Exploring wage-driven employment displacement in a supply constrained labour market and the impacts on integrating CCUS into the UK economy
Why is this research needed?
The purpose of this project is to aid timely Carbon Capture, Utilisation and Storage (CCUS) project delivery while meeting wider net zero and just transition commitments, in line with ambitions set out in the UK Government’s Ten Point Plan for Green Industrial Revolution and Net Zero Strategy. CCUS has the potential to bring wider societal and economic benefits and value to the UK in terms of GDP and job creation and preservation (linked to jobs, for example, in the current Oil and Gas sector). Government analysis suggests that CCUS could potentially support around 50,000 jobs by 2030 and the UK Government’s Net Zero Strategy recognises that efforts to decarbonise the UK will put new demands and require significant changes in the UK labour market, with one in five jobs likely to be affected.
However, understanding how recent challenges around labour market pressures impact on the rollout of individual CCUS projects, and the knock-on effects for wider socioeconomic benefits in terms of jobs and GDP, will be critical. The research undertaken as part of this project will involve direct engagement with policy and industry partners to generate new insights and analysis on how the timing and magnitude of potential gross employment gains associated with CCUS roll-out may be affected, as well as the net employment, producer costs and price impacts across the UK’s regional and national economies.
What is this research investigating?
The purpose of this project is to aid timely CCUS project delivery while meeting wider net zero and just transition commitments. The project will achieve this through the following objectives:
Objective 1:To develop useful and practical intelligence and policy-relevant insights for delivery both of UK CCUS and of wider net zero, regional levelling-up and related ‘just transition’ ambitions via economic and fiscally responsible routes. It will do this via further development of economy-wide analytical tools, including models, scenarios and ‘dashboard metrics’ that can be shared with policy analysts and, crucially, will present research findings in a way that signposts and frames key policy implications and trade-offs that need to be considered. An essential component of this work will also be continuous engagement with industry partners to develop and refine scenarios, models and metrics and in the articulation of implications and trade-offs.
Objective 2: To strengthen the political economy and social science evidence-base in contributing to academic discourse around CCUS and broader net zero challenges in a wider public policy challenge context. A driving principle underpinning CEP’s work is to frame net zero as a public policy challenge as well as a technological one. We anticipate that work on this project will continue to contribute to this framing and build on our previous CCUS and industrial decarbonisation focused research funded by UKCCSRC, Innovate UK, the Children’s Investment Fund Foundation and EPSRC. We see complementarities with research being undertaken across the nine Multidisciplinary Integrated Programmes (MIPs) as part of the UK Industrial Decarbonisation Research and Innovation Centre (IDRIC). We plan to engage with this academic community through presentations at the annual UKCCSRC conference as well as through other project outputs including briefings, workshops and blogs and, ultimately, through a peer-reviewed journal paper. In developing the academic core, we intend to leverage existing networks and relationships with IDRIC, UKCCSRC, Scottish Carbon Capture and Storage and through the wider Strathclyde CCS community.
What does the research hope to achieve?
We anticipate that the following academic and other beneficiaries for this research:
1. CCS and wider net zero academic community. The project will make a valuable contribution across the academic community. First, to social scientists who share our broader focus of considering the wider resource impacts of attempting to deliver a just transition to a net zero carbon economy, whilst also ensuring the retention of globally competitive industries within regional clusters. Relating our work in the context of the economy-wide simulation framework provides a solid foundation for ultimate extension to economic modelling techniques used both by economic researchers and government departments/ministries such as BEIS and HM Treasury. Second, to researchers in a number of engineering disciplines (chemical, mechanical, pipeline and reservoir) and social scientists, who will also benefit from the demonstration of policy-facing, multi- and inter-disciplinary research and knowledge sharing methodologies that promote responsible research and innovation and provide a reality check on impact. A significant output and benefit for the academic community will be in demonstrating that this approach, where engineers and social scientists work together and learn from each other, will become an exemplar for delivering impact in similar scenarios that require transformational research.
2. Policy officials working in UK national and devolved governments. In particular we envisage that members of the CCUS Directorate in the Department for Energy Security and Net Zero, who CEP has been engaging with for some time, will find this of particular use in developing thinking and informing decision-making around CCUS implementation and the related business models. We also anticipate that those in the devolved nations, for example the Energy Industries Division within Scottish Government, will also be interested in the outcomes of this research. Beyond this immediate set of actors, we consider that the findings of this research will also be of relevance and interest to those working in HM Treasury and those associated with groups such the Green Jobs Delivery group which is chaired by the Energy Minister and had its inaugural meeting in June 2022.
3. Industrial cluster representatives. This group, particularly the Track 1 clusters, have been instrumental in highlighting labour supply constraints as an issue that requires further research. CEP held a workshop with the Phase 1 clusters in February 2022 and plan to further develop this engagement as part of this project. We would anticipate that the findings from this research can help industrial clusters shape and evolve the design and implementation of their own cluster plans and frame their engagement with policy, in particular UK Government officials as well as regional and local policymakers, as part of this process.
4. Wider UK CCS policy community. Through our other CCS and industrial decarbonisation research, CEP has engaged and built networks with a wider CCS policy community who will have an interest in the findings from this research. This includes organisations such as the Energy Catapult, the Carbon Capture and Storage Association (CCSA), the Climate Change Committee and the All Party Parliamentary Group for CCUS. We anticipate the research can contribute to the wider policy discourse around jobs, CCUS and net zero more broadly.
This research is ongoing. Outputs will be shared below as they become available.