Creating smart green growth and jobs - PES Working Paper PES Climate and Energy network
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PES Working Paper
PES Climate and Energy network
Creating smart green growth and jobs
1. Introduction:
Climate change is one of the biggest challenges we face. 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. An increase in temperature will
lead to more desertification and floods and a decline in agricultural production, rising sea
levels and devastating consequences for coastal regions, the spread of malaria and other
tropical diseases in Europe as well as the extinction of many species. Europe’s economic
output will be weakened and employment will suffer. Many conservatives and liberals argue
that we cannot afford to invest in tackling climate change due to the financial and economic
crisis. The opposite is true: the longer we wait, the more expensive it will be. The later we
manage to slow climate change, the higher the adaptation costs in infrastructure, agriculture,
energy, health, transport, tourism and many other sectors1 and the more expensive will the
transformation of Europe’s traditional economy to a carbon free economy. Reducing the
magnitude of climate change must therefore be a priority, not only for politicians but also for
entrepreneurs, employers, workers and citizens.
The growth of GreenTech in the past years has shown that investing in green growth is not a
costly duty, but a huge economic opportunity. While nearly every sector has suffered big
losses as a result of the recession, the green sector has suffered a drop in growth but is still
growing. Until 2020, the global turnover in the GreenTech sector is expected to double to
€3100 billion.2 In Germany this sector already contributes to 8% GDP, which is expected to
rise to 14% GDP by 2020.3 In the past years, about a million new green jobs have been
created and, in many countries, green tech is already or will soon be the biggest employer.
Therefore the PES European election manifesto calls for the creation of 10 million new smart
green jobs by 2020, which is an ambitious but also realistic commitment. Renewable energies
equipment and energy efficient products are increasingly sold in Europe, but also exported to
the rest of the world. Increasing the efficiency of energy and natural resource use of our
economies will decrease production costs and contribute considerably to increasing the
competitiveness of European economies. Reforms in energy production, distribution and use,
support for the export of green products as well as the right investments in renewable
energies and energy efficiency will not only bring economic benefits, but will also decrease our
energy dependence.
1
European Commission (2009): White Paper – Adapting to climate change: Towards a European framework for
action. (COM(200) 147 Final.
2
German Environment Ministry (2009): GreenTech made in Germany 2.0 – Environmental technology Atlas for
Germany.
3
German Environment Ministry (2009): GreenTech made in Germany 2.0 – Environmental technology Atlas for
Germany.2 The green sector could be a driving force behind Europe’s economic recovery and job creation. But the right financial and legal incentives need to be put in place for this to happen. The PES has developed an alternative, progressive recovery plan for the European Union which includes very concrete proposals on how to overcome the crisis, which includes proposals for green growth.4 The current paper should be seen as a complement to this plan. The purpose of this paper is to assess the economic and employment potential in the transport, housing and renewable energy production sector. In this framework it is important to look at four questions. 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 the US and Japan as well as emerging economies, especially China, India and Brazil have increased investments and efforts in green growth enormously, Europe should make greater efforts to lead the transformation of its economy. While we have to continue allocating greater resources to research in renewable energy and energy efficiency, we must also use and support those technologies already available. 1.1. Job creation potential The potential for new green jobs and greening existing jobs is enormous. The PES believes that 10 million new jobs can be created with the right investments and legal incentives for smart green growth, as set out in our European election manifesto proposal. Many green jobs have already been created in key sectors such as renewable energies, retrofitting of houses, cleaner cars and public transport. In the renewable energy industry alone, 2 million new jobs could be generated by 2020.5 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.6 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 rising. 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. Competitiveness and jobs in European manufacturing will be safeguarded by lowering production costs through higher energy efficiency. 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 loss of some jobs in traditional energy production and mining, for example, will be more than compensating by job creation in green sectors. 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 4 PES: “A Matter of Urgency: A New Progressive Recovery Plan for the European Union - The need for a new effort”, 24th April 2009. 5 European Commission, Director General for Energy and Transport: MITRE-Report - Meeting the Targets & Putting Renewables back to work. 6 Grice, Andrew , The Independent (2009): Brown's electric dream for Britain 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
in a different sector.7 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 qualifications8 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.
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.9
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;
7
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.
8
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.
9
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.
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- develop a European strategy for matching workforce skills with the needs of the
GreenTech sector, looking to different sub-sectors and their needs for qualified
workers as well as developing a Europe-wide database for high skilled green jobs.
