Transition to a green economy in Transition to a green economy in Europe: implications on jobs

Adarsh Varma Senior Economist

Social partner workshop on Climate Change –

Adarsh Varma, Senior Economist

p p gElectricity – Employment Consequences

10 December 200910 December 2009

There are temporal, spatial and technological aspects to the transitiontechnological aspects to the transition

OpportunitiesNew business,

products &

Pressures:Physical

Economic, Responses:Shifts in

services

Physical RegulatoryCompetitionConsumer

natural & social

systems

Shifts in trajectory of the economy

BarriersConsumer BarriersSkills, training, supply chain constraints, Manifest as changes in:

fconstraints,

start up costs• The spatial location of demand• The distribution of demand across sectors• The distribution of demand within sectors

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The growth and transformation of different occupations will in turn drive training and skills demand

Main Economic Activities Relevant to the ‘Green Economy’Relevant to the Green Economy

Clean EnergyEnvironmental

ResourceEnergy & Material

Environmental Cleaner

production &Clean Energy ResourceManagement

MaterialEfficiency

Services

Power Generation•Solar•Wind

Water•Desalination / purification•Wastewater treatment

Advanced Materials•Advanced coatings•Lightweight substitutes

Manufacturing Services• Pollution control•Energy and material

production & diversification

Energy intensive•Extractive industries•SteelWind

•Clean coal (sequestration, infrastructure)•Other clean power generation (Geothermal, hydro, biomass, wave / tidal,

•Wastewater treatment•Distribution and management•Water efficiency

•Lightweight substitutes•Solvents and biodegradables

AgricultureBuilding Efficiency•Building management

•Energy and material efficiency•Clean production techniques•Integrated systems

•Steel• Cement • Bricks• Pulp & Paper• Speciality chemicals• Petrochemicals

methane capture, nuclear)

Cleantech Infrastructure•Infrastructure management•Supply chain management

•Irrigation innovation•Clean pesticides•Consumer food purity•Seeds•Timberland and Forestry•Organic

•Building management including green data centre management•Heating & cooling systems•Lighting systems•Insulation

Business Services•Insurance•Logistics inc. transportation•Green focused banking

f

• Ceramics

Manufacturing• Food & Drink• Automotive• White goods

Transport & Sustainable

Organic

Power Storage Technology•Battery technology and fuel cells

Waste Management•Recycling•Toxin management•Energy from waste

•Micro generation / micro CHP

Power Grid Efficiency •Transmission (including smart grids)

•Microfinance•Consultancy/advisory•Intellectual property•Weather

Engineering• Metal finishing

g• Furniture• Electronics• Textiles

Transport & Sustainable Biofuels•Low carbon transportation•Bio‐diesel, ethanol

Energy from waste•Land remediation

g )•Smart metering•Storage•Infrastructure

Land management & Protection•Land conservation Materials management

Retail Services•Green product and services• Labelling•Communication•Low carbon services

• Metal finishing

and conservation•Environmental restoration•Sea defences•Carbon sequestration

g•Recycling•De‐materialization• Durability and reparability of products

•Low carbon services

EMPIRICAL EXPERIENCE IN EMPIRICAL EXPERIENCE IN EUROPE – COMPANY CASE STUDIES

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15 Company Case Studies

Sector Company Country EmployeesSWM Germany 7 000Energy producers SWM Germany 7,000

Enel Italy 85,000

Stratkraft Norway 3,000

Holcim Switzerland 90 000

Energy producers

Competition intensive Holcim Switzerland 90,000

Cementa Sweden 425

Coca-Cola US 90,500

C db UK 45 000

Competition intensive - Cement

Competition intensive – Food and Drink Cadbury UK 45,000

ANCC-COOP Italy 55,450

M&S UK 75,000

Food and Drink

Employment intensive - Retail

Carrefour France 495,000

Employment intensive - Construction

Vinci France 164,000

Virgin Atlantic UK 9 000Transport Air Virgin Atlantic UK 9,000

Air France KLM France/NL 105,000

Menzies UK 4,000

D t h P t DHL G 500 000

Transport – Air

Transport - Haulage

Deutsch Post - DHL Germany 500,000

Actions taken by enterprises

Mapped environmental impacts (including supply chains and from use of products/services)All enterprises have established strategies, plans and priorities

Internal measures – energy efficiency, substitution of inputs, greener products/services and adaptationE t l “E ” ith l h i External measures – “Engage” with supply chain mgmt, influence customer, carbon trading, “engage” with policy makers and new partnershipswith policy makers and new partnerships

