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£2bn lost to UK local authority pensions due to oil investments

This analysis, commissioned by Platform London, shows that UK local authority pension funds that are not divesting from fossil fuel companies could have lost at least £1.75 billion in value over the past three years as a result of investments into just nine oil & gas companies.

56 pension funds were identified as holding direct investments into oil companies and not having made public commitments to reduce direct fossil fuel holdings. These funds’ combined direct investments into nine oil companies were valued at £3.6 bn in spring 2017, and would have dropped to £1.8 bn by November 2020.

The three funds losing the most value have all publicly opposed divesting direct holdings. 

  • Greater Manchester Pension Fund was the most exposed, potentially losing £375 million in value, or 2.2% of its total holdings. This is equivalent to £1,000 per pension member. 
  • West Yorkshire Pension Fund was second most exposed in terms of total value, losing £211 million in value. This is equivalent to £740 per pension member. 
  • Nottinghamshire was third with £81 million, equivalent to £1,070 per pension member.

In early 2020, Reuters reported Greater Manchester and West Yorkshire funds as claiming they would have lost £400m and £160m respectively over 3 years to 2019, if they had divested from fossil fuels. The losses by 2020 on only the nine top oil companies almost entirely eradicate this gain.
Share values are volatile, and regularly rise and fall. However, repeated Financial Times reporting on the falling asset values and impairments amongst big oil companies describes this not as a temporary downturn, but as “the direction of travel” . Despite the expected continued use of fossil fuels in some industries for many years, the push to net zero will hit the underlying business model of large oil & gas companies significantly – especially those that rely on high oil prices to turn profits.

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Regional job creation from a clean infrastructure stimulus in England & Wales

Analysis and modelling carried out by Transition Economics for the TUC’s Voice and Place report provides a regional analysis of clean infrastructure investment options, and the resulting potential for direct job creation.

This analysis demonstrates the regional distribution (at NUTS1 level) of 506,000 English and Welsh potential direct jobs, including in rail upgrades, EV charging, cycles lanes and pedestrianisation, home energy efficiency retrofits, social housing construction, and reforestation.

It also provides job creation estimates for priority industrial policy proposals for a just climate transition in England and Wales identified in the TUC’s Voice & Place report, including battery gigafactories, manufacturing for offshore wind, steel and district heating.

Transition Economics analysis:

The full TUC report: Voice and Place: How to plan fair and successful paths to net zero emissions

TUC regional press releases:

North East TUC regional secretary urges the Government to invest in the region to unlock 30,000 new green jobs

We can create 60,000 green jobs for Yorkshire in less than two years, says TUC

TUC plan would mean more than 46,000 new green jobs for the West Midlands over next 2 years

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Report

Wales TUC: Infrastructure investment could create 59,000 jobs and boost economic recovery

Research carried out for the Wales TUC by Transition Economics shows that almost 60,000 jobs could be created in Wales in the next two years through government investment in key infrastructure projects.

Broken down by sector, projected job creation from a £6bn investment in infrastructure would mean: 

●           27 thousand jobs in housing construction and energy efficiency retrofits

●           18 thousand jobs in transport upgrades

●           9 thousand jobs in energy, manufacturing, and broadband infrastructure upgrades

●           5 thousand jobs in land, forestry, and agriculture improvements   

These jobs would benefit some of the sectors and demographics hit hardest by the COVID19 emergency. Over 75% of the jobs would be created in sectors that traditionally employ non-graduate workers.

Shavanah Taj, Wales TUC General Secretary, said:

“The best way to protect our economy is to keep people in work. And that’s why we’ve been calling for an extension to the job retention scheme beyond October.

“But we also need urgent action to create equitable and inclusive new job opportunities for all workers in Wales. We have suffered from long-term under-investment in our nation’s infrastructure. Investing in green and ambitious projects now will not only create work for thousands of people in Wales but will also provide huge long term benefits to the Welsh economy, which is particularly crucial as we set to leave the EU.

“The costs of inaction far outweigh the costs of making these investments. We need the UK Government to provide the level of funding that Wales needs”.

Commenting on the publication of the report, the Future Generations Commissioner, Sophie Howe, said:

“This analysis from Wales TUC shows the potential of investment in key sectors to enable a green, fair and prosperous recovery from COVID-19.

“We urgently need a recovery that increases equality, provides skills, training and employment opportunities in industries of the future, while incentivising every sector in Wales to meet the well-being goals of the Well-being of Future Generations Act.

“This analysis shows this is within reach through wise investment and bold stimulus decisions.”

Read the report here.

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Event

What next for workers?

Transition Economics’ Mika Minio-Paluello is speaking at a webinar organised by CLASS (Centre for Labour and Social Studies) on Thursday 16 July.

Here are her slides.

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Report

TUC: Can an infrastructure stimulus replace UK jobs wiped out by COVID19 crisis?

