As part of a mini-series on employment and its drivers of change into the near future; we have touched upon a number of elements. Till now this series has explored digitalisation and automation, the global war for talent and the need for enhanced quality of jobs as key drivers. This week we look at the role of transitioning into the green economy. Greening the economy is currently seen as one of the most active policy prescriptions, especially as part of the broader Covid-19 recovery and stimulus plans. Apart from the positive environmental impact, greening the economy is also seen as a key contributor to the creation of new ‘green’ jobs. However, there is yet no agreed definition on green jobs with different institutions adopting different definitions. Based on a review of the latest related data and documents issued by the OECD and the ILO on this topic, the latest grouping of green jobs is determined on their contribution to:

 • improving the efficiency of energy and raw materials,

• limiting greenhouse gas emissions,

• minimising waste and pollution,

•  protecting and restoring ecosystems,

• adaptation to the effects of climate change.

 The OECD has taken a leading role in the ‘green growth’ movement through its ‘Green Growth Strategy.’ This strategy links productivity growth, green growth, and inclusive growth, starting from the premise that environmental protection can be a driver for economic growth and social inclusion, rather than a barrier. It is now promoting the mainstreaming of this strategy, with an underlying green growth measurement framework, into national economic policies.

According to the OECD, green policies can trigger job creation in several green economic sectors, even as job destruction occurs in ‘brown’ sectors. A successful transition to a low-carbon, resource-efficient and green economy, if managed well, can lead to more opportunities for workers. In fact, green jobs can create a new job dimension that can absorb several workers impacted by technology disruption across sectors.

As per the OECD’s research and recommendations, the ILO also stresses that low-skilled workers will be the most negatively affected by the green shift. This implies that transition to other jobs may be more difficult and possibly more costly in terms of social benefits and/or retraining schemes.

In a 2018 Working Paper, the ILO studied all available data and recommendations issued by the United Nations Environment Programme (UNEP) and other leading bodies (including the International Trade Union Confederation) and identified four main impacts on the labour market.

Three fundamental, long-term trends are driving structural changes in the global employment as environmental concerns continue to shape economic activities:

 • Adoption of more resource-efficient and less harmful technologies and business operations.

• Physical effects of climate change, e.g., heat stress, with impacts on outdoor work such as agriculture (largest provider of jobs globally).

•  Changing consumer habits and responsive legislation towards promoting more sustainable products and services.

 The potentially positive impact of a greener global economy on the global labour market was reiterated in the ILO’s 2018 World Employment and Social Outlook, which concluded that, on balance, shifting towards a green economy creates employment at the global level. Compared to the ‘business-as-usual scenario’, changes in energy production and use to achieve the Paris goals can create around 18 million jobs throughout the world economy. These changes include a shift towards renewable energy sources and greater efficiency, the projected adoption of electric vehicles and construction work to achieve greater energy efficiency in buildings. This net job growth results from the creation of some 24 million new jobs and the loss of around 6 million jobs by 2030.

The EU’s focus on sustainability is captured in its ‘European Green Deal’, announced at the end of 2019. This is a package of policy initiatives aimed at enabling Member States to benefit from sustainable green transition, targeting a goal of zero emissions by 2050 and decoupling economic growth from resource use.

The ‘European Green Deal’, as proposed by the European Commission (EC) at the end of 2019, is a new growth strategy that aims to transform the EU into a fair and prosperous society, with a modern, resource-efficient, and competitive economy where there are no net emissions of greenhouse gases in 2050 and where economic growth is decoupled from resource use. In terms of employment, the key dimension of the Green Deal is the Just Transition Initiative, which allocates funding to manage the transitional impacts on workers. Despite the onset of Covid-19, almost as soon as the Green Deal was released, the Commission has stated that the underlying drivers of change for the strategy remain in place, the need for it is more urgent, and that it will be the "motor for the recovery.”

Reaching the targets of the European Green Deal will require action across all sectors of the economy, including:

 • Decarbonising the energy sector through renewable energy projects, especially wind and solar, and kick-starting a clean hydrogen economy.

• Investing in environmentally friendly technologies.

• Supporting industry to innovate.

• Rolling out cleaner, cheaper and healthier forms of private and public transport.

• Ensuring buildings are more energy efficient and supporting the circular economy.

• Working with international partners to improve global environmental standards.

 In Europe, job creation related to renewable energy and energy efficiency has been especially strong. This activity stems from the production of renewable energy itself as well as from the manufacturing of renewable energy and energy-efficient equipment, and the provision of green installation, engineering, and research services. Employment in this domain increased from 0.6 million full-time equivalents in 2000 to 1.5 million full-time equivalents in 2017 (Eurostat) - almost one million new full-time equivalent jobs across the EU27 between 2000 and 2017.

The second largest contribution to environmental employment came from waste management, with the number of jobs increasing from 0.8 million full-time equivalents in 2000 to 1.2 million full-time equivalents in 2017 (an overall increase of 38.0 per cent). By contrast, employment related to wastewater management decreased in the same period by 23.0 per cent from 0.7 million to 0.5 million full-time equivalents. Whereas environmental protection accounted for more than three quarters (78.0 per cent) of the employment in the environmental economy in 2000, the share decreased to 62.0 per cent in 2017 following the creation of new jobs related to renewables and energy-efficiency.

The transition to a green economy will also have a positive impact on jobs creating new ones whilst transitioning previous roles into new ones too. It is therefore essential for any employment policy to consider the green transition and to start giving workers and future workers training in this sector to ensure that the workforce is imbued with the right skills that will be required in this green transition.

The writer is a co-founding partner of Seed, an international research driven advisory firm with offices in Europe and the Middle East.

www.seedconsultancy.com 

| jp@seedconsultancy.com