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The importance of skills in responding to drivers of changeresponding to drivers of change

Impacts have tended to be in relation to skills rather pthan on levels of employment, with few effects on sales or profits

Activities have generated a need for new or upgraded skills, especially relating to new energy efficiency measures

Met by substantial activity in the introduction of new training programmes especially in technical training programmes, especially in technical competencies

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Policy implications and barriers

Need for pro-active management perspectives and Need for pro active management perspectives and approaches – directly and in supply chainsNeed for clear and transparent policiesNeed for clear and transparent policiesLack of skills is a barrier to the take-up of carbon reduction measures, requiring training programmes, q g g p g/ initiatives (inc supply chains)SME capacities will be tested directly and through supply chainsHigh cost of innovation and access to finance

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Green skills strategy requires a coordinated approachcoordinated approach

International level – role of international agencies g(ILO, UNEP, etc) and sector specific initiatives (eg. WBCSD)Country level - high level strategies which recognise the need to reduce CO2 emissions and take-up of other

i iti ti (i i i d d ti )green initiatives (inc. raising awareness and education)Sector level – specific initiatives for training/upskilling especially in those industries which training/upskilling, especially in those industries which have a substantial carbon footprint Company level - anticipating increased demand for Company level anticipating increased demand for high level skills, particularly to support technology research, development and deployment, p p y

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EMPLOYMENT IN THEEMPLOYMENT IN THERENEWABLE ENERGY SECTOR

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Renewable Energy Sources (RES) – realities(RES) – realities

The European Union is already the global leader in The European Union is already the global leader in renewable technologies, which account for a turnover of €20 billion and employ 300,000 people.According to the European Commission’s Impact Assessment (SEC (2006), 1719) the cumulative investment needed to increase the share of RES in total energy generation from 6.5% in 2005 to 20% in 2020 is in the range of €600 670 billion (2005)in 2020 is in the range of €600–670 billion (2005).This would result in an increase in GDP by 0.5% compared to business-as-usual conditions and compared to business as usual conditions and would increase that employment by around 0.3%, which amounts to about 650,000 additional jobs. , j

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Renewable Energy Sources (RES) – realities(RES) – realities

Eastern European countries have generally been Eastern European countries have generally been slow to embrace RES technologies especially wind energy, although this is changing. g g g gWind power increased by 150% in 2008 in the Czech Republic.(25) Poland’s wind capacity grew 71% in 2008. Bulgaria has a goal of 220 MW wind capacity by 2012, up from 16.5 MW today.F t l f i i t i t E t Future plans for expansion exist in most Eastern European Member States.

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Main employment effects of policies supporting renewable energysupporting renewable energy

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Significance of economic & employment impacts RES sector by Member Stateimpacts RES sector, by Member State

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Future RES Potential by Member StatesMember States

Source: DG TREN (2009)

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Overview of Selected Estimates of the Positive Employment Impacts from Environmental Polices in the EU

Current jobs in the EU Future jobs in the EU j j

Core Environmental Activities (includes renewables)

4.4m (direct jobs) plus a further 4.3m indirect and induced jobs

5% per annum growth till 2020

Renewables

Around 1.4 million gross jobs in 2005, and 0.3m to 0 4m net jobs

2020 RES target would generate ~ 0.4m net additional jobs and 2 8 million0.4m net jobs jobs and 2.8 million jobs in total

Energy Efficiency Goods and Services 0.9m (direct jobs) n.a Services

Efficient Automobiles 0.2m(direct jobs) n.a

Transport Infrastructure (Rail manufacture, urban transport, etc.)

2.0m (direct jobs) n.a

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Source: GHK

What does the country and company experience tell us?company experience tell us?

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Recent experience and concerns with low carbon transition with low carbon transition

Short and medium term impact of the credit Short and medium term impact of the credit crunch on low carbon transitionInadequacy of green fiscal stimulusInadequacy of green fiscal stimulusSocial impacts of transformation to a low-carbon economyyRole of labour market policies for enabling transition to a low carbon economy

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Take home messages

More jobs will be created than lost in the move More jobs will be created than lost in the move to a low carbon economyNew markets for low carbon technology will New markets for low carbon technology will create new jobsSome jobs are relatively more vulnerable, as j y ,economies shift to low carbon.A stronger skills policy response would make net benefits more likely and speed up transitionThe issue of comparative advantage is of high iimportancePolicies (inc. skills) will vary according to national and regional circumstancesnational and regional circumstances

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Thank you !a you

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