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;
- put an end to subsidies to unsustainable products and services and reform tax policies
so that goods and services with a higher environmental value are taxed lower than the
others;
- support especially small and medium enterprises to create green jobs;
- invest in training and education for green jobs, increase information of available green
jobs and support research and development in this sector.
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 oil10, an energy resource that is extremely scarce in
Europe, energy independency of Europe depends on reforms in this area.
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 competitiveness 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
Around 15 million jobs related directly and indirectly to transport in the EU 25, i.e. more than
7% of European employment, largely in road transport.11 By increasing the energy efficiency
of cars produced in Europe and raising the share of renewable energies used, many of these
jobs could be “greened”. Focusing on more fuel efficient cars, electric cars and running cars
with sustainable biofuels will be a precondition for the survival of the European car industry
and therefore for Europe’s overall competitiveness and employment. An assessment of the
10
PES (2006): PES Position Porto 2006: Secure energy supply and smart, green growth: a new social democratic
energy policy.
11
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.
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.org5 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 worldwide, the bulk of these being in Europe and Japan.12 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%.13 For many years European car producers have researched and developed electric cars, but so far no such cars are available at affordable prices. There is an enormous job creating potential in public transport and rail transport in Europe.14 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 140,000.15 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.16 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.17 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. 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.18 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 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. 14 UNEP (2008): Green Jobs: Towards Decent Work in a Sustainable, Low-Carbon World, p. 169. 15 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. 16 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. 17 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. 18 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 Parti Socialiste Européen T+ 32 2 548 90 80 F+ 32 2 230 17 66 info@pes.org www.pes.org
6
2.3. Political recommendations
More incentives and investments for reforming European transport are necessary, on the
European and national levels:
European level
- 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;
- allocate more resources to Trans European Network (TEN) funds for improved
European railway connections;
- making use of structural and cohesion funds to improve public transport systems;
- 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.
National, regional and local levels
- support the use of low consumption, hybrid and electric cars with tax reduction or
direct subventions;19
- state support to renew old emission incentive cars with newer ones;20
- 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;21
- 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;
- increase investments in public and efficient rail transport both for freight and
passengers22;
19
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 scrapping 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.
20
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).
21
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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- introduce tax advantages for rail transport (passenger and freight) compared to road
transport;
- support major public transport infrastructure projects;
- urban planning must be adapted: new residential areas should be built where public
transport already exists or where it is easy to construct new metro and tram lines;
- service hours of public transports should be extended, in order to meet the needs of
people working shift hours or going out late at night and to increase employment in this
sector;
- adapt public transport to the large number of people with disabilities traveling in the
urban transport systems and the growing segment of older people.
3. Housing
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
compared with traditional building construction.23 The energy saving potential is especially
high in the new Member States.24 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, more efficient heating and
cooling systems, installing more efficient lighting systems and introducing more efficient
electronic equipment and appliances all have an excellent job creation potential.25 Amongst
others, 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. In the UK for
example, by the end of 2009 5.7 million households will be spending 10% or more of their
income on gas and electricity bills.26 Since many of the concerned jobs do not require much
qualification, long-term jobless could be reintegrated into the labour market.27
Increasing the use of renewable energies in all buildings will have further positive economic
and employment effects. We have to turn our houses into the power plants of the future.
Installing solar heating and cooling as well as photovoltaic panels as well as geothermal
heating and power generation can produce much of the power used in households. In the
near future, this energy can also charge the batteries of electric cars overnight and therefore
store the power produced. Increasing the use of district heating can further increase energy
efficiency and reduce energy bills.
3.1. Job creation potential in the housing sector
Many jobs – especially in the construction sector - have been created in the past years
through retrofitting of houses.28 According to a study from ETUC, up to 2.59 Million people
22
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.
23
UNEP (2008): Green Jobs: Towards Decent Work in a Sustainable, Low-Carbon World.
24
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.
25
UNEP (2008): Green Jobs: Towards Decent Work in a Sustainable, Low-Carbon World.
26
European Liaison Committee for Social Housing (CECODHAS): Presentation during PES Climate Change
Network, 16.04.2009.
27
ETUC (2005): Climate Change and Employment: Impact on Employment in the European Union-25 of climate
change and CO2 emission reduction measures by 2030.
28
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.
