Green jobs and skills: the local labour market implications of addressing climate change

Posted in July 2020

This is a really interesting article from the OECD.

SOURCED: Please cite this paper as:OECD/Martinez-Fernandez. C, Hinojosa C, Miranda G.,

“Green jobs and skills: the local labour market implications of addressing climate change”,

8 February 2010, working document, CFE/LEED, OECD, www.oecd.org/dataoecd/54/43/44683169.pdf?contentId=44683170OECD LEED ProgrammeGreen jobs and skills: the local labour market implications of addressing climate changeCristina Martinez-Fernandez, Carlos Hinojosa, Gabriela Miranda

CFE/LEED(2010)42TABLE OF CONTENTSINTRODUCTION...........................................................................................................................................5THE IMPACTS OF CLIMATE CHANGE ON LABOUR MARKETS........................................................7The impacts of changing consumer habits on labour markets.....................................................................7The direct effects of environmental changes on labour markets..................................................................8Climate change regulation and labour markets: what to expect?.................................................................9THE DYNAMICS OF GREEN GROWTH: GREENING JOBS AND SKILLS.........................................18A stairway to "Green Utopia"....................................................................................................................18The shades of green and the "green equilibrium"......................................................................................21Greening skills and job profiles.................................................................................................................25LOCAL POLICY IMPLICATIONS FOR MANAGING AND ENABLING GREEN GROWTH..............28Managing the transition to green growth...................................................................................................29Enabling green growth...............................................................................................................................31CONCLUSIONS -EMERGENT POLICY THEMES AND TARGET GROUPS.......................................34REFERENCES..............................................................................................................................................36GLOSSARY..................................................................................................................................................41APPENDIX I: LEARNINGMODELS -SELECTION CRITERIA MATRIX............................................43APPENDIX II: LEARNING MODELS........................................................................................................44TablesTable 1. Potential effects of climate change on economic activity & employment in Europe..............8Table 2. Climate change regulation by type of impact on labour markets (examples)........................11Table 3. Green job indicators...............................................................................................................22Table 4. Classification of skills at work..............................................................................................26FiguresFigure 1.Impacts of climate change on labour markets........................................................................7Figure 2.A taxonomy of climate change regulation.............................................................................10Figure 3. Green dimension of European stimulus funds.......................................................................13Figure 4. Green jobs intensity by sector...............................................................................................15Figure 5. The stairway to 'Green Utopia'..............................................................................................19Figure 6. The facets of eco-innovation.................................................................................................20Figure 7. Green equilibrium dashboard................................................................................................24
CFE/LEED(2010)418THE DYNAMICS OF GREEN GROWTH: GREENING JOBS AND SKILLS42.Job creation, suppression and adaptation are all part of the dynamics of the transition to a low-carbon economy,but the way these dynamics will actually unfold is still largely unknown. Thissection conceptualisesthe main issues relating to this transition and highlights that this analysis requires thinking beyond the traditional boundaries established by the current literature on the subject.43.There is increasing acknowledgment among academics, international institutions and governments of the high growth potential of green jobs as a result of increased climate change regulation and the need to develop energy-efficient products to replace traditional high-carbon goods and services. The UNEP and ILO state that, "the pace of green job creation is likely to accelerate in the years ahead. A global transition to a low-carbon and sustainable economy can create large numbers of green jobs across many sectors of the economy, and indeed can become an engine of development"(UNEP, 2008a, p. 3).44.As a result, national and local governments have taken it upon themselves to study the conditions of their labour markets in order to identify high-potential growth sectors in the "green economy"to be targeted in their economic and employment development policies. But what are exactly these green jobs everybody is talking about? A stairway to "Green Utopia"45.In current policy literature there is a tendency to use the concept of "green jobs"as a"one-size-fits-all"encompassing notion that covers any job that contributes to improving environmental quality. However, if looked atmore closely, it becomes evident that the term is loosely defined which can eventually lead to misconceptions and overly optimistic calculations of the economic and employment growth opportunities created by climate change regulation. Local policy makers will need to better understand what a green jobreally is before they can design and implement policies and programmes aimed at supporting their growth.However, "green job"is a fuzzy term that needs to be unpacked into a framework of "pure green"and "steps of green". Figure5exemplifies the steps to achieve a pure green framework and an interpretation of the number of years needed.
