# EUR-Lex - 52012SC0092 - EN

*|*

# 52012SC0092

**COMMISSION STAFF WORKING DOCUMENT Exploiting the employment potential of green growth /* SWD/2012/0092 final */**

			*

			*

COMMISSION STAFF WORKING DOCUMENT

Exploiting the employment potential of
green growth

Accompanying the document

COMMUNICATION FROM THE COMMISSION
TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL
COMMITTEE AND THE COMMITTEE OF THE REGIONS

Towards a job-rich recovery

TABLE OF CONTENTS

1........... Introduction.................................................................................................................... 4

2........... Defining and measuring 'green jobs'................................................................................. 5

3........... Labour market challenges to developing a green economy............................................... 6

3.1........ Drivers influencing the rate of employment creation.......................................................... 6

3.2........ Sectoral developments affecting job creation prospects.................................................... 7

3.3........ Managing labour shortages and skills transformation...................................................... 10

3.4........ Securing sufficient levels of investment........................................................................... 15

3.5........ Job quality.................................................................................................................... 16

Disclaimer: This document is a European Commission staff working
document for information purposes. It does not represent an official position
of the Commission on this issue, nor does it anticipate such a position.

1.           Introduction

The gradual
transition towards a competitive, low carbon and resource efficient economy is
above all an opportunity to minimise the negative consequences of climate change and resource depletion for future generations. In
the current recessionary context, this shift also represents and unprecedented
chance for the EU to reconsider its traditional economic model based on labour
and capital productivity and begin a move towards a new one founded on the
principle of resource efficiency. Transforming our economies will
bring advantages in terms of enhancing energy security, improving the health of
European citizens and boosting international competitiveness of EU industries.
In relation to employment, many new jobs will be created and redefined while
others might be lost.

The right choice of
employment and skills policies can make an important contribution to realising
this vision by capitalising on new possibilities and at the same time
addressing existing bottlenecks. It is therefore essential that labour markets
and associated policies at EU and Member State level act as a catalyst and not
an obstacle that could halt this transformation process. Governments will need
to engage public and private actors, mobilise existing resources and financial
instruments at European and national level to ensure that policies are backed
up by funds to business, entrepreneurs, workers and the research community so
that new companies and jobs can flourish. Whilst freeing up credit and building
consensus might seem like a difficult choice at present, all stakeholders must
perceive this shift as a medium to long term development that will require
resolute short term action if it is to succeed. A unique opportunity is
therefore before Europe to leap into a new economic era of competitiveness.

This Staff Working
Document informs and advances an on-going strategic reflection process on how
to build a competitive, low carbon and resource efficient economy in line with
the Europe 2020 Strategy. Employment policies are only a piece in a bigger
puzzle but in depth discussions and smart articulation of tools and policies,
including the European Employment Strategy, can go a long way in tackling the
challenge. The emphasis placed on the transition towards a greener economy in
worldwide fora (G20, ILO, UNEP – Rio+20, OECD) also calls for the EU and its
Member States to provide clear and credible answers on this front.

As a follow up to
the EU flagship initiative on new skills and jobs[1], the December 2010 EPSCO conclusions[2], the conclusions of the
informal European Council of January 2012 [3]
and the report by the European Parliament[4],
the Commission has undertaken research on how to build a competitive low carbon
and resource efficient economic model. The results of this work have been used
to feed into this Staff Working Document.

2.           Defining
and measuring 'green jobs'

Development of a competitive, low carbon and resource efficient
economy will bring about a fundamental transformation in terms of business
processes and related skill sets, whilst also giving rise to so-called 'green
jobs'. In the longer term, many of existing jobs will be transformed into
'green jobs'. In this context also the concept of 'green jobs' could refer to
each sector of the economy and not only to certain sectors such as renewables
or energy efficiency. This paper understands 'green jobs' as

...covering all jobs that depend on the environment or are created,
substituted or redefined (in terms of skills sets, work methods, profiles
greened, etc.) in the transition process towards a greener economy.

This
broad definition is complementary and not opposed to the one coined by the
United Nations Environmental Program (UNEP)[5].
For instance, additional employment will be created through increasing
of the renovation rates of buildings, development and deployment of new
technologies such as renewables or carbon capture and storage, some employment
will be substituted as manufacturing of hybrid cars gradually replaces
production of traditional cars, and existing jobs will be redefined as
gas-fitters move towards installing gas combined heat and power instead of
traditional systems or the builders constructing new buildings would move to
the retrofitting business[6],
etc.

Several
difficulties exist when measuring 'green jobs' defined that way primarily
because these are not a clearly delineated part (and certainly not a sector) of
the labour market. In terms of the skills that these jobs require, these are
not necessarily distinct from many existing skills, and empirical data shows
that skill requirements for jobs associated with a competitive, low carbon and
resource efficient economy can already be found in existing occupations.
Therefore, it would be safe to assume that specific skill sets will evolve
as jobs change and adapt to new business practices. Finally, the very
concept of a 'green job' is a moving target, since virtually every new product
is greener than the one it replaces and involves more intelligent use of
resources, changes in production processes and associated skills and
technological evolution, all of which affect training and education
curriculums.

