Experts Sound the Alarm: UK's Economy Could Lose a Staggering £224 Billion by 2050
Image: Hanson UK's Padeswood cement plant has made the shortlist for government funding to install CCS
Urgent cries for a coherent, eco-friendly industrial roadmap echo across Britain's corporate landscape. Businesses at the forefront of green innovation are clamoring for more than mere lip service from the government. The message? Get your act together on sustainable policies and market incentives. Otherwise, we're staring at a staggering £224 billion economic loss by mid-century.
Aldersgate's Wake-Up Call: The Time is Now or Never
The Aldersgate Group—a consortium of industry giants—sounded the alarm just yesterday. The collective emphasized the urgent need for more concerted policy initiatives to reduce greenhouse emissions from industrial sectors. They also stressed the need to catalyze the emergence of green tech options like carbon capture and hydrogen fuel. Neglect this, and the UK risks being left in the dust as the global scramble for clean tech investments intensifies.
On the flip side, newly minted data by WPI Economics, commissioned by the Aldersgate Group, paints a sunny picture—should the government listen, that is. Targeted policy maneuvers could ignite private sector investments in green industries. The trickle-down effect? A 5.9% boost in the Gross Value Added (GVA) to the UK's economy by 2050. We're talking secure supply chains, an astounding 450,000 jobs salvaged, and a $72 billion jolt to the economic GVA.
Philippa Spence, UK managing director at engineering consultancy Ramboll, urged the government to take heed of the warnings from businesses, arguing that a more supportive policy environment "could set the UK on course to harness the myriad social and economic opportunities of the net zero transition."
"The decarbonisation of the UK's heavy industries has positive spillover effects across the economy, from the built environment to the UK's energy and transport sectors, all of which benefit from local low carbon materials," she said. "Crucially, however, policy support and an attractive investment environment must be in place."
Here's some food for thought. Currently, the UK's heavy industries and extensive supply chains pump £152 billion into its coffers while securing 1.4 million jobs. But Aldersgate's pronouncement is clear—time is of the essence for the government to act.
Many UK industries, like chemicals and beverage manufacturing, are already miles ahead globally. However, this lead is under threat, thanks to legislative maneuvers like the US's Inflation Reduction Act (IRA) and the European Union's extensive net-zero subsidies. Last year alone, the UK saw a 10% dip in energy transition investments. In contrast, the US and Germany surged at 24% and 17%, respectively.
Rachel Solomon Williams, executive director at the Aldersgate Group, said its members wanted to harness the economic opportunity offered by the net-zero transition, but they needed policy clarity to turn these ambitions into a reality that would offer huge benefits up and down the country.
"The government has made positive statements about the need for investment into UK clean industries but is increasingly falling behind the US and other countries in backing statements up with firm policies and long-term strategies," she said. "This new research highlights both the risks of inaction and the huge benefits that would follow tangible action.
The government has so far been mum on the issue, skirting away from major subsidy packages. It claims its current stance continues to attract green investments. But with the Treasury's Autumn Statement expected to be a forerunner, all eyes are pinned on November.
Forward Momentum or Stagnation?
While whispers circulate about potential relief packages for automotive and steel sectors, the consensus is unanimous: the government needs an overarching net-zero strategy. Ministerial clarity on eligible projects and swift execution of plans for new Carbon Capture and Hydrogen infrastructures are non-negotiables.
The clock is ticking.