Creating smart green growth and jobs - PES Working Paper
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PES Working Paper
Creating smart green growth and jobs
Updated 15 April 2009
1. Introduction:
Climate change is one of the biggest political challenges for the next decades. Global warming
will have devastating consequences, not only for the environment, but also for the economy,
for employment and for the social welfare of European citizens. Enormous investments will be
necessary to transform Europe’s traditional economy to a carbon free economy and to adapt
infrastructure and environment to climate change. Reducing the magnitude of climate change
must therefore be a priority, not only for politicians but also for entrepreneurs, employers,
workers and citizens.
However, promoting green growth is also a huge opportunity, especially in times of economic
crisis. In our election Manifesto, the PES calls for the creation of 10 million new smart green
jobs. This target is ambitious, but not unrealistic. In the past years, some million new green
jobs have been created. Renewable energies equipment and more efficient products have
been developed, produced and installed in Europe, as well as exported abroad. Increasing the
energy and raw material efficiency of our economies will contribute considerably to increasing
the competitiveness of the European economies. With the right investments into renewable
energies today, our energy dependence and energy prices in the midterm will decrease.
The purpose of this paper is to assess different political tools and instruments to prevent
climate change from an employment and economic point of view. In this framework it is
important to look at four questions:
- In what sectors can green jobs and green growth be created?
- What is the labour intensity of proposed measures and policy fields?
- How much impact on economic growth and competitiveness will a “green” measure
have?
- How sustainable is the measure (economically, socially and environmentally)?
A carbon free Europe can only become a reality if huge public and private investments are
made and smart and efficient solutions are found. The European climate change and energy
package already offers some first solutions, but more measures on the European and on the
national level could be taken. Large proportions of the national and European economic
recovery programmes should be allocated to green growth elements, since they are much
more sustainable and create more jobs than traditional infrastructure investments.
Considering that emerging economies, especially China, US, India and Brazil have increased
investments and efforts in green growth enormously,, Europeans should make greater efforts
to lead the transformation of its economy. While we have to continue allocating great
resources to renewable energy and energy efficiency research, we must also use and support
available technologies.2 1.1. Job creation potential The potential for new green jobs and greening existing jobs is enormous. Especially in some key sectors such as renewable energies, retrofitting of houses, cleaner cars and public transport, many green jobs have been created in the past. In these three sectors alone, several million new green jobs can be created. For example, the British government set itself to create 400,000 jobs in "green industries" over the next five years with their economic recovery programmes.1 However, green job creation will not be limited to renewable energy production, increasing energy efficiency and the transport sector. All sectors will have to put a stronger focus on green growth. Consumer awareness of the importance of buying “green products” is increasing. Furthermore, “greening” jobs will be an economic necessity very soon. All enterprises in the service sector will be able to profit from increasing energy efficiency, producing their own renewable energies, reducing the use of material used (such as office equipment) and making the transport of products and their employees carbon free. First companies already claim to offer their products or services absolutely carbon-free and therefore gain a competitive advantage compared to “traditional” companies. Also the competitiveness of the European manufacturing industry could be increased considerably through higher energy efficiency. Production costs could be reduced much more effectively this way and social and economic costs which occur when laying off workers to decrease expenditure could be prevented. Transforming Europe’s traditional economies to carbon-free economies will have effects on all sectors, but the “stress” caused for the labour market will be limited. The large-scale redistribution of jobs that will result from the implementation of climate policies will occur within rather than between sectors. It is considered easier for workers to change companies within the same sector than to find work in a different sector.2 In general one can conclude that jobs will be created in companies that can take advantage of opportunities created by climate policies and jobs will be lost in companies that cannot adapt. 1.2. Quality of green jobs The economic crisis and its employment and social consequences in the near future remind us once again that it is important to improve the quality of jobs. Poor and precarious jobs are laid off first in times of crises, do not offer social and financial stability for workers and contribute to low consumer demand in the European market. Many of the green jobs that have been created in the last years are of a high quality and a similar trend is to be expected in the future. On the one hand, the development, production and installation of new low-carbon and highly energy efficient technologies will require high-level qualifications3 and will play an important role in reforming Europe to a knowledge-based economy and increase the competitiveness of the European economy. On the other hand, green growth offers the possibility to create many new jobs and “green” existing jobs in the construction sector and in the manufacturing industry, for example the car industry, both hit especially hard by the economic crisis. Many recently and long-term unemployed will be able to find new jobs after participating in short retraining programmes. 1 Grice, Andrew , The Independent (2009): Brown's electric dream for Britain 2 ETUC (2005): Climate Change and Employment: Impact on Employment in the European Union-25 of climate change and CO2 emission reduction measures by 2030, p. 185. 3 ETUC (2005): Climate Change and Employment: Impact on Employment in the European Union-25 of climate change and CO2 emission reduction measures by 2030, p. 186. Party of European Socialists 98 Rue du Trône, B-1050 Brussels AISBL – BBCE – n°0897.208.032 Parti Socialiste Européen T+ 32 2 548 90 80 F+ 32 2 230 17 66 info@pes.org www.pes.org
3
The "winning" sectors, such as building, electrical equipment manufacturing, renewable
energy, logistics and intermodal transport, will have to evolve positively at the social and wage
levels in order to create attractive jobs for job seekers. Indeed, there is a risk — which is not
limited to climate policies but is also valid for the information and communication technologies
sector — that jobs developed in newly created companies may be perceived by workers as
less well paid and offering less secure working conditions than jobs in well established
branches, in particular the historic operators of the electricity sector.4
1.3. Political recommendations
Before going into detail in some specific sectors, some general political recommendations
could be made:
European level
- Introduce legislation and regulation on the use of renewable energies and increasing
energy efficiency, providing legal certainty, a common playing field and allow public
and private investments;
- redirect big proportions of EU funding programmes (Structural Funds, European Social
Funds, funds under the Common Agricultural Policy, the Framework Programs for
Research and Technological Development and the Trans-European Networks
Programme) to green jobs and growth;
- equip green growth projects with sufficient credits through the European Investment
Bank (EIB);
- eliminate in the midterm all subsidies and financial support for fossil and non
environmentally sustainable policies, allowing those actors creating green jobs and
growth to be more competitive;
- provide a platform for the member states to coordinate their efforts in creating new
green jobs and growth.