At EU level Eurostat
collects data on the so-called "eco-industries" (i.e. environmental
goods and services sector (EGSS)[7].
This measurement is more limited than the abovementioned definition for 'green
jobs' but is the only source of harmonized European data providing information
on employment related to activities with environmental purposes.[8]

The
overall employment in the so-called "eco-industries" as defined by Eurostat
is estimated at 1-2% of total European employment. Job creation in these
industries has been positive throughout the recession in comparison to many
other sectors, even if investments have dropped, and is forecast to continue to
be quite sound in future years. Average annual growth in employment in the
eco-industries in 2000-2008 was 2.7%. Total numbers employed have grown from
2.4 million in 2000 and 3.0 million in 2008 and are forecast to reach 3.4
million in 2012[9].

At
present, the size of the "eco-industries" sector in Europe is larger than the aerospace and defence sectors[10]. Estimates for countries such as United States and Germany indicate
that 2-3% of total employment is related to activities to reduce CO2 emissions[11].

Available evidence
on a sectoral level regarding the impact on employment shows that certain
sectors are already experiencing strong employment dynamics, with solar, wind and biomass technologies progressing most rapidly[12]. All in all, the renewables sector in Europe has seen an increase of more than
300,000 employees within only five years (2005-2009)[13].

3.           Labour
market challenges to developing a green economy

Current available
evidence in so called 'green jobs' and eco-industries appears to point to a
bright future in terms of potential for employment creation in this area.
Indeed, the sector has shown some impressive resilience and positive growth
in the face of the crisis. Below an overview of the main drivers having an
effect on job creation rates in the context of a greener economy is provided,
as well as a qualitative assessment of job creation potential and labour market
challenges and factors that can be expected as a result of this transformation.

3.1.        Drivers influencing the rate of employment creation

Several
factors will affect the employment creation potential associated with a
transition to a new economic model based on a more efficient use of resources.
These include particularly the additional investments needed to reach the EU
2020 targets (especially the Climate and Energy 20-20-20 targets for
reducing greenhouse gas emissions, increasing the share of renewables and
improving energy efficiency) and to pursue the 2050 vision in line with targets
as set out in the 2050 Low-carbon and Energy Roadmaps[14]. For example, the Renewable
and the Energy performance of Buildings Directives were crucial for the
development of renewables and energy efficiency market niches and led to new
employment opportunities. The impact was coupled with a number of regulatory,
financial and fiscal policies at Member States level. The process of job
creation in energy efficiency will intensify with the implementation of more
measures under the Ecodesign and Energy Labelling Directives and upon the
adoption of a new Energy Efficiency Directive and more measures on financing.

Other
important drivers will be higher prices of energy goods, needed to
recover the cost of investments in the long run; and factor substitution
between labour, capital and energy caused by higher carbon prices if emission
permits are auctioned and/or by regulation that affects the allocation of
production factors.

The
employment impact can also be reinforced by the way in which green-tax
revenues are recycled should market based instruments be used to reach the
Europe 2020 targets. Recent studies show that the best employment outcomes will
be yielded when revenues are used to subsidise low-carbon technologies,lower
taxes and social security contributions paid by employers and/or employees, or raise
or introduce in-work benefits that top up the wage income of most disadvantaged
working households[15].
It should be noted that the average contribution of environmental taxes in the
EU amounts to 6.3% of the overall tax bill. If all Member States were to raise
this figure to 10% the result would yield an additional tax revenue equivalent
to around 1.4% of EU GDP that could be used to reduce budget deficits or labour
taxes[16].

Studies
show that the positive job creation impacts of green policies would outweigh
the shortcomings. For example, the increased investments in energy efficiency
would stimulate job creation in the construction and manufacturing of
construction materials and sectors and would have limited impact on the
reduction in jobs in the fossil fuels mining sectors.

3.2.        Sectoral developments affecting job creation prospects

A recent study by
the European Commission[17] sought to analyse the sectors and occupations which might benefit from a transition to the low carbon economy in
the coming decades. These are outlined in table 1.

Table 1. Sectors and occupations with potential to
benefit from the low-carbon transition

Source: Cambridge Econometrics et al, (2011)

Several studies show the potential employment gains at EU level in a
more disaggregated manner. They illustrate types of employment critical for
achieving green growth. However, these estimates are not cumulative as they are
based on various modelling exercises performed under different scenarios and,
are subject to some forecasting uncertainty. Some selected results from
recently conducted studies are outlined below.[18]

In the coming years,
advancement and implementation of climate adaptation measures will spur
demand for both high- and low-skilled labour. Construction will be one of the
sectors directly benefiting from this as major investments in adaptation could
offer employment and income opportunities in activities such as extending
coastal defences, reinforcing buildings and infrastructures, water management
and relocation of exposed settlements[19].
Other activities will also gain, such as the development and manufacture of
advanced water management technologies; development, distribution, and
cultivation of drought-resistant seeds; development of ecosystem based
adaptation measures; integrated modelling and climate risk assessment; or
development of early warning systems.[20]

Climate adaptation
measures will also decrease disruptions on economic activity and workforce
availability due to climate change related natural phenomena (e.g. floods, heat
waves, changes in precipitation patterns). The forthcoming EU Adaptation
Strategy will provide additional evidence on the employment implications of
adaptation to climate change.

In
terms of resource efficiency, a number of tested policy simulations
demonstrate that the EU could realistically reduce the total material
requirements of its economy by 17%. It could then boost the GDP by up to 3.3%
and create between 1,4 and 2,8 million jobs. Every percentage point reduction
in resource use could therefore lead to up to 100,000 to 200,000 new jobs[21].

