EN Official Journal of the European Union C 44/40

Opinion of the European Economic and Social Committee on ‘The employment impact of industrial change caused by ecological, energy and climate-related challenges’ (exploratory opinion)

2011/C 44/07

Rapporteur: Mr Valerio SALVATORE

Co-rapporteur: Mr Enrique CALVET CHAMBÓN

In a letter dated 9 February 2010, Mr Paul MAGNETTE, Minister for Climate and Energy, acting on behalf of the Belgian Presidency, asked the European Economic and Social Committee, under Article 304 of the Treaty on the Functioning of the European Union, to draft an exploratory opinion on:

The employment impact of industrial change caused by ecological, energy and climate-related challenges.

The Consultative Commission on Industrial Change, which was responsible for preparing the Committee's work on the subject, adopted its opinion on 1 July 2010.

At its 464th plenary session, held on 14 and 15 July 2010 (meeting of 15 July 2010), the European Economic and Social Committee adopted the following opinion by 89 votes to 2 with 5 abstentions.

1. Conclusions and recommendations

1.1 The Belgian presidency's request for an examination of industrial change in the area of employment engendered by the fight against global warming comes against a backdrop characterised by a three-fold failure, or to use less harsh terms, by three negative scenarios within an economic crisis of colossal proportions. A. Within the European Union, little progress has been made towards achieving the sound objectives of the Lisbon strategy. B. An enormous crisis has hit the financial sector, resulting from dysfunctional regulation and insufficient monitoring. C. The results of the UN Copenhagen summit, intended to secure an international agreement on climate change to replace the Kyoto protocol, were inadequate.

1.2 The EU must both contribute effectively to a global reduction in greenhouse gases and also develop its economy and labour market with a view to meeting the Lisbon objectives in the decade ahead, i.e. securing a competitive position at world level and doing away with mass unemployment in Europe.

1.3 The Committee, and within it the CCMI, have made a number of contributions regarding the challenges of energy and climate, sustainability, industrial change and employment. These include the following opinions: CCMI/002, 024, 027, 029, 045, 052 and 053; ECO/267; NAT/392, 440 and 453; and TEN/401. The present opinion takes a cross-cutting approach to the issue, but it is clear that regional and sector-based studies are also essential if the ideas it discusses are to be put into practice, particularly in the area of employment.

1.4 The European Union's 2020 strategy will have to address the failure of the Lisbon strategy. It therefore represents a new opportunity, providing it strengthens the key role played by SMEs. The EESC recommends reinforcing economic cooperation at European level and promoting a new, common concept of competitiveness.

1.5 The EU needs stronger economic governance within its institutions (i.e. a debate on the transfer of sovereignty to the existing European institutions in certain economic policy matters) in order to nurture industrial change so as to make the European economy greener and generate sustainable jobs.

1.6 Population growth, environmental difficulties in Africa, Asia and Latin America, drinking water shortages in many countries and the fight against climate change are developments that boost world demand for ‘green’ products and technologies and thus generate sustainable jobs. Consideration must also be given to the fact that known reserves of energy-generating raw materials are not unlimited.

1.7 An employment strategy aimed at establishing a sustainable economy could be built on knowledge and know-how that is already well-developed in the Member States. The EU needs skilled jobs and must use these strong points to its advantage. Member States should therefore invest more in their education and continuing training systems, not least in promoting science, technology and engineering. The EESC believes that the current level of public investment in education is totally inadequate, and that it should be part of a coherent life-long learning strategy.

1.8 The EU and its Member States should take the measures necessary to ensure that changes in industry do not run counter to their objectives when it comes to maintaining and creating jobs.

1.9 A green economy involving a high level of research and the application of new knowledge, aimed at increasing competitiveness should have an impact on the labour market by creating more skilled and stable jobs, reducing the risk of precarious employment. Member States should therefore invest more in their education systems and in ongoing training.

1.10 The public sector plays an important part in supporting research and fostering the use of new green technologies, as well as improving existing green technologies which have proven to be effective, above all by means of its fiscal instruments. That is why economic, social and environmental progress requires a healthy and adequately qualified public sector; weakening it by privatising all economic activities would not always serve the general interest. The EESC believes that in order to safeguard the general interest it is going to be necessary to review the regulatory framework for the liberalised energy markets.

1.11 The new jobs will be generated by the private sector and, in particular, by SMEs. The role of the public sector will therefore be to establish a stable and constructive framework at European level that allows companies to optimise the transition towards a greener economy that performs better and is rich in sustainable employment.

