The LEP Network - Green Economy

Policy Information

Green Economy

What is a Green Economy?

A green economy is about transforming our whole economy into one geared towards long-term and environmentally sustainable growth i.e. resource-efficient and low-carbon growth. The environment is an economic issue – a thriving green economy will generate the investment, innovation, skills and entrepreneurship needed to transform our products and services, developing cleaner technologies and capturing new international markets – for the benefit of the UK economy – now and for future generations.

Opportunities for LEPs

Local businesses will be crucial to the transition to a green economy as they will drive much of the investment and innovation in new and existing products which will create growth and jobs and move the economy onto a greener footing. We want to establish a continuing dialogue between government, business and communities to enable this transition - a green economy will only be achieved through working together.

LEPs can have a key role in this transition both in terms of their role in strategic economic planning, for instance in investing in the necessary infrastructure and skills, and also through their local leadership, helping their local business communities to recognise and seize the opportunities.

Resilience, Resource Efficiency and Security – it’s estimated that using resources such as energy, water and materials more efficiently can save around £23 billion per year for UK businesses from measures that pay back within a year. Advice and tools to help organisations such as business, civil society organisations and local authorities achieve cost savings by managing resources and reducing waste is available from the Waste Resource Action Programme (WRAP) – much of it free of charge. WRAP has a key role in implementing the Government’s commitment to creating a sustainable green economy; contact details and information is available on the WRAP website: www.wrap.org.uk. During 2008-2011 WRAP’s work helped to divert 11 million tonnes of waste from landfill and avoided 5.5 million tonnes of GHG emissions each year. These activities have generated over £2 billion of economic benefits to the UK. WRAP’s civil society programme has provided 3,884 placements and 553 jobs.

Many businesses are becoming concerned about the security of supply of key resources such as metals and minerals, and the products or components they need that contain them. LEPs can help businesses understand the risks, how to manage them and the new markets that may exist from developing solutions around aspects such as the recycling and reuse of precious metals. The Knowledge Transfer Networks have established a Special Interest Group to help share understanding and develop new approaches across businesses and others
Adaptation to climate change is an economic issue, it’s about maximising the opportunities and minimising the risks so that the UK is positioned for sustainable growth. Building on this growth agenda, LEPs can help businesses understand the climate risks and work with them to develop the appropriate local adaptation responses to maintain resilience. LEPs can also encourage businesses to look for and take advantage of opportunities presented by a changing climate
Low carbon products, services and production processes - there are business opportunities for organisations of all sizes from the growing markets for low carbon and environmental goods and services which will be crucial for the move to a green economy. This sector is worth £3.2 trillion globally, whilst the UK market was worth £117 billion in 2009/10, employing 900,000 people and expected to grow at around 4% per year for the next five years
Valuing natural assets and services - sustainable economic growth relies on resources and services provided by the natural environment. A green economy captures the value of nature and uses its natural capital sustainably. The National Ecosystems Assessment showed that the natural environment is key capital with a true value of billions of pounds to the UK, providing vital economic inputs and ecosystems services. Businesses can benefit from new opportunities from markets that protect nature’s services and from using natural capital more sustainably in their own supply chains. LEPs can consider the value of the natural environment to their local economy (see examples below [add bookmark to link them straight down to the paragraphs]) and encourage local economic decision makers and land use planners and managers to take these into account. We would envisage them working with Local Nature Partnerships [add link to our other page] on environmental aspects of their local economy. LEPs and LNPs will be able to benefit from the results of some related Government initiatives set out below
The Skills Strategy for England covers all skills, including green skills. The demand led approach is designed to meet skills needs, supplemented with targeted action to help shape demand and supply for green economy skills. A report “Skills for a Green Economy” was published in October 2011, and maps out possible skills needs and gaps across different green sectors
We have an additional set of institutions and policies to help shape demand and provide confidence to supply in areas such as the green economy, where time lags may exist, or there is uncertainty about the course of that demand. These include the Employer Investment Fund, the Growth and Innovation Fund, National Skills Academies and Higher Level Apprenticeships.

Opening up markets LEPs can help to identify opportunities for local businesses to benefit from low carbon investment and associated supply chains such as through bids to the advanced manufacturing supply chain initiative. And Eco-innovation can also open up new markets whilst helping to address many environmental issues. The TSB and Knowledge Transfer Networks support businesses on innovation. The TSB also co-funds a national contact point to help businesses access EU funding for eco-innovation projects which are close to market.

What Government is doing

'Enabling the Transition to a Green Economy: government and business working together' is a government publication which sets out what the transition to a green economy means for businesses. It puts all of Government policy on the green economy in a single place, with an easy to navigate timeline to help businesses understand what the transition to a green economy means to them. A full suite of information is also available on the Business Link website.