The
implementation of individual energy efficiency measures could lead to 2
million green jobs being created or retained by 2020[22]. These are jobs mainly for the
renovation of the building stock, the uptake of products covered by eco-design
and labelling measures (e.g. electric motors and
drivers, refrigerators and freezers, circulators), and the improvement
of energy efficiency in the manufacturing sector. A large part of these jobs
would be in the construction sector – linked to a move from new construction to
renovation of existing buildings – therefore having a direct positive impact on
one of the sectors worst affected by the economic crisis. Taking into account
the scope of the challenge to renovate Europe's buildings stock this could be a
long-term engagement, lasting for at least 30 years, mainly for local SMEs.

Job
potential from renewable energy (RE) sector development is estimated at
3 million jobs by 2020[23].
Also, implementation of the revised Energy Taxation Directive could
create 1 million jobs by 2030[24]
in cumulative terms. These might be associated equally with high-, medium-, as
low-skilled positions in: equipment manufacturing and distribution, project
development, construction and installation, operation and maintenance. A closer
look at the types of employment created in the renewable energy field reveals
that the policy approach matters. More ambitious RES policy targets trigger
investments and hence employment in knowledge intensive generation technologies
while a less ambitious policy target provides an impulse for employment via
biofuels. Capital-intensive technologies such as photovoltaic and wind off- and
on-shore, solar thermal and heat pumps dominate in absolute terms under a
strong RES promoting policy. For many of these technologies, the construction
phase is the most labour intensive one. However, this is not the case for
biomass-based renewable energy use.

Raising
revenue through carbon pricing, such as through auctioning of allowances
via the Emissions Trading System (ETS) or taxing CO2 in other non-ETS
sectors and lowering taxation on labour can have positive effects for
employment. Full recycling of revenues to reduce the costs of labour
potentially could increase employment in the EU by 0.7% or up to 1.5 million
jobs by 2020[25].

Moving away from a
wasteful economy towards one based on durability and reparability of products
is likely to create job opportunities throughout the product lifecycle in terms
of, maintenance, repair, upgrade, and reuse. Full implementation of the EU waste
acquis would increase the annual turnover of the EU waste management and
recycling sector and create over 400 000 jobs by 2020. Some research shows
also, that by recycling 70% of key materials the EU could create over
560 000 new jobs by 2025[26].

Achieving the
objectives of the EU 2020 Biodiversity Strategy[27] is expected to have a positive
impact on jobs and to create a need for special skills. Conserving, managing
and restoring the natural environment will push up demand for workers in
sustainable agriculture and forestry, eco-tourism, sustainable fisheries, the
marine environment, environmental monitoring, nature conservation, forestry,
use of genetic resources (pharmaceutical, cosmetic), spatial planning for green
infrastructures, and more resource efficient methods of managing maritime space[28]. These niche opportunities
also offer good prospects for the development of social economy activities and
reinsertion of vulnerable workers. The numbers of jobs provided directly and
indirectly by biodiversity and ecosystem services is significant – in the EU
they are projected at 14.6 million of people[29].

3.3.        Managing labour shortages and skills transformation

As stated in the
Commission flagship initiative ‘An agenda for new skills and jobs: A
European contribution towards full employment’[30], Europe has to be able to rely
on a skilled workforce, capable of contributing and adjusting to technological
change with new patterns of work organisation.

The gradual shift
towards a new economic model will lead to a progressive redefinition of many
jobs across almost all sectors. New skills will be demanded of employees in
order to satisfy business growth needs and meet changes in job profiles and
content. A more low carbon and resource efficient economy is likely to create
demand for both transversal competences and "specific" skill sets[31]. Transversal competences are
gaining in importance since a lot of green projects are done within
multidisciplinary teams bringing together professionals with different
backgrounds. In this context, certain skill sets are essential in order to
ensure successful outcomes, among these: strategic planning, leadership and
management skills, communication in order to advise users about new
technologies, adaptability/transferability skills, systems analysis , risk
analysis, coordination, etc.

The
"specific" skills associated with the green economy are not entirely
new skills[32].
They are add-on or a mixture of existing skills such as knowledge of
sustainable materials, relevant traditional skills for installation of new
technologies (e.g. fitting or electrical skills for installation of solar tube
or panel technologies), skills to measure the carbon footprint and
environmental impact assessment skills (e.g. energy assessment, diagnostic
skills).

In an initial phase,
high-skilled workers may benefit more as the transition to new
activities calls for the roll out of advanced technologies[33]. Indeed, many of these sectors
are characterised by intense innovation implying that generic skill requirements
might be somehow higher overall than for similar occupations in other parts of
the economy. With market deployment of new technologies, lower-skilled
workers will also benefit from diversifying and enhancing their skills to
adjust their current job content or to fill new positions. This is currently
the case in the area of building renovation where in addition to planners (e.g.
architects, designers, engineers and auditors), lower-skilled workers are
needed to carry out the actual work. As for the medium skilled workers,
the challenge will be to ensure that their skills are up-to-date and to prevent
them from falling down the skills ladder as a result of inadequate adaptation
and access to training possibilities.

