Earnings higher in the net zero sector

Radical policies will be required to retrain or upskill millions of workers in both high-tech STEM roles and low- and medium-skilled technical qualifications to meet the challenge of net zero, according to a new report from think tank, Onward. But if ministers take action quickly, they can meet the Prime Minister’s pledge to deliver a “green industrial revolution” that disproportionately boosts wages in the north of England.

The report, Qualifying for the Race to Net Zero, includes a comprehensive analysis of the current skill and wage levels of incumbent carbon intensive industries and compares them to that of low carbon and renewable sectors. It finds that:

• in total, an estimated 3.2m workers in the UK will need to increase their skill level or retrain in a new qualification to meet the Government’s commitment to decarbonise the economy by 2050;
• some sectors are more heavily affected than others. Almost 1 in 3 workers in construction (30 per cent) will need upskilling along with over 1 in 4 workers in transport and storage (26 per cent); and
• the average skill requirement of a job in a carbon-intensive industry is 46 per cent lower than the average net zero job, and net zero workers have qualification levels that are on average 24 per cent higher than carbon-intensive workers.

However, the research also identifies the considerable opportunity if ministers can seize them. Net zero jobs have a median annual gross income of £37,190 for full-time employees, 18 per cent higher than the national average and 30 per cent higher than jobs in current carbon-intensive industries. This means that for every £1 earned in a carbon intensive industry, a worker in a net zero transition industry would earn £1.30. Net zero industries also have a smaller gender pay gap than the national average, with male salaries 17 per cent higher than females, compared to 21 per cent nationwide.

Some parts of the country are more exposed to this shift than others. The regions which stand to disproportionately benefit from net zero are the North West and Yorkshire and the Humber. These regions make up 24.2 per cent and 18.2 per cent of areas in the top quintile of areas where there is high potential for industrial emissions abatement and a higher average skill level within the workforce.

The report puts forward a series of recommendations for the Government to tackle the skills challenge, including:

• introducing a Green Human Capital Tax Credit to encourage employers to invest in the skills of their employees;
• developing new Apprenticeship Standards, T Levels and Degree Apprenticeships to provide net-zero industries with the opportunity to grow their workforces;
• funding 2,800 net-zero-aligned PhDs in order to bolster domestic engineering expertise;
• reviewing the free qualifications offered within the Lifetime Skills Guarantee, to ensure the key qualifications required for buildings retrofit are included to help realise the estimated 900,000 – 1.3m new jobs that will be required in this space by 2030; and
• establishing a number of prestigious Net Zero Academies to address the low skills penetration in regions which also suffer from a high proportion of jobs in carbon-intensive industries.

Ted Christie-Miller, report co-author, said: “At present the UK workforce is woefully prepared for the transition to net zero emissions. If we want people to take advantage of the opportunities of a green economy, and the well-paid green collar jobs it will provide, urgent action is needed to upskill and train people up and down the country.”