1.12 The EESC proposes establishing a dedicated European fund to support industrial change and, more specifically, research, development and the application of green technology, whether renewable energy technologies or new technologies that enable an effective reduction in emissions from energy-hungry industries.

1.13 The Committee notes that a solid industrial base will be indispensable for the EU if sustainable employment objectives are to be reached. Many jobs, even in the services sector, depend on the success of European industry. Industrial change varies from sector to sector and region to region and must be enacted in a gradual way, so as to avoid negative repercussions on the labour markets and without compromising the existence of an indispensable industrial network. This is not about obstructing environmental policy but managing it in a socially sustainable manner.

1.14 The EESC recommends that common agricultural policy reform post 2013 take into account the importance of agriculture and contribute to the development of the necessary synergistic links with other Community policies in the areas of research, new technologies and industrial modernisation.

1.15 The Member States should agree on a tax on financial transactions. The receipts from this tax should be used to reduce Member States' public deficits, giving them more leeway, for instance, to finance their education systems more effectively.

1.16 Green economy-oriented industrial change will require a completely new understanding of growth and competitiveness. The EESC has already declared its support for a new approach to measuring economic and social progress. It reaffirms its conviction that industrial change and employment will only be compatible with sustainability targets if the EU and the world as a whole agree on a different vision of growth. The proposal made by the Commission on its 2020 strategy is insufficient.

1.17 The EESC is of the view that it is up to the European institutions to work towards a level playing field at global level, to prevent relocations, or even the dismantling of entire sectors, from having a detrimental impact on employment and the environment.

1.18 As the institutional voice of European civil society and an important forum for structured dialogue, the EESC is in favour of the democratic participation of the European public in the broad debate that must take place on the industrial change, its impact on the employment markets, its pace and the overall social repercussions.

2. The scope of the opinion

2.1 The Belgian presidency has asked that this document be of a political nature and that it explore new areas for consideration. The presidency's representatives wish the approach to the text to be horizontal and general as opposed to sector-based. It is not a study, but a political strategy. The Belgian presidency plans to examine this opinion during an informal Council meeting of energy ministers.

2.2 The ecological and climate-related challenges underpin the statements made by the European Council in relation to the Copenhagen summit. The energy challenge is multi-faceted. European access to energy resources must be secured within the framework of the international policy of the EU and its Member States. This aspect is not addressed in the current opinion, which deals with energy challenges in the context of the industrial change caused by the fight against climate change, and in particular its effects on employment in Europe.

2.3 This opinion uses the term ‘green’ to imply goods or production methods that tie in with a logic of sustainability and thus contribute to reaching the EU's objectives in the fight against global warming. The EESC argues in favour of greening the economy and, with regard to the labour market, creating a maximum number of green jobs, i.e. the jobs (including training and qualifications) necessary to achieve this, that are of a high quality in terms both of the level of qualifications required and also of their capacity to secure social inclusion (see opinion TEN/401 on Promoting sustainable green jobs for the EU energy and climate change package, which quotes the definition of ‘green jobs’ proposed by the Director of the ILO's Economic and Labour Market Analysis Department in response to a recent European Commission initiative. The EESC would refer in this context to its October 2009 opinion on ‘flexicurity’ (1).

3. Challenges, achievements and a new opportunity

3.1 It is necessary to outline briefly the global context underlying the Belgian presidency's request. This backdrop corresponds to challenges that can be summed up by three closely-linked setbacks.

Challenges – the failure of the Lisbon strategy

3.2 The Lisbon strategy, as officially defined in the Lisbon European Council Conclusions of 23 and 24 March 2000, aimed to establish ‘the most competitive and dynamic knowledge-based economy in the world’ by 2010, ‘capable of sustainable economic growth with more and better jobs and greater social cohesion’.

3.3 At the beginning of 2010, the Committee is forced to observe that there has unfortunately been little success in attaining these necessary and well chosen objectives. The results are especially poor on jobs. One aspect of the Lisbon strategy was that it foresaw the positive effects that a more competitive economy would have on employment.

Challenges – the failure of financial market regulations

3.4 The economic upturn witnessed between 2005 and 2008 was the result of a number of factors. First, European countries focusing on the export of industrial goods benefited from high demand from Asian countries and principally China. Some European countries, meanwhile, experienced growth, which is now known to have been unhealthy, in the financial and property speculation sectors. So the progress made was based in part on external demand and in part on a high level of speculation in the property sector. The growth within the EU was therefore unsustainable. Sustainable growth and healthy labour markets need exports as well as internal demand.