Ensuring that
workers have the right skills will be a challenging task as it will require mapping
employers' fast evolving needs in a nascent field and delivering adequate
and increasingly demanded tailored training. This will be essential in avoiding
a ‘muddle through’ approach where insufficient planning is done by enterprises,
especially SMEs, and employees receive inappropriate re-skilling and the
possibility of recruiting new competent staff is disregarded[34]. Multiple entry routes, varied
levels of qualification and insufficient recognition of skills acquired
through non-formal or informal learning could limit mobility of workers
into green occupations. Moreover, a lack of qualified professional
coaches/trainers enabling the delivery of new skills to workers could well
slow down the process of equipping the workforce with the skills sought by
employers.

Certain sectors
already face skill shortages and European companies
are lacking the qualified labour needed for working with emerging low-carbon
technologies. For instance, in Germany the renewables industry has pointed to a
lack of qualified workers, including technical engineers, while companies in
Britain are facing a shortage of supply of technical specialists, designers,
engineers and electricians in sectors going green (Ecorys, 2008). An acute
shortage of engineers was reported also by wind energy companies in other EU
countries[35].

The more
environmentally friendly modes of transport are also vulnerable to skill
shortages in part related to deep demographic trends but also to more immediate
causes such as changes in the organisation of markets or the economic crisis
itself which has slowed down the hiring and training of new workers. In the
railway sector for example, the average age of workers is rising constantly and
skill renewal is thus a major challenge.[36]
A lack of skilled personnel is also a problem for sea and inland navigation and
may soon harm the different forms of collective public transport as well as the
greening of transport and logistics in general. As for the maritime economy the
potential for green jobs is not fully perceived due to the lack of
visibility. This creates a barrier to growth, despite the fact that
qualifications required in the maritime context are often similar to those
required in land-based sectors. As a consequence, these sectors are also
suffering from a shortage of workers.

A fundamental
weakness in the EU’s skills base is the deficit in management skills and
technical, job-specific skills, especially related to science, technology,
engineering and mathematics (STEM). This might weigh even more heavily on
the EU's capacity for green growth than shortages in specialist clean-tech
know-how[37].
At the same time, research and innovation are
critical to make new, more efficient and cost-effective low-carbon energy technologies
commercially attractive at the scale needed to deliver a sustainable
energy system by the middle of the century, to regain a European industrial
leadership on low carbon technologies as prioritised within the Strategic
Energy Technology (SET-) Plan[38],
and to achieve the European Commission's 2050
Low-carbon and Energy Roadmaps vision[39].

Whilst companies may
take it upon themselves to revamp employees' skills, the role of Public
Employment Services (PES) is key in preparing jobseekers to benefit from
new job openings by ensuring quick labour market transitions and successful
matching practices. A pro-active approach by PES is needed to provide
comprehensive services such as counselling, advice, training and general
re-skilling initiatives with a particular effort made to ensure participation
of the most vulnerable. Ensuring that Active labour market policies
provide return on investment in employment terms and that they are targeted and
designed to meet labour demand needs, will be of critical importance so that
they can lead to a real work experience and/or placement.

On the side of
employers, special attention should be paid to SMEs and their needs, as
they could especially benefit from external support in upgrading the skills of
their workforce in the transition to a greener economy. Often, SMEs are not
aware of training schemes offered by PES and/or are sceptical about such
programs because of the disruption it may cause to their business. However,
SMEs are open to in-house informal training (e.g. tutorship, mentorship,
apprenticeship) as a preferential way of recruiting proven workers.

The importance of
human capital investments in enabling the transition to a low-carbon and more
resource efficient economy is well-recognised in the Commission's proposal[40] for the European Social Fund 2014-2020. ESF resources can be
used by national, regional and local authorities for example to strengthen
provision of relevant skills through their education
and training systems, support the adaptation of workers and enterprises or
improve the capacity of PES to assist in green transitions.

It should be noted
that the shift to a low carbon economy is expected to have very diverse effects
in terms of the overall levels of skills required, but also in terms of how
novel these skills are compared to familiar occupational requirements for
which training is already established[41]
– this is demonstrated by various examples of greening of occupations as
depicted in Table 2.

Table 2. The skill profile of low carbon
occupations: selected illustrative examples

Occupations || Growth profile || Skill profile || Policy challenges and national initiatives

Recycling & Waste management (continued development of long-established sector)

Waste sorting and reception || Long-established occupation || Low qualification (minimal on-the-job training) || Low job quality and health risks are main concerns, not skill deficits

Hazardous waste management specialist || Growing demand expected in medium and long run due to tighter regulations || Medium and high level || Identified shortage of qualified workers e.g. in Spain in the medium term

Transportation (increase energy efficiency and/or reduce the environmental impact of various modes of transportation)

Specialized technicians of fuel cell batteries, automotive maintenance technicians || Introduction of renewable and cleaner fuels for transportation || Low to medium level for installation and maintenance || Uncertainty about which fuels for transportation will eventually mainstream

Automotive engineers, freight forwarders, fuel cell engineers, logistics analysts, logistics engineers, logistics managers, supply chain managers, transportation engineers and transportation planners || Reorganisation and the re-engineering of the transportation systems || Medium and high level skills, combined with sector-specific, pre-existing medium and high-level competencies || Best candidates could be incumbent employees with retraining to get needed skill mix, but with a substantial retraining process for some occupations and a role for new professional development tracks in tertiary education

