THE LOW CARBON AND ENVIRONMENTAL ECONOMY IN

DRAFT FINAL REPORT FOR PLYMOUTH CITY COUNCIL

LOW CARBON FRAMEWORK PROJECT

June 2011

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the RED Group

Based at the Plymouth Business School, the RED Group produces high quality, bespoke economic databases, economic models and independent research to support public policy development and implementation at national and local levels.

Led by academics, our Advanced Modelling Of Regional Economies (AMORE) solutions encompass econometric, computable general equilibrium, input‐output, Monte Carlo and game theoretic methodologies.

This report was written by Professor Paul Bishop (Director of Research), Dr Steven Brand (Director) and Andrew Hunt (Associate Director)

Disclaimer Whilst every care has been taken to ensure the accuracy of the contents of this report, the University of Plymouth cannot take responsibility for loss, however incurred, arising from use of or reliance upon the information contained within the report.

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1. INTRODUCTION

This report was commissioned by Plymouth City Council in January 2011. It has been produced by the Regional Economic Development (RED) group of Plymouth Business School, University of Plymouth on behalf of the University’s Institute for Sustainability Solutions Research (ISSR). The report further develops the findings of the Interim Report produced in April 2011.

The main objectives of the study are:

• To assess the current size and value of the low carbon and environmental economy (LCE) in Plymouth

• To provide forecasts of the potential future growth of the low carbon and environmental sectors for the period through to 2020

• To provide an analysis of current and future skill requirements for the low carbon economy

• To examine the implications of the research results for local policy makers

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The report has the following structure:

Section 2 (page 4) This section provides a brief overview of the strategic policy context impacting on the Plymouth economy with regard to low carbon developments. It focuses, in particular, on new developments since the Coalition Government came to power in 2010.

Section 3 (page 17) This section outlines the methodology employed to derive the quantitative estimates of the size of the local low carbon economy and presents the results of this quantitative analysis.

Section 4 (page 44) This section provides an illustrative case study of potentially one of the most important low carbon growth sectors for Plymouth and its surrounding region ‐ offshore wind .

Section 5 (page 51)

This section provides an overview of current knowledge concerning the skill requirements of the LCE and a quantitative analysis of the occupational and educational profile of the LCE in Plymouth.

Section 6 (page 69) Summarises the results and assesses the implications for local policy‐making.

Appendices 1 to 3

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2. STRATEGIC CONTEXT

Introduction The low carbon policy agenda has grown significantly in importance in recent years, with policy‐makers at all levels developing strategic initiatives to reduce carbon emissions. The fundamental drivers for these developments are related to environmental, economic, energy security and legislative factors:

• Environmental The key issue has been alarm concerning the impact of climate change. It is now widely accepted that the scientific evidence concerning the existence and potentially catastrophic impact of climate change is overwhelming. Given that climate change is strongly related to the emission of greenhouse gases such as Carbon Dioxide, without action to reduce emissions there will be significant environmental damage.

• Economic Climate change is likely to impose severe economic costs. It is impossible to derive accurate estimates; however, the Stern Review (2006) estimated that a failure to act could result in a long term reduction of per capita consumption of between 5‐20%. Given that Carbon Dioxide emissions are largely a consequence of the way that economic activity is currently organised, most sectors of the economy (business and consumer) contribute to these emissions and will be affected by the move to a LCE. The required structural changes will create both economic opportunities and threats. These include threats arising from the loss of jobs in high carbon sectors; a failure of markets to supply the substantial funding required for the development of new technologies; a lack of investment arising from informational gaps concerning the benefits to industry of a LCE, and, uncertainty concerning changing labour skills. Opportunities arise in terms of the potential economic return from the development of new products and technologies, together with the associated impact on job creation and economic growth.

• Security of energy supply The economic imperative for a move to a LCE is also driven by concerns over medium and long term developments in traditional energy markets. Increasing energy demands from developing nations, coupled with a decreasing supply of relatively easy to extract oil may result in steeply rising costs for traditional energy

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sources. In addition, increased international political and economic instability arising from the global recession and other international events have created further uncertainty. The development of a LCE is hence also driven by a desire to restrain energy demand and ensure a secure supply of reasonably priced energy over the long term.

• Legislation In response to environmental, economic and energy supply concerns, the UK government has developed a series of policy initiatives which have, in turn, provided a driving force for policy at the regional and local level. Thus, many local authorities, including Plymouth, have introduced policies to facilitate low carbon developments within their area of jurisdiction.

This section provides a brief overview of the strategic context which frames local policy developments together with an overview of recent developments in Plymouth.

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The National Policy Agenda The stimulus for recent action on climate change dates back to the Kyoto Protocol of 1997. This international agreement set targets for the reduction of aggregate greenhouse gas emissions by industrialised countries of 5.2% by 2012, with the UK subsequently agreeing to a reduction of 12.5%. It has proved difficult to secure further international progress; indeed, the 2010 United Nations Climate Change Conference in Cancun, Mexico resulted in only an agreement rather than a binding treaty. However, despite the difficulties at the international level, the EU and UK remain committed to active policies to reduce Carbon emissions. The EU Climate Package adopted in 2008 commits members to reduce their collective greenhouse gas emissions by 20% from 1990 levels by 2020 and derive 20% of final energy consumption from renewable sources. There is a longer term commitment to an 80‐90% reduction by 2050 but, as yet, there is no clear plan as to how the major reductions beyond 2020 are to be achieved.

In the period since Kyoto, the UK Labour Government (1997‐2010) was very active in developing policies geared towards addressing environmental issues. This activism was driven by its international commitments and a desire to secure competitive advantage within the LCE. Policy measures included a range of demand side measures (e.g. incentives to stimulate consumer demand for low carbon energy) and supply side measures (e.g. direct support for innovation and low carbon projects). Whilst the policies of the new Coalition government elected in 2010 are still evolving, there appears to be a continued commitment to support similar measures to reduce climate change. However, the details of policy and the strategic framework affecting policy at the local level are undergoing a number of changes.

Recent Policy Initiatives

The Climate Change Act This 2008 Act established the current legal framework for UK low carbon policy. Under the provisions of the Act, the UK became the first country to have a legally binding long‐term framework to cut carbon emissions by establishing statutory targets. The Act’s provisions include a reduction in emissions of 80% over the period 1990‐2050 with a reduction of 34% (amended from the original 26%) by 2020. A subsequent UK Low Carbon Transition Plan (2009) outlined the medium term actions required to meet climate change targets and was followed by a plethora of low carbon strategy documents. Specific measures include a target of 40% of electricity from Low Carbon sources by 2020, support for green technologies and subsidies for domestic energy efficiency measures.

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The Coalition has indicated that it will continue to support the targets contained within the Act. In May 2011, the government announced that, in accordance with the provisions of the Act, it was to establish emissions targets for 2023 to 2027, which implied a 50% reduction in emissions by the end of this period compared to the 1990 base. These are ambitious targets that will, in principle, require concerted action by business, LAs and consumers if they are to be achieved. However, the government will review policy in 2014 to ensure that targets are in‐line with emission reductions in other EU countries, so that the UK is not at a competitive disadvantage. Thus, whilst the commitment to the Act provides a degree of continuity in policy, the 2014 review provides a degree of uncertainty over the future direction of policy which appears now to partially depend on the extent of progress within other EU countries.

The Carbon Plan In March 2011, the Coalition Government announced a draft plan that articulates its strategy more fully. The draft Plan highlights three key priorities:

• Changes in the way electricity is generated A dramatic shift away from fossil fuels and towards low carbon alternatives is needed – including renewable energy, new and fossil fuel power stations fitted with carbon capture and storage • Changes in the way homes and businesses are heated a step change is needed in how well homes are insulated and away from gas boilers to low carbon alternatives • Changes in the way people travel more use of public transport and substituting the need for some journeys; the greatest change will be in road transport – reducing emissions from petrol and diesel engines and moving towards alternative technologies such as electric vehicles.

Thus, it is evident that the focus of government policy is concerned with the promotion of low carbon energy, domestic and business energy efficiency and transport. Specific measures to achieve these objectives are still emerging. The first Annual Energy Statement (June 2010) produced a number of illustrative scenarios concerning pathways to achieve the emissions reduction target and set out a range of actions the government intended to take including energy saving measures and actions to secure energy supply. Two of the most important measures that are likely to impact at the local level are the Green Deal and Green Investment Bank.

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The Green Deal This initiative aims to provide incentives for households to improve their energy efficiency by avoiding the need for upfront payments and allowing households to pay back the money over time via their energy bills. Thus, it is clear that the government remains committed to providing financial incentives for households to reduce emissions. The government envisages the private sector playing the major role in the provision of the Green Deal and the precise role of LAs is not clear at the time of writing this report; however, whatever role LAs play, the program will have an impact on local plans through its impact on local domestic emissions.

The Green Investment Bank (GIB) The strategic purpose of the GIB is to leverage the huge private investment necessary to fund Britain’s low carbon infrastructure programme. It is recognised that, at present, there is a funding gap for investment in the technologies required to move to a low carbon economy. A recent report by Ernst and Young, for example, Capitalising the Green Investment Bank, argues that there is a funding requirement to meet the country’s low carbon agenda of approximately £450bn until 2025. However, traditional sources of capital can only provide approximately £50‐£80 billion leaving a huge funding gap.

The details of the Bank were announced in May 2011. The Bank is to evolve over a number of stages. In the short term, the government will provide funding of £3bn in the period up to 2015 with the aim of leveraging £15bn of private investment. Whilst awaiting European approval for the GIB, the government will make direct investment in green infrastructure projects. Once the Bank is established (2012), the investments and funding will be transferred to the GIB. The Bank is to be independent of the government and from 2015 will be able to borrow in capital markets and from the private sector. These latter provisions have assuaged some of the concerns of the private sector and environmentalists that the GIB would only be given a limited role, forced to rely on direct government funding.

Initially, the GIB will focus on wind, energy efficiency, waste and transmission networks. As its focus is on working with the private sector, the bank will only have an indirect impact on LAs. However, the bank could play a major role in leveraging the finance for major regional developments and the priorities of GIB will have an impact on the nature of low carbon developments within a region. Hence, it will be important for LAs to examine their own strategies within the context of the priorities of the GIB. The Bank may also have an

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important local impact if, as suggested in some reports, it is used to assist in providing finance for the Green Deal.

The Impact of Deficit Reduction Government investment in the LCE has not been immune to cuts arising from the deficit reduction program. Some noteworthy changes include:

• the ending of core state funding for organisations such as the Carbon Trust and Energy Saving Trust • cuts in subsidies for larger solar powered energy schemes • scrapping of the £42 million Marine Renewables Development Fund • an announcement that the scale of funding that GIB will be permitted to access after 2015 will be dependent on progress towards the government’s deficit reduction targets

These types of funding changes create a degree of uncertainty concerning the scale of funds that will be invested in the LCE. There is a danger that such uncertainty may impact on business confidence and hence adversely affect private sector investment in low carbon technologies. The sudden ending of funding for certain solar power schemes has, for example, created significant worries over future investment in the sector resulting in a potential loss of UK competitive advantage in these technologies. Such changes have also led some commentators to question the extent of the Government’s commitment to action to deal with climate change. Whether one agrees with the view or not, it is clear that available resources for the GIB and other priorities will be dependent on the rate at which the economy recovers from the recent financial crisis.

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The Regional Framework Prior to the recent establishment of Local Enterprise Partnerships (LEPs), low carbon strategy across the South West was guided by The Regional Economic Strategy originally launched by the South West RDA (SWRDA) in 2006. The strategy had an environmental focus, recognising that the South West environment presented significant opportunities for the region to benefit from the growth of the environmental technologies sector. SWRDA also facilitated a number of strategic developments in the region concerning low carbon. These have included the project and a Renewable Energy Strategy, driven through the provision of core funding for Regen, a not for profit sustainable energy agency and a Low Carbon High Skills (LCHS) project focused on "… addressing the emerging higher skills needs (degree level and above) of businesses and employees in the region..."

The strategic focus of the region on low carbon developments was emphasised in 2009, when the South West was named the UK's first Low Carbon Economic Area due to the potential significance of its marine energy resources and expertise in marine research, development and engineering. The UK Government confirmed an investment of £19.5 million as part of a £100 million two‐year investment programme in marine renewables, to be led by the SWRDA.

Local Enterprise Partnerships (LEPs) The decision to abolish Regional Development Agencies and introduce Local Enterprise Partnerships (LEPs) marks an important change in government regional policy. It represents a shift away from strategic regional planning towards a focus on devolved decision‐making at the local level, with an enhanced role for local businesses. This will inevitably shift the focus for initiatives concerning climate change and the LCE.

The Coalition has stated that "Local Enterprise Partnerships will want to create the right environment for business and growth in their areas, by tackling issues such as the transition to the low carbon economy." The Local Growth White Paper in 2010 envisaged that LEPs would explore opportunities for developing financial and non‐financial incentives on renewable energy projects and the Green Deal. A particularly strong steer has been given with regard to the importance of skills: "Delivering a skilled workforce, particularly people with Science, Technology, Engineering and Maths (STEM) skills, will be essential for our transition to a low carbon economy. This will include up‐skilling the existing workforce and retraining those out of work."

Individual LEPs are likely to have their own specific focus. However, the importance of the LCE and, in particular, renewable energy and marine renewables, has been emphasised by

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all three South West LEPs. Thus, the Heart of the South West LEP (, Plymouth, Somerset and Torbay) states that a key aim is to encourage investment in marine technologies and low carbon energy generation. The overlapping priorities of the LEPs highlight the potential benefits from co‐operation amongst local LEPs. However, it remains to be seen whether the new devolved structure will facilitate co‐operation or competition. Whatever the outcome, the priorities of the Heart of LEP will provide an important context for the development of policies at the local level in Plymouth and it will be important for Plymouth to align itself with these priorities.

LEPs will not have direct central funding and are expected to leverage in private investment. Some small scale short‐term support is available from a LEP capacity fund of £4m and LEPs may compete with others for a share of a £1bn Regional Growth Fund. However, the Business, Innovation and Skills Committee of the House of Commons raised concerns about a gap in transitional funding until the LEPs become self‐sustaining. A second concern is the ability of LEPs to deliver a strategic focus – their initial responsibilities do not, for example, include inward investment (although the possibility for some LEPs to play a role is left open in the White Paper). There is a potential danger that this lack of resources and strategic focus may limit the ability of the organisations to drive forward the low carbon agenda. The cancellation of the Marine Renewables Development Fund may further limit access to finance to achieve some of the key priorities of South West LEPs.

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The Local Agenda

Strategies to promote a low carbon economy and address wider environmental issues have been actively pursued by many cities across the world. Initially, strategies focused upon mitigation ‐ policies designed to reduce current and future levels of carbon emissions. Whilst mitigation still remains the focus of most strategies, many strategies now encompass adaptation ‐ enhancing the ability of a city to adapt to the consequences of climate change. This adaptation may require physical measures (e.g. planning for the impact of rising sea levels in a coastal city) or economic adaptation (e.g. planning to take advantage of the opportunities arising from the impact of climate change for the development of new, low carbon industries).

In order to stimulate and measure progress at the local level in the UK, a new set of National Indicators (NIs) for local government and other local bodies was introduced from April 2008. These include three indicators that are directly linked to climate change mitigation and adaptation:

NI 185 CO2 reduction from Local Authority operations

NI 186 Per capita reduction in CO2 emissions in the LA area

NI 188 Planning to adapt to climate change

Despite announcing that LAs will no longer be required to report against NI188, the Coalition has reinforced the importance of local councils to the new Carbon Plan. Indeed, the Environment Secretary recently signed a Memorandum of Understanding with the Local Government Association to set out how the government and LAs will work together to assist councils to:

• reduce the carbon emissions from their own estate and operations • reduce carbon emissions from homes, businesses and transport infrastructure, creating more, appropriate renewable energy generation, using council influence and powers; and • participate in national carbon reduction initiatives at the local level, particularly the roll out of the Green Deal, smart metering and renewable energy deployment

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Mitigation

Most cities have focused upon mitigation and policy has typically involved four stages:

• Establishing an emission reduction target • A baseline measurement of current emissions • Development of strategies & plans to achieve the target • Securing implementation through the establishment of an administrative framework.

In common with many other local authorities, Plymouth has embarked upon a strategy which encompasses these phases of mitigation. A broad framework for action was introduced in 2008 with the publication of a Climate Change Framework. This set out a "framework for the actions we will take to limit (or mitigate) the impact of climate change, to reduce the emission of the greenhouse gases thought to be the key contributors to climate change and to adapt to the changes we will experience over time." The framework explicitly commits the City to a low carbon strategy with targets as drivers for change, emphasising the importance of partnership with the business sector and wider local community.

