The Green Investment Bank is to operate from 2012-13. The UK devoted just £12.6bn towards green investment in 2009-10 according to an independent report from the Public Interest Research Centre (PIRC), released yesterday.

This is half the minimum of £20bn that must be invested in each of the next ten years, according to the Treasury, and is less than 1% of UK GDP - or less than what Britain spends on furniture each year.

This is why it is welcome that the Chancellor George Osborne announced £3 billion rather than the £1 billion previously announced to set up the Bank, with £2 billion to be funded from the sale of assets, which includes £775 million net proceeds already received from the sale of High Speed I.

Mr Osborne said that the Bank would “support low-carbon investment where the returns are too long-term or too risky for the market”.

However, he resisted calls that the bank be allowed to borrow and lend with immediate effect, saying instead that it will have to wait until 2016 to do so.

Andrew Raingold, executive director of the Aldersgate Group, was amongst critics of this, saying: "We welcome the additional finance for the Green Investment Bank but it must have the power to borrow from day one. This would put the bank at the heart of Chancellor's plan for growth and not wait until the UK is overtaken in key green industries by competitors."

Mr Osborne did argue that the £3 billion will allow a further £15bn to be raised privately for investment in green infrastructure by 2014-15.

Carbon price floor

Besides the GIB, the Government is to introduce a carbon price floor for electricity generation from 1 April 2013.

This will start at around £16 per tonne of carbon dioxide and follow a linear path to £30 per tonne in 2020 to drive investment in the low-carbon power sector. The Treasury says that the carbon price support rates for 2013-14 will be equivalent to £4.94 per tonne of carbon dioxide.

It means that signatories to the Emissions Trading Scheme (ETS) will make up the difference between the actual price of carbon permits under the ETS and the agreed floor price. It expects to raise £740 million in the first year, rising to £1.07bn in the second year and £1.4 billion in the third year.

Friends of the Earth complained that the floor price is too low to make much difference (it is currently only £1.30 less than that) and will provide a "windfall for existing nuclear power".

Meanwhile, income from the Climate Change Levy is projected to increase from £0.7 billion now to £2 billion in 2015-16.

Other environmental taxes

Reform to the Climate Change Agreements, which rewards businesses for energy efficiency, will cost the Treasury £140 million in 2013-16. These tax discounts will stay at 80% not reduce to 65% in 2013 as previously proposed, and the scheme will continue till 2023.

Adjustments to company car tax rates from 2013-14 are expected to bring in to the Treasury over the following three years an additional £390 million. A slight change to the Climate Change Levy exemptions in Northern Ireland will bring in an additional £15 million in the same period.

Negatively for the environment, the Aggregates Levy, which is intended to cut landfill from construction, is having its rate increase postponed this year, at a total cost to the Treasury of £90 million, but it will continue until 2021.

Similarly, the proposed increase in air passenger duty is to be deferred and this will cost the Treasury £145 million. However, wealthy owners of private jets will have to pay fuel duty for the first time.

The fuel duty escalator is also being cancelled, as long as oil prices remain high, and fuel duty is to be cut by 1p. Friends of the Earth wondered what this means for David Cameron's recent promise to "wean the UK off oil". Interestingly, the Treasury is predicting that oil prices will come down from today's highs of £69.3 per barrel to £66.2 in 2015-16.

As previously announced, there will be an increase in the standard rate of landfill tax by £8 per tonne to £56 per tonne on April 1 2011 and to £64 per tonne on 1 April 2012 but the lower rate of landfill tax will be frozen at £2.50 per tonne in 2012-13. The value of the Landfill Communities Fund will rise in line with inflation in 2011-12 to £78.1 million.

The proportion of the landfill tax liability paid by landfill operators into it will remain the same. Future decisions on the value of the fund will take into account the success of environmental bodies in reducing the level of unspent funds that they hold.

Despite previous promises to tax pollution more, there were no new initiatives here.

Carbon capture and storage

As predicted yesterday, carbon capture and storage is to get £1bn but there will be no special levy to support this technology, and any additional support will be funded from general spending.