Vehicle manufacturing (energy-efficiency, waste and product lifecycle management, shift of business model from products to services)

Engineering technicians, welders, transportation equipment painters, metal fabricators, computer-controlled machine operators, engine assemblers, and production helpers || Greening production techniques for vehicles components || Low to medium general skills with medium job-specific skills || Close integration of industry and education. For example, in the UK North East’s Low Carbon Economic Area (LCEA),: the National Training Centre for Sustainable Manufacturing was created

Computer software engineers, electrical engineers and operations managers || Changes in production methods and business models || Medium and high || E.g. the Low Carbon Future Leaders Graduate Placement Scheme in the UK

Mining and extractive industry (shrinking the environmental footprint)

Operators of heat coproduction, Geospatial Information Technologists || Upgrading core technologies || Medium || E.g. Eesti Energia's training programmes for current and new employees

Geospatial Information Scientists and Technologists, managers for heat coproduction, energy auditing, and technology developers and managers || Supply chain re-organization, and upgrading management practices || High level for development of new technologies and production re-organization || Estonia, for example, revised and coordinated higher-education programmes in mining

Source: OECD (
forthcoming)

Finally, shifts
both within and across sectors require support for those with low and obsolete
skills, so as to prevent the risk of structural unemployment and inactivity
prospects.

In declining
sectors some skills/occupations are already becoming obsolete. For instance, utility meter reading services will be phased out by
the introduction of ‘smart’ household meters that automatically relay data to
utility companies. The skills composition of workers in high- and
low-carbon intensive sectors will influence the employment transition to a
greener economy. Evidence shows that in all but two countries, the share of
low-skilled labour in high-carbon sectors is higher[42] than in low carbon sectors.
Moving workers from high to low carbon intensive sectors will thus require
additional re-skilling strategies.

This transition
process might impact on particular regions, urban/rural development and
workers' mobility. Employment in areas with a high
concentration of either traditional energy-intensive and high-carbon industries
or by poor economic diversification risk being hit during the transition
process and development of integrated strategies for economic revitalisation of
such areas is therefore an important element of the transition process. The
fisheries sector offers a good example as changes to fisheries policy and the
scaling down of the fishing fleet has put many workers at risk of redundancy.
This requires accompanying targeted measures that prevent this particular group
from falling into long-term unemployment or inactivity. Growing sectors may
offer opportunities to use skills acquired from workers employed in declining
sectors. This is notably the case for some coastal and maritime activities.
Synergies between such sectors could be developed hence facilitating the
sectoral mobility of workers.

However, and
contrary to other transitions (e.g. globalisation, ICT), short to medium term
costs linked to firm restructuring in the context of a green economy might not
be fully compensated by productivity improvements and companies could be
searching for additional compensation through cheaper labour. A potential risk
exists that the low pay trap or unemployment will affect in particular older
and low-skilled workers over-represented in the most polluting industries[43]. Investments in innovation and
re-skilling are crucial for counteracting this threat.

Much of the adjustment
in the high-carbon sector is expected to occur in only 15 industries[44] occupying up to 12% of EU workers (or some 24 million people). At
the same time, the gap between EU-15 and EU-10 is particularly striking – more
than 20% of all employees in the EU-10 are working in the top 15 emitting
industries, which is more than double the rate in EU-15 countries[45].

3.4.        Securing sufficient levels of investment

If the transition to
a resource efficient and low carbon economy is to succeed, smart investment
plans will be needed to capitalise on emerging opportunities and tap into the
job creation potential in this area. Recent developments show that
as many other segments of the economy, the clean technologies area is also
vulnerable to the impacts of the economic and financial crisis, as well as to
the increasing competition from emerging economies such as China and India.[46]
Indeed, according to the International Energy Agency (IEA), investments in
renewable energies dropped by 14% in Europe during the second semester of 2008
alone, and they decreased further in 2009 by 10%, while increasing by more than
50% in China. The February 2012
Renewable Energy Country Attractiveness Indices cites China as the most
attractive location in which to invest in renewable energy projects, followed
by the US[47].

Strategic medium to
long term policy planning in this field will require that governments create
conditions for substantial investments in low carbon and resource efficient
industries, while ensuring compliance with the EU State aid rules, in an
attempt to prepare the ground for tomorrow's economic model. For instance, the main driver of the employment effects in the promotion of the
renewable energy sector are the considerable investments required to upgrade
the energy infrastructure.

Analysis undertaken
by the Commission suggests that whilst annual capital investment in renewable
energy today averages € 35 bn, this would need to rapidly double to € 70 bn to
ensure we achieve our renewables goals. Previous analysis showed that, from a base
of 1.4 million people across the EU, i.e. 0.7% of the total EU workforce, the
renewable energy sector would generate roughly 2.3 million jobs in 2020 under
business as usual, and 2.8 million jobs under ambitious policies consistent
with the 2020 targets (growing up to 3.4 million in 2030)[48].

The analysis on the
2050 Low-carbon Roadmap shows that to prepare the transition to a low-carbon
economy, over the next 40 years additional annual investment equivalent to 1.5%
of EU's GDP, or around € 270 billion, would be needed on top of current annual
investment equivalent to 19% of GDP in 2009. It is not a net cost for the
economy or a reduction of GDP, but an additional investment in our own economy
that would bring multiple benefits such as reduced energy bill, less health
care costs and damage to ecosystems, crops, materials and buildings.