National, regional and local level
- Allocate economic recovery plan resources to green jobs and growth;
- implement the climate change package on the national level;
- introduce stricter legislation on energy efficiency and the use of renewable energies,
for example by selling all emission certificates given out under the European Emission
Trading Scheme (ETS), setting stricter limits on emissions, introducing fixed feed-in
prices for renewable energy or obliging power producers to reach a certain minimum of
renewable energies in their energy-mix:
- provide subsidies or tax cuts for enterprises and private people producing their own
renewable energies or reducing their energy consumption;
- support especially small and medium enterprises to create green jobs.
2. Transport:
In the transport sector there is a big potential for creating green jobs and for reducing green
house gas emissions. In contrast to other sectors, emissions have been rising considerably in
the last years in the transport sector. Due to the fact that the transport sector is responsible for
nearly 60% of Europe's consumption of oil5, an energy resource that is extremely scarce in
Europe, energy independency of Europe depends on reforms in this area. Around 15 million
4
ETUC (2005): Climate Change and Employment: Impact on Employment in the European Union-25 of climate
change and CO2 emission reduction measures by 2030, p. 185.
5
PES (2006): PES Position Porto 2006 : Secure energy supply and smart, green growth : a new social democratic
energy policy.
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jobs related directly and indirectly to transport in the EU 25, i.e. more than 7% of European
employment, largely in road transport.6 During the economic crisis, many jobs, especially in
the car industry, have been lost. Although the overall demand for cars has plummeted, the
demand for energy efficient cars has increased. If European car producers would have started
to focus more on the energy efficiency of their cars earlier, the employment crisis in this sector
could conceivably have been smaller. European economic recovery programmes have
foreseen some measures to create green jobs in the transport sector, but less than those
planned in the US, China and Korea. Amongst them are increased investments into clean
cars, mass transport, research and development as well as smart incentives and regulations
in order to increase the demand for clean cars. If not more is done to create green jobs and
green the economy in this sector, the competiveness of the entire European economy will
suffer. More efforts are necessary to move from individual transport to mass transport and
reduce the use of energy and raw material in the production and use of cars, busses, trucks,
trains and trams.
2.1. Job creation potential of green transport
There is an enormous job creating potential in public transport and rail transport in Europe.7
Despite climate change, employment has been going down in this sector in the past decades.
Railway employment is down to about 900,000 jobs in Europe, the number of workers in
manufacturing rail and tram locomotives and rolling stock there has declined to 140,000.8
Employment statistics for urban transit are incomplete and trends vary considerably by city
and country. But some 1.3 million people work in public transit in the European Union and the
United States alone.9 Especially in times of climate change and economic crises, the
readiness of consumers to use public transport will increase. This has to be met by more
public investments into the mass transport infrastructure, making public transport and rail
transport more accessible and affordable as well as increasing its quality. Furthermore
investments and incentives are necessary to encourage a shift from road freight transport to
rail freight transport. According to an ETUC-study, the number of direct and indirect jobs in rail
and public transport (tramway, bus, underground, bicycles) would be multiplied fourfold, in
case of increased support for public and rail transport.10 Although some jobs would be lost in
the automobile sector in this case, overall much more employment would be created than
today and economically dangerous overproduction in the car industry could be reduced.
A big potential for green jobs also lays cleaner or clean cars. Although most of these jobs will
not be new green jobs but “greened” jobs, producing more fuel efficient cars, electric cars and
running cars with sustainable bio fuels will be a precondition for the survival of the European
car industry and therefore for Europe’s competitiveness and employment in total. An
assessment of the most efficient cars available today suggests that relatively green auto-
manufacturing jobs may number about a quarter million out of roughly 8 million direct jobs
6
ETUC (2005): Climate Change and Employment: Impact on Employment in the European Union-25 of climate
change and CO2 emission reduction measures by 2030, p. 185.