The Government is also looking to ensure UK businesses are able to gain from new market opportunities which protect and improve natural capital. Nationally we have established:

Natural Capital Committee - which will advise the Government on the state of English natural capital, on how it should prioritise action to protect and improve natural capital, and help put its value at the heart of our economic thinking. This independent advisory committee will report to the Economic Affairs Cabinet Committee, which is chaired by the Chancellor

Green Economy Council - set up with leading businesses to look at how Government and industry can work together to help business rise to the low carbon challenge, and which includes in its terms of reference ensuring natural capital is used sustainably

Green Investment Bank - which has been capitalised with £3bn to invest in green infrastructure. UK Green Investments is managing the Government’s investments in green infrastructure projects until the establishment of the Bank as a stand-alone institution, expected in Spring 2013

Ecosystems Market Taskforce - Government is looking to ensure UK businesses are able to gain from new market opportunities which protect and improve natural capital and has set up a business-led, independent Ecosystem Markets Task force to review the opportunities for UK business from expanding green goods, services, products, investment vehicles and markets which value and protect nature’s services. It will report back to Government in early 2013

National Ecosystem Assessment Follow On project – Developing tools and resources that will help various sectors take better account of the benefits they gain from the environment. http://uknea.unep-wcmc.org

The formation of Local Nature Partnerships (more info available here) to take a strategic view of the environment in their area and its interdependence with the health of the local economy and the people it supports

Climate Ready - The Climate Ready service on the EA website includes online resources to help businesses assess their vulnerability, develop an adaptation action plan, and build the capacity of the businesses to deal with climate change. The service also provides tailored tools, guidance and training for your business

Green Infrastructure Partnership - launched in October 2011 to support the development of green infrastructure in England. It is a strong partnership of nearly 150 organisations from professional bodies, civil society, industry, planning, development and housing bodies, local government, and community groups

Work to incorporate the value of natural capital in our country’s national accounts. The Government and the Office for National Statistics will publish a roadmap in 2012, setting out the way forward

Developing partnerships between Government and businesses to address resource concerns around the non-food and non-energy materials needed by UK companies, as outlined in the Resource Security Action Plan – making the most of valuable materials.

Examples of Value of Natural Capital

The value of natural materials / resources

The value of UK fish landings is about £600 million per annum (p.a.), while that of aquaculture (fish and shellfish farming) is around £350 million p.a.
Timber values are just under £100 million p.a.
The UK aggregates industry is worth £4,800 million p.a., of which more than £100 million comes from the marine environment.
UK farmers generate £6,600 million for the economy each year.

The value of nature’s regulating services

Insect pollination of crops in the UK is estimated to be worth at £430 million p.a.
The water quality benefits of inland wetlands may be as high as £1,500 million p.a., while planned river quality improvements may generate values up to £1,100 million p.a.
The total value of net carbon sequestered currently by UK woodlands is estimated at £680 million p.a.

The value of nature’s services to health and wellbeing

Views of green space from a house is worth up to £450 per person each year, in health benefits.
The amenity value of all wetlands, including coastal, is around £1.3 billion p.a.
3,000 million outdoor recreational visit each year generate a social value in excess of
Increasing physical activity through universal access to quality green spaces could save the NHS around £2.1bn every year.

SSSIs deliver a range of ecosystem services, including:

Cultural services to people and the economy including tourism, education, sense of place and recreation; as well as clear conservation benefits.
Regulating services including water purification, regulation of climate, air quality, water and natural hazards by protecting and enhancing natural processes.
Provisioning services that they produce, including goods such as food, timber, genetic resources and fresh water.

Healthy natural green spaces in towns and cities

The economic benefits include: the natural reduction of air pollution to reduce ill-health, their cooling effect in heat waves to avoid disruption to business, their use of outdoor exercise for health benefits, their ability to store and manage water to avoid flood damage after heavy rains.

The National Ecosystem Assessment showed that if we managed our green spaces better, there is the opportunity to generate £5 billion per year in extra benefits by 2060.

Who to contact

Green Economy is a joint government initiative which Defra/DECC/BIS take the lead on.

National Contacts:

Defra – [email protected]

DCLG - [email protected]

BIS – http://www.bis.gov.uk/contact/business

DECC - [email protected]

Local Contacts:

Defra Agencies - This information sheet gives details of the principal responsibilities of the Defra delivery bodies and how to contact them.

BIS Local offices - Yorkshire, Humber and the North East BIS Local team lead on Green Economy/Low Carbon and can be contacted at this link BIS Local Offices.

DCLG Contacts: Lead LEP Liaisons

Local Nature Partnerships - LNPs don’t exist yet, the application period closed at the end of June 2012 and the first ones will be announced later in the summer. However, if you want to contact someone in your area, a good starting point may be this list on the Defra website which shows the organisations in receipt of a small Government capacity fund last year. It does not automatically mean that they are working towards being an LNP but they can probably point you in the right direction.

Reducing waste to save money

Businesses can cut their costs by careful waste management and Defra is keen to work with LEPs to encourage this. We would like to discuss ways in which to make it easy for SMEs to recycle and to encourage cooperation between businesses interested in creating a more sustainable approach to waste management, using low-tech solutions.

Contact: Louise Clark (020 7238 5698).