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could be employed in the “green” housing sector until 2030, requiring an investment of €137
billion, which will be quickly recouped due to reduced energy bills.29 The job intensity of
energy efficiency investments in the residential sector is extremely high. A study published in
2000 by the UK 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.30
Furthermore, for every 100 direct jobs created in this sector, 17 indirect jobs are created. Out
of 19.5 million construction workers in Europe31, one of the sectors hit hardest by the
economic crisis, a large proportion could find a new job in energy efficient construction.
Another important advantage is that most of the jobs linked to retrofitting of houses cannot be
delocalised. 32
3.2. Quality of green jobs in the housing sector
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.33 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.34 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.35
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;
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, P. 149.
30
UNEP (2008): Green Jobs: Towards Decent Work in a Sustainable, Low-Carbon World.
31
EU KLEMS Project (2008): Productivity in the European Union: A Comparative Industry Approach. On:
http://www.euklems.net/.
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.
33
Centre for American Progress. Green Recovery (2008): A Program to Create Good Jobs and Start Building a
Low-Carbon Economy. 2008.
34
ETUC (2005): Climate Change and Employment: Impact on Employment in the European Union-25 of climate
change and CO2 emission reduction measures by 2030.
35
ETUC (2005): Climate Change and Employment: Impact on Employment in the European Union-25 of climate
change and CO2 emission reduction measures by 2030.
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- 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;
- to overcome a shortage of technological knowledge in many countries, an inner-
European technology transfer should be organised and supported;
- 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;
- support the dissemination of particularly energy efficient materials and technologies
across Europe.
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 installation of renewable energy capacities in existing houses and 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;36
- ensure surplus energy produced by solar panels and other renewable energies can be
fed into the local energy grid and is remunerated adequately;
- strengthen training schemes for retrofitting of houses;
- modernising the communal infrastructure, including better isolation of public buildings;
- 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;37
- 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
36
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.
37
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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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;
- governments should ensure that social housing is retrofitted, since these tenants are
most affected by high energy prices;
- involve tenants in a dialogue on energy efficiency in the housing sector on the local
and community level.
4. Producing renewable energy technologies
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. In 2008, more new renewable power capacity was installed than
fossil power capacity.38 In 2007, €155 billion turnover was generated in the global market for
renewables, 40% more than was expected in 2006. The volume is likely to increase to €615
billion by 2020 if the right policy measures are implemented.39 The renewable energy industry
is one of the most stable sectors. The growth of the wind sector decreased from 25% before
the crisis to 9% during the crisis, which is considerably higher than most other economic
sectors.40
Like most relatively new technologies, renewable energies are still dependent on public
support. 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. Feed-in tariffs and other tools are not only necessary to
make clean power compatible, but increase planning security for companies and help
renewable energy producers to access credits from banks. 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, and 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. New storage technologies need to be developed and storage capacities
based on existing know-how must be installed. 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.
38
Of the newly installed power capacity, 36% was wind power, 29% gas, 18% photovoltaic, 10% fuel oil, 3%
coal, 2% hydro and 1% biomass. European Wind Energy Association (EWEA): Presentation during PES Climate
Change Network, 16.04.2009.
39
German Environment Ministry (2009): GreenTech made in Germany 2.0 – Environmental technology Atlas for
Germany.
40
European Wind Energy Association (EWEA): Presentation during PES Climate Change Network, 16.04.2009.
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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,
12.3 in biomass, 12.8 in retrofitting houses and 15.4 in mass transit.41 Due to growing
automation and mechanization in the oil, natural gas, and coal industries, many jobs were lost
in those sectors.42 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.43 In the five years
between 2002 and 2007 direct employment in the wind energy sector increased by 125%.44 It
is expected that wind energy employment in the EU will more than double to almost 330,000
in 2020.45 A study from the European Commission comes to the conclusion that around 2
million jobs can be created in the renewable energy industry until 2020.46
Currently, employment in the renewable energy sector is very diverse: according to the
European Wind Energy Association (EWEA), 82.000 out of 109.000 direct jobs in the wind
power industry have been created in Germany, Denmark and Spain alone. The potential, but
also the need, for other countries to catch up is huge.47
Investing in renewable energies can be an important contribution to economic restructuring. In
the German town Bremerhaven, which used to be blighted by declining shipping and fishing
industries, €250 million of public and private investments in wind energy over two years
created 1.200 direct jobs. In Denmark – the first country in the world to start mass production
of wind turbines and today producing almost 40% of global installed wind power capacity -
many workers have moved jobs to work in the wind industry from the steel industry,
shipbuilding, slaughterhouses and other agriculture-related businesses.48 The Spanish city,
Navarra, is home to four wind turbine assembly factories, four blade manufacturing centres,
two component manufacturing plants and the largest wind turbine testing laboratory in the
world, creating 5,000 jobs. The key to Navarre’s success is a combination of factors: the
region has been an early mover, strong support was given by the regional government and a
qualified workforce and advanced infrastructure were available.49
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 efficiency50, which are much more labour intensive.