7
UNEP (2008): Green Jobs: Towards Decent Work in a Sustainable, Low-Carbon World, p. 169.
8
ECOFYS (2007): Making Energy Efficiency Happen: From Potential to Reality. An assessment of policies and
measures in G8 plus 5 countries, with recommendations for decision makers at national and international level.
2007.
9
ECOFYS (2007): Making Energy Efficiency Happen: From Potential to Reality. An assessment of policies and
measures in G8 plus 5 countries, with recommendations for decision makers at national and international level.
2007.
10
ETUC (2005): Climate Change and Employment: Impact on Employment in the European Union-25 of climate
change and CO2 emission reduction measures by 2030, p. 169.
Party of European Socialists 98 Rue du Trône, B-1050 Brussels AISBL – BBCE – n°0897.208.032
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worldwide, the bulk of these are in Europe and Japan.11 Even more indirect jobs are linked to
the production of clean cars. The reduction potential in the transport sector ranges from 25%
to almost 50%.12 For many years European car producers have researched and developed
electric cars, but so far no such cars are available for an affordable price.
2.2. Quality of green jobs in the transport sector
The quality of green jobs in the transport sector is expected to be slightly higher then
conventional transport jobs. Research and development of more energy efficient cars, electric
cars and bio fuels as well as the construction of new trams, trains and busses offer
employment for many scientists and engineers. On the other hand, strengthening mass
transport infrastructure could give a boost to the highly troubled construction sector. Many of
the workers in the traditional automotive industry can find new jobs in producing clean cars
and running the public transport systems.13
2.3. Political recommendations
More incentives and investments for reforming European transport are necessary, on the
European and national levels:
European level
- Allocate more resources to the Trans European Network (TEN) funds for improved
European railway connections;
- making use of structural and cohesion funds to improve the public transport systems;
- further tighten European legislation on the emissions of cars and strictly sanction non-
compliance;
- introduce incentives or regulation for reducing the use of energy and raw material for
producing cars, busses, trucks, trains and trams;
- abolish tax advantages for emission incentives company cars and public cars, based
on the European competition legislation;
- consider a European energy tax;
- support more research and development in clean cars and mass transport out of the
European Framework Programmes for Research and Technological Development;
- include shipping and aviation into the emission trading scheme;
- introduce efficiency criteria for shipping and aviation transport;
- introduce minimum criteria on quality, accessibility and affordability of mass transport
into European internal market policy privatisation of mass transport must not lead to
decreased passenger numbers, but rather the opposite;
- establish Europe-wide minimum criteria for investments in public transport and rail
transport.
11
ECOFYS (2007): Making Energy Efficiency Happen: From Potential to Reality. An assessment of policies and
measures in G8 plus 5 countries, with recommendations for decision makers at national and international level.
2007.
12
ECOFYS (2007): Making Energy Efficiency Happen: From Potential to Reality. An assessment of policies and
measures in G8 plus 5 countries, with recommendations for decision makers at national and international level.
2007.
13
Centre for American Progress (2008): Green Recovery. A Program to Create Good Jobs and Start Building a
Low-Carbon Economy. 2008.
Party of European Socialists 98 Rue du Trône, B-1050 Brussels AISBL – BBCE – n°0897.208.032
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National, regional and local levels
- Increased investments in public and efficient rail transport both for freight and
passengers14;
- introduce tax advantages for rail transport (passenger and freight) compared to road
transport;
- support the use of low consumption, hybrid and electric cars with tax reduction or
direct subventions;15
- state support to renew old emission incentive cars with newer ones;16
- make use of spatial planning in order to reduce the distance between home and work
place, in order to reduce transport necessity;
- abolish tax advantages for emission incentives company cars and public cars;
- internalise costs of road transport through green tax and/or tolls (first steps already
taken in many EU member states);
- increase taxes on air transport (already done in UK);
- make public cars more energy efficient;17
- support the development and encourage the production of affordable electric cars and
efficient batteries for electric cars;
- replace old public trucks, busses and cars with new, efficient ones (due to decreased
fuel costs, these expenses will amortise);
- implement measures to reduce road congestion and therefore reducing emissions and
making the European economies more competitive by saving money in all sectors;
- make it more attractive to use bikes by installing bike tracks, special bike street lights
and public bike hiring stations.
3. Energy efficiency
Increasing energy efficiency represents an enormous economic and employment growth
potential. Energy efficient houses, efficient heating and cooling, savings in lightening, more
efficient electronic equipment and appliances and a more efficient way of production can save
millions of jobs, create millions of new jobs, decrease costs - especially for poor households –
and therefore strengthen economic development in Europe.