In more specific terms, the framework proposed:

• A reduction in citywide carbon dioxide emissions by 20% by 2013, 60% by 2020 and 80% by 2050 from a 2005/06 baseline. • A reduction in the carbon footprint of the city’s residents from 5.8 tCO2 to 5.0 tCO2 by 2013. • The production of a Climate Change Action Plan detailing the actions required to meet the targets • Establishing robust monitoring data & regular updating of the plan • Establishment of a Climate Change Commission to assist in the delivery of the plan

The framework was followed by a Climate Change Action Plan 2009‐11 which sets out the short term actions needed to meet targets. The Action Plan established two key bodies:

• A Climate Change Commission incorporating business leaders, decision makers and academic experts. The commission's role involves advising the Council and Local Strategic Partnership on local carbon management and reducing the city's carbon footprint, developing a low carbon economy, meeting carbon related growth targets and delivering and reviewing the city's Climate Change Action Plan.

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• A Low Carbon Network (Plymouth 186) was launched In June 2009 with support from: the Chamber of Commerce and Industry, Plymouth Manufacturers’ Group and other partners from the community and public sectors. The network offers free training to businesses to help them reduce their carbon footprint, thereby assisting in meeting the city's carbon reduction targets. The aim is to recruit 186 companies to the network.

The approach to low carbon mitigation developed by PCC commits the city to ambitious targets and identifies partnership with the business and wider community as a key feature of its approach. In our view, sustaining and further developing such partnerships is crucial, for if Plymouth is to meet its ambitious targets, a willingness to take action must be apparent throughout the local community, rather than simply relying on individual producers and consumers to undertake isolated actions.

Adaptation

Whilst the focus of policy in the UK is centred on mitigation, a UK Climate Impacts Programme (UKCIP) was established in 1997 to help organisations adapt to the inevitable consequences of climate change and some 25 local authorities have developed Local Climate Impact Profiles. From September 2011, the Environment Agency will be responsible for delivering work on adaptation and some of UKCIP’s activities will transfer to the EA.

Policies geared towards adaptation were stimulated by the NI188 target for local authorities introduced in 2008. According to the guidance notes: "The indicator measures progress on assessing and managing climate risks and opportunities, and incorporating appropriate action into local authority and partners’ strategic planning. The impacts might include increases in flooding, temperature, drought and extreme weather events. These could create risks and opportunities such as: impacts to transport infrastructure from melting roads or buckling rails, increases in tourism, increased damage to buildings from storms, impacts on local ecosystems and biodiversity, scope to grow new crops, changing patterns of disease, impacts on planning and the local economy and public health."

Plymouth is one of 51% of areas classified at level 0 on NI188: "The Authority has begun the process of assessing the potential threats and opportunities across its estate and services (for example, flood and coastal resilience plans, emergency planning, community risk registers/strategies etc) and has identified and agreed the next steps to build on that assessment in a systematic and coordinated way.” However, the coalition has made the decision that LAs are not now required to report against the indicator NI188. A survey for UKCIP indicated that the target was a prime mover for the development of adaptation

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policies and three quarters of respondents said they would not have done any work on adaptation without the presence of the target.

Whilst mitigation is likely to constitute the main priority for LAs such as Plymouth in the short term, it would be unwise to neglect adaptation even in the absence of the stimulus of NI188. A recent report for the World Bank (Bulkley et al, 2009), which includes a number of city case studies, notes that the barriers to adaptation are much greater than mitigation and, consequently, adaptation is proving a major challenge for many cities. Relevant issues include ‐ a lack of data and local expertise; a lack of resources to fund projects; variability of issues in different localities and the lack of short terms payoffs from adaptive policies. However, given the inevitability of climate change, long term economic adaptation is likely to be essential rather than optional and advanced planning may mitigate costs over the long term.

The Low Carbon Framework In 2010 Plymouth was one of a number of councils to receive government funding for a Low Carbon Framework pilot scheme to be managed by the Climate Change Commission. The scheme involves councils working with individuals, businesses and communities to find the best and most effective ways to build a low‐carbon future. The framework has an emphasis on new skills, job opportunities in the ‘green’ sector, investment, reductions in carbon emissions and improved environmental management. The funding will result in a Local Carbon Framework plan which will update and replace the Action Plan. There are two aspects to the Plymouth pilot scheme:

• First Steps Towards a Low Carbon Economy Revision of 2009/10 Climate Change Action plan; report production, management & analysis of supporting evidence: Carbon metrics / aspects of behaviour change / guidance for future delivery • Enabling Low Carbon Development Establishment of a District energy procurement partnership / procurement process

In order to facilitate the further development of policy within the remit of the LCF, PCC has been involved in the commissioning two studies. The first focuses on mitigating emissions by seeking to establish the extent and source of current emissions in the city, identify actions that can be taken to reduce emissions and set carbon reduction targets. The second study (the present one) focuses on measuring the current low carbon economy in the city, forecasting the potential for growth and examining the implications for skills and strategic priorities. This report can be regarded as part of a process of moving beyond mitigation towards considering the economic adaptation required in the face of the developing LCE.

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Summary of Section 2

• The future development of the UK Low Carbon Economy will be strongly driven by government policy which, in turn, reflects underlying economic, environmental, energy security and legislative drivers for change. • Despite the difficulty of securing a renewed international agreement on climate change and the uncertainty created by the global recession and change of government, the UK remains committed to achieving ambitious emission reduction targets and the growth of a low carbon economy. • The shift in policy focus from the regional to sub‐regional level has created a renewed impetus for local actions and LAs such as Plymouth will play a critical role in driving policy at a local level. It is important that local policies are aligned within the new LEPs to facilitate co‐operative action on low carbon issues. • The policy environment confronting local authorities is characterised by a number of uncertainties. These include: o the impact of the 2014 review of climate change policy, which implies future policy may depend on progress elsewhere within the EU; o the role of LEPs in driving the Low Carbon agenda and the extent of resources that they can leverage for regional development; o the medium/long term priorities and funding of the Green Investment Bank and its impact on regional development; o the role that LAs will play in new government initiatives such as the Green Deal; o the relative focus on adaptation and mitigation policies in the medium and long term. o Funding of climate change initiatives within the context of the deficit reduction program • Whilst mitigation may be the short and medium term priority, it is important that long term planning for economic adaptation is not neglected.

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3. QUANTIFYING THE LOW CARBON AND ENVIONMENTAL ECONOMY

Introduction and Methodology The objective of this part of the report is to assess the size and value of Plymouth’s low carbon and environmental economy and to provide some forecasts of how the low carbon sector might grow over time. Throughout this section of the report we use the term ‘low carbon and environmental economy’ to mean industries that produce goods and services aimed at addressing environmental objectives, and in particular, the objective of lowering carbon emissions. Our approach adopts a reasonably broad definition of engagement in environmental and low carbon activity in that it includes both industries involved in the direct supply of relevant goods and services, such as the operators of wind farms, but also industries that are likely to be indirectly involved in supply, such as the manufacturers of gears and bearings for wind turbines.

The most accurate way of quantifying low carbon activity would be to implement a ‘bottom up’ approach ‐ that is, to survey a sample of companies in order to determine the extent to which environmental and low carbon activities form part of their business. Whilst accurate, the approach is likely to be resource intensive and may fail to deliver results that can be readily contextualised or replicated.

The second way of quantifying low carbon activity is to adopt a ‘top down’ methodology. Essentially this approach would define low carbon activity according to a set of Standard Industrial Classifications (SIC) and form quantitative estimates of activity from secondary data sources. Whilst this method may be relatively easy to implement across different geographies, it is likely to be relatively inaccurate in its quantification.

We apply a hybrid methodology – one that applies a top‐down methodology to available bottom‐up data. In this way we aim to derive a higher degree of accuracy than a purely top‐ down approach whilst maintaining generality and ease of implementation.

The source of the bottom‐up data is the analysis conducted by Innovas (2009) Low Carbon and Environmental Goods and Services: an Industry Analysis for the Department of Business Innovation and Skills. This report provides survey‐based estimates of environmental and low carbon goods and services for the UK and the Government Office regions (i.e. the South West of England) for the year 2007. Moreover, the report provides growth forecasts for those industries.

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Our approach takes their non‐standardised definitions of low carbon and environmental sectors and links them to detailed Standard Industrial Classifications (4 digit, SIC2003). In order to identify relevant SICs, we refer to a wide range of industry sources regarding the nature of supply chains in low carbon and environmental industries. Inevitably we rely upon judgement and interpretation, particularly in terms of assessing the extent to which activity in any given SIC is partially involved in the production of low carbon and environmental goods and services. Our methodology starts by mapping the Innovas non‐standardised sectors and SICs for the UK. This mapping is then modified to meet the estimates for Government Office Regions using an iterative scaling algorithm. The resulting map of low carbon and environmental sectors for the South West is subsequently applied to secondary data sources for the Plymouth Unitary Authority. A schematic mapping of GB low carbon and environmental goods and services to SICs can be found in Appendix 1; a schematic map of the importance of low carbon and environmental goods and services to each SIC group can be found in Appendix 2.

Innovas themselves acknowledge that their classification of the low carbon and environmental sector is imperfect because areas of economic activity naturally overlap. For example, the ‘marine renewable energy’ sector would potentially fall across a number of the Innovas sectors: ‘wave’, part of the ‘wind’ renewable sector, and particularly in the case of Plymouth, companies such as Babcock Marine are classified to the ‘low carbon vehicles’ sector. If the survey element of this work were to be revisited, we would recommend revising the Innovas sector definitions to better suit the local context.

It should also be noted that this schematic map has a relatively short shelf‐life. The shares of each SIC group are those that fit the Innovas survey data of 2007. However, it is likely that the share of the low carbon and environmental sector is likely to grow in the future (and indeed will have been smaller in the past). Hence the mapping identified here is only applicable to a limited number of years and mapping outside that timeframe is likely to be problematic. In order to continue to use the hybrid methodology effectively, the ‘bottom‐ up’ element of the work (i.e. the survey) requires periodic revision.

The scheme also relates to SIC(2003) rather than the new SIC(2007) which has been adopted in National Statistics databases from 2008 onwards. In this report we have, for example, mapped 2009 data in SIC(2007) back to the SIC(2003) basis.

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Employment in Low Carbon & Environmental Sectors in 2008 Table 1 presents estimates of employment in low carbon and environmental industries in 2008. The table shows that Plymouth had around 3,200 full‐time equivalent (FTE) workers in low carbon and environmental industries, representing 0.37% of GB employment in the low carbon and environmental sector and 2.9% of Plymouth’s total employment. This makes Plymouth slightly under‐specialised in low carbon and environmental industries, reflected in a location quotient of 0.92 (2.9% / 3.2%). The South West region is estimated to be slightly more specialised in low carbon and environmental industries than both Plymouth and GB as a whole.

Table 1: Estimated Employment in Low Carbon and Environmental Industries, 2008 Employment, 2008 PLY SW GB FT 2806 66100 756765 PT 378 10948 101848 Jobs 3184 77048 858614 FTEs 3181 75841 855846 % share of GB employment 0.37 8.9 ‐‐ % of all industry 2.9 3.3 3.2 Location Quotient 0.92 1.04 ‐‐

Chart 1 and Table 2 give further details of employment in low carbon and environmental sectors, utilising the classification scheme used by the Innovas (2009) report for the Department for Business Innovation and Skills. Sectors are split into three broad groups containing a number of sub‐groups.

• Environmental Industries Such as pollution control, waste collection, recycling, water supply and treatment; • Renewable Energies Such as hydroelectricity, biomass and geothermal; • Emerging Carbon Industries Such as vehicle manufacture, manufacture and supply of alternative fuels for vehicles and the manufacture and supply of other alternative fuels (including nuclear energy).

The estimates show that Plymouth is significantly under‐specialised in both the environmental and renewable energy sectors but has relatively strong representation in the emerging carbon industries. Its strength in this sector is driven almost entirely by the marine industry, reflected in the location quotient of 2.74 in low carbon vehicles and vehicle

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fuels. Both Plymouth and the South West have very low representation in carbon finance, a sector which is strongly concentrated in London.

Chart 1 : Full Time Equivalent Workers in Broad Classification of Low Carbon and Environmental Sectors, 2008 GB SW PLYMOUTH

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Environmental Renewable Emerging

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Table 2: FTE and Location Quotient in Narrow Low Carbon and Environmental Sectors, 2008 Full Time Equivalents, 2008 Location Quotient PLY SW GB PLY SW ENVIRONMENTAL INDUSTRY 446 20531 184191 0.60 1.31 Air pollution 18 841 7272 0.61 1.36 Environmental consultancy 17 387 4403 0.95 1.03 Environmental monitoring 3 85 1176 0.68 0.85 Control of marine pollution 3 72 674 1.22 1.26 Noise and vibration control 5 159 1472 0.88 1.27 Contaminated land 9 787 7187 0.30 1.29 Waste management 120 5095 37463 0.79 1.60 Water & waste water treatment 114 6514 66723 0.42 1.15 Recovery & recycling 157 6591 57820 0.67 1.34 RENEWABLE ENERGY 665 16546 249302 0.66 0.78 Hydroelectricity 16 266 4428 0.88 0.71 Wave & tidal 3 46 502 1.59 1.09 Biomass 104 3521 44629 0.58 0.93 Wind 260 5299 86698 0.74 0.72 Geothermal 193 5054 72284 0.66 0.82 Renewable consulting 18 326 3870 1.13 0.99 Photovoltaic 72 2034 36892 0.48 0.65 EMERGING LOW CARBON 2070 38764 422353 1.21 1.08 Low carbon vehicles & vehicle fuel 1083 8658 97914 2.74 1.04 Other low carbon fuels 588 18174 164418 0.89 1.30 Development of new energy 18 630 9977 0.46 0.74 Carbon capture & storage 14 366 4357 0.79 0.99 Carbon finance 2 69 20557 0.03 0.04 Energy management 55 1943 18604 0.74 1.23 Building technologies 309 8925 106528 0.72 0.99 TOTAL 3181 75841 855846 0.92 1.04

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Gross Value Added and Productivity in Low Carbon and Environmental Sectors in 2008 Gross Value Added (GVA) is a standard measure of economic output for industries. It is largely comprised of wage cost but also includes industry profits and depreciation.

Table 3 presents estimates of Gross Value Added in the low carbon and environmental sectors in 2008. The table shows that these sectors contributed £192m to Plymouth’s economy, representing 4.7% of its economic output. In value terms, both Plymouth and the South West were a little under‐specialised, reflected in location quotients of below unity.

The table suggests that employment in the low carbon and environmental sector is generally high value added. Every worker in a low carbon or environmental industry in Plymouth contributed around £60,330 in GVA in 2008 which was around 60% higher than the City average. A higher than average level of productivity was also apparent in the South West and GB sectors. This general feature largely reflects the high capital intensity of energy generating sectors.

Plymouth’s productivity in low carbon and environmental sectors lags some way behind the national average at around 72% of the GB figure. However, estimates of worker productivity relative to Great Britain in Plymouth’s wider economy show a similar gap1. Productivity in low carbon and environmental industries was higher in Plymouth than the South West region as a whole.

Table 3 : Gross Value Added and Productivity in Low Carbon and Environmental Industries, 2008 GVA, 2008 PLY SW GB GVA (£m) 192 4509 72071 % of GB 0.27 6.3 ‐‐ % of all industry 4.7 4.7 5.3 Location Quotient 0.89 0.90 ‐‐ Productivity (£/FTE) 60330 58521 83938 Productivity vs all industry 1.60 1.41 1.66

Chart 2 and Table 4 provide further detail of GVA and productivity for the low carbon and environmental sectors in 2008. Chart 2 emphasises the dominance of the emerging carbon sector across Plymouth, the SW and GB. However Plymouth’s emerging sector is significantly more pronounced than in either the SW or GB; it also constitutes a higher

1 The South West Regional Accounts, 2011 (data as of June 2011) show that Plymouth’s GVA/FTE relative to GB was 74.5% in 2008

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proportion of GVA than employment (approximately 75% of GVA compared to 65% of employment).

Table 4 breaks down the GVA analysis to the narrow definitions of low carbon and environmental sectors and reveals some interesting differences in the composition of sectors relative to employment. Whilst Plymouth’s vehicle and vehicle fuel sector is an important component of low carbon and environmental GVA, it is the other fuel sector that accounts for the largest proportion of GVA (41%). This is also true for the SW and GB but to a lesser degree. One of the main contributors here is the gas industry which, in Plymouth and the SW, is gas distribution rather than manufacture; the gas industry generally has a very high ratio of GVA to employment. Plymouth’s productivity lags considerably behind that of the nation in almost all other sectors with waste management and recovery and recycling being the only sectors of any significant size where productivity remotely holds up. Excluding the low carbon fuel industry sees productivity fall from 72% of GB average to just 63%.