Although Osbourne says that the government remains committed to providing public funding for four Carbon Capture and Storage (CCS) demonstration plants, there are concerns over whether the necessary development of this technology, seen as being crucial to reducing carbon emissions from existing and new fossil fuel plants, will go ahead on schedule.

Water shortages

To address the issue of water shortages, The Government is to consult shortly on making reforms to the existing WaterSure scheme, the approach to company social tariffs and options for additional government spending to provide further support for water affordability.

The Budget 2011 documents are available on the Treasury website.

Can we leap the skills hurdles for the low carbon economy?

In order to create the low carbon, environmentally sound economy that is touted a way of getting the country out of the recession, tens of thousands of jobs are going to be needed in the environmental sectors of the economy.

But a skills gap in these sectors is well documented, with one in three firms being hampered by a shortage of skilled staff, from those needed to install new technology to scientists and engineers, according to a report by the Commission on Environmental Markets and Economic Performance.

The Environmental Audit Committee recommended two years ago that the Skills Funding Agency support training in this area and called for a leader to help "deliver green skills across all sectors".

This is slowly happening, with a number of academies opening specialising in part of this huge and varied area.

In a report issued earlier this month, Greening the Economy, the Aldersgate Group called on the government to "build on [this] national skills strategy to ensure that its support for skills and training matches the focus and ambition of its strategies for promoting investment in green innovation and infrastructure" and compared the situation here unfavourably with France’s mobilisation plan for green jobs.

In terms of manufacturing, the UK is unlikely to be cost competitive with emerging economies in many sectors and so must ensure that instead it builds on its vast experience and skills for higher value-added manufacturing activities and services.

It can cost such tradespeople upwards of £6000 to get suitable qualifications. If they want to go on to be a registered installer they have to register under the Microgeneration Certification Scheme which can cost many thousand pounds more.

Not surprisingly, many wonder if it's worth the hassle and cost in terms of the increase in income they can expect to receive.

In other words, is there a cost barrier to entering the low carbon economy?

Well, in one sector of this economy there is good news. A survey carried out by The ENDS Report in collaboration with the Chartered Institution of Water & Environmental Management (CIWEM) and the Society for the Environment (SocEnv) has revealed that gaining professional qualifications can lead to a direct increase in your salary.

The online survey, published in the March edition of the ENDS Report, of over 2,200 environmental practitioners revealed that half are Chartered Environmentalists (CEnv). Among those working in the water sector, half are CIWEM qualified.

Similarly, of those describing their main professional activity as 'engineering’, over 50% are Chartered Engineer (CEng) qualified.

SocEnv says that "as well as raising their status, gaining professional qualifications has also led to monetary reward for around 20% of respondents...as a direct result of gaining additional professional qualifications".

Among those able to recall a percentage rise, almost half had enjoyed one of 10% or more. The median increase was 6% and half of rises were in the 5-10% range. One in seven enjoyed an increase of 20% or more, after gaining additional professional qualifications.

And despite many organisations facing tighter budgets, the level of employer support for professional development remains generally high.

Two-thirds of respondents said their organisation offered financial assistance for professional development and most have taken advantage of it; almost three in five said they had undertaken formal training in the past year.

Acting Chief Executive of SocEnv, Kerry Geldart, said “this particular finding from the ENDS survey reflects the importance employers and individuals place on professional registration, particularly in times of austerity, giving individuals a competitive edge in the market place.”

Rosemary Butler, Director or Membership & Professional Development at CIWEM agrees. "This is an extremely valuable piece of research," she said, "and bears out our findings that more and more applicants for CIWEM membership also seek the CEnv qualification to add real and tangible value to their career progression."

The Energy Saving Trust (in its 'Economics and Impact Model: Data and Assumptions', 2010) cite a multiplier of at least 1.93 for every £1 invested by local authorities in industries related to renewable energy, in terms of the benefit to the local economy. They say that farsighted councils can support local electricians and plumbers to access training courses that will qualify them to install renewable generators.

Hopefully, further research will bear out this success story in other sectors of the green economy. It means that, if true, there will not only be benefits for society as a whole, but individuals partaking in the green sector and those around them will benefit financially as well.

Blueprints for saving the world and producing green growth

Two new United Nations-sponsored reports offer hope that the world will be able to reduce the severity of climate change – and bring other benefits to its people.

