Just transition initial analysis by industry group in London

These slides begin to explore the potential impacts of the transition to a net-zero carbon and circular economy on different industry groups and workers in London.

It should be noted that this analysis has not been based on London’s emissions as reported through the London Energy and Greenhouse Gas Inventory (LEGGI). Instead we use UK level data on emissions and energy consumption by industry group and apportion to a London level using regional employment estimates.

This is an imperfect approach, intended to provide a first approximation of trends by industry group based on available data. The findings provide an initial insight but should be treated with caution.

Main findings from the analysis

Among the main findings, the analysis shows that by industry group:

• London apportioned GHG emissions are highest in Transport & Storage, followed by Electricity & Gas and Manufacturing
• High-emitting industry groups tend to account for a relatively small share of employment among London residents
• Some (but not all) high-emitting industry groups have seen a recent increase in GHG emissions at the UK level and employment at the London level
• Jobs in high-emitting industry groups tend to be spatially concentrated in different parts of London

  What are the main assumptions behind these findings?

In the absence of sub-national estimates being available by industry group, we have apportioned UK GHG emissions and energy consumption to London using (resident based) ONS Annual Population Survey data. This allows us to look at trends using Standard Industrial Classification (SIC 2007) groups.

This approach assumes that GHG emissions per worker and energy consumption per worker are the same within industries across the country. In reality, the occupational structure and carbon intensity of an industry is likely to vary across regions. It also reflects resident, not workplace, employment patterns.

Our London apportion estimates also exclude GHG emissions from consumer expenditure and only covers direct emissions by industry. Further analysis of indirect emissions across supply chains could be of value when considering the longer-term challenges faced by the economy as part of this transition.