Chart 2 : Gross Value Added in Broad Classification of Low Carbon & Environmental Sectors, 2008 GB SW PLYMOUTH

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Environmental Renewable Emerging

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Table 4: GVA and Productivity in Narrow Low Carbon and Environmental Sectors, 2008 GVA (£m, 2008) Productivity (£000 per FTE) PLY SW GB PLY SW GB ENVIRONMENTAL INDUSTRY 24.8 1535 16000 56 75 87 Air pollution 0.6 31 345 34 37 48 Environmental consultancy 0.6 15 227 36 38 52 Environmental monitoring 0.1 4 62 39 46 53 Control of marine pollution 0.1 3 29 43 42 43 Noise and vibration control 0.2 7 74 46 42 50 Contaminated land 0.8 36 422 88 46 59 Waste management 7.5 292 2551 63 57 68 Water & waste water treatment 5.6 764 8599 49 117 129 Recovery & recycling 9.1 384 3691 58 58 64 RENEWABLE ENERGY 23.8 695 12907 36 42 52 Hydroelectricity 2.1 40 843 134 151 190 Wave & tidal 0.1 2 25 38 43 50 Biomass 2.9 127 2059 28 36 46 Wind 8.7 214 4115 34 40 47 Geothermal 6.9 210 3607 36 41 50 Renewable consulting 0.7 15 202 40 46 52 Photovoltaic 2.3 87 2057 31 43 56 EMERGING LOW CARBON 144 2279 43163 69 59 102 Low carbon vehicles & vehicle fuel 49.3 390 9698 45 45 99 Other low carbon fuels 79.0 1397 24331 134 77 148 Development of new energy 0.7 29 1024 40 46 103 Carbon capture & storage 0.7 15 230 51 41 53 Carbon finance 0.1 3 1157 35 38 56 Energy management 3.7 82 1010 68 42 54 Building technologies 10.0 363 5712 32 41 54 TOTAL 192 4509 72071 60 59 84

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FTE Employment in Low Carbon And Environmental Industry By Standard Industrial Classification, 2008 Table 5 shows the composition of the low carbon and environmental sector by FTE employment in terms of Standard Industrial Classification (SIC, 2003) for Plymouth, the SW and GB. The final two columns show location quotients for Plymouth and the SW relative to GB2, whilst Charts 3 and 4 show the composition graphically for Plymouth and GB respectively.

Manufacture is the largest of these industry classifications for all three geographies. However, it is apparent that Plymouth has a much larger share of its low carbon and environmental sector concentrated in manufacture than either the South West or the nation – and much of the manufacturing activity is marine‐related. Plymouth also has higher concentrations in electricity (transmission and distribution rather than production ‐ Langage lies in the South Hams district) and gas (distribution), as well as a strong concentration within education services (technical/vocational and higher education). By contrast, low carbon and environmental industry in Plymouth has a somewhat lower concentration of technical and engineering services, the relevant distribution and transport services and sanitation; it has a significantly lower representation in agriculture and extraction, business services and water supply; despite its strong showing in education (i.e. the University) it has a poor representation in R&D.

Table 5 : Composition of FTE Employment in Low Carbon and Environmental Sector by SIC, 2008 %Location Quotient PLY SW GB PLY SW Primary and secondary 0.2 5.5 3.4 0.06 1.65 Manufacture (incl recycling) 45.2 27.9 29.1 1.55 0.96 Electricity 6.6 4.4 2.0 3.33 2.22 Gas 2.8 1.0 2.2 1.30 0.48 Water 0.4 4.3 3.3 0.13 1.29 Sanitary services 4.9 9.7 7.0 0.70 1.37 Construction 5.6 7.3 9.7 0.58 0.75 Distribution, retail and transport 9.9 11.8 11.4 0.87 1.04 Business services 1.0 3.4 4.1 0.25 0.83 R&D 0.4 0.6 2.9 0.13 0.20 Civil engineering, architects, technical services 16.0 20.0 20.8 0.77 0.96 Public administration 0.6 0.5 0.7 0.87 0.73 Education services 6.3 3.5 3.5 1.81 1.02

2 The location quotient presented here is expressed in relation to the total employment in the low carbon and environmental sector, not total employment in all industries. In other words, the fact that Plymouth is relatively less specialised in low carbon and environmental industries per se is not reflected in these calculations.

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Chart 3 : Composition of FTE Employment in Low Carbon and Environmental Sector by SIC, PLYMOUTH 2008

Primary and secondary Education services 0% Public administration 6% 1%

Civil engineering, architechture, technical services 16%

R&D Manufacture (incl recycling) 0% 45%

Business services 1%

Distribution, retail and transport 10%

Construction 6%

Sanitary services 5% Water Gas 0% Electricity 3% 7% Chart 4 : Composition of FTE employment in Low Carbon and Environmental Sector by SIC, GB 2008

Education services Primary and secondary Public administration 4% 1% 3%

Civil engineering, architechture, technical services 21%

Manufacture (incl recycling) 29%

R&D 3%

Business services 4%

Electricity 2% Gas 2% Distribution, retail and transport Water 11% 3%

Sanitary services Construction 7% 10%

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GVA in Low Carbon and Environmental Industry By Standard Industrial Classification, 2008 Table 6 and Charts 5 and 6 present an analysis of GVA in the low carbon and environmental sector by SIC group. The composition of GVA between SICs is broadly similar to that of employment, although high productivity industries such as electricity and gas account for a larger share of low carbon GVA than for employment.

Table 6 : Composition of GVA in Low Carbon and Environmental Sector by SIC, 2008 %Location Quotient PLY SW GB PLY SW Primary and secondary 0.1 2.2 13.6 0.00 0.16 Manufacture (incl recycling) 32.9 21.4 21.5 1.53 0.99 Electricity 17.7 14.6 6.8 2.61 2.15 Gas 20.5 5.9 10.5 1.94 0.56 Water 1.0 13.8 8.9 0.11 1.56 Sanitary services 6.2 11.4 6.5 0.96 1.77 Construction 1.8 3.7 4.8 0.37 0.77 Distribution, retail and transport 4.1 6.9 7.2 0.56 0.96 Business services 1.0 2.1 2.2 0.45 0.95 R&D 0.2 0.4 2.0 0.11 0.18 Civil engineering, architects, technical services 9.3 14.9 14.0 0.66 1.07 Public administration 0.4 0.4 0.4 1.23 1.06 Education services 4.9 2.3 1.7 2.81 1.32

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Chart 5 : Composition of GVA in Low Carbon and Environmental Sector by SIC, PLYMOUTH 2008 Education services 5% Primary and secondary Public administration 0% Civil engineering, architechture, 0% technical services 9%

Business services 1% R&D 0% Manufacture (incl recycling) Distribution, retail and transport 33% 4%

Construction 2%

Sanitary services 6%

Water 1%

Gas 21% Electricity 18%

Chart 6 : Composition of GVA in LC & Environmental Sector by SIC, GB 2008

Education services Public administration 2% 0% Civil engineering, architechture, Primary and secondary technical services 14% 14%

R&D 2% Business services 2%

Distribution, retail and transport 7% Manufacture (incl recycling) 21%

Construction 5%

Sanitary services 6% Electricity 7%

Water 9% Gas 11%

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Employment in Low Carbon and Environmental Sectors, 2007­2009 Table 7 and 8 presents the analysis of low carbon and environmental industries within the context of estimates for 2007 and 2009 in order to illustrate the performance of the sector in recent history. 2009 is the most recent year for which secondary data exists.

Table 7 shows that, in Plymouth, the SW and GB, low carbon and environmental sectors performed strongly between 2007 and 2008 relative to other industries. Growth in Plymouth’s low carbon and environmental sectors was 3.4% relative to a fall of 1.6% in other industries. The environmental sector saw the highest percentage growth, with Table 8 suggesting that this came from higher employment in recovery and recycling and waste management.

Low carbon and environmental sectors saw employment fall between 2008 and 2009 across Plymouth, the SW and GB. However, Plymouth’s low carbon and environmental industries were more resilient to the downturn than elsewhere. Employment in low carbon and environmental industry fell by 0.4% in Plymouth between 2008 and 2009 compared to reductions of 6.3% in the SW and 3.9% in GB; the 0.4% fall in Plymouth was less than the 2.2% fall experienced by other industries in the city. Plymouth’s low carbon and environmental sector was the only one of the three regions to show net growth between 2007 and 2009. Both the environmental and renewable energy sectors in Plymouth recorded a fall in employment between 2008 and 2009, Table 8 attributes this to recovery and recycling and wind energy renewable; these falls were largely offset by growth in the emerging sector.

Table 7 : Employment Growth in Low Carbon and Environmental Sectors and Non­Low Carbon and Environmental Sectors, 2007­2009 FTE workers, % growth PLYMOUTH SW GB 2008 2009 2008 2009 2008 2009 Environmental Industry 23.8 ‐4.1 15.0 ‐5.5 ‐0.1 ‐5.0 Renewable Energy 1.3 ‐5.4 ‐1.6 ‐3.3 1.9 ‐3.0 Emerging Low Carbon 0.5 2.1 4.7 ‐7.9 1.8 ‐4.0 TOTAL LOW CARBON INDUSTRY 3.4 ‐0.4 5.8 ‐6.3 1.4 ‐3.9 Non‐Low Carbon Industry ‐1.6 ‐2.2 ‐0.1 1.9 0.2 ‐2.3

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Table 8 : Employment in Low Carbon and Environmental Sectors, 2007­2009 FTE workers PLYMOUTH SW GB 2007 2008 2009 2007 2008 2009 2007 2008 2009 ENVIRONMENTAL INDUSTRY 360 446 427 17856 20531 19411 184445 184191 175038 Air pollution 18 18 16 779 841 679 7194 7272 6473 Environmental consultancy 14 17 17 326 387 373 3986 4403 4349 Environmental monitoring 5 3 4 82 85 83 1145 1176 1105 Control of marine pollution 5 3 4 71 72 76 695 674 641 Noise and vibration control 5 5 6 143 159 167 1385 1472 1455 Contaminated land 9 9 6 782 787 540 6523 7187 5646 Waste management 94 120 129 3944 5095 5351 38869 37463 35939 Water & waste water treatment 117 114 124 6764 6514 7216 69256 66723 64030 Recovery & recycling 93 157 120 4964 6591 4925 55392 57820 55399 RENEWABLE ENERGY 657 665 630 16808 16546 15998 244535 249302 241840 Hydroelectricity 17 16 16 288 266 251 4614 4428 5190 Wave & tidal 3 3 3 47 46 54 514 502 494 Biomass 114 104 105 3727 3521 3566 44810 44629 42344 Wind 249 260 234 5432 5299 5045 85076 86698 86237 Geothermal 181 193 187 4949 5054 4807 70010 72284 67666 Renewable consulting 18 18 17 300 326 310 3733 3870 3808 Photovoltaic 76 72 67 2065 2034 1965 35778 36892 36101 EMERGING LOW CARBON 2059 2070 2112 37027 38764 35687 414932 422353 405561 Low carbon vehicles & vehicle fuel 1106 1083 1092 8714 8658 8375 96766 97914 90259 Other low carbon fuels 569 588 641 16817 18174 16235 161212 164418 160225 Development of new energy 20 18 17 613 630 572 9873 9977 9394 Carbon capture & storage 12 14 12 357 366 364 4289 4357 4139 Carbon finance 3 2 3 64 69 68 19253 20557 20144 Energy management 31 55 47 2158 1943 1568 20781 18604 19973 Building technologies 319 309 300 8304 8925 8503 102758 106528 101427 TOTAL 3076 3181 3169 71691 75841 71095 843912 855846 822439

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GVA in Low Carbon and Environmental Sectors, 2007­2009 Tables 9 and 10 present an analysis of GVA between 2007 and 2009 which is broadly similar to that of employment. GVA data for Plymouth and the SW for 2009 should be treated with a little caution as it is derived by applying national growth rates to regional/local Annual Business Inquiry data for 2008.

Table 9 suggests that whilst Plymouth’s GVA in non‐low carbon and environmental industries fell more than in other regions in both 2007‐8 and 2008‐9, again, its low carbon industries performed relatively better. GVA in low carbon and environmental sectors in both Plymouth and GB saw a net rise whilst in the SW it fell in successive years. Table 10 shows that growth in GVA in Plymouth was largely driven by electricity distribution/transmission and gas distribution sector within the ‘other low carbon’ sector.

Table 9 : GVA Growth in Low Carbon and Environmental Sectors and Non­ Low Carbon and Environmental Industry, 2007­2009 GVA (% growth, nominal prices) PLYMOUTH SW GB 2008 2009 2008 2009 2008 2009 Environmental Industry 32.3 ‐9.5 10.6 ‐3.2 15.9 ‐8.5 Renewable Energy 7.5 ‐9.5 1.9 ‐9.0 9.9 ‐6.6 Emerging Low Carbon 7.6 1.6 ‐7.7 ‐9.6 22.4 ‐11.9 TOTAL LOW CARBON INDUSTRY 10.2 ‐1.2 ‐0.7 ‐7.3 18.5 ‐10.2 Non‐Low Carbon Industry ‐2.5 ‐3.4 ‐0.7 ‐0.8 4.7 ‐2.8

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Table 10 : GVA in Low Carbon and Environmental Sectors, 2007­2009 GVA (£m, nominal prices) PLYMOUTH SW GB 2007 2008 2009 2007 2008 2009 2007 2008 2009 ENVIRONMENTAL INDUSTRY 19 25 22 1389 1535 1486 13805 16000 14637 Air pollution 0.5 0.6 0.6 30 31 25 315 345 298 Environmental consultancy 0.5 0.6 0.6 13 15 14 192 227 217 Environmental monitoring 0.2 0.1 0.2 3.7 3.9 3.7 54 62.3 57 Control of marine pollution 0.2 0.1 0.2 3.0 3.0 3.1 27 29.3 27 Noise and vibration control 0.4 0.2 0.3 6.6 6.8 6.5 67 74.0 69 Contaminated land 0.8 0.8 0.8 33 36 34 415 422 384 Waste management 4.9 7.5 7.0 244 292 284 2508 2551 2406 Water & waste water treatment 4.8 5.6 4.7 754 764 792 6775 8599 7837 Recovery & recycling 6.4 9.1 8.1 301 384 323 3453 3691 3342 RENEWABLE ENERGY 22 24 22 682 695 632 11745 12907 12056 Hydroelectricity 2.3 2.1 2.2 45 40 34 704 843 873 Wave & tidal 0.1 0.1 0.1 2 2.0 1.8 23 24.9 25 Biomass 3.3 2.9 2.8 137 127 115 1961 2059 1856 Wind 7.4 8.7 7.2 201 214 193 3793 4115 3833 Geothermal 6.2 6.9 6.3 193 210 187 3210 3607 3298 Renewable consulting 0.5 0.7 0.7 12 15 14 163 202 193 Photovoltaic 2.3 2.3 2.2 92 87 88 1891 2057 1979 EMERGING LOW CARBON 133 144 146 2469 2279 2061 35272 43163 38031 Low carbon vehicles & vehicle fuel 54.2 49.3 50.0 446 390 347 8569 9698 7679 Other low carbon fuels 66.0 79.0 80.5 1539 1397 1250 18634 24331 21868 Development of new energy 0.8 0.7 0.7 30 29 26 879 1024 827 Carbon capture & storage 0.5 0.7 0.6 15 15 14 212 230 221 Carbon finance 0.1 0.1 0.1 2.4 2.6 2.5 997 1157 1107 Energy management 2.8 3.7 3.6 90 82 74 897 1010 934 Building technologies 9.0 10.0 10.6 347 363 347 5083 5712 5394 TOTAL 174 192 190 4539 4509 4179 60821 72071 64724

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Economic Forecasts for Low Carbon and Environmental Sectors, 2010­ 2020 Forecasts are made for GVA and FTE employment from 2010 to 2020. The approach makes use of the market forecasts that appear in the Innovas (2009) report. These forecasts are compiled from a range of sources across low carbon industries. We make several modifications to the Innovas forecasts. Firstly, given that the forecasts largely predate the global economic downturn, we adjust the forecasts to better reflect these conditions. Secondly we modify the forecasts to accommodate recent changes in Government policy (e.g. reductions in feed‐in tariffs to solar energy). Thirdly we make adjustments to accommodate local knowledge. Fourthly, the Innovas forecasts end in 2014 and we extend the period to 2020 using simple methods of extrapolation. Finally we translate market growth into employment terms using assumptions about the relationship between output and employment growth.

