442. Net zero is a driver of economic growth: it has already delivered growth for the UK and will continue to do so. There are already around 430,000 jobs in low carbon businesses and their supply chains across the country with turnover estimated at £41.2 billion in 2020.321 Government analysis suggests that nearly 68,000 green jobs have been created or supported since November 2020.322
443. In 2022, the economic context changed which means the opportunities from net zero have never been greater. High fossil fuel prices are expected to remain high in the short-term and there is uncertainty over their long-term future. As a result, markets are moving to capitalise on this.xviii
444. It is essential that the UK acts quickly and decisively. There is a new global race to maximise the growth potential from net zero at a time of wider geopolitical uncertainty. We are now at a crunch point where the UK could get left behind.
445. We are operating in an international environment in which foreign enterprises are being offered incentives to invest elsewhere in the world.xix In 2019, there were 2.5 million businesses operating in the UK non-financial business economy; only a small percentage of these (1.3%) were foreign owned, yet they contributed 28.5% of approximate gross value added (GVA).323
446. The UK can take a share of the global economic prize from the transition, but it must act now. The UN's Net Zero Asset Managers initiative recently announced that nearly a third of the $66 trillion of assets managed by their members globally are committed to net zero with tangible decarbonisation goals. Additionally, McKinsey have estimated that supplying the goods and services to enable the global net zero transition could be worth over £1 trillion to UK businesses between 2021 and 2030.324
447. If the UK wants to be part of this race and reap the benefits, it must act now to seize this opportunity. We know that first-mover advantage means a greater opportunity to secure growth opportunities and expand on the potential co-benefits from the transition.
448. The UK can seize this opportunity by focussing on the enablers of growth to build a resource efficient economy that utilises its areas of comparative advantage, creates an open investment environment, delivers projects via a highly skilled workforce, using reliable and well- connected infrastructure and empowers participation throughout supply chains and small businesses.
449. Given the global momentum, driven by industry, to reach net zero and reap benefits from the economic opportunities, the risk is that the UK does not capitalise on this via poor planning and a lack of policy certainty.
450. The evidence seen by the Review has shown that significant action is required to ensure the UK economy grasps the opportunity on offer. The UK needs to:
• Tackle the enablers of economic growth that will affect success for all sectors of the economy: business tax incentives, a highly skilled workforce, energy efficient non-domestic buildings and an informed and active small business base.
• Provide targeted support to individual sectors.
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xviii There are different estimates on the future of fossil fuel prices. Estimates, based on BEIS modelled scenarios predict the return of prices to near previous levels are different years in the future. While the OBR's assessment anticipates prices persisting at three-to-fourfold the average price observed from 2018-2021. Early view of the BEIS 2022 Fossil Fuel Price Projections
xix Firms are also seeking regulatory alignment to enabler cross-border investment.