41
U.S. Department f Commerce Industrial Survey, in: Robert Pollin (2008): Green Growth and Good Jobs.
42
UNEP (2008): Green Jobs: Towards Decent Work in a Sustainable, Low-Carbon World.
43
European Wind Energy Association (2009): Wind at Work, p. 7.
44
European Wind Energy Association (2009): Wind at Work. p. 7.
45
European Wind Energy Association (2009): Wind at Work, p. 9.
46
European Commission, Director General for Energy and Transport: MITRE-Report - Meeting the Targets &
Putting Renewables back to work.
47
European Wind Energy Association (EWEA): Presentation during PES Climate Change Network, 16.04.2009.
48
European Wind Energy Association (EWEA): Presentation during PES Climate Change Network, 16.04.2009.
49
European Wind Energy Association (EWEA): Presentation during PES Climate Change Network, 16.04.2009.
50
UNEP (2008): Green Jobs: Towards Decent Work in a Sustainable, Low-Carbon World, p. 9.
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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.51 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.52
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;
- coordinate the setting up and support the financing of the ‘North Sea Ring’, which one
day should interconnect off-shore wind energy production in the North Sea and
national energy grids with a super power grid, in order to balance the wind energy
production across this vast region and allow the storage of unused wind power in
hydro-power plants in Norway as well as possibly produce hydrogen which can be
stored in empty gas fields;
- introduce regulation that new and refurbished buildings should be required to have a
minimum percentage of their energy from renewable energy.
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)
51
Centre for American Progress (2008): Green Recovery. A Program to Create Good Jobs and Start Building a
Low-Carbon Economy.
52
UNEP (2008): Green Jobs: Towards Decent Work in a Sustainable, Low-Carbon World, p. 7.
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- 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
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.53
More energy efficient production and reducing the use of raw material could increase the
competitiveness of the European manufacturing sector. 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. Most
of the 51 million jobs in the manufacturing sector in Europe54 will only be secure for the next
decades if diminishing energy and raw material use lead to lower prices. Secondary steel
production, based on recycled scrap, requires 40–75 percent less energy than primary
production; recycling aluminium scrap uses only 5–10 percent the amount of energy it takes to
make aluminium from scratch.55 Lower costs could save many jobs.
Modernizing the energy grid and therefore reducing the amount of energy lost in the
production will be an important contribution to cost saving. 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.56 Furthermore, 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
53
UNEP (2008): Green Jobs: Towards Decent Work in a Sustainable, Low-Carbon World, p. 300.
54
EU KLEMS Project (2008): Productivity in the European Union: A Comparative Industry Approach. On:
http://www.euklems.net/.
55
UNEP (2008): Green Jobs: Towards Decent Work in a Sustainable, Low-Carbon World.
56
PES Position Porto 2006 : Secure energy supply and smart, green growth : a new social democratic energy policy
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Parti Socialiste Européen T+ 32 2 548 90 80 F+ 32 2 230 17 66 info@pes.org www.pes.org14 crises period. Recovery programmes on the national and European level as well as new “green growth” legislation and regulation are therefore necessary. 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.57 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.58 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.59 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.60 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.61 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. Water management is another sector, where more green jobs can be created. While water is getting scarcer 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. 57 UNEP (2008): Green Jobs: Towards Decent Work in a Sustainable, Low-Carbon World, p. 300. 58 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. 59 UNEP (2008): Green Jobs: Towards Decent Work in a Sustainable, Low-Carbon World, p. 300. 60 UNEP (2008): Green Jobs: Towards Decent Work in a Sustainable, Low-Carbon World, p. 300. 61 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
15
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.
There is also potential for higher green jobs in the textile and fashion industry. For example,
there is a new trend is developing in “organic” clothes, based on sustainably produced and
processed wool.
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.62
62
UNEP (2008): Green Jobs: Towards Decent Work in a Sustainable, Low-Carbon World, p. 300.
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