It should be noted that the forecasts do not consider the possibility that Plymouth will embark on a strategy of actively developing its low carbon and environmental sector, which it may do if for example, it achieves Enterprise Zone status. Rather, these forecasts assume that Plymouth’s low carbon and environmental sector will grow largely at the same rate as the corresponding national industries.

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FTE Employment Forecasts, 2010­2020 Employment forecasts for the Plymouth low carbon and environmental industries are illustrated in Charts 7, 8 and Table 11.

Chart 7 : Annual Compound Growth Rate in FTE Employment During Forecast Period

% Annual Compound Growth Rate 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% 4.5%

Air pollution Environmental consultancy Environmental monitoring Control of marine pollution Noise and vibration control Contaminated land Waste management Water & waste water treatment Recovery & recycling Hydroelectricity Wave & tidal Biomass Wind Geothermal Renewable consulting Photovoltaic Low carbon vehicles & vehicle fuel Other low carbon fuels Development of new energy Carbon capture & storage Carbon finance Energy management Building technologies Non Low Carbon Industry

Table 11 shows that whilst Plymouth’s general economy is not expected to return to steady positive employment growth until 2016, low carbon and environmental sectors are expected to show strong and positive growth in all years beyond 2010. Employment in low carbon and environmental sectors is expected to grow by more than 2.5% beyond 2012 and to outstrip growth in other industries significantly. Chart 7 shows that the annual compound growth rate in non‐low carbon and environmental industry is close to zero but above 1.5% for the majority of low carbon/environmental sector (water and waste management).

Generally, growth rates in the environmental industry are forecast to be lower than in other industries, reflecting the fact that the environmental sector contains a number of ‘mature’ industries such as water supply. The exception is the waste management sector which is

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expected to grow significantly in 2014 assuming the proposed Combined Heat and Power plant at HM Naval Base Devonport begins production then.

The forecasts suggest there may be around 880 jobs created between 2010 and 2020 in Plymouth’s low carbon and environmental sector. This would see the share of low carbon and environmental industries rise from 3.0% in 2010 to 3.8% in 2020.

It should be noted that these jobs are not necessarily additional to total employment and instead may result from existing firms refocusing their products on the environmental and low carbon sector. It is however difficult to estimate the degree to which this substitution will take place.

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Table 11 : Annual Growth Rate in FTE Employment for Broad LC & Environmental Sectors & Non LC & Environmental Industry, 2010­2020 FTE Growth 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Environmental Industry ‐1.1% 0.2% 0.7% 1.4% 9.5% 1.5% 1.5% 1.5% 1.5% 1.5% 1.5% Renewable Energy 0.5% 1.9% 2.5% 3.3% 3.4% 3.4% 3.5% 3.6% 3.6% 3.7% 3.8% Emerging Low Carbon ‐0.3% 1.2% 1.8% 2.5% 2.5% 2.5% 2.6% 2.6% 2.6% 2.6% 2.7% TOTAL LOW CARBON INDUSTRY ‐0.2% 1.2% 1.8% 2.5% 3.6% 2.6% 2.6% 2.6% 2.7% 2.7% 2.8% Non‐Low Carbon Industry ‐2.2% 0.4% ‐0.5% ‐0.6% ‐0.2% 0.0% 0.5% 0.5% 0.5% 0.5% 0.8%

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Chart 8 : FTE Employment Index (2009=100) in Broad LC & Environmental Sectors and Non­LC & Environmental Industry, 2007­2020

150

140

130 100 120 NON‐LOW CARBON INDUSTRY =

ENVIRONMENTAL

2009 RENEWABLES

110 EMERGING LOW CARBON SECTORS INDEX

100

90

80 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

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Table 12 : FTE Employment for Narrow Low Carbon and Environmental Sectors and % of Plymouth Economy, 2010­ 2020 FTE Workers 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 ENVIRONMENTAL INDUSTRY 427 423 423 426 432 474 481 488 495 503 510 518 Air pollution 16 16 16 16 16 17 17 17 17 18 18 18 Environmental consultancy 171717171718181919192020 Environmental monitoring 444444445555 Control of marine pollution 444444444445 Noise and vibration control 6 6 6 6666777 7 7 Contaminated land 666677777777 Waste management 129 128 128 129 131 168 171 174 176 179 182 185 Water & waste water treatment 124 122 122 122 123 125 126 127 128 129 130 131 Recovery & recycling 120 119 120 121 123 125 127 130 132 134 137 140 RENEWABLE ENERGY 630 633 645 661 683 706 730 756 783 811 841 873 Hydroelectricity 16 16 16 17 17 17 17 18 18 18 18 19 Wave & tidal 3 3 3 3333444 4 4 Biomass 105 105 107 109 112 115 119 123 126 131 135 139 Wind 234 237 243 252 263 274 287 300 313 328 344 361 Geothermal 187 187 190 195 201 207 213 220 227 235 243 251 Renewable consulting 17 17 17 17 18 18 18 18 19 19 19 20 Photovoltaic 67 67 68 69 70 71 73 74 75 77 78 80 EMERGING LOW CARBON 2112 2107 2131 2169 2223 2278 2336 2396 2458 2522 2589 2658 Low carbon vehicles & vehicle fuel 1092 1088 1099 1117 1143 1170 1197 1226 1255 1286 1318 1350 Other low carbon fuels 641 640 649 662 680 699 718 738 759 780 803 826 Development of new energy 17 16 17 17 17 18 18 18 19 19 20 20 Carbon capture & storage 121212121213131313141414 Carbon finance 3 3 3 3334444 4 4 Energy management 47 47 47 48 49 50 51 52 54 55 56 58 Building technologies 300 300 304 310 318 326 335 345 354 364 375 385 TOTAL 3169 3162 3199 3256 3338 3458 3547 3640 3736 3836 3940 4049 % of All Plymouth FTEs 3.0% 3.0% 3.0% 3.1% 3.2% 3.3% 3.4% 3.5% 3.5% 3.6% 3.7% 3.8%

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GVA Forecasts 2010­2020 Table 13 and 14 and Chart 9 show GVA forecasts for low carbon and environmental industries between 2010‐2020. GVA is valued at 2009 prices.

The analysis is similar to that for employment with growth outstripping the non‐low carbon/environmental industry in all years with the fastest growth rates observed in renewable energies.

The analysis suggests that between 2010 and 2020, low carbon and environmental industries may grow 66% in real terms, from £189m in 2010 to around £316m in 2020, rising from 4.6% to 6.5% of Plymouth’s economic output.

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Table 13 : Annual Growth Rate in GVA for Broad Low Carbon and Environmental Sectors and Non Low Carbon and Environmental Industry, 2010­2020 GVA Growth (2009 prices) 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Environmental Industry ‐2.3% 0.5% 1.7% 3.3% 9.8% 3.3% 3.4% 3.4% 3.5% 3.5% 3.5% Renewable Energy 0.8% 3.8% 5.2% 6.9% 7.1% 7.2% 7.4% 7.6% 7.8% 7.9% 8.1% Emerging Low Carbon ‐0.4% 2.7% 4.0% 5.6% 5.6% 5.7% 5.7% 5.8% 5.9% 5.9% 6.0% TOTAL LOW CARBON INDUSTRY ‐0.5% 2.5% 3.9% 5.5% 6.2% 5.6% 5.7% 5.8% 5.8% 5.9% 6.0% Non‐Low Carbon Industry ‐0.9% 1.0% ‐0.2% 0.7% 1.0% 1.4% 2.3% 2.3% 2.3% 2.3% 2.5%

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Chart 9 : FTE GVA Index (2009=100) in Broad Low Carbon and Environmental Sectors and Non Low Carbon and Environmental Industry, 2007­2020

220

200

180 100 160 NON‐LOW CARBON INDUSTRY =

ENVIRONMENTAL

2009 RENEWABLES

140 EMERGING LOW CARBON SECTORS INDEX

120

100

80 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

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Table 14 : GVA for Narrow Low Carbon and Environmental Sectors and % of Plymouth Economy, 2010­2020 GVA (£m, 2009 prices) 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 ENVIRONMENTAL INDUSTRY 22 22 22 22 23 25 26 27 28 29 30 31 Air pollution 0.6 0.6 0.6 0.6 0.6 0.6 0.6 0.6 0.6 0.7 0.7 0.7 Environmental consultancy 0.6 0.6 0.6 0.7 0.7 0.7 0.7 0.8 0.8 0.9 0.9 0.9 Environmental monitoring 0.2 0.1 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 Control of marine pollution 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.3 Noise and vibration control 0.3 0.3 0.3 0.3 0.3 0.3 0.4 0.4 0.4 0.4 0.4 0.5 Contaminated land 0.8 0.7 0.7 0.8 0.8 0.8 0.8 0.9 0.9 0.9 1.0 1.0 Waste management 7.0 6.9 6.9 7.1 7.3 9.0 9.3 9.6 10.0 10.3 10.7 11.1 Water & waste water treatment 4.7 4.5 4.5 4.5 4.6 4.7 4.8 4.9 5.0 5.1 5.2 5.3 Recovery & recycling 8.1 7.9 8.0 8.2 8.5 8.8 9.2 9.5 9.9 10.3 10.7 11.2 RENEWABLE ENERGY 22 22 23 24 25 27 29 31 34 36 39 42 Hydroelectricity 2.2 2.1 2.1 2.2 2.2 2.3 2.4 2.5 2.6 2.7 2.8 2.9 Wave & tidal 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.2 0.2 0.2 0.2 Biomass 2.8 2.8 2.9 3.0 3.2 3.4 3.6 3.9 4.2 4.4 4.8 5.1 Wind 7.2 7.4 7.9 8.5 9.3 10.1 11.1 12.2 13.5 14.9 16.4 18.1 Geothermal 6.3 6.3 6.6 6.9 7.3 7.8 8.4 8.9 9.6 10.2 11.0 11.8 Renewable consulting 0.7 0.7 0.7 0.7 0.7 0.8 0.8 0.8 0.8 0.9 0.9 0.9 Photovoltaic 2.2 2.3 2.3 2.3 2.4 2.5 2.6 2.7 2.9 3.0 3.1 3.3 EMERGING LOW CARBON 146 145 149 155 164 173 183 193 204 216 229 243 Low carbon vehicles & vehicle fuel 50.0 49.5 50.6 52.4 55.1 57.9 60.8 64.0 67.3 70.9 74.7 78.7 Other low carbon fuels 80.5 80.4 82.8 86.4 91.4 96.9 102.7 108.9 115.6 122.8 130.4 138.7 Development of new energy 0.7 0.6 0.7 0.7 0.7 0.7 0.8 0.8 0.9 0.9 0.9 1.0 Carbon capture & storage 0.6 0.6 0.6 0.6 0.6 0.6 0.7 0.7 0.7 0.8 0.8 0.8 Carbon finance 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.2 0.2 0.2 Energy management 3.6 3.5 3.6 3.7 3.9 4.1 4.3 4.5 4.7 5.0 5.2 5.5 Building technologies 10.6 10.5 10.8 11.3 11.9 12.6 13.4 14.2 15.0 16.0 16.9 18.0 TOTAL 190 189 194 201 212 225 238 252 266 282 298 316 % of Plymouth GVA 4.6% 4.6% 4.7% 4.9% 5.1% 5.3% 5.6% 5.7% 5.9% 6.1% 6.3% 6.5%

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Summary of Section 3

• Low Carbon and Environmental industries were estimated to employ around 3,200 FTE workers in 2008, representing 2.9% of Plymouth’s total FTE employment. • The value of the low carbon and environmental industry was estimated to be £192m in GVA at 2008 prices, representing 4.7% of Plymouth’s total economic output. • Plymouth was slightly under‐specialised in low carbon and environmental industries relative to GB reflected in location quotients for employment and output of around 0.9 • Low carbon and environmental industries in Plymouth were significantly more productive than the average. GVA per FTE was around £60,300, over 60% higher than the average of all industries in Plymouth. • Nevertheless, Plymouth’s productivity in low carbon and environmental sectors lagged behind that of the GB sector at around 72% of the GB average. • Around 45% of low carbon and environmental industry employment in Plymouth was manufacturing based compared to less than 30% in Great Britain. • Plymouth has a particularly strong representation in low carbon and environmental industries related to the building and refitting of marine vessels, electricity transmission and distribution and education services (e.g. the University). • Plymouth’s low carbon and environmental industries have ridden the recent recession reasonably well relative to other industries and regions. Employment in low carbon and environmental industries in Plymouth grew between 2007‐2009 whilst it fell in other Plymouth industries and in the South West and GB. • Forecasts suggest that growth in low carbon and environmental industries in Plymouth will outstrip growth in other industries by a significant margin between 2010 and 2020. • Up to 880 jobs could be created in the low carbon and environmental industries between 2010 and 2020 adding £127m to GVA. • The importance of low carbon and environmental industries is likely to rise between 2010‐2020: from employing 3% of workers in 2010 to 3.8% in 2020 and from generating 4.6% of GVA in 2010 to 6.5% in 2020.

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4. Offshore Wind: An Illustrative Case Study

Introduction The preceding chapter presented quantitative estimates of the scale of the LCE in Plymouth and forecasts of its future development. These forecasts do not, of course, take into account the possible impact of “step‐change” developments arising from the emergence of a specific sector in which the local economy acquires a comparative advantage. It is beyond the scope of this report to assess the potential for such developments in detail. However, in order to illustrate the potential impact (and the uncertainties involved), this section presents a brief, illustrative case study of one of the potentially most important low carbon growth sectors for Plymouth and its surrounding region ‐ offshore wind electricity generation.

The offshore wind sector is a key focus of the city’s bid for Enterprise Zone status. However, since the success or failure of this bid will not be known until later this summer, the policy landscape under which the sector will be operating remains unclear. The council, and its partners, should further consider how it may support the sector once the policy levers at its disposal are known. The case study below provides an overview of the sector’s drivers and constraints.

Potential for the UK economy and demand side drivers The offshore wind renewables sector has the potential to make a significant economic contribution to the economy in future years. However, there is considerable uncertainty as to the number of jobs that could be supported at the national level by the sector. The Carbon Trust estimates suggest that by 2050 the sector could support anywhere between 80,000 and 230,000 jobs (Carbon Trust, 2011). This estimate stands in stark contrast to that of a study commissioned by Renewables UK which placed the sector’s 2050 potential well below this at just 42,700 jobs (Madigan, 2010). A third author suggests a much higher estimate placing the sector at 70,000 jobs as soon as 2020 (Gowdy & Gowers, 2011).

This variation in estimates for the potential employment within the sector reflects a number of factors. The most significant of these is the uncertainty over the markets that will be served by the emerging industry. If the total offshore energy sector reaches even a modest proportion of its potential, the UK would become a net electricity exporter. The full offshore resource (including wind, wave and tidal) is estimated to be capable of generating six times the current UK electricity demand. Thus, for any projections based upon a level of

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resource capture exceeding around one third, most of the demand for the electricity produced would derive from overseas markets (Boston Consulting Group, 2010).

A second key demand side driver of the demand for renewable energy is the emergence of a domestic ‘energy gap’. This gap is being created as nuclear and plants reach the end of their serviceable lives and will be widened by a simultaneous increase in electricity demand. Renewable options may also receive an additional demand boost due to the commitment to meet a 15% EU renewable energy production target by 2020 (Carbon Trust, 2011). The potential for the sector will thus be heavily influenced by central government decisions on the future role played by nuclear and other electricity production methods. A final driver will be the role of carbon capture and storage in meeting targets for reductions in carbon emissions into the atmosphere. Combining the complexities of these demand drivers with inevitable differences in methodologies and definitions across studies imply that any long term projections for job creation in the offshore wind sector are highly uncertain and, at best, indicative. However, all projections agree that the sector has the potential to become a major employer if the correct incentives are put in place to foster investment in the sector within the UK.

Realising the potential When compared to onshore facilities, offshore wind farms offer considerable economic potential. They are subject to fewer planning restrictions, offer the potential for larger scale projects and can be situated in locations where there is more wind than onshore locations (Carbon Trust 2011). These additional benefits need to be offset against the additional costs of offshore production. At present these costs are prohibitively high, however, as the technology improves, and as implementation scales increase, costs will decline substantially. The achievement of large cost reductions, through economies of scale, is critical; unless the sector can achieve higher volumes with lower costs there will be no viable market for any electricity produced. The potential for offshore wind (and tidal and ) to achieve cost reductions is known to be significantly above that of onshore wind and nuclear generation options due to the infancy of the technology (George et al., 2011).