CFE/LEED(2010)419Figure 5.The stairway to 'Green Utopia'46.The reference point (point B) located at the top of the stairway is what the UNEP describes as "green utopia"which refers to ―an ideal state of affairs‖ in which the economy ―does not generate pollution or waste and is hyper-efficient in its use of energy, water, and materials‖ (UNEP, pg.35). "Green utopia"could be considered as the long term objective of all society efforts to move towards a "green economy"but not a situation that can be achieved without transition.This is not really a new term; the circular economy has been discussed extensively in developed and developing economies (recently the focus of the 1stCaofeidian Forum in Tangshan, China, September 2009). Point A on the stairway represents current conditions in a particular geographicalcontext. 47.The stairway is useful to explain several key considerations that must be taken into account when trying to understand the dynamics of "green growth":Green today and brown tomorrow: The "green"label is usually added when an industry, firm, job or product isefficient in the use of energy, water and materials. However determining the thresholds between efficient and inefficient can prove to be a difficult task (UNEP, 2008a). Benchmarking using traditional and mainstream standards is usually the way to measure if greater efficiency is achieved. For example, households that run on solar photovoltaic energy are considered to be more energy efficient than households running on electricity produced by carbon;and can thus be considered as "green"households. In this case the benchmark to determine if solar households can be considered as "green"is the fact that most houses currently use carbon-generated electricity to satisfy their energy demands. However, the task becomes increasingly complex when there is more than one alternative in order to carry out the benchmarking procedure. In addition, as eco-innovation and technological advancements generate increasingly efficient production methods and products, what might be considered "green"today (point A of the stairway) will no longer be so in the future. For example, today solar panels are used to capture solar energy and hence, a job in solar panel production/installation is considered to be a "green job". However, a more efficient instrument might be invented in the future to carry out the same task. In this case, the same worker
CFE/LEED(2010)420producing/installing solar panels would no longer be considered as having a "green job". As a result, the "green"label is a ―relative and highly dynamic concept‖ (Worldwatch Institute, 2008, p.4) and is bound to change as steps are climbed on the stairway to green utopia.It takes two to tango –the importance of mitigation and adaption: Reaching "green utopia"will require implementing both mitigation and adaptation strategies and actions(Patts, Reckien etal.,2010). As shown by each of the stepping stones on the stairway, bridging the gap from point A to point B of the stairway is not possible unless both of these dimensions are taken into account. As stated by the OECD, ―mitigation includes all measures taken to reduce negative impacts of human activities on the environment and is achieved by reducing both the energy intensity of GDP and the carbon intensity of energy used‖ (OECD, 2008a, p.11). Adaptation on the other hand ―consists in deliberate actions undertaken to reduce the adverse consequences [of climate change] as well as to harness any beneficial opportunities‖(OECD, 2008b, p.1).Adaptation is now widely recognised as an equally important and complementary response in addressing climate change as mitigation (OECD,2008b). The "green"label is therefore applicable to sectors, firms or jobs who contribute to both mitigation and adaptation efforts. Eco-innovation -the pillar of the stairway: There is one underlying element without which the climb to "green utopia"wouldnot be possible. Eco-innovation is the process that allows organisations and industries to gradually improve the standards of efficiency and thus, to reduce society‘s footprint on the environment. The OECD defines innovation as ―the implementation of a new or significantly improved product (good or service), or process, a new marketing method, or a new organisational method in business practices, workplace organisation or external relations‖ (OECD, 2009a, p.2). Eco-innovation is generally the same as other types of innovation except for two key distinctions: it represents innovation that results in a reduction of environmental impact, no matter whether thateffect is intended or not; and its scope may go beyond the conventional organisational boundaries of the innovating organisation and involve broader social arrangements that trigger changes in existing socio-cultural norms andinstitutional structures (OECD, 2009a). Figure6shows the main facets of the eco-innovation process.Figure 6. The facets of eco-innovationSource: OECD, 2009a. Source: OECD, 2009a.