Joint
public-private ventures can use public finances,
while ensuring compliance with the EU State aid rules, and regulatory policy to
support the scaling up of private investment in energy efficiency. As
identified by the International Energy Agency (IEA)[49] three main mechanisms are
needed to put in place such initiatives i) dedicated credit lines ii) risk
guarantees and iii) energy performance service contracts. Equally important
factors in making such initiatives a success are careful planning,
diligent implementation, continuous monitoring of measures and
regular evaluation of results.

Ensuring that SMEs
fully benefit from the transition to a low carbon economy in terms of
improved competitiveness, growth and market coverage is also of utmost
importance. A strong SME sector is fundamental for a healthy economy. Indeed, studies show that[50] about
two thirds of the jobs created in the renewables sector are based on SMEs.
Policies must therefore take into account the specificities and needs of this
particular group of companies. For instance, transition to a greener economy
will require adaptation of workforce skills in order to ensure the necessary supply
of high-skilled or intermediary-skilled workers. Normally SMEs are at a
disadvantage when recruiting such workers, as SMEs cannot match the wages and
non-financial arrangements offered by larger companies. Also, it has to be
noted that SMEs have more difficulties to train their workforce in-house as
compared to larger companies.

3.5.        Job quality

'Green
jobs' will only be sustainable if they also integrate safe, healthy and decent
working conditions. They should not only be good for the environment but also
for workers. As the Community Strategy 2007-2012 on Health and Safety at Work
acknowledges, occupational safety and health plays a vital role in increasing
the competitiveness and productivity of enterprises and contributing to the
sustainability of the economy.

The
greening of the economy stimulates the demand for high, medium and low skilled
jobs. Increased demand for high-skilled labour is likely to have an overall
positive impact on job quality as in general, the higher the level of
skill (or qualification) associated with an occupation, the higher the job
quality. It is however also to be expected that there are occupations, which
are currently associated with relatively high quality employment, which may
contract, i.e high quality jobs amongst office clerks in high-carbon industries
and skilled agricultural and fishery workers while job quality in newly arising
'green' economic activities is generally satisfactory.

Adjustments
in the transition to a more low carbon and resource-efficient economy may
equally create challenges in terms of improving the gender balance on the
labour market in terms of both quality and quantity of green jobs. Apart from
the total and sectoral employment effects it is to be noted that women
and young people are currently more likely to be employed in non-green
occupations compared to other workers. Some sectors (as for instance, the
maritime economy) suffer from a lack of attractiveness and difficulties
in appealing to young people into what is perceived to be 'dirty' manual work. The
job potential in sectors suffering from the image problems therefore remains
underexploited as many typically male-dominated jobs are sometimes wrongly seen
as having unattractive work conditions with low pay[51]. Here
again, the increased skills requirements associated with the need for greater
efficiency in using natural resources may improve job quality and perception.

Where jobs are
created in companies and sectors with little tradition of social dialogue
and employee representation, safeguarding the fundamental rights of workers[52], ensuring equal pay and decency of work can present particular
challenges. Changes in working conditions and their impact on workers will have
to be accounted for while social security coverage of workers as well as the
portability of social rights of mobile workers are also issues to be addressed.
'Green' construction, building insulation activities and consumer waste
disposal are examples of sectors experiencing employment growth and meriting
further investigation of possible problematic areas in terms of job quality,
such as precarious forms of employment or health and safety issues[53]. Risks can include manual handling during collection and sorting of
waste management and potential exposure to hazardous chemicals.

Indeed,
examples exist of 'green jobs' where workers’ health was damaged (e.g in the
waste management sector)[54]. Also, jobs where traditional skills are needed but in new contexts
(e.g. installation of solar panels) attract workers from traditional sectors
who may not have the appropriate skills to perform these new jobs in a safe and
healthy manner (e.g. electricians not trained for working at height, or
construction workers not trained against electrical hazards). This shows the
importance of ensuring that workers have the adequate prevention culture and
occupational safety and health skills to perform green jobs.

[1]               COM
(2010) 682 final, An Agenda for new skills and jobs: A European contribution
towards full employment, available at:       
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2010:0682:FIN:EN:PDF

[2]               Doc.
18131/10, available at: http://register.consilium.europa.eu/pdf/en/10/st18/st18131.en10.pdf

[3]               Statement
of the Members of the European Council of 30 January 2012, available at: http://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/en/ec/127599.pdf

[4]               European
Parliament (2010), Report on developing the job potential of a new
sustainable economy (2010/2010(INI)), A7-0234/2010, available at: http://www.europarl.europa.eu/sides/getDoc.do?type=TA&reference=P7-TA-2010-0299&language=EN&ring=A7-2010-0234

[5]               UNEP
defines green jobs as positions in agriculture, manufacturing, construction,
installation, and maintenance, as well as scientific and technical,
administrative, and service-related activities that contribute substantially to
preserving or restoring environmental quality. Specifically, but not
exclusively, this includes jobs that help to protect and restore ecosystems and
biodiversity; reduce energy, materials, and water consumption through
high-efficiency and avoidance strategies; de-carbonize the economy; and
minimize or altogether avoid generation of all forms of waste and pollution.