If the potential for the offshore wind sector is to be realised, then a significant amount of investment will be required; a typical estimate suggests that nationally around £100 billion of investment will required by 2020 (Mazhuvanchery, 2010). This investment will need to occur not only within the sector itself, but also within the supply chain. Clearly, much of this investment will need to make a commercial return; however, it is generally recognised that for private investment to be induced continued public subsidy will be necessary (Boston

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Consulting Group, 2010). Continued government support is also needed to provide access to suitable sites for wind farm construction.

The UK is currently considered to be the leading world market for offshore wind development and thus has a solid platform upon which the sector can develop (Madigan, 2010). A key advantage for the UK, over other countries, is the existence of high levels of potential resource located in shallow water (Carbon Trust, 2011) which helps to reduce production costs. Some of these advantageous sites are located in the South West. Although no generating projects have been installed in the South West, two zones in the region (the in the Bristol Channel and the Eneco Wind Park off Dorset) were announced by the government at the start of 2010, with construction expected to commence between 2015 and 2018 (Regensw, 2011). The off‐shore wind resource in the South West has been estimated to contain two‐thirds of the South West’s renewable energy capacity extractable by 2030. Several sites have been identified which can use either existing technologies, deeper water than currently utilized or water floating technologies (PMSS, 2010b).

The Potential for Offshore Wind in Plymouth and the South West Recent research has assessed the potential for the offshore wind sector to develop in the South West (PMSS, 2010a, 2010b) including an examination of potential sites and an economic impact assessment. The economic assessment estimates full‐time equivalent (FTE) worker numbers for the sector and its supply chain based upon relatively conservative power generation assumptions.

The two PMSS (PMSS, 2010a, 2010b) reports provide considerable information, including a comprehensive list of assumptions on investment levels and how competitive various parts of the South West’s off‐shore wind supply chain are on national and international scales. The results are based upon a low level of equipment supply chain and project supply chain penetration by regional companies. We do note the following point of caution in interpreting results.

“Whilst located within the study area, the ability of South West businesses in securing even the low level of penetration assumed within the economic study will be difficult given the level of competition between businesses in the South West and those situated in neighbouring regions, most notably the South East and Wales.” PMSS, 2010a

Table 15 shows the FTE employment impacts from the PMSS study. Direct impacts refer to employment in the sector itself and indirect and induced impacts refer to the supply chain and the impact from increases in household spending emanating from employed workers.

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The impacts from capital expenditure initially exceed the operational impacts with this picture reversing as the number of projects increases. Total regional impacts rise from 18,000 in the 2015‐20 period to 30,500 after 2030. However, as indicated above, such estimates are extremely uncertain.

Furthermore, the study appears to have assumed that Gross Value Added (GVA) per FTE remains constant over the period to 2030, i.e. they do not recognise the role of technological change and productivity improvements in this part of their methodology; thus their employment estimates may be biased upwards. This potential upwards bias increases with time and may be in the region of 50% by 2030 (assuming 4% productivity improvement per annum). However, the core conclusion of their work still holds; when using conservative assumptions about the growth of the offshore wind sector potential economic impacts for the region as a whole sum to thousands jobs.

The difficulty of allocating a portion of these regional impacts to Plymouth can readily be appreciated. This would require an assessment of Plymouths relative ability to develop competitive advantages in several of the sectors identified within the quantitative chapter of this report. The offshore wind sector spans more than the wind renewable energy sector identified in our methodology (which itself contains several sub‐sectors, see below), jobs could also be created in sectors such as environmental consultancy and the control of marine pollution. Were such an assessment to be made the results could, in principle, be added to quantitative estimates in the preceding chapter.

Table 15 : FTE Impacts 2015‐20 2020‐25 2025‐30 2030+ Direct 8,720 3,699 2,893 2,726 Capital expenditure Indirect & induced 2,341 993 777 732 impacts Total 11,061 4,692 3,670 3,458 Direct 5,542 13,604 18,017 21,695 Operational impacts Indirect & induced 1,393 3,421 4,530 5,443 Total 6,935 17,025 22,547 27,138 Direct 14,262 17,303 20,910 24,421 Total Indirect & induced 3,734 4,414 5,307 6,175 Total 17,996 21,717 26,217 30,596 Source: PMSS (2010a)

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The Offshore Wind Supply Chain Jobs generated within the offshore wind sector will occur in five main areas (Carbon Trust, 2011):

• Turbines • Foundations • Installation • Collection and transmission • Operation and maintenance.

Thus, the potential for job creation will depend upon the national, regional/LEP and local ability to generate a competitive advantage in each area. The UK is perceived as having, or being capable of generating, a competitive advantage in each of these areas apart from collection and transmission (Carbon Trust, 2011). The offshore marine sector supply chain is in a position to build upon existing UK sector expertise and make use of existing infrastructure within the maritime sector such as ports, vessels as well as manufacturing and engineering facilities and skills (HM Government, 2010a). One major concern is that the existing technology and capacity for developing on‐shore wind farms is dominated by businesses located in Denmark, Spain and Germany (Madigan 2010). Thus, there is the possibility that whilst the UK may operate a significant number of wind farms, the production of turbines will take place elsewhere.

One of the new areas that will emerge as more wind farms are built (under the current round 3 of wind zones and beyond) is the offshore wind servicing sector. This sub‐sector is significant in terms of jobs creation since bulk of the long‐term jobs created will to be in the operation and maintenance of the wind farms (Carbon Trust, 2011). This servicing and maintenance sub‐sector is considered to offer particular opportunities for Plymouth, assuming the correct incentives are in place to allow the sector to develop in the city. This sub‐sector is a particular focus of Plymouths bid for Enterprise Zone status – accommodating the facilities needed to service and maintain the rapidly increasing number offshore wind farms in the UK. However, the results of this second round of bids for Enterprise Zone status will not be known until later this summer. Transforming the areas identified within the bid into a renewables hub could lead to significant benefits for incumbent businesses including business rate discounts and reduced planning restrictions.

If Plymouth’s Enterprise Zone bid is successful, it is possible that the benefits the zone offers to businesses will lead to significant ‘first mover’ advantages for the city and a lasting comparative advantage in the servicing sub‐sector. Government financial support until now has been relatively modest but has been key to mobilising private sector investment. Central government recognises that without significant public investment, the full potential of the sector will not be realised within the UK (HM Government, 2010a). Hence additional public support is crucial to the city’s success; this signals to investors that offshore wind servicing is viewed as a major new industry and that it will happen and jobs will be created (George et al., 2011). Enterprise Zone status for the city will help create a focus, and

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credible mechanism, for addressing some of the five themes that are needed to ensure competitive advantages are developed in the sector (HM Government, 2010a).

1. The need to develop investor confidence by proving the technology can be economically viable. 2. Providing appropriate regulatory regimes. 3. Ensuring the availability of appropriate public and private funding. 4. Generating co‐operation and engagements across the sector and the supply chain. 5. The importance of interdependencies across the above four themes.

Alongside the need to engage with and develop the sector’s supply chain is the requirement to improve the education and skills levels appropriate to providing a high quality labour force to the sector (HM Government, 2010a). If Plymouth is to succeed in servicing the sector’s service and maintenance needs it will require a greater number of suitably qualified individuals in areas such as technicians, environmental scientists, offshore and sub‐sea workers, power engineers, health and safety specialists (Gowdy & Gowers, 2011). At this point in time it is simply not possible to comment in detail upon these needs. We recommend that further research is needed once the policy and institutional landscape becomes clearer to assess potential economic impacts and the role of the Council and its partners, including educational institutions, in supporting development. This assessment should include an assessment of the emerging demands for core skills required by the sector.

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Summary of Section 4

• The offshore wind renewables sector has the potential to make a significant economic contribution to the economy. • There is considerable uncertainty, even at the national level, as to the number of jobs that could be supported by the sector as it grows. • The Carbon Trust estimates for the nation suggest that by 2050 that the sector could support anywhere between 80,000 and 230,000 jobs. • Regional employment estimates for offshore wind rise from 18,000 supported jobs for the 2015‐20 period to 30,500 by 2030. • No offshore wind generating projects have yet been installed in the South West. • Two offshore wind zones within the region (the Atlantic Array in the Bristol Channel and the Eneco Wind Park off Dorset) were announced by the government at the start of 2010. Construction of these is expected to commence between 2015 and 2018. • In terms of job creation, one of the most important sub‐sectors that will emerge as more wind farms are built is the offshore wind servicing and maintenance sector. • The servicing and maintenance sub‐sector is considered to offer particular opportunities for Plymouth, assuming the correct incentives are in place to allow the sector to develop. This sub‐sector is a particular focus of Plymouth’s bid for Enterprise Zone status. • If Plymouth is to succeed in servicing the sector’s service and maintenance needs it will require a greater number of suitably qualified individuals in areas such as technicians, environmental scientists, offshore and sub‐sea workers, power engineers, health and safety specialists. • We recommend that further research on the opportunities offered by this sector is carried out once the policy and institutional landscape becomes clearer. This should assess potential economic impacts and the role of the Council and its partners, including educational institutions, in supporting development.

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5. Low Carbon Skills

Introduction The development of a low carbon economy has potentially significant structural implications for local labour markets. New jobs may emerge in industries that produce low carbon products and technologies, whilst other jobs may be eliminated if they are related to high carbon intensive activities. The net impact of these changes is likely to differ across regions and sectors according to their dependence on high carbon jobs and ability to secure competitive advantage within the newly emergent LCE. In addition, the flexibility of the labour force may be critical to success, as a wide range of existing jobs may be altered and require skill adaptation as businesses react to the demands of the transition to a LCE. The impact on the labour market may hence involve a complex process ranging from radical change to small scale adaptation.

The complex nature of the LCE and uncertainties concerning its future development makes it a difficult exercise to assess future skills needs in a local economy such as Plymouth. The approach taken in this section is as follows:

• To provide an overview of a number of consistent conclusions that have emerged from several recent reports concerning skills at the European, National, Regional and Sector levels. This provides a framework within which to view skills issues at the local level.

• To provide a quantitative analysis of the existing skill profile of Plymouth’s LCE and the implications of the growth of the sector. The low carbon sector is also contrasted with the skill profile of the wider local economy to facilitate an assessment of the extent to which the skill requirements of the local LCE may differ from those of traditional industries.

• To discuss the supply of skills in the local economy and identify any gaps that might require attention.

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Low Carbon Skills: What do we know?

Background Recent UK policy on skills dates back to the Leitch Review of 2006 which assessed long‐term skill needs and recommended a series of actions to improve performance. In 2007, the Government published its response, World Class Skills: ‘Implementing the Leitch Review of Skills in England,’ which included a commitment to putting low carbon skills at the centre of the general drive to improve skills. The various reports, policy documents and consultation exercises concerning low carbon skills since this time have typically made an important distinction between specific and generic skill requirements and this is a distinction maintained in this current report. The former refer to core skills directly involved in the production of low carbon and environmental goods and services e.g. carbon foot‐printing, environmental impact assessment, and knowledge of sustainable materials; the latter includes more general requirements such as STEM skills and general business skills.

Following the Leitch review, the Windsor Consultation on ‘Skills for a Sustainable Future’ was undertaken in 2008. This emphasised the need for all workers to have environmental and sustainable objectives embedded within their skill set, rather than assuming that low carbon merely affected businesses in ‘niche’ environmental industries. From 2008 onwards, a series of reports emerged that examined low carbon skills in more detail and provided a number of consistent conclusions. A new consultation on low carbon skills, Meeting the Low Carbon Skills Challenge, was announced by the previous government in 2010. The results of this consultation and the response of the Coalition were published in December 2010. This response together with a more general Coalition statement on its approach to skills, announced in Skills for Sustainable Growth (2010), places particular emphasis on the role of apprenticeships, flexible vocational training and employer‐based training schemes to meet the UK’s skill needs.

Key Research Findings The various skills reports since 2008 have produced a number of remarkably consistent insights concerning emerging skill requirements. These are now summarised with supporting references from the following reports:

• Skills for a low carbon and resource efficient economy (Proenviro, for DEFRA, 2008) (PRO) • The Future’s Green: Jobs and the UK Low Carbon Transition (Institute for Public Policy Research, 2009) (IPPR) • Low Carbon Cluster Skills Assessment Report (report by eleven sector skills councils involved with low carbon activities, 2009) (SSC)

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• Skills for Green Jobs (European Union, 2010) (EU) • Meeting the Low Carbon Skills Challenge (Consultation paper, HMG, 2010) (HMG). • Meeting the Low Carbon Skills Challenge – a Government Response (Department of Energy and Climate Change, 2010) (DECC)

• Uncertainty There is consistent agreement that future skill requirements are highly uncertain: "It is currently unclear what the UK's specific skill needs are for the emerging low carbon economy." (IPPR) This reflects both a weak current evidence base on required skills and the early stage of development of many low carbon sectors (PRO). "By their very nature, low carbon industries are, in many cases, still in their infancy and relatively little is known about the precise nature of their future skills requirements." (SSC)

• Latent demand for new skills Demand for low carbon skills has been slow to emerge as the benefits and skill needs are not fully understood by businesses. Most organisations will be driven to take action only by legislation or a clear business case (PRO). A lack of investment also reflects uncertainty concerning future demand. Given that the demand for skills is a derived demand for the goods and services provided by low carbon industries, there may be a case for the government to "kick‐start the development of these industries" perhaps through "its own procurement activities as well as through the legislation and regulations it creates." (SSC) “... we will need to find better ways to inform and stimulate demand if we are to have the skilled workforce we need in the numbers required.” (DECC) There is also “...insufficient recognition across the supply chain of the need for low carbon or resource efficiency skills, meaning that there was likely to be a case for government intervention.” (DECC)

• Many essential skills are not new There is a consensus that very few of the critical skills for the transition to a low carbon economy are new (EU). "We did not uncover any evidence that the sector demanded entirely new types of skills amongst the workforce." (IPPR) “Many of the skills required for the transition to the low carbon economy will not be new.” (DECC) What is generally required is the topping‐up of existing skills to familiarise workers with new concepts and practices and the adaptation of skills within a low‐carbon context (PRO). In many cases, these training requirements are not likely to be onerous. Indeed, even the ".....retraining required for workers to convert to an occupation in an entirely different greener industry, may be less than expected. Case studies suggest that skills development responses, required to enable a person to

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fulfil a new occupation, are often a matter of up‐skilling, or adding to existing core skills." (EU)

• The critical skill gap is with regard to the supply of some key generic skills If latent demand is transformed into actual demand, it is unlikely that current levels of skills training capacity will be sufficient to meet demands (PRO, SSC, EU). The most important generic skills are the leadership and management skills required to drive through the changes required for business adaptation and traditional Science, Technology, Engineering and Mathematics (STEM) skills which tend to be associated with the design, development and deployment of new low carbon technologies (PRO, SSC, HMG, DECC). "...deficits in management skills and technical job‐specific skills (many of which are related to science, technology, engineering and mathematics [STEM]) are a greater concern than shortages of new green skills." (EU) "...employers in the low carbon sector currently have two major skills problems: management... and technical, job specific skills, including but not limited to Science, Technology, Engineering and Mathematics (STEM) skills." (IPPR)

¾ There are some areas in which investment in skills delivery will be needed due to the scale of action required: "This is most notable in energy efficiency and construction of zero‐carbon homes, both of which are heavily driven by national legislation. The concern over the ability of the construction industry to meet low‐ carbon requirements with its existing workforce is based more on the volume of workers that require upgrading of skills – even if the actual skill requirement for the individual is relatively low." (EU) “Decarbonising the power industry will require a major cross‐sector effort to meet escalating demand for skills. The industry will need to recruit apprentices and graduates in large numbers, particularly those with STEM skills.” (HMG) “In the wind and nuclear energy sectors, we have a clearly identified a need for technician level skills.” (HMG) There are also specific skill shortages in some key low carbon areas that may require investment: (e.g. pipe welders and civil engineers (IPPR)).

¾ Low carbon skills should be integrated within the training of all companies Low carbon skills should not be seen as separate to skills delivered by general training programs. They should be embedded within these programs to ensure that low carbon understanding and competences spread throughout a company. (PRO) This is critical given that most jobs will require an element of "greening" (SSC).

