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  • Writer's pictureAnastasia Guerra

Net-zero Goals and Regional Inequalities: Opportunities and Risks of an Industrial Transition

By Anastasia Guerra, Contributing Editor

Fossil fuel reliance, carbon emissions, and regional inequalities are interconnected issues. In Greater Manchester, the effect of air quality on its population contributes to at least 1200 early deaths every year, with Manchester ranking among the top most polluted cities in the UK. The most affected individuals are the most vulnerable, those living in poverty and in low-income areas. These are the same people who might struggle more to afford care for health complications related to pollution exposure, and whose conditions are likely to worsen due to poor quality housing. Manchester is particularly subject to these issues. Its risk of flooding threatens to increase the number of damp households and to exacerbate mental and physical health for those affected.

This is not only Manchester’s story; correlations between pollution exposure and social inequalities are persistent across the UK. Those living in the most deprived areas are exposed to higher levels of air pollution, and the 85% of people living in areas with illegal levels of NO2 concentration, are in the poorest 20% of the population. If this wasn’t challenging enough, in October 2021 already four million households found themselves in fuel poverty. With the energy price cap rising from April 2022, significantly more households are now under the same threat. These are only a few of the ways carbon emissions and the current energy sector impact on regional inequalities.

In spite of necessity to address this issue, in the Levelling Up White Paper released in February 2022, environmental and sustainability goals found themselves at the fifteenth place of sixteen priorities. No clear strategy was provided on how to align regional inequality policies with the need for shifting from imported gas dependency, reducing emissions, and achieving net-zero goals. This gap in policy vision is problematic considering the many local opportunities an aligned strategy would provide, and even more problematic if we consider the risks behind a lack of alignment among policies. Covering the full extent of their merging would require much more ink spilt than available here. This article will therefore focus on the green and energy industries, showing how their contribution to net-zero goals can also be a catalyst for regional empowerment if installed in a regionally sensitive manner. It will then illustrate how clear alignment between levelling up and net-zero agendas is also needed because risks of unjust net-zero transition can arise from their separation.

Green industry development has been recognised as a key element for reaching net-zero.

Green industries can be defined as those that “strive for a more sustainable growth pathway,” and that align with current environmental conditions, environmental risks, and ecological scarcities. Key sectors include renewable energy, carbon capture, agriculture, clean transportation, green financing, and ecotourism.

Green industry development strategies have great potential to give underperforming regions unique advantages, if strategically designed within those areas. This is because, while addressing the air pollution and health crisis, they generate economic, social, and environmental benefits. These benefits are linked to firms becoming more resource-efficient, innovative, and technologically advanced, whilst also creating new industries, jobs, and markets.

The implementation of a locally-focused green industry development strategy could therefore facilitate regional structural change, helping areas replace high carbon-reliant industries, fostering the creation of unique growth models specially tailored to local conditions.

Moreover, many areas in the UK already have latent potential to unlock these opportunities to grow. Interesting geographical patterns have been observed in the returns to the investment of clean innovation. These reuters appear to be relatively higher when such investments occur in less productive and innovation-intense locations, than in other areas. This happens as the biggest fractions of clean firms amongst all the firms within a specific area, have been found in regions with lower regional productivity.

The northwest of England in particular, with its relatively more skilled regional labour force, has great potential to benefit from the green industry transition, in an optimistic trajectory of 170,60 direct jobs employed in the low-carbon and renewable energy sectors. Looking in more detail at the northwest region, the increasing uptake of sustainability and green industry growth represents a considerable opportunity for Greater Manchester’s local economy. This is indeed already happening. The low carbon sector in Greater Manchester already generates £6.8 billion in sales and is now expanding in ensuring energy-efficient practices in both commercial and domestic sectors, and in becoming self-sufficient by generating energy locally. This focus on renewable energy, energy efficiency, and energy consumption reduction, can play a crucial role in lifting up the burden of high energy prices from the most deprived regions and most vulnerable communities. Enhancing insulation measures and increasing low carbon heat sources, for example, are expected to benefit Greater Manchester citizens directly, giving residents more disposable income, helping lift families out of poverty, and improving regional health and wellbeing.

We observed how transitioning to net-zero can be a powerful tool for levelling up. This tool, however, does not come without risks. As shown previously, net-zero transition signifies industrial change. Shifts out of “old industries” into new ones can generate unemployment, economic underdevelopment, and the exacerbation of poverty for local communities, when such changes are occurring without careful local socio-economic consideration. A net-zero transition blind to regional disparities can potentially exacerbate them. Therefore, a concrete plan to align net-zero and levelling up commitments is not merely needed for the opportunities it would generate, but because its absence poses a risk to undermine both agendas.

