Net zero in power and industry—creating or destroying value and jobs?

TL;DR

This study examines how transitioning to net zero in the UK's power and industry sectors affects economic value and jobs, finding that it can create value and employment under the right conditions.

Contribution

The paper introduces a standardized methodology using the JEDI framework to quantify economic and job impacts of net zero scenarios in the UK.

Findings

A net zero target can increase gross value added and jobs if the economic structure remains constant.

Offshoring industrial emissions reduces both value and jobs, while expanding domestic low-carbon industry enhances them.

Local supply chains have a greater positive impact compared to importing goods and services.

Abstract

Value and job creation are frequently claimed as positive by-products of decarbonization. The lack of a standardized methodology and quantitative analyses limit the credibility of such claims. In this work we apply the Jobs and Economic Development Impacts (JEDI) framework to our model of UK power and industry and consistently quantify the impact on economic value and employment for a range of net zero scenarios. Our results suggest that a net zero target can create gross value added and jobs under the right conditions. Offshoring industrial emissions, however, results in a reduction of both, whereas expanding domestic low-carbon industry can lead to further value and job creation. We determine economic sectors with gains and losses, and quantify the impact of local supply chains vs. importing goods and services. A thought experiment indicates ways to further increase value added.

•We connect a bottom-up model of power and industry with socio-economic data•Under constant economic structure a net zero target increases value and employment•Offshoring emissions diminishes, expanding low-carbon production elevates impacts

We connect a bottom-up model of power and industry with socio-economic data

Under constant economic structure a net zero target increases value and employment

Offshoring emissions diminishes, expanding low-carbon production elevates impacts

Energy resources; Energy policy

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