In many sectors new jobs can be created through saving energy:
- Retrofitting of buildings;
- more efficient electronic products and appliances;
- more efficient cars (see chapter 2);
- building up a smart and efficient energy grid;
- more efficient production;
- changing consumer behaviour.
The biggest employment and economic effects are to be expected in the housing sector.
Modern, high-performance buildings have the potential to save energy by at least 80 percent
14
As part of the French recovery programme, the state will invest 300 million € into regenerating railway networks
and speeding up the construction of new regional railway connections.
15
As part of the French recovery programme, the state will offer up to 1000 € to people who purchase a new car
that emits less than 160 grams of CO2 per km and when restituting an old car, which is at least 10 years old. The
German recovery program introduces a tax reform: taxes for buying cars will in the future depend on the emissions,
not on the cubic capacity anymore. Furthermore, when buying very energy-efficient car (Euro-5 and Euro-6), no
car-tax needs to be paid for the first two years.
16
The German recovery programme includes a provision that citizens receive 2500€ in case they scrap their cars
older than 9 years and buy a new “cleaner” car (Euro-4).
17
In the framework of the French recovery programme, 5000 new police cars will be purchased which respect strict
CO2 emission norms.
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compared with traditional building construction.18 The energy saving potential is especially
high in the new Member States.19 Effects of investments into more energy efficient buildings
would materialise relatively quickly - not only in emissions saved, but also from an
employment, economic and social perspective - and would therefore by counter-cyclical. The
construction of “green buildings”, retrofitting of existing houses, installing more efficient lighting
systems all have an excellent job creation potential.20 Especially construction workers, who
have suffered a lot from the economic crises, will find new jobs if further incentives are given
to increase the energy efficiency. Furthermore, very positive social and economic effects are
to be expected. Especially poor households will be able to profit from lower energy prices and
they are very likely to reinvest these savings into new consumption and therefore increase the
demand in the European economies. Since many of the concerned jobs do not require much
qualification, long-term jobless could be reintegrated into the labour market.21
An important contribution could be done by modernising energy grids and energy production.
The average efficiency for electricity generation is currently around 40%. A new generation of
energy capacity can reach efficiency close to 60%. Losses in the transmission and distribution
of electricity, which amount up to 10%, can also be reduced.22
More energy efficient production and reducing the use of raw material could increase the
competitiveness of the European economies. While China and other Asian countries have
invested many thoughts and considerable finances into increasing the energy and raw
material efficiency of their production sector, too little has happened in Europe. Modernizing
the energy grid and therefore reducing the amount of energy lost, supporting efficient district
heating and informing consumers better about opportunities to reduce their energy use and to
finance efficiency measures, could further contribute to strengthen Europe’s economy during
the crises period. Recovery programmes on the national and European level as well as new
“green growth” legislation and regulation allow for a number of measures to be implemented
(see chapter 3.3.).
3.1. Job creation potential of increasing energy efficiency
Increasing energy efficiency is likely to be the cheapest, fastest and most efficient way to
create green jobs and growth. Many jobs – especially in the construction sector - have been
created in the past years through retrofitting of houses.23 A 2000 study by the U.K.
government concluded that for every $1.4 million (€1 million) invested in residential energy
efficiency, 11.3 to 13.5 FTE (full-time equivalent) jobs were created. 24 According to a study
from ETUC, up to 2.59 Million people could be employed in the “green” housing sector until
2030.25 Out of 19.5 million construction workers in Europe26, a large proportion could find a
new job in energy efficient construction.
18
UNEP (2008): Green Jobs: Towards Decent Work in a Sustainable, Low-Carbon World.
19
ECOFYS (2007): Making Energy Efficiency Happen: From Potential to Reality. An assessment of policies and
measures in G8 plus 5 countries, with recommendations for decision makers at national and international level.
2007.
20
UNEP (2008): Green Jobs: Towards Decent Work in a Sustainable, Low-Carbon World.
21
ETUC (2005): Climate Change and Employment: Impact on Employment in the European Union-25 of climate
change and CO2 emission reduction measures by 2030.
22
PES Position Porto 2006 : Secure energy supply and smart, green growth : a new social democratic energy policy
23
From 2001–2006, through €3.8 billion in public investment and € 15.2 billion in private investment, Germany’s
retrofitting program resulted in 342,000 apartment retrofits and the creation of 145,000 additional FTE jobs in 2006.
In: UNEP (2008): Green Jobs: Towards Decent Work in a Sustainable, Low-Carbon World.
24
UNEP (2008): Green Jobs: Towards Decent Work in a Sustainable, Low-Carbon World.
25
ETUC (2005): Climate Change and Employment: Impact on Employment in the European Union-25 of climate
change and CO2 emission reduction measures by 2030, P. 149.