3.5 The world financial crisis put an end to any hopes tied to the Lisbon strategy. The strategy proved wholly unsuccessful. Unemployment in Europe is on the increase and there is no end to the crisis in sight. The knowledge-based society is still not a reality, given the difficulties experienced by many Member States in their education systems and the proportion of GDP given over to research in the EU, far from the Lisbon target in too many countries. Public and in some cases private debt is reaching such a level in the EU that some Member States are even in danger of bankruptcy. The need to balance the books and resolve these issues must not however obstruct important investments.

Challenges – the failure of the Copenhagen summit

3.6 On 15 and 16 June 2001, the Gothenburg European Council added a new dimension to the Lisbon strategy: the sustainable development strategy. The overarching idea was to look at the economic, social and environmental consequences of European policies, including, above all, the global dimension of climate change.

3.7 It was a global-scale agreement that the UN sought to conclude in Copenhagen on 7 to 18 December 2009, in order to step up the fight against the global warming caused, according to the analyses of the majority of scientists, by greenhouse gas emissions. The 192 countries that had ratified the 1997 UN framework convention on climate change (UNFCCC) tried in vain to renegotiate an international agreement on the climate to replace the Kyoto protocol that had been in force since 2005.

3.8 It is clear that climate change and environmental pollution, particularly in very big cities, are serious issues. Furthermore, population growth at global level demands an urgent response. Nine billion people cannot survive unless resources are used more sustainably and more fairly. The issue of insufficient energy resources and their accessibility will arise more and more frequently unless our societies find intelligent answers before it is too late. Under these circumstances, use must be made of existing technologies and solutions, such as, for instance, those designed to improve the energy performance of existing buildings. Furthermore, new technologies are indispensable, especially for energy-hungry industries, but there is also a need for a new awareness of public assets such as water, which must be managed and, above all, conserved more effectively; access to water should be considered a human right.

3.9 This global dimension is significant as it offers opportunities to an innovative industry in Europe that is already highly competitive on the ‘green’ products and services market. By defending this favourable position in its negotiations at international level in a realistic manner, the EU can both contribute effectively to a global reduction in greenhouse gases and also develop its economy and labour market, with a view to achieving the Lisbon objectives.

Achievements: Committee reference points

3.10 In recent years, the Committee and its CCMI have expressed their views a number of times on the challenges of energy, climate, sustainability, industrial change and employment. That important work is taken into account in this opinion. Any new elements are the result of a new awareness raised by the three setbacks (failures of the Lisbon Strategy, financial market regulations and the Copenhagen conference) described above.

3.11 The EESC has already underlined the need to combine competitiveness with sustainable development and social and territorial cohesion (2).

3.12 The EESC considers that the employment strategy ‘cannot be addressed without reference to the macroeconomic context’ (3).

3.13 The EESC has drawn attention to the fact that ‘the man-made global warming hypothesis that climate change is a result of the increased content of greenhouse gases in the atmosphere was the basis for the policy decision of the states involved and the European Community’ (4).

3.14 The CCMI has also referred to the issue of sustainable development and industrial change with a view to considering ‘how sustainable development as Brundtland defined it […] can act as a catalyst for gradual and proactive industrial change’ (5). The definition of sustainable development presented in 1987 by the World Commission on Environment and Development in the Brundtland Report also underpins this opinion.

3.15 The Committee has adopted an opinion in which it observes ‘a new industrial revolution that places quality of life and of the environment at the heart of development’ (6).

3.16 The EESC has stressed that a solid industrial base is crucial for the European social model. It warns that a ‘possible relocation of energy-intensive industry outside the EU would significantly reduce the attractiveness of the industrial location in Europe and lead to a loss in economic growth and employment’ (7). In this context, the EESC will follow with interest the coming to fruition of the EU 2020 Strategy flagship initiatives ‘Resource efficient Europe’ and ‘An industrial policy for the globalisation era’.

3.17 The EESC works on the premise that gross domestic product (GDP) ‘as an instrument for guiding policy […] is inadequate to meet the challenges of the 21st century’ (8). The Committee has adopted an opinion in which it recommends that the Commission aim to include new measures in the 2020 strategy in order to ‘have a framework in place by 2011 on the basis of which it could develop clear proposals for comparable action on a global scale in time for the World Summit on Sustainable Development that the UN has convened for 2012’ (9).