CFE/LEED(2010)428LOCAL POLICY IMPLICATIONS FOR MANAGING AND ENABLING GREEN GROWTH68.The impacts of climate change regulation on labour markets will befelt immediatelyat local level. The paradox however is that while local governments play a relatively marginal role indesigning and implementing climate changeregulation, they will play a considerable role in managing transition to a low-carbon economy and enabling green growth.Hence, alocal approach to the analysis of the impacts of climate change on labour markets is not only relevant, but necessary for thefollowing reasons: Greening the economy will have a particular effect on sectors such as agriculture, transport, extractive industries, construction, manufacturing and services. All of these sectors are extensively engaged in at local levels by SMEsworking alone or as part of value chains.Local governments play a key role in the transformation and upgrading of the immediate built and natural environment, a key element of green economic growth(Apollo Alliance, 2008).Urban centresare the most important consumers of energy. In Europe for example, cities and townsaccount for 69 per cent ofenergy use and thus most of the GHG emissions (EEA, 2009).Local governments are responsible for a number of public services which are of particular relevance to thefight against climate change such as waste management, public procurement, water resources and public transportation.The assumption that the transition to a low-carboneconomy will have an overall positive effect on employment is not valid at the local level.As mentioned by ETUC, ―aggregate estimates of the impacts of climate change on employment mask local disparities. Although no region will be left unaffected, the effects of climate change are unlikely to be uniform across regions‖ (ETUC, 2009 p.15).The spatial structure of labour markets is a key element to be taken into account when analysing the impacts of a green economic restructuration.Local governments and institutions have a better understanding of local economic and labour market conditions, and are therefore more apt to design strategies for green growth that are relevant for their constituency. A critical, often missing,ingredient in the green growth model is the role of bottom up, community driven, business and local authorities engagement towards green innovation (Potts, 2010, forthcoming).New environmental policy instruments and social change mechanisms emerge,and are implemented at local levelsby local authorities (e.g.local branding;eco-innovation networks;and combined reporting on state of the environment and economic development)(Potts 2010).69.Despite the fact that certain green activitiesare already beginning to develop as a result of market forces (increased demand for green goods and services, and changing consumer habits) governments are
CFE/LEED(2010)429expected to support the creation and growth of companies in these sectors in order to create new job opportunities for those who will be facing the consequences of economic restructuration. As the UNEP report points out ―markets cannot drive the transition [to a green economy]; and neither can they be relied upon to deal with the problems that the transition will inevitably create‖ (2008a, p.278).70.As a result, the transition to a low-carboneconomy has direct implications for the actors responsible for designing and implementing economic and employment policies especially at the local level. Choosing the adequate policy toolsand programmesto facilitategreen growth and reduce negative externalities on labour markets represents a considerable challenge as well as an opportunity for policy makers and relevant stakeholders in these fields. However, those seeking to manage a smooth transition and to avoid negative impacts on the workforcewill be faced with difficult decisions as there are several possible approaches that can be taken in order to identify the right target groups and policyfields. As will be seen, there is no one recipe or set of policy tools to do so. On the contrary, a multiplicity of approaches can be taken based on policy objective, priorities and local specificities. 71.Local policy makers will be faced with a double challenge in terms of the policies they will have to design and implement in order to ensure a smooth transition to a low-carboneconomy. On the one hand, there will be a strong need for policy intervention in order to reduce the potential negative consequences of green growth on labour marketsand promote economic restructuration towards cleaner industries and production practices.On the other hand, local authorities also have a role to play in the creation of opportunities for the expansion of green activities and green investments; and the reduction of emissions levels within their localities. 72.The followingsection discusses transitional issues of "managing"green growth and issues for "enabling"green growth. To illustrate these two dimensions, a selection of good practice examples (learning models) has been included in the text and in Appendix II. Three maincriteria have been used to select these good practices: (1) type of actors involved in the design and implementation of the initiative (public, private and community);(2) the employment dimension (greening jobs and skills,and creating green jobs);and (3) the geographic location -so as to cover a variety of economic and political contexts from SouthAmerica, European Union and Asia-Pacific (see criteria matrix in Appendix I). 73.Finally, the section will discuss some of the emergent policy fields and target groups of policies aimed at bringing about the transition to a low-carbon economy. Thesehave also been included in each of the good practice examples found in Appendix II. Managing the transition to green growth74.The first set of policy implications for local authorities relatesto the tools that will need to be adopted in order to successfully reduce the potential negative effects of the transition to a low-carbon economy, especially on the workforce. Trade union federations, labour organisations and international organisations have all strongly emphasised the need for the adoption of adequate policy tools in order to manage a "just transition"for a stronger, cleaner and fairer world economy, so as to protect workers in the shift towards a green economy (TUAC2009, UNEP2008b,ILO, 2007, OECD, 2009). 75.The policy implications of managing transition can be dividedinto two dimensions. On the one hand it implies ensuring that the potential negative effects on the workforce are effectively limited. In order to do so public authoritiesand relevant stakeholders will have to ensure asupply of adequate skills within the labour force to respond to the new demands of employers, adoptactive labour market programmes such as training and skills upgrading, and enhance social protection programmes directed at displaced workers. An example of this type of policy is the Construction Reference Centre establishedby publicauthorities

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