Government officials are searching for policies that will meet the twin aims of providing jobs and meeting the UK’s climate change targets. It is proving a difficult task. The easiest ways of reducing fossil fuel use will probably not create many new jobs in the UK. All large wind turbines are built abroad and although the construction work on a nuclear power station will generate a few thousand jobs, most of the key components will need to come from Europe and Japan. So where are the opportunities? I think two major areas stand out as excellent ways of generating jobs quickly without also dragging in expensive imports or sharply raising prices.

***

One opportunity is well understood. The UK’s houses are the worst insulated in northern Europe and the scope for improvement is clear. The other idea is newer. I think that massively increasing the availability and use of wood for fuel can generate large numbers of jobs both in forestry and in business such as horticulture that can productively use the cheap heat from small wood-burning power stations.

Housing Initially government seems to have hoped that the clear need for improved heat retention means that the insulation industry could be used as a way of generating large numbers of jobs as an army of installers laid thick wads of cladding in UK lofts. But once the Department of Energy and Climate Change had worked out the numbers, it looked as though the potential for extra employment was limited.

I think that the department was far too pessimistic when it looked at the opportunity. Although it is true that almost all UK houses now have loft insulation, remarkably few have a thick enough layer. Most commentators say that increasing the thickness to at least 25cm (10 inches) will save more in central heating bills than it costs. My estimate is that at least 15 million homes could profitably increase their loft insulation to this level. A large-scale programme of installation would reduce UK gas consumption and provide tens of thousands of jobs for several years.

However, lofts should not be the biggest focus of the green new deal. They are responsible for less than 10% of the heating losses of a typical house. Far more heat leaves through walls, windows, and floors. Surprisingly, almost as much energy is lost through doors as through the roof. Losses from draughts are also far more important than the loft. A sustained national programme to improve the heat retention characteristics of our housing would be hugely beneficial. It would reduce fuel bills, cut the UK’s use of insecure supplies of Russian gas, and provide the prospect of employment for hundreds of thousands of people in manufacturing and installation industries. We should be installing cavity wall insulation in millions of homes, replacing leaky single-glazed windows, carefully repairing draughty floors and walls, and hanging properly insulated well-fitting doors. All simple and straightforward measures that can be taken using British-made goods and newly trained people. More complicated schemes such as re-cladding blocks of flats make even more sense financially, but will require us to import some skills and products from Europe. For the average house, a saving of 30% of the heating bill is easily achievable.

How would we finance this programme? We can copy the successful features of the German eco-renovation policies which are now systematically reducing energy use in several hundred thousand homes each year. Through soft loans, grants for achieving energy reduction targets, and other measures, householders and landlords have been incentivised to take measures that sometimes cut domestic heat need by 80% or more. The German government claims that the cost per tonne of carbon saved is impressively low and trumpets that household emissions of greenhouse gases have fallen by a third since 1990. This finding chimes with what we already know: house insulation makes financial sense and people just need the right incentives and advice. The Energy and Climate Change people should look again at the scope of generating jobs and reducing emissions.

Woodland The UK is one of the least forested countries in the temperate world. Only about 11% of the land area is covered by trees. Simply planting more trees would have value: they will soak up CO2, reduce the risk of catastrophic flooding in times of intense storms, and possibly help reduce summer peak temperatures. Of course people would be employed planting and looking after the trees. But the even more important objective is to reduce fossil fuel use by replacing coal and gas. In other northern countries, wood fuel provides a substantial fraction of total heat needs through district heating systems that burn the wood in central plants and then distribute hot water to local homes. This replaces the need to use gas or oil. Increasingly, these wood-fuelled heating plants are also generating electricity as well using turbines. The UK could aim to install thousands of small-scale wood-burning (or, more likely, wood gasification) plants dotted around forested areas.

There’s little competition from other users for wood in many areas of the country. Even in woodlands close to major cities, such as the Chilterns, prime wood is increasingly left unused. Beautiful wooded areas won’t stay that way if we don’t manage them properly. Creating a market for wood by encouraging the growth of small-scale local electricity generators is an excellent way of incentivising proper care of our woodlands.

How much difference could a major reforestation plan make? Moving the UK from 11 to 12% forest cover would add 250,000 hectares of woodland. Fast-growing species might produce a yearly yield of up to 10 tonnes per hectare, with enough energy to replace over 5% of our electricity need for ever, as well as huge amounts of useful heat. The reduction in UK emissions is potentially worth tens of millions of tonnes a year. But is it a feasible target to increase woodlands by 250,000 hectares? Think of it this way: China has reforested 4 million hectares every year for the last two decades. So of course it is possible and, moreover, much of the employment would be in areas of low incomes and poor job prospects. Planting and nurturing young trees is a skilled job, and these skills have atrophied in the UK in recent years. But given the right incentives, traditional farmers could hire and train the people needed to plant large areas of fast-growing coppices.

The best use for the heat from wood-using power plants would be in homes and other buildings such as offices and schools. But we should also use spare heat for a new generation of horticultural greenhouses. The fall in the value of the pound has made imported fruit and vegetables expensive. We could grow much more food in the UK using cheap heat and some electricity from small wood power stations for glasshouses. The great advantage of this is that horticulture is highly labour intensive and so it can revive areas of limited prosperity such as Cornwall. Replacing Dutch and Spanish fruit and vegetables with home-produced products in greenhouses heated by local wood could transform the economic prospects of parts of the UK. The percentage of the Dutch labour force working in agriculture is almost three times the level here and widely available cheap heat could pull the UK back up towards the Dutch employment level.

Is such a plan financially possible? I think that at current prices for advanced small-scale electricity plants wood is probably just about economic as a source of heat and electricity. As with other low-carbon technologies, we need to reduce further the cost of the plant and equipment. This will happen as more small wood power stations are installed and manufacturing costs are reduced. With some sensible government support, a plan to reforest 1 or 2% of the UK clearly makes economic sense, not least because of its potential employment impact and for its effect on carbon reduction.