[6]               UNEP/ILO
(2009), Green Jobs: Towards decent work in a sustainable, low-carbon world;
available at: http://www.ilo.org/wcmsp5/groups/public/@ed_emp/@emp_ent/documents/publication/wcms_158727.pdf

[7]               Eurostat
(2009), The environmental goods and services sector. A data collection
handbook, available at: http://epp.eurostat.ec.europa.eu/cache/ITY_OFFPUB/KS-RA-09-012/EN/KS-RA-09-012-EN.PDF

[8]               In addition the Commission pursues work and research
to develop and produce measures other that GDP that better encompass
environmental quality and sustainability. See: http://www.beyond-gdp.eu/index.html.

[9]               For
all data linked to "eco-industries" see: Ecorys (forthcoming), The
number of jobs dependent on environmental and resource efficiency improvements,
Study for European Commission, Directorate General for Environment

[10]             See:
http://ec.europa.eu/enterprise/policies/sustainable-business/eco-industries/index_en.htm

[11]             EC/ILO
(2011), Towards a greener economy: the social dimensions, p. 16,
available at: http://ec.europa.eu/social/main.jsp?catId=87&langId=en&moreDocuments=yes

[12]             The
first two are developed for electricity generation while the latter is
predominantly for the heating sector.

[13]             European
Renewable Energy Council statistics available at: http://www.erec.org/statistics.html

[14]             COM
(2011) 112 final, A Roadmap for moving to a competitive low carbon economy
in 2050, available at: http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2011:0112:FIN:EN:PDF;
COM (2011) 885/2, Energy Roadmap 2050, available at: http://ec.europa.eu/energy/energy2020/roadmap/doc/com_2011_8852_en.pdf

[15]             Cambridge
Econometrics et al, (2011), Studies on sustainability issues – green jobs;
trade and labour; Final Report, Research Project for the European
Commission, DG Employment, Social Affairs and Inclusion prepared by Cambridge
Econometrics, GHK and the Warwick Institute for Employment Studies; Institute
of Communication and Computer Systems of National Technical University of
Athens, (2010), MODELS, Final Publishable Activity Report for Contract No:
044089 (SSPI). OECD (forthcoming), The jobs potential of a shift towards a
low-carbon economy, study prepared for the European Commission, DG
Employment, Social Affairs and Inclusion, p.90. OECD analysis did not include
recycling of revenues towards R&D and low-carbon technologies.

[16]             Ecorys
(2011), The role of market-based instruments in achieving a resource
efficient economy,:

[17]             Cambridge
Econometrics et al, (2011), op.cit.

[18]             For
a more detailed overview of studies see: Cambridge Econometrics et al, (2011), op.cit.,
available at: ,http://ec.europa.eu/social/keyDocuments.jsp?policyArea=&type=0&country=0&year=0&advSearchKey=tacklingclimatechange&mode=advancedSubmit&langId=en

[19]             UNEP/ILO
(2008), Green jobs. Towards decent work in a sustainable, low carbon world,
available at:
http://www.ilo.org/wcmsp5/groups/public/@ed_emp/@emp_ent/documents/publication/wcms_158727.pdf.
Also according to an on-going study commissioned by DG MARE, "Blue Growth:
scenarios and drivers for sustainable growth from the oceans, seas and
coasts", (ECORYS) both coastal protection and the marine and maritime
monitoring and surveillance sectors are set to grow both in terms of turnover
and employment.

[20]             See
for instance: Oxfam America (2010), A fresh look at the green economy. Jobs
that build resilience to climate change, available at: http://www.oxfamamerica.org/files/a-fresh-look-at-the-green-economy.pdf

[21]             GWS
(2011), Macroeconomic modelling of sustainable development and the links
between the economy and the environment, Report for the European
Commission, DG Environment prepared by Cambridge Econometrics, the Institute of
Economic Structures Research (GWS), the Sustainable Europe Research Institute
(SERI) and the Wuppertal Institute for Climate, Environment and Energy (WI); available
at: http://ec.europa.eu/environment/enveco/studies_modelling/pdf/report_macroeconomic.pdf

[22]             COM
(2011) 109 final, Energy Efficiency Plan 2011, available at:
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2011:0109:FIN:EN:PDF

[23]             COM
(2011) 31 final, Renewable Energy: progressing towards the 2020 target,
available at:
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2011:0031:FIN:EN:PDF

[24]             COM
(2011) 168/3, Smarter energy taxation for the EU: proposal for a revision of
the Energy Taxation Directive, available at: http://ec.europa.eu/taxation_customs/taxation/excise_duties/energy_products/legislation/index_en.htm

[25]             SEC(2011)
288 final, Impact assessment. Accompanying document to the Roadmap for
moving to a competitive low carbon economy in 2050, p. 90; available at:               
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:52011SC0288:EN:NOT

[26]             Friends
of Earth (2010), More jobs, less waste – potential for job creation thorough
higher rates of recycling in the UK and EU, available at: http://www.foe.co.uk/resource/reports/jobs_recycling.pdf

[27]             COM (2011) 244 final, Our life insurance, our natural capital: an EU
biodiversity strategy to 2020, available at: http://ec.europa.eu/environment/nature/biodiversity/comm2006/pdf/2020/1_EN_ACT_part1_v7[1].pdf

[28]             http://ec.europa.eu/maritimeaffairs/policy/maritime_spatial_planning/index_en.htm

[29]             GHK
(2011), The Social Dimension of Biodiversity Policy; available at:
http://ec.europa.eu/environment/enveco/biodiversity/pdf/Social%20Dimension%20of%20Biodiversity.pdf

[30]             COM
(2010) 682 final, op.cit.

