The Role of Green Jobs and Employment in the Social Policies of the EU

The Role of Green Jobs and Employment in the Social Policies of the EU

This essay deals about the EU’s green job policies and their consequences. It will be shown in what context these policies are set and what origins and consequences they have on the employment situation within the EU. In 1987 with the Single European Act a legal framework for environmental laws from the EU level was laid. In the Maastricht Treaty of 1992 “sustainable development” got a legal basis and in 1997 with the Amsterdam Treaty got declared to a priority. To date, the European Union passed 200 legal acts as regulations and directives that consider different environmental sectors. As an example: 70 to 80% of environmental law in Germany are directly or indirectly influenced by European law.

The concept of a greening of jobs is embedded in the European Commission’s “Europe 2020” strategy which proclaims the Union’s economy to become smart, sustainable and inclusive. The strategy has five targets: First, to reach an employment rate of 75% of the 20-64 year-olds. Second, to invest 3% of the EU's GDP (public and private combined) in R&D/innovation. Third, to reduce greenhouse gas emissions 20% lower than 1990, gain 20% of energy from renewables and increase 20% in energy efficiency. Fourth, to reduce school drop-out rates below 10% and take care that at least 40% of 30-34–year-olds complete third level education. Finally, to have at least 20 million fewer people in or at risk of poverty and social exclusion. Especially the first three targets are covering the topic of this essay.

But first the answer shall be given to the question why the EU needs sustainable green growth. There are five main reasons which can be localised within the frame of energy, environmental and economic policies. First, the over-dependence on fossil fuels like oil, gas and coal and eventual price shocks could cause harm to the economic security and it contributes to climate change. Meeting the EU’s energy goals could save €60 billion on Europe's bill for oil and gas imports by 2020. Another reason is that in consequence to emerging markets worldwide global competition for resources will grow and thus expenses. A higher efficiency shall keep the economy competitive. Furthermore, handling the climate change is considered the main reason for extending sustainable growth. In this case the concept of sustainable growth represents a pre-emptive measure since it is estimated that the cost of a rise in sea-level in the EU, which would be a result of an temperature rise of 4.5°C by 2100, would be as high as €5 billion a year in 2020 and up to €42 billion a year in 2080. Moreover, natural disasters would increase. Fighting pollution is the fourth main reason. For example, health costs from air pollution are estimated to be between €275 billion and €790 billion a year. This includes 369,000 premature deaths and the loss of 347 million working days a year. Fifth, the EU’s productivity and competitiveness shall be improved. The early lead in green solutions shall be maintained and the aim of 20% coverage of energy needs from renewable sources shall be reached. The latter is estimated to create over 600,000 jobs in the EU and an additional 400,000 if the 20% energy-efficiency target is met.

To fulfil the requirements and the spreading of sustainable green growth there was established one of Europe 2020’s flagship initiatives called the “New Skills for New Jobs” agenda: “It sets out 13 key actions aimed at reforming labour markets, upgrading skills and matching them with market demand to boost employability and make it easier to move jobs, to improve working conditions and job quality, and to create jobs.” It is a programme that shall help to bridge the gap between 23 million people being unemployed across the EU while at the same time there are recruiting problems, especially in high-skilled jobs. Labour markets shall be made more flexible and offer more security. The headword is “flexicurity”. Among others, for that reason the Commission announced in 2009 that it would provide €105 billion through its cohesion funds to invest in green technologies and eco-innovation. In this framework green jobs are promoted. To realize the shift to green jobs a changing demand for skills is required. Other than green skills will become obsolete and those required for existing jobs will have a stronger green element (e.g. bottle manufacturers learning new technical skills to reduce carbon emissions from production). Shifts, both within and across sectors, due to demands for a greener economy are expected.

The concept “green job” has various definitions. Here, the slightly broader definition of the ILO shall be presented:
“´Green jobs´ does not lend itself to a tight definition but certainly includes the direct employment which reduces environmental impact ultimately to levels that are sustainable. This includes jobs that help to reduce the consumption of energy and raw materials, decarbonizes the economy, protect and restore ecosystems and biodiversity and minimize the production of waste and pollution. […] A somewhat wider concept of “green jobs” might embrace any new job in a sector which has a lower than average environmental footprint, contributes to improving overall performance, albeit perhaps only marginally."