One report from the United Nations Environment Programme (UNEP) argues that there are plenty of opportunities for creating wealth, jobs, a more pleasant environment and improved social equality by transferring subsidies that support polluting activities to those supporting low carbon ones, up to a value equivalent to about 2% of global GDP.

Another, Integrated Assessment of Black Carbon and Tropospheric Ozone, also argues that by imposing strict limits on emissions of "black carbon" soot, methane and tropospheric ozone - a greenhouse gas that is also a significant component of smog - would clear the air, reduce human deaths and improve crop yields.

It would also reduce the impacts of climate change in the short term by 0.5 degrees Celsius (0.9 Fahrenheit) to the equivalent of a carbon dioxide presence in the atmosphere of 450 ppm.

Black carbon, caused by incomplete burning mainly of fossil fuels and wood, is blamed for accelerating global warming by soaking up heat from the sun. Soot can darken snow and ice when it lands, hastening a thaw such as in the Arctic or Himalayas.

Ozone is not directly emitted but is produced from precursors including methane and carbon monoxide. The troposphere is the lower atmosphere; higher up, ozone is beneficial as un ultra-violet sunshield.

Many studies show that existing pledges made at Cancun for cuts in greenhouse gas emissions are insufficient to reach the 2 degree limit, widely viewed as a threshold to dangerous change from floods, heatwaves, desertification and rising sea levels. But the measures outlined in the report could buy the world more time to implement the measures in the other report, outlined below.

"This is not an alternative to carbon dioxide reductions, it's complementary," commented Johan Kuylenstierna, of the Stockholm Environment Institute, scientific coordinator of the report, produced also with help from the World Meteorological Organization and NASA Goddard Institute for Space Studies.

Proposed measures include cuts in flaring of natural gas, curbing gas leaks from pipelines and reducing methane emissions from livestock. Poor countries should make wider use of cleaner-burning stoves, and open-field burning of farm waste should be banned.

The scientists say that achieving widespread implementation of the measures they recommend would be most effective if it were done at a country or region level.

Transition to the green economy

The other report, Towards a Green Economy: Pathways to Sustainable Development and Poverty Eradication, makes a number of positive suggestions, again with multiple spin-off benefits.

It argues that investing just 2% of global GDP into ten key sectors can kick-start a transition towards a low-carbon, resource-efficient economy. These include agriculture, buildings, energy, fisheries, forests, manufacturing, tourism, transport, water and waste management.

The sum, currently amounting to an average of around $1.3 trillion a year , backed by forward-looking national and international policies, would grow the global economy at around the same rate if not higher than those forecast under current economic models.

The report comprehensively debunks the myth of a trade-off between environmental investments and economic growth and instead points to a current "gross misallocation of capital".

Removing existing and harmful subsidies in energy, water, fisheries and agriculture sectors, alone, would save 1-2% of global GDP a year, which could be used for the transition to the green economy.

The figure of 2% of global GDP assumed is a fraction of total gross capital formation; about 22% of global GDP in 2009.

The report says that greening the economy generates growth - in particular gains in natural capital (biodiversity and resources) - and in fact a higher growth in GDP and GDP per capita than business-as-usual. "It is expected to generate as much growth and employment – or more – compared to the current business as usual scenario, and it outperforms economic projections in the medium and long term, while yielding significantly more environmental and social benefits," the authors say.

The report contains many case studies to illustrate this, for example in India, where over 80% of the $8 billion National Rural Employment Guarantee Act, which underwrites at least 100 days of paid work for rural households, invests in water conservation, irrigation and land development. This has generated three billion working days-worth of employment benefiting close to 60 million households.

Such measures can therefore contribute to poverty alleviation because there "is an inextricable link between poverty alleviation and the wise management of natural resources and ecosystems, due to the benefit flows from natural capital that are received directly by the poor".

New jobs will be created, which over time exceed the losses in “brown economy” jobs.

The transition towards a green economy is already happening on a scale and at a speed never seen before.

Therefore, the report concludes: “world leaders, civil society and leading businesses must engage collaboratively to rethink and redefine traditional measures of wealth, prosperity and well-being. What is clear is that the biggest risk of all would be to continue with the status quo."