Party of European Socialists 98 Rue du Trône, B-1050 Brussels AISBL – BBCE – n°0897.208.032
Parti Socialiste Européen T+ 32 2 548 90 80 F+ 32 2 230 17 66 info@pes.org www.pes.org8 Making existing and new buildings more efficient would save many million jobs in the construction sector, one of the sectors hit first and hardest by the economic crises. Such employment would also be more sustainable than employment in this sector created thanks to the huge bubble in the housing sector in many European countries. Developing and producing energy efficient cars would “green” millions of jobs in the European car industry and could save many of the threatened companies in this sector, without the necessity for large scale training and qualification programmes. Although there is no data available, the job creation and saving potential in increasing the energy efficiency of technological products and appliances is also very high, since the competitiveness of these products increasingly depend on their energy efficiency when used. Most of the 51 million jobs in the manufacturing sector in Europe27 will only be secure for the next decades if the use of raw material as well as the use of energy and therefore the price of the products can be decreased. Secondary steel production, based on recycled scrap, requires 40–75 percent less energy than primary production, recycling aluminum scrap uses only 5–10 percent the amount of energy it takes to make aluminum from scratch.28 If European production would be more energy and raw material efficient, laying off workers with all negative economic and social effects could be avoided in many cases. Although some jobs would be lost in energy production, the net impact of energy savings on employment would be positive. The jobs lost in the coal sector would be largely compensated for by employment gains resulting, on the one hand, from the options that allow energy savings, given the highly capitalistic and low labour intensiveness of the energy production sector, and on the other, from the redistribution of savings on the energy bills of businesses and households. Such jobs are also harder to relocate and are created mainly in small local companies.29 3.2. Quality of green jobs in increasing energy efficiency There is a wide variety of jobs that can be created through saving energy. Retrofitting buildings alone offers new jobs in many professions: electricians, heating/air conditioning installers, carpenters, construction equipment operators, roofers, insulation workers, carpenter helpers, industrial truck drivers, construction managers and building inspectors.30 Producing energy efficient cars, efficient electronic equipments and appliances as well as building green houses also creates employment in other professions, such as engineers and architects. In contrast to other sectors, such as renewable energies, jobs created though increasing energy efficiency would mostly require only low qualification levels, enabling many of those loosing employment during the crises to re-qualify for those jobs.31 Furthermore, increasing the energy efficiency of buildings is extremely intensive in direct employment, which cannot be easily outsourced because it is connected to a territory or to regional or national market.32 26 EU KLEMS Project (2008): Productivity in the European Union: A Comparative Industry Approach. On: http://www.euklems.net/. 27 EU KLEMS Project (2008): Productivity in the European Union: A Comparative Industry Approach. On: http://www.euklems.net/. 28 UNEP (2008): Green Jobs: Towards Decent Work in a Sustainable, Low-Carbon World. 29 ETUC (2005): Climate Change and Employment: Impact on Employment in the European Union-25 of climate change and CO2 emission reduction measures by 2030. 30 Centre for American Progress. Green Recovery (2008): A Program to Create Good Jobs and Start Building a Low-Carbon Economy. 2008. 31 ETUC (2005): Climate Change and Employment: Impact on Employment in the European Union-25 of climate change and CO2 emission reduction measures by 2030. 32 ETUC (2005): Climate Change and Employment: Impact on Employment in the European Union-25 of climate change and CO2 emission reduction measures by 2030. Party of European Socialists 98 Rue du Trône, B-1050 Brussels AISBL – BBCE – n°0897.208.032 Parti Socialiste Européen T+ 32 2 548 90 80 F+ 32 2 230 17 66 info@pes.org www.pes.org
9
3.3. Political recommendations
European level
- Introduce stricter European-wide isolation standards for the construction or renovation
of buildings, promoting the spread within the housing sector of new technologies and
building materials which use less energy;
- use ESF and structural funds to co-finance national measures to retrain workers for
jobs which contribute to more energy efficiency, such as retrofitting houses;
- use structural funds and ESF to co-finance retrofitting of residential houses, social
houses, public buildings and schools, especially in new member states, where the
energy saving potential is still very high;
- using the funds in the Trans-European Networks programme in order to move towards
a “smart grid” in Europe, which is secure, energy efficient, allows smart energy saving
technologies to be applied and which allows renewable energy to be transported to all
households in Europe;
- introduce European legislation on labelling all electronic appliances and cars for their
energy efficiency and strictly sanction non-compliance;
- introduce Europe-wide minimum energy efficiency standards and strictly sanction non-
compliance;
- setting a European Top-Runner-Standard for household electrical appliances (all
companies are forced to reach the energy efficiency of the “top-runner” in a given time)
and introduce stricter European energy efficiency standards such as the EU-US
"Energy Star" Programme for energy efficient office equipment;
- use structural funds to co-finance the construction of district heating;
- increase efforts to introduce Europe-wide guidelines for ecologic urban development,
which would result in major energy savings;
- make use of the European Framework Programs for Research and Technological
Development to fund research and development for energy efficiency;
- improve the follow-up to pilot projects for increasing energy efficiency in the social
housing sector;
- tighten minimum criteria for the use of recycled material in the manufacturing and the
service sector;
- launch a European initiative to inform citizens about ways to reduce energy
consumption.