Policies affecting labour markets to promote the growth of green jobs can base on two methods: pricing and non-pricing instruments. The first includes taxing environmentally harmful activities or production factors as much as charges and tradable permits (e.g. emissions trading schemes) and subsidies for promoting environmentally friendly production while phasing out subsidies for environmentally harmful inputs and products. Non-pricing instruments are to influence the behaviour of economic consumers, companies and individuals by other means than price signals. They include regulatory measures (e.g. technical standards on car emissions, industrial pollution, product ingredients etc; eco-design i.e. introduction and monitoring of minimum energy-efficiency standards: eco-labelling, i.e. labelling of products and services); awareness raising and promoting the consumption of green products; research and technology development for more environmental use of resources; stimulations for transfers of knowledge and information; fostering voluntary environmental agreements between industries; completion of the internal market in the EU and, finally, the green public procurement. As consequences for sectors that are affected by these policies can be mentioned the greening of the building industry, the greening of buildings and communities as much as energy saving measures in buildings, the creation of energy efficient transport systems and the expansion of road and rail transports or support for electric and hybrid cars.

The mentioned policy measures describe a backsliding from the liberal market credo. The policies are regulations to correct market failures by creating common standards and fair competition across the EU’s single market. It is a politically desired shift (of subventions) away from old polluting industrial production toward green economy. According to a report of the Employment Committee (EMCO) the consequences for employment and labour markets can be described in four possible scenarios:
Scenario A describes a “net loss of jobs” outcome with a high loss of jobs in "dirty" industries which is not matched by the creation of new jobs in green activities. Scenario B is called “green jobs but lower productivity”. It implies a moderate carbon leakage but higher energy prices and lower real incomes, by a probable lower productivity. Scenario C implies a “loss of dirty jobs” which is compensated by higher productivity in green or other sectors as well. It describes a transformation of needed job skills. Scenario D would be the “green growth” scenario. By doing such prognosis, one has to consider that consequences can have significantly different effects across economic sectors, skill types and regions. There is also the question about short-term and long term effects. The feared potential negative effects of the actual green policies are higher energy costs, the loss of competitiveness, lower employment and the risks of new technologies. Positive effects could be a lower dependence on import energy, lower energy consumption, less local environmental problems, new jobs (in the long run) and new innovations (in the long run).

Recently, the EU expects and propagates the last and most successful scenario. According to EU sources, by now up to 36 million European jobs are already linked to the environment (in a broader meaning), 2.4 million are direct employed in eco-industries. The EU eco-industry has become one of Europe’s biggest industrial sectors. It contributes to EU economic growth and employment. It has an estimated annual turnover of about €227 billion, which is about 2.2% of the EU’s Gross Domestic Product (GDP). Renewable energy plants and water supply are this industry’s two most important sectors. The Commission does see no evidence for environmental policies having negative impacts on international competitiveness. But the positive effects are recognized: EU companies are more efficient in their use of resources and thus more profitable. Furthermore they are more innovative and have a better brand image because they have to cope with the strict framework that is given with the EU’s targets.

A report of the Vrije Universiteit Amsterdam lists current and future impacts of EU’s environmental-related investments and capital expenditures on jobs. The prognosis about investments in renewable infrastructure expects that until 2005 1.4 million jobs have been created and another 1.4 million jobs will be created until 2020. Furthermore, investments in buildings’ infrastructure might create 208,000 to 450,000 jobs until 2020. And investments for transport infrastructure in 2003 have created 140,000 jobs. These expectations and successes underline the need and potential of EU’s green environmental policy.

Literature

1.EU-documents:

-Com(2010) 2020.

-IP/10/1541.

2.Literature and Articles:

-EMCO (2010): Towards a Greener Labour Market. The Employment Dimension of Tackling Environmental Challenges.

-European Commission (2011): Green Jobs. Europe’s environmental and economic future, in: http://ec.europa.eu/social/main.jsp?langId=en&catId=370&featuresId=130&f..., accessed at 18.05.2011.

-European Commission (2011): Sustainable growth. For a Resource Efficient, Greener and more Competitive Economy, in: http://ec.europa.eu/europe2020/priorities/sustainable-growth/index_en.htm, accessed at 18.05.2020.

-Lebensministerium Bayern (2011): Umweltschutz in der Europäischen Union. Die Umweltpolitik der Europäischen Union, in: http://www.stmug.bayern.de/eu/umweltschutz/index.htm, accessed at 18.05.2011.

-Office for Official Publications of the European Communities (2007): Facts and Figures. The Links between EU’s Economy and Environment, Luxembourg.

-Raymenta, Matt, Pirgmaierb, Elke, De Ceuster, Griet, et.al. (2009): The economic benefits of environmental policy, Amsterdam.