Fact-check

What's in the green economy?

Jordan Nadian
A man works on a UK offshore wind turbine
License: All rights reserved. Credit: Greenpeace

People building wind farms, yes, that's probably green - but what of the rest?

The UK’s green goods and services market increased by 4.7% to £128bn during 2011-12, according to figures released by the Department for Business Education and Skills. The report states that 940,000 people are currently employed in the sector.

But rather than a specific piece of research into the green economy the figures are instead a collation of data, much of it categorised long before the government wanted to know about green growth.

2800 goods and services were analysed, falling under 3 umbrella headings of Environmental, Low Carbon and Renewable Energy technologies.

The figures show the biggest areas of growth were wind, low-carbon finance, solar PV and alternative fuels, which increased by 7.2%, 6.7%, 6.2% and 5.4% respectively.

Being four of the biggest subcategories, their expansion was key to the overall growth figure.

A quick back of the envelope calculation shows that they alone were responsible for 2.4% of annual growth – more than half. Indeed, if the data only covered these sectors, growth would have been even higher.

What's in and what's not?

The problem is that whilst some of the fastest growing categories may indeed fall under a ‘green’ banner, some others will be subject to debate.

Using nuclear power to generate electricity is low carbon but is it environmental – that very much depends who you ask. Discounting it would leave the sector £3.96 billion lighter and shy of 35,900 jobs. However it only contributed to  0.07% of the growth in 2011/12.

Water supply and waste water treatment is almost certainly environmental - but probably relatively little to do with the low-carbon economy (though it may be key to mitigating the impact of climate change). It only added an extra 0.13% to the green economy last year, though as a large sector it employs 73,000.

Noise and vibration control, accounting for £238 million and employing almost 2000 could be related to insulation and efficiency - we're not really sure.

The data reveals that “windows” and “doors” have snuck their way into the building technologies subcategory. Both could be part of efforts to improve home efficiency - or they could not. The category also includes home insulation – which is more clearly linked to efforts to tackle climate change. All in all these household essentials make up 11.6% of the entire green sector and were responsible for 0.53% of the total 4.7% growth.

How much of that growth comes from the sectors clearly linked to reducing energy use? We simply don’t know. The appendix of the report states that mainstream building materials are included here, as well as those which are designed to minimise energy usage. 

There are also sectors arguably missing from the data.  One of the major upsides of protecting the environment is tourism to areas of natural beauty. The 'outdoor adventure' sector has been valued at around £1bn for example.

And that's before one attempts to put a value on the protection of ecosystems more generally - as the natural capital initiative does for example.

A more accurate measurement might show faster growth, it might also show a smaller sector. The problem with this data is we just don't know.

As the Green Alliance's Julian Morgan points out using data compiled for another reason to make a point about the green economy is probably the underlying problem here. 

"Green business is no longer niche, it's a key part of the mainstream economy," she argues and calls on the Office of National Statistics to provide data specifically relevant to the sector and including key factors such as wages.

There are other measurements but for now, when it comes to official data, there is relatively little else for government and everyone down to gauge the success or otherwise of this part of the economy.