National, regional and local level
- Publicly financing as well as giving incentives for enterprises to fund retraining of
workers for jobs which contribute to more energy efficiency, such as retrofitting
houses;
- introduce housing isolation programs for existing buildings (especially in poor
households, where these measures have the biggest economic benefit) and support
the construction of green houses by private persons, enterprises and public
authorities;
- give incentives or force energy producing companies through legislation to contribute
to increased energy efficiency;33
- modernising the communal infrastructure, including better isolation of public buildings;
33
In the UK, energy suppliers are obliged to achieve reductions in carbon emissions by installing energy efficiency
measures such as loft and cavity wall insulation over the period 2008-2011, a measure which is expected to deliver
emissions savings of 185 MtCO2 over the projected lifetime of the measures. Measures such as loft and cavity wall
insulation are now available to all households at a discount of 50 per cent, saving those householders that install
insulation up to £300 a year on fuel bills. A priority group of eleven million households, comprising those on
qualifying benefits and the over 70s, qualify for these measures at no cost. In: Green growth elements of the UK
Pre-Budget Report 2008.
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- use revenues of the EU Emission Trading Scheme to be used to promote energy
efficiency and renewable energy in existing housing stock;
- introduce tax bonus for energy efficient retrofitting of houses;34
- support energy-efficient heating systems, especially district heating supply;
- tax advantages or subsidies to replace old electronic equipment such as fridges and
washing machines with more energy efficient models;
- facilitate innovative financing schemes and contractual tools, such as microcredit, joint
ventures between private companies and local authorities, third party financing or
public guarantees on bank loans to private enterprises in order to encourage energy-
efficiency investments;
- launch public information campaigns in order to inform citizens about ways to reduce
energy efficiency;
- in public procurement, the energy efficiency of equipment and services in the public
sector should become one of the key criteria when deciding which tender to accept;
- in order to encourage green public procurement, governments should provide
designated offices with tailored information packages with up-to-date information on
procurement rules, existing cost effective saving potential and a calculator for life-cycle
costs.
4. Renewable energies:
Transforming the European carbon economies into renewable economies and societies is one
of the most difficult challenges in the next decades. Increasing shares of renewable energies
in our energy mix and one day a carbon free economy will not only be a crucial contribution to
stopping climate change but will enormously improve the energy security and energy
independence of the EU. Furthermore, millions of jobs can be created in the renewable
energy sector.
A carbon free Europe can only become reality if huge public and private investments are done
and smart and efficient solutions are found. The renewable energy directive is already an
important step, but much more can be done (see also chapter 4.3.). The national and
European recovery programs need to support the development and installation of large
quantities of renewable energies. Infrastructure investments to prepare the European energy
grid for large amounts of unsteady, renewable energies produced in different parts of Europe
will be necessary. Wind and wave power produced on the coasts, solar power from the south,
biomass power from rural areas as well as hydro and geothermal power have to be
transported to the production sites and cities where most energy is consumed. As much as
possible the EU and member states should focus on decentralising power production and
therefore weakening quasi monopolists in the energy production sector. Renewable energy
devices – especially solar heating/cooling and photo voltaic panels - installed in new or
existing houses could not only satisfy the demand in electricity inside of the house, but could
also power electric cars (which could thus serve as instruments to store power), reducing the
energy dependence of a house hold considerably.
4.1. Job creation potential
All renewable energy sectors, wind power, PV, solar heating, geothermal and biofuels are
much more labour intensive than fossil and nuclear energy production. According to the US
Department of Commerce Industrial Survey, with every 1 million Dollar investment, 2.9 jobs
are created in the nuclear field, 3.4 in oil, 4.8 in coal, 10.1 in smart grid, 10.4 in wind and solar,
34
As part of the German recovery program, construction costs for making buildings more energy efficient are tax
free up to 1200 € per person. Green growth in the German Recovery Program
