Greening the European economy

Newsletter articles

1 Feb 2010

Employment Studies Issue 11

Andrea Broughton, Principal Research Fellow

Andrea BroughtonHow to ensure that Europe’s economy is in a fit state to face up to the future challenges of alternative energy sourcing and the demands of climate change is an issue that has been steadily gaining importance on the political and social policy agenda in recent years. The future green economy is something that touches on many social and employment policy areas, including labour market planning, skills and competence building, and the protection of vulnerable social groups. In this article, we review the main findings of recent IES research looking at EU policy in this area.

Aware of the future likely demands of climate change and the green economy, the institutions of the European Union have been active in recent years in trying to put into place a policy framework in this area within which individual member states can operate. Most recently, the European Commission issued in April 2009 a White Paper entitled Adapting to climate change: towards a European framework for action, in which it notes that a rapid response is needed in Europe to address the demands of climate change.

In terms of social policy, the European Commission states its belief that the social dimension of adaptation policies needs to be pursued within existing EU processes in the social and employment fields, and that all of the social partners need to be involved in this process.

At present, developing the green economy is also being seen as one potential way of helping national economies in the EU to climb out of the current recession. In November 2008, the Commission published a European Economic Recovery Plan, in which it recommended investment in green measures – for example, alternative and sustainable energy sources, increased energy efficiency in buildings, and low CO2 emission cars and public transport networks.

In terms of skills policies, the European Commission issued a report entitled Environment and labour force skills in December 2008 in which it stated that up to 21 million jobs in the EU are currently linked to the environment – largely jobs in the environment sector or those that require environment-related skills. It highlighted the fact that specific skills are likely to be needed for the green economy, such as knowledge of sustainable materials, ‘carbon footprinting’ skills and environmental impact assessment skills.

Forecasting labour market needs

The Commission believes that the green sector is changing rapidly and makes a number of forecasts on labour market development. Firstly, it believes that additional jobs will be created in a range of new areas, for example in the manufacturing of pollution control devices that are added to existing production equipment. It also believes that substitution of employment will take place in many sectors, resulting from factors such as the shift from fossil fuels to renewable energy sources, from truck manufacturing to rail car manufacturing, or from land filling and waste incineration to recycling. It also predicts that many existing jobs – for instance, those of plumbers, electricians, metalworkers and construction workers – may be altered due to the ‘greening’ of day-to-day skill sets, work methods and profiles.

However, it also forecasts that particular jobs may be eliminated without direct substitution – for example, when the use of certain packaging materials is discouraged or forbidden and their production ceased.

Mapping green actions and initiatives in the EU

Within the context of European interest in harnessing the job creation potential of the green economy, IES recently carried out a mapping exercise on the policies and initiatives that EU member state governments and social partners (employer bodies and trade unions) are putting into place to work towards a greener economy and maximise the job creation potential of this new area.

In terms of government-led initiatives, we found that many of the EU member states have launched a range of economic recovery programmes to help tackle the current financial crisis, and that some of these programmes have a specific green policy content, focusing on issues such as the modernisation of buildings, better insulation, car scrappage and the use of alternative energy. Car scrappage schemes are proving to be particularly popular across the EU, although some debate has arisen over whether these schemes promote the green economy by encouraging the use of newer and more energy-efficient, cleaner cars, or whether they merely support traditional jobs in the automotive sector.

Overall, we found that awareness raising and public discussion of green issues is becoming more prominent in most countries. These types of actions include organising conferences to debate green issues, publishing information, and organising specific ‘green days’ in order to raise awareness of green issues.

Differences in national approach

Our research was able to compare national differences in approach, finding that the green agenda and green policies are more advanced in some countries than others. In the Scandinavian countries and Germany, policymakers and the social partners have been active with regard to green issues for a significant length of time – decades, in some cases – whereas in some of the newer EU member states, green issues are relatively new on the policy agenda. For these newer EU nations, the EU framework designed to help nations move towards a greener economy will be of significant assistance.

The types of actions and initiatives undertaken also depend on the nature of a particular country’s economy. For example, where the automotive industry, agriculture or tourism play an important role in the economy, green actions will tend to focus on these sectors as these are predicted to be most affected by the development of the green economy.

Employer and union activities – differences of approach

Although green issues are not a particularly contentious area for the social partners in general, there are nevertheless differences of approach between employer and trade union bodies. For example, trade unions are more likely to favour regulation over the voluntary commitment usually championed by the employers. Trade unions in some countries also believe that the employers should be doing more to help the move towards the green economy and are wary of employers using ‘greenwash’ – allegedly paying lip service to environmental issues while not changing their actual activities.

Trade union concerns linked to the green agenda usually focus on employment levels and working conditions: unions are also often preoccupied with membership issues, fearing the decline of more traditional industries with strong trade union membership and recognising that it may be harder to recruit members in new green industries.

Employer representative bodies tend to prefer the voluntary route to regulation on green issues, rather than backing the formulation of new legislation. Awareness-raising activities for member companies tend to deal with issues such as compliance. There are also some anxieties about potential cost increases and possible reduced competitiveness.

Skills shortages feared

As the green economy develops, there are major concerns that significant skills shortages will develop across the EU, as the demand for certain types of skills outstrips the supply. In the UK, the Confederation of British Industry (CBI) has highlighted the fact that skills are needed in areas such as science, technology, engineering and maths, technical competencies and a range of new business skills. The CBI makes a range of recommendations on how to increase the number of workers with these skills, including developing a greater focus on such skills in schools and proposing ways to encourage education providers to work with business to meet the demand for these types of skills.

Skills training to support the workforce in the transition to a green economy is recognised as high profile in many countries. Governments in most countries are aware of this and are trying to overhaul training and skills policies in order to meet the likely demand for new skills in the future. An innovative training scheme exists in Belgium, under which long-term jobseekers are trained to carry out energy assessments and help advise on energysaving measures. These individuals are called ‘energy trimmers’ (Energiesnoeiers/tuteurs d’énergie) and help to implement energysaving measures in buildings through ‘energy trimming companies’, which are not-for-profit organisations.

The research was carried out by IES for the European Foundation for the Improvement of Living and Working Conditions, Dublin. It is based on questionnaire responses from the Foundation’s network of national correspondent organisations in EU member states plus Norway.

For more information on this work, please contact Andrea Broughton at IES.