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A South West Perspective

Whilst considerable research on skill needs has been undertaken at a national level, there has been a growing consideration of skill requirements at the regional level including major studies for London, the North West and Merseyside. In a South West context, a recent SLIM report Green Skills, Green Jobs: Opportunities for the South West Low Carbon Economy (January 2010) reviews recent research and the results of a workshop on green skills. The conclusions of the report echo many of the themes identified at the national level. Recommendations on delivering skills, for example, emphasise the importance of leadership skills, STEM skills, improving environmentally responsible practice throughout the workforce and "carbon literacy" for all types of organisation. The report also noted the need for further analysis of future skill needs to facilitate advanced planning at the national and regional level and the need to make clear the business case to drive the development of the low carbon economy.

A further regional report which reinforces the national picture is a recent study on Low‐ carbon manufacturing skills in the South West of England (2010). This report notes that many low carbon technologies in the region are at such an early stage of development that it is difficult to identify future skill needs. However, it identifies four potential skill gaps:

• Generic management and leadership skills. • Specific technical skills shortages • Skills gaps that could be addressed by 'topping up' existing workforce skills. • Generic 'low‐carbon' skills including a broad understanding of the changes needed for businesses to reduce their carbon emissions.

The report concludes that policy‐makers should focus on “…improving and upgrading current skills rather than developing entirely new training programmes for low‐carbon jobs.”

At the sector level, a report on Low Carbon Research ‐ 2010 ‐ Construction Skills ‐ identifies a range of occupations likely to be affected by the low carbon agenda including architects, construction managers, insulation installers, electricians, plumbers and building service engineers. However, the report notes that for many occupations, changes will be about new knowledge rather than completely new skills: "…. addressing the low carbon challenge while affecting large segments of the construction workforce, will have a more significant impact on a relatively small range of occupations."

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The clear message that emerges from existing studies is that whilst certain core skills may be required for particular sectors of the low carbon economy, the key to success involves the greening of existing skills and expansion in the supply of generic skills, particularly STEM skills and management/leadership skills. An added advantage of concentrating on such generic skills is that it facilitates greater labour force flexibility; a strategy solely concentrated upon the development of core skills is problematic when the scale and nature of future skill requirements is so uncertain. Expansion of generic skills is likely to require action on both the demand and supply side of the labour market. On the supply side, policy makers can take action to encourage the acquisition of these skills within the training and education system. However, success also requires transforming the latent demand for low carbon into a realised demand by encouraging employers to invest in these skills and integrate low carbon issues within their existing training programs.

Low Carbon Skills in Plymouth This section examines the current skills profile of the low carbon sector in Plymouth and changes in its composition over recent years. A comparison of the sector with the profile of the wider Plymouth economy and the national low carbon sector facilitates an analysis of the extent to which the local low carbon sector exhibits distinct characteristics. Skills are examined in terms of both occupation and highest qualification held. It should be noted that the discussion involves an examination of broad quantitative data on occupations and qualifications; it does not provide a detailed analysis of specific skills within, for example, individual firms within the local LCE.

Table 16 provides data on a number of occupations in which there are significant differences between the low carbon sector and the wider Plymouth economy (details of the complete occupational profile can be found in Appendix 3). The ten occupations all have a local occupational Location Quotient (LQ) of over 1.2 (defined as % share of that occupation in the Plymouth low carbon sector/ % share of the occupation in all Plymouth industries). Thus, there are, for example, 3.3 times as many individuals involved in Science and Technology Professional occupations in the low carbon sector as there are involved in all local industries; the second column indicates that these type of occupations accounted for 9.1% of all occupations in the LCE.

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Table 16 : Occupational Structure of Plymouth’s Low Carbon and Environmental Economy, 2008

Composition Δ in LC LQ vs (%) of LCE share, LQ vs GB2 Plymouth1 Employment Plymouth, Occupation in Plymouth 2002‐2008 Science and Technology Professionals 3.3 9.1 0.9 1.4 Science and Technology Associate Professionals 2.9 7.7 1.5 1 Skilled Metal and Electronic Trades 2.9 15.5 1.7 ‐3.3 Skilled Construction and Building Trades 2.3 6.1 0.7 ‐0.2 Process, Plant and Machine Operatives 2.2 6.1 0.8 ‐0.7 Business and Public Service Professionals 1.7 6 0.9 0.1 Elementary Trades, Plant & Storage Related Occupations 1.6 3.8 0.8 0 Corporate Managers 1.3 11.7 0.8 2.6 Customer service occupations 1.3 3.1 2.5 0.7 Transport and mobile machine drivers and operatives 1.2 4.9 0.8 ‐1 1 % Employment in Occupation in Plymouth LC Economy / % Employment in Occupation in Plymouth Economy as a whole 2 % Employment in Occupation in Plymouth LC Economy / % Employment in Occupation in GB LC Economy

The highest local LQ’s are in the two Science & Technology occupations, confirming the importance of these skills to the LCE noted in the previous section. In addition, business and leadership skills, certain skilled trades, transport and customer service occupations all have a relatively high level of importance in the sector compared to other local industries.

The ten occupations with a local LQ of over 1.2 involve three quarters of the labour force in the LCE – around 2,350 jobs. If the low carbon sector had a similar occupational profile to that of the local economy as a whole, then it would only have required around 1,200 individuals in these jobs, indicating an extra demand for 1,150 workers in these occupations due to the specific occupational structure of the LCE. To put this in perspective, this corresponds to only around 1% of the local employed labour force. Thus, whilst there are significant differences in the occupational structure of the LCE compared to the rest of Plymouth, the quantitative impact of these differences is relatively small given the current contribution of the sector to the local economy.

In seven of the occupations listed in Table 16, the low carbon sector LQ defined relative to the nation as a whole (% low carbon in Plymouth/% low carbon in GB) is close to one, suggesting that the importance of these occupations locally is broadly in line with the low carbon sector nationally. However, in three cases: Science and Technology Associate

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Professionals, Skilled Metal and Electronic Trades, and Customer Service occupations, the LQ is significantly greater than one implying a greater demand for these skills locally than the national average. Again, however, the scale of this “extra” demand is relatively small in terms of the absolute number of jobs that it relates to.

Applying the forecasts for the growth of the LCE presented in the previous chapter to the current occupational profile of the sector in Plymouth, provides a baseline forecast for the types of new jobs that might be created in the future. Given that the forecast of the total number of jobs created in the LCE by 2020 is around 900, the number of jobs created in the identified occupational categories is relatively small ‐ varying from approximately 30 – 140 across the various occupations. Over a ten year time period, these figures do not suggest any major increase in demand for these broad skill categories purely arising from the expansion of the LCE.

Of course, such forecasts assume that the occupational profile of the LCE is static; however, as industries change in response to new technologies, changes in demand and productivity improvements, there may be changes in the occupational profile of the sector. The uncertainties that have been noted concerning the future development of the LCE implies that forecasting quantitative changes in the occupational structure is a problematic exercise. At a local level, the numbers involved in specific occupations are relatively small and forecasting errors would be relatively large. An alternative procedure is to examine recent trends and assess the implication of these trends continuing; this has the advantage of relying upon actual data rather than uncertain forecasts but should still be treated with extreme caution.

The final column of Table 16 presents data on changes in the occupational profile of the LCE over the period 2002‐8 (defined as the % increase or decrease in the share of the occupation in the sector with industry structure held constant). Of the ten occupations, five have seen their share fall or hold steady, whilst five (Science and Technology Professionals, Science and Technology Associate Professionals, Business and Public Service Professionals, Customer Service occupations, Corporate Managers) have seen their share increase. This supports the general picture that has emerged concerning the increasing importance of Science, Technology and Business skills to the low carbon sector. However, once again, the quantitative significance of such changes in terms of the absolute number of jobs affected is small.

An alternative to examining the occupational structure of the LCE is to examine qualifications. Details concerning the highest qualification held by the LCE workforce are

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presented in Table 16. There is some evidence of a slightly higher level of qualification requirement in the low carbon sector. The six highest levels of the qualification ladder all have a local LQ of one or above, whereas those at lower levels tend to have a local LQ of slightly below one. However, the differences are not dramatic and the only local LQ greater than two applies to trade apprenticeships, rather than high level academic qualifications. In comparison to GB as a whole, the third column indicates that only in the case of NVQ level 5 is the LQ greater than 1.5. Thus, In general terms, the educational profile of the local LCE is not dramatically different from that in the sector in GB as a whole and, as was the case for occupations, the quantitative significance of any differences is relatively small.

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Table 17 : Qualifications in Plymouth’s Low Carbon and Environmental Economy, 2008 Composition Δ in LC LQ vs (%) of LCE share, LQ vs GB2 Plymouth1 Employment Plymouth, Qualification in Plymouth 2002‐2008 Higher degree 1 7.9 0.8 2.3 NVQ level 5 1.6 0.5 1.8 0.4 First degree 1 13.6 0.9 1.8 Other degree 1.3 1.5 1 ‐1 NVQ level 4 1.2 1 1.2 0.4 Other higher education 1.2 12.3 1.3 1.4 NVQ level 3/GNVQ advanced 0.8 4 1.1 0.8 A level or equivalent 0.7 5.1 1 1 City/guild advanced and other advanced v 1.9 8.6 1.3 ‐2.5 AS level 0.6 1.2 1.2 0.2 Trade apprenticeship 2.1 11.2 1.5 ‐2.5 NVQ level 2/GNVQ intermediate 0.7 2.9 0.9 0.4 City/guild craft/other vocational interme 0.9 1 1 ‐0.2 O/GCSE A‐C 0.7 11.6 0.9 ‐1.6 NVQ level 1/GNVQ foundation 0.7 0.3 0.7 0 CSE/GCSE below C 0.9 2.6 0.9 0 Other qualifications 0.9 7.1 0.7 0.2 No qualifications 0.8 7 0.9 ‐1.2

Don't know 1.2 0.8 1.1 0.3

1 % Employment in Qualification Group in Plymouth LC Economy / % Employment in Qual group in Plymouth Economy as a whole 2 % Employment in Qualification Group in Plymouth LC Economy / % Employment in Qual group in GB LC Economy

An examination of recent trends (final column) shows a decline in share of some of the more vocational‐type qualifications and an increase in the share of first and higher level degrees. This is broadly in line with trends in other industries and the GB low carbon sector as a whole. Thus, the demand for higher level qualifications is part of a general trend throughout the economy rather than low carbon specific and is undoubtedly related to the expansion of supply of graduates in recent years.

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Summary In summary, there is no evidence that the occupational or educational requirements of the low carbon sector are dramatically different from the rest of the local economy. However, there is some evidence to support the view that occupations related to STEM‐type skills, business skills and certain technical skills are relatively important to the low carbon economy. These skills tend to be more important to the local low carbon sector than they are to other sectors and have been growing in their share of low carbon occupations in recent years. However, even if these occupations continue to grow more rapidly than other occupations, there is no clear evidence of a massive increase in demand purely due to the development of the low carbon economy. As far as qualifications are concerned, there is some evidence of a slightly higher level of qualification required in the LCE compared to other industries. Increases in the number of graduates mirrors similar trends in other industries.

Finally, it must be remembered that this analysis of the low carbon sector neglects the potential importance of the “greening” of all jobs, which may be a more important issue than changes is the specialist labour requirements of the LCE This is not an issue that can be addressed by this type of quantitative analysis.

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Local Skills Supply To shed further light on the ability of Plymouth and its surrounding area to provide the skills demanded by the existing and potential low carbon economy, we have carried out a baseline audit of courses provided by both universities and colleges in Devon and Cornwall. This audit does not set out to be comprehensive and list all programmes on offer and intentionally excludes short course provision ‐ a full audit of provision is beyond the scope of this project’s brief. Its purpose is to provide a broad overview of the current provision of generic and core skills that are accessible locally by the area’s existing population.

The analysis follows the existing literature by separating the skill needs of the LCE into generic skills and core skills. Generic skills, applicable to a wide number of sectors, are sub‐ divided into STEM skills and ‘general business, management and leadership’ skills. Specific skills are applicable chiefly to the low carbon sector. We examined courses listed on the web pages of two universities (Exeter and Plymouth) and twelve colleges in Devon and Cornwall. With the exception of three specialist colleges, all providers offered courses relevant to the low carbon economy.

Generic and Specific Programme Provision

Generic skills The provision of programmes providing generic skills demanded by the low carbon economy is, as would be expected, wide ranging. The portfolio offered by most education providers within the two counties includes courses developing both general business and STEM skills (see Table 3). General management, leadership and business skills are provided by all providers, with the exception of the specialist institutions such as Plymouth College of Art. Programmes developing the broad areas contained under the STEM skills umbrella are also widely available, though with fewer providers than management/leadership and business skills. STEM skills are comprehensively provided by the two universities and partially provided by most colleges. Within the colleges various forms of engineering are widely offered, whereas some other STEM areas, especially mathematics, are less frequently offered3. In addition to the offer of a broad range of courses in generic skills, the Plymouth area also has good access to different levels of provision from NVQ level 1 to 5 (and equivalents).

As indicated elsewhere in this report, national research suggests that there may be an issue with an insufficient number of individuals studying STEM subjects. If this continues, it may cause a future skills shortage which may constrain growth of the low carbon economy. If this becomes an issue in the local area then it appears to be a demand side problem, being

3 Although this may be embedded within programmes with other titles.

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brought about by low course take‐up rates, rather than a lack a willingness by training providers to supply relevant courses. Thus, the appropriate policy response appears to be the promotion of the value of STEM subjects to individuals who may have a latent demand for them.

Core skills As is to be expected, programmes aimed specifically at developing the core, bespoke, skills required for a well developed LCE are less widely available. Most colleges offer at least one relevant programme of study and the two universities offer significantly more. The low number of available courses may be a reflection of the fact that many of these skill demands are still emerging and their precise nature and scale remains unknown.

When assessing core skill provision, it is important to avoid the assumption that the number of programmes in areas core to the low carbon sector represents the sum‐total of core skill provision. Core skill provision will be much higher than this, with large numbers of students acquiring core skills via options studies as part of more generic programmes. For example, students studying for general engineering qualifications may undertake options in marine engineering or renewable energy. Finally, the employer focus and vocational nature of many of these courses is evident from the use of field trips and placements within taught programmes.

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Table 18 : Skills Provision Within Devon and Cornwall Generic skills Core skills General business Provider Area STEM skills skills Example programmes BTEC Extended Diploma in Environmental Some ‐ Land based Bicton College Devon N/A Sustainability technology Foundation Degree in Environmental Education Some (Engineering & Bridgwater College Devon Yes Nuclear safety related NVQ 2 and 3 nuclear) City College Plymouth Devon Yes Yes Marine Engineering Foundation Degree Cornwall College Cornwall Yes Yes FdSc Applied Ecology, marine science & boat design

Yes ‐ Electrical & Exeter College Devon mechanical Yes No engineering

Peninsula College of Devon N/A N/A N/A Medicine & Dentistry Yes ‐ various Petroc Devon Yes No engineering Plymouth College of Art Devon N/A N/A N/A Marine Engineering NVQ2; short courses on South Devon College Devon Yes Yes installation of solar voltaic systems etc Truro & Penwith College Cornwall Some Yes No Some UCP Marjon Devon No management N/A & leadership MEng/BSc Renewable Energy. MSc Environmental University of Exeter Devon Yes Yes Management. BSc Environmetal Science. BEng Marine Technology. University of Plymouth Devon Yes Yes BSc Marine and composites Technology. UC Falmouth Cornwall N/A N/A N/A N/A = not applicable since outside the institutions clearly stated educational focus.

As indicated above, the skills demand in the sector is, to some extent, latent due to the need to build awareness of the possibilities within the LCE and demonstrate its commercial value to both individuals and businesses. Hence the apparent lack of existing provision may be a manifestation of informational problems on either the demand or supply side of the market; i.e. course providers do not currently fully recognize the demand for courses relating to the low carbon sector or individuals and businesses do not fully recognize the potential benefits from studying such a course. However, the conclusion from the sector projections in this study is clear, there is a (small) existing demand for courses providing core skills and this demand is expected to rise over the coming years. Thus, it may be appropriate for policy makers to consider supporting mechanisms to increase core skill provision and convert latent demand to actual demand.

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Core skill progression There is clear evidence of pathways for progressing from the lower to higher levels of accreditation in core skills. For example, the Foundation Degree in Marine Science offered by Cornwall College can be used to gain entry to BSc degrees relevant to low carbon sectors at both Plymouth University and the College itself (albeit accredited by the university); similar programmes are linked with the University of Exeter. Additionally, there are pathways for progression within many of the colleges, including from part‐time short courses to more substantial part‐time and full‐time programmes.