[31]             CEDEFOP
(2009), Green economy, Skillsnet Sector Flash, June, available at: http://www.cedefop.europa.eu/etv/Upload/Projects_Networks/Skillsnet/Flashes/SkillsnetSF_GreenEco(HR).pdf

[32]             Szovics,
P., M. Tessaring, Cl. Walmsley and J. McGrath (2008), Identification of
future skill needs for the green economy, Conclusions from the workshop on
Future skill needs for the green economy, October, available at: 
http://www.cedefop.europa.eu/etv/Upload/Projects_Networks/Skillsnet/Flashes/GreenEco-conclusions.pdf;
and GHK (2009), Thematic Expert Work on Green Jobs for DG EMPL/D1,
unpublished report submitted by GHK for DG Employment, European Commission.

[33]             In
this respect, figures show that three quarters of high-skilled workers in the
EU-15 are employed in low-carbon intensive sectors.

[34]             CEDEFOP
(forthcoming), Green Skills and Environmental Awareness in Vocational
Education and Training

[35]             Blanco,
M. and G. Rodrigues (2009), Direct employment in the wind energy sector: An
EU study, Energy Policy, Vol. 37, No 8, pp. 2847-2857.

[36]             CER
Annual report 2009-2010, pp 28-29, available at:
http://www.cer.be/publications/annual-reports/2011-annual-report-2009-2010-a-closer-look-at-the-railways

[37]             Cedefop
(2010), Skills for green jobs, European Synthesis Report, available at:
http://www.cedefop.europa.eu/EN/Files/3057_en.pdf

[38]             COM
(2007) 723 final, A European Strategic Energy Technology Plan (SET-Plan).
Towards a low carbon future, available at:
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2007:0723:FIN:EN:PDF;
and COM (2009) 519 final, Investing in the Development of Low Carbon
Technologies (SET-Plan), available at: http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2009:0519:FIN:EN:PDF

[39]             COM (2011) 885/2, op. cit.

[40]             COM
(2011) 607 final, Proposal for a Regulation of the
European Parliament and of the Council on the European Social Fund and
repealing Regulation (EC) No 1081/2006, available at: http://ec.europa.eu/esf/BlobServlet?docId=231&langId=en.

[41]             OECD
(forthcoming), op. cit.

[42]             EC/ILO
(2011), Towards..., op.cit., p. 52

[43]             OECD
(forthcoming), op.cit.

[44]             These
include following industries: electrical energy, gas, steam and hot water; coal
and lignite, peat; products of agriculture, hunting and related services; other
non-metalic mineral products; crude petroleum and natural gas; basic metals;
sewage and refuse disposal services; glass and glass products; coke, refined
petroleum products, nuclear fuel; other land transportation services; articles
of paper and paper board; manufactured gas and distribution services of gas;
pharmaceuticals, medicinal chemicals, botanical prod.; chemicals, chemical
products, manmade fibres; air transport services.

[45]             EC/ILO
(2011), op.cit., p.17

[46]             E.g.
European Restructuring Monitor reported that Danish turbine maker Vestas, a
world-leader in the field, announced it would have to cut more than 2,300 jobs
– 10% of its workforce – to restore profitability as it faces firm competition
from China. And in Spain approximately 15 000-25 000 jobs were lost
because of austerity measures and withdrawal of the feed-in tariffs to solar
energy contributed to the bankruptcy of a number of newly created
establishments.

[47]             Ernst&Young
(2012), Renewable Energy Country Attractiveness Indices, available at: http://www.ey.com/GL/en/Industries/Power---Utilities/Renewable-energy-country-attractiveness-indices

[48]             See:
http://ec.europa.eu/energy/renewables/studies/renewables_en.htm

[49]             See:
http://www.iea.org/publications/free_new_Desc.asp?PUBS_ID=2489

[50]             EC/ILO
(2011), Skills..., op.cit.

[51]             CEDEFOP
(forthcoming), op.cit.

[52]             Such
as: freedom of assembly, workers' rights to consultation within the
undertaking, right of collective bargaining and action. Also a requirement of
adequate representation of women in the collective structure is a way to ensure
that social partners work towards new jobs that provide quality work for both
women and men.

[53]             For
more information see: WALQING (Work and Life Quality in New & Growing Jobs)
project financed under the 7th Framework Programme, available at: http://www.walqing.eu/

[54]             EU-OSHA
(forthcoming), Foresight of new and emerging risks to occupational safety
and health associated with new technologies in green jobs by 2020. This
foresight project has 3 phases. Phase 1 report on key drivers of change,
available at:
http://osha.europa.eu/en/publications/reports/foresight-green-jobs-drivers-change-TERO11001ENN/view.
Phase 2 report on key new technologies, available at: http://osha.europa.eu/en/publications/reports/foresight-green-jobs-key-technologies  
EU-OSHA (2009), Expert forecast of emerging chemical risks related to
occupational safety and health, available at:
http://osha.europa.eu/en/publications/reports/TE3008390ENC_chemical_risks 
EU-OSHA (2007), Expert forecast of emerging biological risks related to
occupational safety and health, available at:
http://osha.europa.eu/en/publications/reports/7606488