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Parti Socialiste Européen T+ 32 2 548 90 80 F+ 32 2 230 17 66 info@pes.org www.pes.org11 12.3 in biomass, 12.8 in retrofitting houses and 15.4 in mass transit.35 Due to growing automation and mechanization in the oil, natural gas, and coal industries, many jobs were lost in those sectors.36 The biggest potential for job creation in the renewable energy sector is currently found in the production of wind power and biofuels. In 2007, the EU wind energy sector directly and indirectly employed approximately 154,000 in the EU.37 In the five years between 2002 and 2007 direct employment in the wind energy sector increased by 125%.38 It is expected that wind energy employment in the EU will more than double to almost 330,000 in 2020.39 A study fro the European Commission comes to the conclusion that around 2 million jobs can be created in the renewable energy industry until 2020.40 Also photovoltaic energy (PV) and solar heating/cooling have a big job potential in the last years, probably overtaking the wind energy sector in some years, while the potentials of geothermal and wave energy employment is currently rather low. Hydro energy, the oldest renewable energy in use, will most likely not produce many more jobs in Europe in the next years. Many of the jobs created in the renewable energy sector are linked to the export, contributing to Europe’s economic growth. It appears unlikely that Carbon Capture and Storage Technologies (CCS) could become a significant source of employment and there is a danger that CCS will absorb scarce investment resources that otherwise might be devoted to renewables and energy efficiency41, which are much more labour intensive. 4.2. Quality of the green jobs Like in the other sectors, a large number of occupations will profit from a positive development of renewable energy production (especially wind energy, solar energy and biofuels), such as environmental engineers, electrical engineers, electricians, industrial machinery mechanics, welders, iron and steel workers, millwrights, sheet metal workers, machinists, electrical equipment assemblers, construction equipment operators, industrial truck drivers, industrial production managers, first-line production supervisors, chemical engineers, chemists, chemical equipment operators, chemical technicians, mixing and blending machine operators and agricultural workers.42 Many of these jobs are decent and high quality jobs. The construction of windparks, PV-panels, solar heating, geothermal heating and electricity as well as wave energy installations will create many jobs for construction workers, which have been directly affected by the economic crises. Of considerable concern is especially the quality of work for imported biofuels: most jobs are found at sugarcane and palm oil plantations, where wages are low, working conditions often extremely poor, and worker rights at least in some cases suppressed.43 35 U.S. Department f Commerce Industrial Survey, in: Robert Pollin (2008): Green Growth and Good Jobs. 36 UNEP (2008): Green Jobs: Towards Decent Work in a Sustainable, Low-Carbon World. 37 European Wind Energy Association (2009): Wind at Work, p. 7. 38 European Wind Energy Association (2009): Wind at Work., p. 7. 39 European Wind Energy Association (2009): Wind at Work, p. 9. 40 European Commission, Director General for Energy and Transport: MITRE-Report - Meeting the Targets & Putting Renewables back to work. 41 UNEP (2008): Green Jobs: Towards Decent Work in a Sustainable, Low-Carbon World, p. 9. 42 Centre for American Progress (2008): Green Recovery. A Program to Create Good Jobs and Start Building a Low-Carbon Economy. 43 UNEP (2008): Green Jobs: Towards Decent Work in a Sustainable, Low-Carbon World, p. 7. Party of European Socialists 98 Rue du Trône, B-1050 Brussels AISBL – BBCE – n°0897.208.032 Parti Socialiste Européen T+ 32 2 548 90 80 F+ 32 2 230 17 66 info@pes.org www.pes.org
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4.3. Political recommendations
European level
- A Common European fund could be established by banks, private corporations and
public authorities to support the development and installation of renewable energies;
- Using the funds for the Trans-European Networks to build up a European energy grid
ready to transmit renewable energies to all households in Europe
- Using funds from the European Framework Programmes for Research and
Technological Development and the structural funds to support large scale renewable
energy pilot projects
- Providing more funds through the European Investment Bank for renewable energy
projects
- Using funds from the European Framework Programs for Research and Technological
Development to finance research and development of renewable energies
National, regional and local level
- Introduce incentives (guaranteed prices for renewable energies, direct subsidies, tax
reductions) for individual households as well as enterprises to produce their own
renewable energies and install solar power heating and cooling in their buildings
- Introduce incentives or regulations for existing and new commercial energy producers
to move away from carbon energy to renewable energy (guaranteed prices for
renewable energies, direct subsidies, tax reductions, compulsory minimum renewable
targets in the companies energy mix)
- Encourage consumers to switch from carbon to renewable energies by offering tax
benefits, keeping renewable energy prices low, financing public information campaigns
and simplifying the switch to a new energy company
- Equip public houses with PV-panels, solar power heating and cooling as well as other
renewable energy technologies
- Provide training for unemployed and workers to prepare them for careers in renewable
energy fields
5. Job creation potential and political recommendations for other
sectors:
The debate about green jobs and growth is only at its beginning. In some sectors, much has
been done already to create new jobs or “green” existing jobs. But most opportunities for
green jobs have not been used yet. In nearly all sectors and subsectors where Europeans are
employed, green jobs can be created and in many cases, creating green jobs or “greening”
existing jobs will be a precondition for ensuring high employment levels in Europe and a high
competitiveness.