Conclusion In conclusion, the existing provision of generic skills programmes, by universities and colleges in and around Plymouth, is fairly comprehensive. This appears to be sufficient for the needs of the low carbon sector, especially when set in the current context of the relatively small size of the overall sector and the general message that for many of the sector’s workers only a ‘greening’ of existing skills is needed and not the acquisition of a new skill‐set.

The conclusion as to the appropriateness of the level of the current provision of courses developing the core / bespoke skills is less clear. There is certainly evidence to suggest that colleges and universities have been responsive to the needs of the labour market as many of the core skills programmes listed in Table 3 have only been offered for a relatively short time period. The key to ensuring appropriate provision is the creation of mechanisms that ensure universities and colleges are informed of the emerging and changing needs of employers. Continued public support for projects such as Low Carbon High Skills (see below) can assist in achieving this. Whilst it is beyond the scope of the current study to assess the current skills shortages and surpluses we believe that this would be a fruitful exercise.

‘Topping­up’ existing skills If the low carbon sector is to reach its full potential in Plymouth then it is necessary to ‘top‐ up’ the skills of the existing workforce. As indicated elsewhere in this report this will include the ‘greening’ of existing skills, the provision of short courses disseminating knowledge relating to new greener technologies etc. Much of this provision will not occur through full length programmes such as HNDs, foundation degrees and undergraduate and postgraduate degrees but through the provision of short courses and workshops. Much of this provision will need to be aimed at businesses, and their employees, who are currently within, or potentially able to enter, the low carbon sector. For a general ‘greening’ of existing skills initiatives such as ‘Plymouth 186’, Plymouth’s low carbon network and climate change framework, have important roles to play in raising awareness in the business community.

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However, for the development of low carbon specific skills a more targeted approach is needed.

Plymouth and its surrounding area currently has a good number of courses aimed at topping‐up low carbon specific skills, for example short courses on construction techniques and meeting stricter environmental construction standards. However, for these courses to be fully effective a large amount of information needs to flow between education providers, businesses and their employees. The South West region recognized that this process could be facilitated by the creation of an organization acting as a clearing house, or broker, between the supply and demand sides of the skills provision market. Between Jan 2010 and March 2011 the Universities for the South West led a partnership project aiming to address the emerging higher skills needs (degree and above) in several low carbon sectors (marine energy (wind, wave and tidal) non‐marine renewables, low carbon manufacturing, civil nuclear (new build and decommissioning) and renewable construction). This Low Carbon High Skills (LCHS) project led to the development of 14 new, demand led, accredited and non‐accredited courses and workshops suitable for delivery to businesses by several providers. Exeter University and the University of the West of England are particularly heavily involved in this provision. So far around 500 learners have received some kind of up‐skilling from the courses and workshops. Outputs from this project are still emerging, with several of the programmes still at a pilot stage. However, this brokerage function comes at a cost; the LCHS project cost around £2 million with much of the budget being used to support project administration and course development.

In addition to the provision of worker up‐skilling, the project has generated valuable case studies aimed at promoting the importance of low carbon higher skills to both businesses and (current & potential) employees. This is a particularly important aspect of the project since it may convert some of the latent demand for skills to an actual demand by reducing some of the uncertainties regarding the potential return of skills investments by businesses and their employees.

This project is a particularly good example of good practice, based upon gaining employer input into course design and working with partner training providers to create the programmes needed to fulfil employer demands. It is important that the momentum created by the LCHS project, and any credibility it has in the eyes of the business community is not lost now its funding has ended. Thus, we recommend that the city and its partners are active in ensuring this work has a lasting legacy.

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Summary of Section 5

• Whilst the development of a LCE has potentially important structural implications for local labour markets, there is general agreement that the precise nature of future skill requirements is highly uncertain.

• The demand for low carbon skills has been slow to emerge as the potential benefits of developing these skills are not fully understood by many businesses. Most organisations will be driven to take action only by legislation or a clear business case. Hence much skill demand remains latent.

• When examining low carbon skills it useful to make a distinction between specific and generic skill requirements. There is widespread agreement that the critical skill gap (assuming latent demand becomes effective) is likely to be with regard to generic skills (e.g. STEM‐type skills and business related skills) rather than core skills.

• For the majority of occupations what is required is the acquisition of new knowledge rather than entirely new skills. The development of new core skills is likely to be required by a relatively small range of occupations.

• When examining data relating to Plymouth, there is no evidence that the existing occupational or educational requirements of the low carbon sector in the city are dramatically different from the rest of the local economy. However, there is some evidence to support the view that occupations related to STEM‐type skills, business skills and certain technical skills are relatively important to the LCE and the sector has a slightly higher level of required qualifications.

• The existing provision of generic skills programmes, by universities and colleges in and around Plymouth, appears to be sufficient for the current needs of the low carbon sector, especially when set within the context of the relatively small size of the sector and the general message that many jobs only require a ‘greening’ of existing skills.

• The appropriateness of the level of current provision of courses developing core skills is less clear given the uncertainties involved concerning future demand. Plymouth and its surrounding area currently has a reasonable number of courses aimed at topping‐up low carbon specific skills, for example short courses on construction techniques and meeting stricter environmental construction standards. However, the provision of whole programmes (HNC, degree etc) is more partial.

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• The key to ensuring appropriate provision of core skills is the creation of mechanisms that ensure universities and colleges are informed of the emerging and changing needs of employers. It may be appropriate for policy makers to consider supporting mechanisms that increase core skill provision and convert latent demand to actual demand. Support for projects similar to the Low Carbon High Skills project can assist in achieving this.

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6. THEMES AND IMPLICATIONS

The detailed conclusions of this report have been highlighted in the individual chapter summaries. This final section discusses some of the broader themes to emerge and the implications of these for local policy makers.

Improving Knowledge of the LCE Whilst the UK is committed to achieving ambitious emission reduction targets, there are significant uncertainties characterising the policy environment affecting LAs. These arise from a variety of sources including ‐ the level of funding for climate change initiatives within the context of deficit reduction; the impact of the 2014 policy review; the emerging strategic priorities of the Coalition; the impact of new strategic organisations (including LEPs and the GIB) and the level of demand for low carbon products and skills. These uncertainties make it essential for policy‐makers to closely monitor emerging policy developments and rapidly assess their local implications. The effective analysis of local impacts requires detailed knowledge of the local LCE. This report presents the first stage in analysing the quantitative importance of the LCE in Plymouth and its potential impact on future jobs and incomes. However, there are a number of limitations to the quantitative estimates presented in this report and these limitations should be addressed in any future work:

• Whilst the hybrid methodology adopted in this study is effective in achieving a balance between the benefits and costs of data collection, the Innovas survey data is now rather dated. Hence, we would recommend that the ‘bottom up’ element of the methodology – the survey – should be renewed in the near future, with periodic renewal as the LCE changes and develops.

• In order to make use of the survey data, the study adopted the Innovas definition of the low carbon and environmental sector. This definition may not be optimal for the specific circumstances of a particular local economy. For example, if Plymouth’s low carbon strategy were to involve developing the marine renewable sector, a clearer and more complete definition of this sector and a survey‐based audit of relevant local businesses would be recommended.

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Strategic Co­operation It is important to recognise that climate change does not respect administrative boundaries and co‐operative actions may be required to develop appropriate policy responses. The abolition of RDAs, establishment of LEPs and the potential regional impact of the GIB creates uncertainties concerning the functioning of the new organisational framework within which the low carbon agenda will be pursued. However, the newly formed Heart of the South West LEP offers an obvious conduit for the development of a sub‐regional co‐ operative response to climate change; alignment of policies within the LEP (as far as this is possible) will enhance the ability of its constituent members to influence future strategic developments and plan for the uncertainties surrounding climate change.

Latent Potential The importance of the LCE to the future development of Plymouth is related to its latent potential for growth rather than its current significance. At present, the low carbon sector is relatively small, representing 2.9% of Plymouth’s total FTE employment and 4.7% of output. Moreover, Plymouth is slightly under‐specialised in the sector relative to GB as a whole and, although the sector has higher levels of productivity than the average of all industries in Plymouth, it lags behind national productivity in these industries. However, on a more positive note, the sector has secured recent employment growth in Plymouth and our forecasts suggest that growth will outstrip that of other sectors possibly accounting for 6.5% of GVA by 2020. Thus, there is significant potential for the sector to acquire increased significance and thereby warrant close attention from local policy‐makers.

Sector Development It is important to note that our forecasts do not take into account the effects of significant policy interventions which might enhance low carbon developments. Further “take‐off” of the local LCE over and above these forecasts is likely to depend upon the ability of the city to generate a comparative advantage in specific sectors. Cities which have acquired a reputation as leading “green cities” tend to have prioritised key sectors, with renewable energy being a strong theme (examples include Reykjavik, Vancouver, Sydney, Quebec, Copenhagen & Växjö). Thus, an emphasis on the marine renewable sector in Plymouth would correspond well with the strategies of other successful cities. Achieving “take‐off” is, however, difficult: indeed, the illustrative case study presented in the report highlights the considerable uncertainties concerning the potential for growth in renewable wind energy. Nevertheless, the development of the sector might be “kick‐ started” by specific policy initiatives. For example, if Plymouth gains Enterprise Zone status,

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aiming at creating a ‘renewables hub’ focusing upon the offshore sector, then the ability of the city to attract and support LCE jobs will increase. We recommend that, if the bid is successful, the council and its partners undertake a detailed, company level, assessment of the sector. This should identify areas where further policy intervention can make a difference, including areas for core skill development. The council should also consider the development of a robust methodology capable of monitoring the ongoing economic value and contribution of the sector.

Flexibility Uncertainty concerning the future policy environment and the growth of the LCE places a premium upon flexibility. LAs must develop policies and structures that enhance their ability to adapt quickly to unforeseen changes. A good example concerns skills. Nationally, there has been much attention devoted to assessing the core skill requirements of the LCE. However, existing evidence suggests that generic skills are the key requirement. An advantage of such an emphasis is that the acquisition of high level generic skills improves the ability of the labour force to adapt to a rapidly changing labour market. Whilst certain core skills may be required for specific sectors, an excessive emphasis on these core skills risks locking the labour force into specific skills for which demand may not emerge. In general, it may be sensible for policy to emphasise improving the generic skills of the local labour force with core skills only developed when a clear need is apparent (e.g. in the case of a strategic focus on a specific sector). The existing provision of generic skills programmes around Plymouth appears to be sufficient for the needs of the current low carbon sector, especially when set in the current context of the relatively small size of the overall sector and the general message that for many of the sector’s workers only a ‘greening’ of existing skills is needed and not the acquisition of a new skill‐set. Of course, it is likely that some specific skill shortages may emerge as the LCE grows and develops. Identifying such requirements will be facilitated by ensuring a good information flow between the city’s businesses community and the public sector. For example, the council could choose to initiate, or support, projects which facilitate training providers to work collaboratively with employers to create additional programmes that meet emerging core skill demands (including knowledge transfer partnerships). In this regard, organisations such as the Low Carbon Network could play an important role through which information is transmitted and local policy‐makers could make a meaningful contribution to the prospects of Plymouth’s LCE.

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Adaptation In addition to developing a capacity to act flexibly, it is important that Plymouth does not neglect the wider issue of economic adaptation in the absence of the stimulus of NI188. Whilst current policy is clearly geared towards mitigation through emission reduction targets, the inevitability of climate change implies that long term economic adaptation is likely to be essential rather than optional and advanced planning may mitigate costs over the long term. Thus, in addition, to short and medium term measures to achieve emission reduction targets, assessing the long term structural changes necessary to adapt to climate change and developing appropriate policy responses is of considerable importance.

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References

Boston Consulting Group (2010) The Offshore Valuation: A Valuation of the UKs Offshore Renewable Energy Resource. Off Shore Valuation Group

Bulkeley, H., Schroeder, H., Janda, K., Zhao, J., Armstrong, A., Chu, S. Y., & Ghosh, S. (2009). Cities and climate change: The role of institutions, governance and urban planning. 92nd World Bank Urban Research Symposium, Marseille.

Carbon Trust (2011) Offshore Wind Green Growth Paper. Carbon Trust Climate Change Act (2008) (http://www.legislation.gov.uk/ukpga/2008/27/contents)

Construction Skills Research (2009) Low Carbon Research ‐ South West England 2010 ‐ Construction Skills.

DECC (2010a) Annual Energy Statement (http://www.decc.gov.uk/en/content/cms/meeting_energy/aes/aes.aspx)

DECC (2010b) Meeting the Low Carbon Skills Challenge – a Government Response DECC (2011) The Green Deal: A summary of the government’s proposals (http://www.decc.gov.uk/en/content/cms/tackling/green_deal/green_deal.aspx)

Department for Innovation Universities and Skills (2007) World Class Skills ‘Implementing the Leitch Review of Skills in England,’ The Stationary Office.

Ernst and Young (2010) Capitalising the Green Investment Bank.

European Union (2010) Skills for Green Jobs, CEDEFOP.

George S., Smith M., Wright M and M Carcas (2011) Current Technology Development and Deployment Challenges: A Perspective from the Technology Developers

Gowdy, J and B. Gowers (2011) Offshore Wind Industy Update. Presentation given to RegenSW’s South West Marine Energy Networking Event 18th March

Griffith M., Stevenson R. And M Rolls Technology Development and Deployment Challenges – A Perspective from the Industrials.

HM Government (2010a) Marine Energy Action Plan Department of Energy and Climate Change

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HM Government (2010b) Meeting the Low Carbon Skills Challenge (Consultation paper) HM Government (2011) Carbon Plan (http://www.decc.gov.uk/en/content/cms/tackling/carbon_plan/carbon_plan.aspx)

Institute for Public Policy Research (2009) The Future’s Green: Jobs and the UK Low Carbon Transition. Innovas (2009) Low Carbon Environmental Goods and Services: an Industry Analysis, Department for Business Innovation and Skills Leitch Review (2006) Prosperity for all in the global economy‐ world class skills, Final Report, The Stationary Office, December 2006. Low Carbon Cluster Skills Assessment Report (2009) (A report by eleven sector skills councils involved with low carbon activities) www.goskills.org/download.php?fileid=3579 Madigan, P (2010) Delivering Offshore Wind – Renewable UK Institute for Civil Engineers

Mazhuvabchery, M (2010) Offshore Wind: Challenges and Opportunities for the UK Marine Sector Institute for Civil Engineers

PMSS (2010a) Offshore Renewcables Resource and Development – South West Economic Impact Assessment South West Regional Development Agency

PMSS (2010b) Offshore Renewcables Resources Assessment and Development (ORRAD Project – Technical Report South West Regional Development Agency

Proenviro (for DEFRA, 2008) Skills for a low carbon and resource efficient economy: A review of evidence Regensw (2011) Renewable Energy Progress Report: South West 2011 Annual Survey Regensw: Delivering Sustainable Energy

SEMTA (for the South West Skills Partnership, 2010) Low‐carbon manufacturing skills in the South West of England.

South West Observatory (2010) Green Skills, Green Jobs: Opportunities for the South West Low Carbon Economy, SLIM Learning Theme Report.

Stern, N. (2007) The economics of climate change: the Stern review, Cambridge University Press.