Most communities in the UK that experienced an industrial change, such as the closing of coal pits and heavy industries in the 1980-90s, are still dealing with the long-term impacts of the industrial decline in rising unemployment, precarious work, and persistently poor health outcomes. Of no less importance, past traumas and conflicts from this period and from 1984/85 miners’ strikes are also not forgotten. In Nottinghamshire for example, the majority of people refused to participate in strikes, creating great divisions between strikers and working miners. Events like these remain an open wound for the communities affected, still scarred by the tensions laid down during the miners’ strikes.

The only way to avoid repeating history is by installing strategic regionally-focused policies which can guarantee a just transition to net-zero. Concepts of levelling up and net-zero should go beyond appealing slogans that hide a fragmented and narrow focus. We can not afford to look at only one side of the story and to deliver out-of-touch and incomprehensive solutions. The climate crisis and the need to shift to a low-carbon economy have huge implications for locals, with legitimate concerns about their livelihoods. These concerns are valid and should be taken into account.

How to make sure net-zero goals are fairly integrated into helping achieve levelling up goals?

Although the answer is certainly complex, I believe three fundamental elements should be at the basis of any integrated net-zero and levelling up policies.

The first one is the necessity to apply local and geographically sensitive approaches. This element encompasses the need for an appropriate assessment of the unique and geographically different opportunities and risks, as well as consideration for specific communities involved and their needs.

I am talking therefore about place-based industry strategies, skills development programmes, and localised investment channelled towards particular sectors, according to the specific regional potential and needs. In the case of Greater Manchester, for example, this would translate into placing a major focus on developing the green transport industry to tackle their lack of appropriate transport system.

Although issues related to transportation are ubiquitous across the north-west, the transport system in Greater Manchester is arguably the weakest element of the city-region, and the most determinant factor for holding it back. Manchester’s lack of appropriate transport links impedes efficiency across the region despite its concentration of highly productive activity and knowledge assets, concentration that is not necessarily found in other areas with similar transport issues. Transport related carbon emissions represent also the largest proportion of Greater Manchester’s total emissions, with petrol and diesel fuelled cars being one of the major contributors of the entire sector’s emissions.

The implementation of a place-based strategy delivering a net-zero sensible and fully-integrated public transport system, could directly contribute to levelling up, improving air quality, improving shared mobility, and providing better alternatives to private vehicles use. To achieve this, the strategy needs to tackle the singular and specific needs that affect Greater Manchester, namely transport network improvement and high car usage.

The second aspect focuses on ensuring the aforementioned sectoral and regional sensitive policies are equally economically, environmentally, and socially considerate. For instance, job transitions should not only be environmentally sustainable and economically beneficial, but first and foremost guarantee decent, healthy and secure positions that take into account pay, autonomy, and progression. Moreover, this sensitivity to the social aspects must have an intersectional inclusivity lens. If we look at the proposal for green industry development, we can’t avoid addressing the existing gender bias in these male-dominated economic sectors, for example. This sensitivity should be translated into another fundamental aspect of successful transition policies, which is the inclusion of affected communities in the projects. Levelling up and net-zero policies should be done with, by, and for locals. Programmes such as In our Nature and the organisation of Manchester's first Community Assembly on climate change in partnership with local partners and cooperatives as Envirolution and the Manchester Climate Change Agency, are examples of initiatives that can increase residents and communities’ participation into the debate. Making sure citizens’ needs and concerns are at the centre of policy decisions therefore can not be avoided. Let’s ask employee ownerships, key workers, households, students, and cooperatives about their opinion. If the transition to net-zero is not designed fairly towards them, public support for climate policies will crumble, and levelling up will fail. Every policy action should represent this balance between economic, social, and environmental conditions.

Lastly, there should be multilevel governance coordination. To help empower regions, we need the central government to provide ambitious nationwide schemes that are in line with the daily decisions of local leaders on net zero. National efforts towards net-zero should be merged with genuine devolution of power to regional and local governments. To achieve policy solutions that are both regionally sensitive, and that respect economic, social, and environmental conditions, local authorities need to be allowed to control aspects related to local funding, education, skills, and community support.

Respecting these three elements is the foundation to create a locally-sensitive and decentralised net-zero transition, that will successfully align with solutions to regional inequality. Decoupling growth from fossil fuel consumption is expected to create new kinds of disruptions, requiring new kinds of policies. Plans on investment, regulation, government spending, skills development, and civil society participation will require to be part of new holistic policy strategies. This is definitely a challenging approach to design and implement, but a much-needed one if we really want to build a more climate-resilient and prosperous future not only within Greater Manchester but for all regions and people across the UK.

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