Out of the 270.000 employees in Europe, only 5.5 million work in agriculture, hunting, forestry
and fishing, 1 million in mining and quarrying and 51.5 million in manufacturing. The other 212
million work in the service sector. The potential for “green” jobs in this sector is naturally much
higher than in manufacturing, mining and agriculture. Nearly all of those jobs can be “greened”
and their competitiveness increased with some easy measures. For instance, providing clean
energy supplies means that any economic activity has far less environmental impact than
today, when fuels and electricity are still produced largely from coal, oil and gas. Likewise,
greening vehicles (that is, producing cars, trucks, and buses that run on cleaner fuels and are
more efficient) means that the many millions of jobs in transportation services are by
implication also greener. Green buildings to an extent help green the jobs of those who work
Party of European Socialists 98 Rue du Trône, B-1050 Brussels AISBL – BBCE – n°0897.208.032
Parti Socialiste Européen T+ 32 2 548 90 80 F+ 32 2 230 17 66 info@pes.org www.pes.org13 in them. Nonetheless, such effects do not obviate the need for additional environmental measures, such as phasing out the use of toxic materials, reducing waste, and so on.44 Much more could also be done to create green employment in the agriculture, forestry and fishing sectors. Organic food production is not only more environmentally friendly, but also much more labour intensive than existing agriculture. A study of 1,144 organic farms in the United Kingdom and the Republic of Ireland showed that they employed one-third more full- time equivalent workers per farm than conventional farms. If 20 percent of farmland became organic in both countries, there would be an increase of 73,200 jobs in the United Kingdom and 9,200 in Ireland.45 Therefore, more European funds should be directed to organic farming, more incentives given to consumers to buy these products and more efforts done to merchandise organic products. Especially small scale sustainable farming – which is very labour intensive – should be supported. Also the use of renewable energies and energy saving in agriculture should be supported.46 Sustainable forestry management is another area were green jobs can be created. The growing demand for products from sustainable farmed forests could be supported by European certification schemes, proving the sustainability of wood products. In the long run, such schemes provide more stable employment over a greater period of time and opportunities to increase labour standards.47 The increasing number of large scale and devastating fires in Europe and increasing desertification in the south or Europe are a consequence of climate change. Ironically, these consequences will create new green jobs in deforestation.48 Also the European fishing industry, which contributes considerably to decreasing fishing stocks worldwide will increasingly be forced to apply sustainable fishing techniques, since it suffers itself from decreasing fish resources. New and greener jobs can be created in sustainable fishing and fish farming, which are both more labour intensive. A greater awareness of the consequences of climate change increased the demand for these sustainable products, even though they are much more expensive. Ecological tourism will play an increasing role in Europe. Already the environment in many tourism destinations is completely destroyed, with negative consequences not only for the locals but also for the tourism industry as such. Awareness that tourism should not lead to destroyed environment increases. Like most ecological alternatives to the traditional way of doing things, ecological tourism is more labour intensive and jobs are of higher quality. It should be supported through European and national legislation preventing the extension of hotels into national parks, improving the environment (such as the obligation to clean waste water) and European and national programs to repair the environment. The waste management sector provides an increasing number of green growth and jobs potential. The decreased use of raw material, its re-use and recycling will reduce production costs. More than one million jobs are expected to already exist in the European recycling industry, but the potential is even higher.49 The amount of waste produced in Europe increases, recycling technology is improved and raw material prices are expected to rise quite soon again, making it economically interesting to step up recycling efforts. 44 UNEP (2008): Green Jobs: Towards Decent Work in a Sustainable, Low-Carbon World, p. 300. 45 UNEP (2008): Green Jobs: Towards Decent Work in a Sustainable, Low-Carbon World, p. 300. 46 The French economic recovery programme foresees some measures to increase the energy efficiency of agriculture and to reduce the agriculture’s dependence on non renewable energy sources. 47 UNEP (2008): Green Jobs: Towards Decent Work in a Sustainable, Low-Carbon World, p. 300. 48 UNEP (2008): Green Jobs: Towards Decent Work in a Sustainable, Low-Carbon World, p. 300. 49 UNEP (2008): Green Jobs: Towards Decent Work in a Sustainable, Low-Carbon World, p. 300. Party of European Socialists 98 Rue du Trône, B-1050 Brussels AISBL – BBCE – n°0897.208.032 Parti Socialiste Européen T+ 32 2 548 90 80 F+ 32 2 230 17 66 info@pes.org www.pes.org
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Water management is another sector, where more green jobs can be created. While water is
getting more scarce due to climate change, the management of water will become
increasingly important. The use of modern desalination technologies, powered with renewable
energies, offers new chances for agriculture in southern Europe but also for exporting
European know how to countries of the south.
Greening cities will be an increasing priority for local governments. Creating green spaces in
cities will not only increase living conditions and therefore offer a advantage of location, but
also contribute to new green jobs, for example in the management of open public spaces and
gardening.
A new trend is developing in “organic” clothes, based on sustainably produced and processed
wool. Big companies have taken up such clothes in their assortments, underlines the potential
for green jobs and growth that lays in this sector.
Climate change has already begun and is unavoidable. An increasing number of natural
catastrophes, desertification and global warming are first signs, in a few decades the increase
in the sea water level will be felt. Even if green house gas emissions could be reduced soon,
these climate change effects will make adaptation measures necessary. Although it is difficult
to estimate the amount of green jobs created, soil conservation efforts such as conservation
tillage and the rehabilitation of degraded crop and pasture land will offer good employment
opportunities.50
50
UNEP (2008): Green Jobs: Towards Decent Work in a Sustainable, Low-Carbon World, p. 300.
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