UNITED NATIONS (1998) Kyoto Protocol to The United Nations Framework Convention on Climate Change (Text available at http://unfccc.int/kyoto_protocol/items/2830.php)

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Windsor Consultation (2008) Skills for a Sustainable Future: facing the challenge, Outcome Notes, (http://www.bis.gov.uk/assets/biscore/corporate/migratedd/publications/s/skills_sustainab le_outcome.pdf)

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APPENDIX 1

The Importance of SICs (2003) to Low Carbon and Environmental Industries

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SIC2003 SIC's IMPORTANCE TOLOWCARBON DEFINITION 92Manufacture 2912 93Manufacture 2913 94Manufacture 2914 80Forging, 2840 Manufacture 2414 2911 2911 Manufacture 2830 Manufacture 2615 Retreading 2512 2466 Manufacture 2413 Manufacture 2412 2411 2411 Manufacture 2121 Production 1511 92Manufacture 2922 Manufacture 2921 41Manufacture 2451 46Manufacture 2416 Manufacture 2415 81Treatment 2851 Manufacture 2513 Manufacture 2122 83Manufacture 2873 81Manufacture 2871 General 2852 Manufacture 2811 Manufacture 2521 62Manufacture 2682 Manufacture 2661 Manufacture 1542 10Extraction 1110 85Manufacture 2875 Manufacture 2812 Manufacture 2523 15Manufacture 2125 Manufacture 2124 13Manufacture 2123 Saw 2010 10Service 1120 62Sha 2612 61Manufacture 2611 81Manufacture 2821 Manufacture 2524 30Manufacture 2320 00Manufacture 2020 82Manufacture 2822 30Processing 2330 01Manufacture 2051 00Manufacture 2030 12Manufacture 2112 0 Forestry 201 Agriculture 100 0 Forestry 202 Manufacture ManufactureManufacture M Mft Industry anu ppg

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Environm EMERGING ental Consultancy RENEWABLE ENVIRONMENTAL Environmental monitoring Control of marine pollution Noise andd vibration control Contaminated Land Waste Management Water & waste water treatment Recovery and recycling Hydroelectricity Wave & tidal Biomass Wind Geothermal Renewable consulting Photovoltaic Vehicles & vehicle fuel Other fuels Development of new energy Carbon capture & storage Carbon finance Energy management Building technologies EWNIRONMENTAL RENEWABLE EMERGING TOTAL SIC2003 SIC's IMPORTANCE TOLOWCARBON DEFINITION 12Agents 5112 Retail 5050 10Collection, 4100 14Agents 5114 51Demolition 4511 93Manufacture 2923 5040 5040 Other 4525 Construction 4524 Distribution 4022 Manufacture 4021 Manufacture 3530 3520 Manufacture 3330 3320 3320 Manufacture 3130 Manufacture 2956 13Wholesale 5143 02Manufacture 3002 52Test 4512 Manufacture 3001 92Manufacture 2972 51Installation 4531 Manufacture 3420 Manufacture 2971 Manufacture 2924 70Recycling 3710 Manufacture 3541 Manufacture 3410 Manufacture 3140 10Manufacture 3110 51General 4521 Manufacture 2943 Manufacture 2931 51Building 3511 00Maintenance 5020 Plumbing 4533 Insulation 4532 Production 4011 Recycling 3720 Manufacture 3430 11Wholesale 5151 10Manufacture 3120 20Manufacture 3210 Manufacture 2952 52Erection 4522 Manufacture 3162 52Building 3512 Manufacture 3161 00Sale 5030 Distribution 4013 Transmission 4012 Manufacture 3150 20Manufacture 3230 Manufacture ManufactureManufacture S Sl Industry a l e,

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and

and

/vehicles

re not

radio

not

processing and and goods apparatus electronic

l ltd classified ate

,

industrial construction

elsewhere

testing testing equipment elsewhere

rolling rolling works

d

and products

batteries and parts

classified

ships television t

their components equipment stock stock

an chemicals

classified

classified d d /aircraft

engines

accessor

goods i i es

Air Pollution

Environm EMERGING ental Consultancy RENEWABLE ENVIRONMENTAL Environmental monitoring Control of marine pollution Noise andd vibration control Contaminated Land Waste Management Water & waste water treatment Recovery and recycling Hydroelectricity Wave & tidal Biomass Wind Geothermal Renewable consulting Photovoltaic Vehicles & vehicle fuel Other fuels Development of new energy Carbon capture & storage Carbon finance Energy management Building technologies EWNIRONMENTAL RENEWABLE EMERGING TOTAL SIC2003 SIC's IMPORTANCE TOLOWCARBON DEFINITION 53Regulation 7513 Regulation 7512 General 7511 40Architectural 7420 02Collection 9002 9001 7470 Research 7320 Retail 5246 Wholesale 5155 5154 Wholesale 5153 02Adult 8042 Higher 8030 Technical 8022 44Business 7414 Accounting, 7412 Legal 7411 03Sanitation, 9003 Storage 6312 Freight 6024 Retail 5261 Wholesale 5156 40Technical 7430 22Other 7222 Sea 6110 Wholesale 5157 40Labour 7450 30Research 7310 12Wholesale 5182 16Wholesale 5186 17Wholesale 5187 25Retail 5245 Wholesale Collection til Id I Industry n d us

and

t

activities

and sale sale sale r software

i education recruitment transport

a

and

(overall) coastal

Name l

and

and and

and testing

c

other

and and and of via of

of li l of of of of of of of of of of remediation ean

book warehousing

hardware, electrical

and management

hardware, hardware, chemical wood, other waste mining, other other

and the experimental experimental mail vocational

treatment treatment treatment

i

consultancy

ng water education

public

and ‐ by

activities engineering keeping contribution

order

intermediate electronic machinery

and and construction road

construction analysis

transport

household products

service

paints and provision plumbing plumbing

scrap

house

secondary of of of

and

not of

consultancy

development development

sewage other sewage and similar

agencies parts

activities

for

and elsewhere auditing to activities

supply

products

materials

more appliances of use waste

and and

and

glass

activities and education

personnel

in

heating heating that

civil

and activities; efficient activities

equipment industry,

on on classified

and egineering provide related

social natural and

equipment equipment

sanitary

operation

radio

tax trade

sciences

technical social

sciences

consultancy

machinery

and

and equipment

services

and and of

television

and navigation

consultancy and business

supplies supplies

humanities

engineering

goods

Air Pollution

Environmental EMERGING Consulta RENEWABLE ncy ENVIRONMENTAL Environmental monitoring Control of marine pollution Noise and vibration control Contaminated Land Waste Management Water & waste water treatment Recovery and recycling Hydroelectricity Wave & tidal Biomass Wind Geothermal Renewable consulting Photovoltaic Vehicles & vehicle fuel Other fuels Development of new energy Carbon capture & storage Carbon finance Energy management Building technologies EWNIRONMENTAL RENEWABLE EMERGING TOTAL

APPENDIX 2

The Importance of Low Carbon and Environmental Industry to SICs (2003)

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IMPORTANCE OF LOW CARBON INDUSTRY TO SIC ENVIRONMENTAL RENEWABLE EMERGING treatment energy

control

fuel storage pollution

new

& water

Consultancy monitoring

Land

of recycling

consulting

vehicle ntal ntal aste chnologies marine nagement vibration LE ance MENTAL al nagement ent tricity

pture

e dal aic on ated and G ls e e e e e e a a f f

n n B c B w c a w a a & a & N N d t ti

m

m m m

o

c fi

m

M

& fue

&

and

Polluti SIC2003 Industry Name Biomass Wind Geother Air Environm Environm Control Noise Water Recovery Wave Renewabl Photovolt Vehicles Other Develop Carbon Carbon Energy Building EWNIRO RENEWA EMERGIN TOTAL Contamin Waste Hydroele 100 Agriculture 201 Forestry and logging 202 Forestry and logging related service activities 1110 Extraction of crude petroleum and 1120 Service activities incidental to oil and gas extraction excluding surveying 1511 Production and preserving of meat 1542 Manufacture of refined oils and fats 2010 Saw milling and planing of wood, impregnation of wood 2020 Manufacture of veneer sheets; plywood and other panels and boards 2030 Manufacture of builders carpentry and joinery 2051 Manufacture of other products of wood 2112 Manufacture of paper and paperboard 2121 Manufacture of corrugated paper/paperboard & containers of same 2122 Manufacture of household and sanitary goods and of toilet requisites 2123 Manufacture of paper stationery 2124 Manufacture of wallpaper 2125 Manufacture of other articles of paper and paperboard 2320 Manufacture of refined petroleum products 2330 Processing of nuclear fuel 2411 Manufacture of industrial gases 2412 Manufacture of dyes and pigments 2413 Manufacture of other inorganic basic chemicals 2414 Manufacture of other organic chemicals 2415 Manufacture of fertilisers and nitrogen compounds 2416 Manufacture of plastics in primary forms 2451 Manufacture of soap and detergents, cleaning and polishing preparations 2466 Manufacture of other chemical products not elsewhere classified 2512 Retreading and rebuilding of rubber tyres 2513 Manufacture of other rubber products 2521 Manufacture of plastic plates, sheets, tubes and profiles 2523 Manufacture of builders ware of plastic 2524 Manufacture of other plastic products 2611 Manufacture of flat glass 2612 Shappging and ppgrocessing of flat glass 2615 Manufacture and processing of other glass including technical glassware 2661 Manufacture of concrete products for construction purposes 2682 Manufacture of other non‐metallic mineral products not elsewhere classified 2811 Manufacture of metal structures and parts of structures 2812 Manufacture of builders' carpentry and joinery of metal 2821 Manufacture of tanks, reservoirs and containers of metal 2822 Manufacture of central heating radiators and boilers 2830 Manufacture of steam generators, except central heating hot water boilers 2840 Forging, pressing, stamping and roll forming of metal; powder metallurgy 2851 Treatment and coating of metals 2852 General mechanical engineering 2871 Manufacture of steel drums and similar containers 2873 Manufacture of wire products 2875 Manufacture of other fabricated metal products not elsewhere classified 2911 MMftanufacture of engines and turtbibines, exceptt aiiftrcraft, vehic le //lcycle engines 2912 Manufacture of pumps and compressors 2913 Manufacture of taps and valves 2914 Manufacture of bearings, gears, gearing and driving elements 2921 Manufacture of furnaces and furnace burners 2922 Manufacture of lifting and handling equipment IMPORTANCE OF LOW CARBON INDUSTRY TO SIC ENVIRONMENTAL RENEWABLE EMERGING treatment energy

control

fuel storage pollution

new

& water

Consultancy monitoring

Land

of recycling

consulting

vehicle ntal ntal aste chnologies marine nagement vibration LE ance MENTAL al nagement ent tricity

pture

e dal aic on ated and G ls e e e e e e a a f f

n n B c B w c a w a a & a & N N d t ti

m

m m m

o

c fi

m

M

& fue

&

and

Polluti SIC2003 Industry Name Biomass Wind Geother Air Environm Environm Control Noise Water Recovery Wave Renewabl Photovolt Vehicles Other Develop Carbon Carbon Energy Building EWNIRO RENEWA EMERGIN TOTAL Contamin Waste Hydroele 2923 Manufacture of non‐domestic cooling and ventilation equipment 2924 Manufacture of other general purpose machinery not elsewhere classified 2931 Manufacture of agricultural tractors 2943 Manufacture of other machine tools not elsewhere classified 2952 Manufacture of machinery for mining, quarrying and construction 2956 Manufacture of other special purpose machinery not elsewhere classified 2971 Manufacture of electric domestic appliances 2972 Manufacture of non‐electric domestic appliances 3001 Manufacture of office machinery 3002 Manufacture of computers and other information processing equipment 3110 Manufacture of electric motors, generators and transformers 3120 Manufacture of electricity distribution and control apparatus 3130 Manufacture of insulated wire and cable 3140 Manufacture of accumulators, primary cells and primary batteries 3150 Manufacture of lighting equipment and electric lamps 3161 Manufacture of electrical equipment for engines /vehicles 3162 Manufacture of other electrical equipment not elsewhere classified 3210 Manufacture of electronic valves /tubes and other electronic components 3230 Manufacture of TV/radio receivers and associated goods 3320 Manufacture of instruments for measuring, checking, testing 3330 Manufacture of industrial process control equipment 3410 Manufacture of motor vehicles 3420 Manufacture of bodies (coachwork) for motor vehicles 3430 Manufacture of parts and accessories for motor vehicles and their engines 3511 Building and repairing of ships 3512 Building and repairing of pleasure and sporting boats 3520 Manufacture of railway and tramway locomotives and rolling stock 3530 Manufacture of aircraft and spacecraft 3541 Manufacture of motorcycles 3710 Recycling of metal waste and scrap 3720 Recycling of non‐metal waste and scrap 4011 Production of electricity 4012 Transmission of electricity 4013 Distribution and trade in electricity 4021 Manufacture of gas 4022 Distribution of gaseous fuels through mains 4100 Collection, purification and distribution of water 4511 Demolition and wrecking of buildings; earth moving 4512 Test drilling and boring 4521 General construction of buildings and civil engineering works 4522 Erection of roof covering and frames 4524 Construction of water projects 4525 Other construction work involving special trades 4531 Installation of electrical wiring and fittings 4532 Insulation work activities 4533 Plumbing 5020 Maintenance and repair of motor vehicles 5030 Sale of motor vehicle parts and accessories 5040 SSlale, maiitntenance and repair of motorcyctlles and relltdated partst and accessories 5050 Retail sale of automotive fuel 5112 Agents involved in the sale of fuels, ores, metals and industrial chemicals 5114 Agents involved in sale of machinery, industrial equipment, ships /aircraft 5143 Wholesale of electrical household appliances and radio and television goods 5151 Wholesale of solid, liquid and gaseous fuels and related products IMPORTANCE OF LOW CARBON INDUSTRY TO SIC ENVIRONMENTAL RENEWABLE EMERGING g atment e rol ion ergy ncy nn tt ee gg tr en

con

fuel stora pollut

new

& water

Consulta monitori

Land

of recycling

consulting

vehicle marine vibration

and

waste & technologies tidal

of

capture finance

management

Management

& fuels

&

and

Pollution SIC2003 Industry Name Carbon Other Development Photovoltaic Vehicles Biomass Wind Geothermal Renewable Noise Water Hydroelectricity Wave Air Environmental Environmental Control Contaminated Waste Recovery Carbon Energy Building EWNIRONMENTAL RENEWABLE EMERGING TOTAL 5153 Wholesale of wood, construction materials and sanitary equipment 5154 Wholesale of hardware, plumbing and heating equipment and supplies 5155 Wholesale of chemical products 5156 Wholesale of other intermediate products 5157 Wholesale of waste and scrap 5182 Wholesale of mining, construction and civil egineering machinery 5186 Wholesale of other electronic parts and equipment 5187 Wholesale of other machinery for use in industry, trade and navigation 5245 Retail sale of electrical household appliances and radio and television goods 5246 Retail sale of hardware, paints and glass 5261 Retail sale via mail order house 6024 Freight transport by road 6110 Sea and coastal water transport 6312 Storage and warehousing 7222 Other software consultancy and supply 7310 Research and experimental development on natural sciences and engineering 7320 Research and experimental development on social sciences and humanities 7411 Legal activities 7412 Accounting, book‐keeping and auditing activities; tax consultancy 7414 Business and management consultancy activities 7420 Architectural and engineering activities and related technical consultancy 7430 Technical testing and analysis 7450 Labour recruitment and provision of personnel 7470 IdIndus tiltrial cllieaning 7511 General (overall) public service activities 7512 Regulation of the activities of agencies that provide social services 7513 Regulation of and contribution to more efficient operation of business 8022 Technical and vocational secondary education 8030 Higher education 8042 Adult and other education not elsewhere classified 9001 Collection and treatment of sewage 9002 Collection and treatment of other waste 9003 Sanitation, remediation and similar activities

Appendix 3

Occupation Structure of Plymouth Low Carbon and Environmental Economy, 2008

Composition D in LC LQ vs (%) of LCE share, LQ vs GB2 Plymouth1 Employment Plymouth, in Plymouth 2002-2008 Occupation Managers and Proprietors in Agriculture and Services 0.4 0.7 0.5 0.0 Science and Technology Professionals 3.3 9.1 0.9 1.4 Health Professionals 0.1 0.1 0.7 0.0 Teaching and Research Professionals 0.6 2.5 0.9 0.1 Business and Public Service Professionals 1.7 6.0 0.9 0.1 Science and Technology Associate Professionals 2.9 7.7 1.5 1.0 Health and Social Welfare Associate Professionals 0.1 0.3 1.1 0.1 Protective Service Occupations 0.2 0.5 2.4 0.0 Culture, Media and Sports Occupations 0.9 1.3 0.7 -0.1 Business and Public Service Associate Professionals 1.0 4.8 1.1 0.2 Administrative Occupations 0.7 8.1 1.2 -1.1 Secretarial and Related Occupations 0.7 1.3 0.7 -0.3 Skilled Agricultural Trades 0.4 0.1 0.1 0.0 Skilled Metal and Electronic Trades 2.9 15.5 1.7 -3.3 Skilled Construction and Building Trades 2.3 6.1 0.7 -0.2 Textiles, Printing and Other Skilled Trades 0.3 0.6 1.2 0.1 Caring Personal Service Occupations 0.1 0.4 0.7 0.1 Leisure and Other Personal Service Occupations 0.2 0.3 1.3 -0.1 Sales Occupations 0.3 2.1 1.3 0.1 Customer Service Occupations 1.3 3.1 2.5 0.7 Process, Plant and Machine Operatives 2.2 6.1 0.8 -0.7 Transport and Mobile Machine Drivers and Operatives 1.2 4.9 0.8 -1.0 Elementary Trades, Plant & Storage Related Occupations 1.6 3.8 0.8 0.0 Elementary Administration and Service Occupations 0.3 3.0 1.0 0.2

1 % Employment in Occupation in Plymouth LC Economy / % Employment in Occupation in Plymouth Economy as a whole 2 % Employment in Occupation in Plymouth LC Economy / % Employment in Occupation in GB LC Economy

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