London targets 15,000 green collar jobs

The Mayor of London's plans to cut energy and tackle climate change could bring up to 15,000 jobs and contribute £600m a year to the capital's economy by 2025, but only if City Hall continues to create the right incentives for green businesses.

That is the conclusion of a major new study published yesterday by Ernst and Young, which warns that while London has the potential to establish itself as the "Low Carbon Capital", it will face fierce competition from other world cities similarly keen to attract green jobs and investment.

James Close, a partner at Ernst & Young, said the report shows the green jobs sector could play an increasingly important role in London's economy.

"Our analysis suggests that London is well placed to compete for inward investment which, when combined with the carbon reduction programmes, provides the opportunity to establish London as the Low Carbon Capital," he said.

Last year, Mayor Boris Johnson announced the development of 10 "Low Carbon Zones" around the city designed to accelerate the rollout of home insulation schemes, green building makeovers, and free energy and carbon assessments, as part of capital's target of reducing carbon emissions 60 per cent by 2025.

However, the Ernst & Young report warns that London faces fierce competition to attract and retain green businesses, particularly given the low carbon focus of economic stimulus packages in the US, China and Germany, as well as high-profile commitments from cities such as Singapore, Stockholm, Toronto, Chicago, New York and Tokyo to establish themselves as hubs for low carbon industries.

It argues that London will need to take further action if it wants to become a hub for green jobs and investment, adding that national, regional and local governments must create the right tax, financial and planning conditions to help London hold its own.

It recommends setting up a new Low Carbon Task Force for London to help guide the development of such an incentive strategy.

Speaking following the launch of the report, Mr Johnson said he was determined to help the city recover from the economic downturn through green measures and was fully committed to establishing London as a low carbon hub.

"We are already making our own buildings more energy efficient, saving £1m per year," he said. "These kinds of things will not only stimulate our economy, but also help to contribute to global efforts to make the changes needed to become a less carbon belching society."

However, despite a range of green commitments since taking office, Mr Johnson has also faced criticism from environmental groups, for scaling back spending on low carbon vehicle projects, announcing plans to scrap the Western Extension of the Congestion Charging Zone, and failing to date to deliver a promised low carbon strategy for the city.