Britain’s ‘net-zero economy’ is booming, creating more better-paid jobs than any other sector, but it is all being put at risk by the government’s reversal on policies on electric vehicles and heat pumps.

That, at any rate, is what the Confederation of British Industry (CBI) and the Energy and Climate Intelligence Unit (ECIU) wants us to believe. In a report this week, these groups claim that the net-zero target has spawned an industry worth £74 billion, up 9 per cent in just a year. It has created 765,000 jobs which are 1.6 times as productive as the average UK job and which offer average wages of £44,600, compared with £35,400 for the rest of the economy. Yet, ‘at a time when the US and EU are ramping up investment and tax breaks in the pursuit of clean industries setting up shop on their soil, the UK has been chopping and changing’, with ‘mixed signals, policy U-turns and contradictory political rhetoric’ discouraging investment. In other words, never mind about such trifles as the 2,500 jobs to be lost at Port Talbot as the blast furnaces are closed, taking with them Britain’s remaining capacity for primary steel-making – there are better-paid green jobs out there for anyone who wants them.

To claim that net zero has sparked an industrial boom in Britain, you have to be pretty inventive with the figures

This analysis falls at the first hurdle. The EU is doing pretty much the same as Britain in retreating from net-zero targets when they collide head-on with reality. Just as Rishi Sunak’s government put back the proposed ban on new petrol and diesel cars from 2030 to 2035, the EU – which never planned to ban them until 2035 in the first place – has revised its rules so that internal combustion engines will still be allowed after 2035 as long as they are capable of running on synthetic fuel. The German government, like Britain’s, was forced to water down proposals to ban gas boilers when it became clear how much it was going to cost households. As for the US, while Joe Biden’s Inflation Reduction Act has made subsidies available for green energy projects, it has never imposed such tight targets for decarbonising the economy as Britain has. Indeed, America has more than doubled oil and gas output in the past 16 years as it sought energy security.

Moreover, the CBI’s claims are at odds with what is really happening to jobs in renewable energy in Britain and Europe. The Danish wind company Orsted – formerly Denmark’s national oil and gas producer – cut 800 jobs and suspended its dividend last month after losing £2.5 billion in the third quarter of 2023. In the past six months eight European solar companies have either gone bust or reported financial difficulties as China increasingly corners the market for clean energy. According to the Inter-national Renewable Energy Agency, 5.55 million of the world’s 13.7 million jobs in renewable energy are in China, and only 1.8 million in Europe. Why China? Because energy is a lot cheaper there, for one thing. But China certainly isn’t using clean energy to manufacture Europe’s wind turbines and solar panels – 60 per cent of the country’s electricity is still generated by burning coal.

Investment and jobs are welcome in clean energy, just as in any industry. However, there is little joy in celebrating the creation of ‘net-zero jobs’ if, overall, the target to achieve net zero is costing you many more jobs while you lose your remaining industrial base due to high energy costs and excessive regulation imposed by net-zero targets. Ineos owner Jim Ratcliffe warned last week that Europe will lose almost all of its remaining chemicals industry over the next 20 years, in a speech that was woefully under-reported by a media more interested in his plans for Manchester United Football Club. One of the reasons, Ratcliffe said, was that in Britain his company is paying five times as much for its gas and four times as much for electricity as it does in the US. At the moment, Ineos in Europe is paying £130 million a year in carbon taxes, but by 2030 that will rise to £1.7 billion. The German industrials giant BASF has already announced that it is to shrink European operations while investing £8 billion in a new plant in China, as well as investments in the US.

To claim that net zero has sparked an industrial boom in Britain, you have to be pretty inventive with the figures. The CBI’s report doesn’t identify all the 23,750 businesses it claims as part of the net-zero economy, but the five it does name include a company that makes electrical transformers– which are used throughout the electricity industry, regardless of how electricity is being generated – and the waste company Veolia. The latter has been included, it says, because it manages landfill sites, which involves separating organic waste and collecting methane gas from waste tips. Yet landfill sites operators have been collecting methane for decades, long before net zero.

Investing in clean technologies is a good idea. Many of them will fail but some will go on to become great generators of wealth. But as China proves, you don’t need a legally binding net-zero target to make money selling the technology to others. As the US is showing, what really powers industrial growth is cheap energy. That is where Britain, like Europe, is falling down. If we are losing out on investment and job creation, that has less to do with the relaxation of one or two net-zero targets. Britain, after all, leads the world purely in terms of the reduction in territorial carbon emissions, which have halved since 1990. It has rather more to do with the expense and bureaucracy being imposed on businesses in a desperate attempt to reach overly demanding net-zero targets.