An analysis of infrastructure investment options to build back better

New research carried out for the TUC by Transition Economics reveals that fast tracking spending on projects such as broadband, green technology, transport and housing could deliver a 1.24 million jobs boost over the next two years.

Read more: TUC’s Rebuilding after recession: a plan for jobs

Our full analysis:

Our analysis recommends 19 infrastructure projects totalling £85 billion public investment, based on investment and employment modelling and ten World Bank-derived criteria including long-term job creation, resilience and sustainability. 

Broken down by sector, projected job creation (direct and supply chain) is as follows:

  • 735 thousand jobs in housing construction and energy efficiency retrofits
  • 289 thousand jobs in transport upgrades
  • 98 thousand jobs in energy, waste, and manufacturing infrastructure upgrades
  • 81 thousand jobs in land, forestry, and agriculture improvements
  • 42 thousand jobs in broadband upgrades

These jobs benefit sectors and demographics hit hardest by the COVID19 emergency. Over 75% of the jobs would be created in sectors that traditionally employ non-graduate workers.

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Work in progress

Our analysis for Scottish TUC shows potential for a £13bn green stimulus package to create 150,000 jobs

May 31st 2020 press release by Scottish Trade Union Congress

Provisional analysis of clean infrastructure projects has outlined the massive benefits of a government funded green stimulus for Scotland, with a £13 billion investment creating almost 150,000 jobs and re-absorbing workers who have lost employment due to the Covid 19 crisis.

The STUC has today published provisional research by Transition Economics into the potential for clean jobs creation in the context of the COVID 19 crisis. The analysis draws lessons from the 2008 Great Recession – including the need to prioritise shovel-ready projects.

Upwards of 50,000 jobs could be created in building retrofit, 40,000 in transport and 20,000 in manufacturing and offshore wind infrastructure. The longer-term supply chain benefits in Scotland would be enormous.

The research is released following the announcement of the paring back of the Job Retention Scheme, threatening a massive increase in redundancies across the economy, ongoing concerns about the future of the North Sea, and while low-carbon supply chain decisions such as the future of the Bi-Fab renewables facility hang in the balance.

In its submission to the Scottish Government’s Advisory Group on Economic Recovery submitted today, the STUC argues for a wide range of measures including “Funding emergency infrastructure stimulus to support Scotland’s economic recovery, including a comprehensive housing programme … and the creation of a national construction and infrastructure company to drive forward change and support high quality employment.” It also calls for investment to support national and municipally owned public transport.

STUC General Secretary Designate Roz Foyer said:

“The need for major infrastructure stimulus becomes more urgent by the day. This research we are publishing is drawn from a wider report on the potential for creating green infrastructure jobs which will be published later in the year. But given the crisis we face there is no time to be lost. We thank the authors Mika Minio-Paluello and Anna Markova for bringing forward these interim conclusions.

“Their analysis shows just that almost 150,000 good quality jobs could be created at the same time as making a real impact on emissions and strengthening Scotland’s renewables supply chain.

“We know that it will still be some time until Scottish industry will emerge from lock-down, so these are the weeks in which we should be planning, and planning big.

“The measures outlined in this report sit along a range of other necessary investments including in key services such as social care. Clearly the level of stimulus we are proposing will require inter-governmental co-operation, but now is the time for those discussions to begin in earnest.”

For further details contact: Dave Moxham 07891 026879

Notes:

Download Provisional Report

The report attached scores potential projects against a range of criteria:

Shovel Readiness; direct Job Creation/Protection; Focus on held-back regions; Builds domestic low-carbon technology & manufacturing; Supports climate transition in hard-to-decarbonise sectors; Contribution to resilience to climate change; Improves economic productivity; Develops domestic skills base; Resilient to re-instated lockdown; Supports health, public services and social fabric

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Report

The UK North Sea as a Global Experiment in Resource Extraction

This report by Juan Carlos Boué was published by ScotE3 with support from PCS and Platform, and edited by Transition Economics’s Mika Minio-Paluello.

Juan Carlos Boué’s report (pdf download) analyses the UK’s North Sea oil tax regime, which has handed super-profits to international oil companies while the taxpayer now foots the bill for decommissioning.

Boué argues that, since the 1970s, these tax arrangements have been “at the forefront of the process of redefinition of the economic frontiers of the State”. These “neoliberal governance structures”, designed in the UK, were exported across the world in the 1980s and 1990s, along with privatisation and “market liberalisation”. The global spread of the UK governance model did produce oil production gains, Boué concludes, “but also destabilised many key petroleum producers, whose governments found themselves starved of fiscal income”.

Boué brings the story right up to date, showing how, as North Sea oil production declines, the government has pushed the burden of decommissioning costs on to the public purse, while the oil companies eke out every last drop of oil, and of profit, from their operations.

Download report: https://tinyurl.com/udpqncd

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Presentation

How can public ownership in Offshore Wind deliver good jobs for the climate transition?

Watch Anna’s video presentation at STUC energy conference in Glasgow, 20 November 2019.