One of the claims often advanced for renewable energy is that it will lead to a bonanza of what are called “green jobs”. It is a way of justifying the upfront costs involved in switching the nation’s energy production to these low carbon sources. The idea is that Britain will ultimately earn squillions from the exciting new technologies that its green entrepreneurs will forge and sell. The sting, of course, is that to secure these benefits, the British public must first sluice the industry with buckets of subsidies, expected to reach £9bn a year by 2020. Recent events in the renewables sector — including attempts to reduce the burden of this support — have sparked concern among participants over consumers’ declining willingness to fund this enormous exercise in job creation. It is why the industry is so keen to insert itself into primeminister Theresa May’s newly proposed — but as yet unexplained —industrial strategy. Promoters see it as a way of ensuring the cash does not dry up. Ministers should treat these tales of untold industrial benefits with considerable caution. No one denies that green technologies create employment. Figures from the Renewable Energy Association, a trade body, suggest that 117,000 people are already beavering away in the sector and its supply chain. But job creation alone does not equate to a benefit for the economy. What ultimately matters is the extra output produced by these new workers. For the exercise to be worthwhile, its value must exceed the wider costs, including the impact on alternative production and employment.
FT 30th Oct 2016 read more »