3.18 As for the ‘Europe 2020’ strategy (10), the Committee has called for priority to be given to generating new jobs.

3.19 The EESC has criticised the Commission for not having done more to develop its analysis around major topics of the future, namely ‘the low carbon economy, protecting biodiversity, water and other natural resources, promoting social inclusion and strengthening the international dimension of sustainable development’ (11). In order to reach these goals, the EU's sustainable development strategy will need ‘an entirely new structure of governance’ (12). The EESC felt it was necessary to find a new way of measuring progress in human well-being.

3.20 Lastly, the EESC has stressed that the world's leading industrial countries need to reduce their greenhouse gas emissions by at least 80 % by 2050.

A new opportunity: the Europe 2020 strategy

3.21 The EU 2020 strategy will have to address the failure of the Lisbon strategy. On 3 March 2010, the European Commission published a communication outlining this new guiding approach to the EU's socio-economic changes (COM(2010) 2020). The Commission states its intention to turn the EU into ‘a smart, sustainable and inclusive economy delivering high levels of employment, productivity and social cohesion’. The EESC notes that the superlatives attached to the previous strategy in 2000 have been dropped. According to the Commission, the EU should promote a greener economy by targeting, among other things, investment in R&D equivalent to 3 % of GDP, a 75 % employment rate among the population aged 20-64 and, importantly in this context of this opinion, a reduction in greenhouse gas emissions of at least 20 % compared to the 1990 benchmark year. The Commission wants the quality of education to be enhanced, and for smart growth to be achieved, based on improved competitiveness ‘vis-à-vis our main trading partners through higher productivity’. The EU should maintain its leadership of the green technologies market, but its advantage in these green technologies is said to be ‘challenged by key competitors, notably China and North America’.

3.22 Initial reactions display some disappointment compared to what European citizens expect of their governments and, in terms of the competences and responsibilities of the European institutions, of European governance. Representatives of the groups at the European Parliament have described the Commission's strategy as unambitious and not enough to meet current and future challenges.

3.23 Overall, the EESC's view is that a special effort must be made to strengthen the key role of SMEs in the EU 2020 strategy, as it is SMEs that generate the greatest number of jobs in Europe and they are undeniably the driving force behind industrial change. The EESC therefore calls on the European Commission to step up its efforts to implement an intellectual property protection system primarily to benefit SMEs, as they often do not have the means to protect their inventions.

3.24 The EESC proposes strengthening economic cooperation at European level and promoting a new, shared understanding of the concept of competitiveness. Thus, the industrial changes already underway, and which are necessary in order to: — reduce greenhouse gas emissions, — make better use of natural resources, and — maximise energy efficiency, may create more high-quality jobs in the EU Member States, provided that education systems are improved and research investment is stepped up.

4. How to facilitate industrial change that supports climate and employment targets at EU level

4.1 The EU needs stronger economic governance (i.e. a debate on the transfer of sovereignty to the existing European institutions in certain economic policy matters)at both European Council and Eurogroup levels. The impact of the financial crisis demonstrates that greater coordination is necessary in order to prevent distortion within the internal market and support industrial change, with a view to making the economy greener, and creating sustainable jobs.

4.2 Sustainable jobs have a future, as they will be fostered by the changes around the world that are set to become challenges that will have to be faced at EU level and not only by individual Member States. These changes include: — population growth and the challenge of feeding 9 billion people by 2050, — the growth of mega-cities, generating enormous environmental problems, especially in Asia and Latin America, — the scarcity of drinking water in many developing countries, — the struggle against climate change, entailing lower emissions and, above all, the smart and sustainable use of energy, both the shrinking fossil fuel reserves and alternative forms of energy production.

4.3 These indisputable changes stoke demand for environmental products and technologies and hence promote the creation of a modern industry generating sustainable jobs. These will be both fair and productive, and ensure a fair transition and strong competitiveness. This will not depend on an approach dictated purely by quantitative economic growth, built on energy-hungry industries, but on a logic of sustainability. Once again, it is clear that a strategic sector-based approach is required. It is above all the basic industrial and technological sectors, for instance construction and bio- and nanotechnology, and also the new green technologies, that can amplify the effect of industrial change in the direction of a more human, greener economy.

4.4 These industrial changes also contribute to social stability and international security, since the negative impact of pollution, climate change, shortages and a growing world population pose major threats to peace in the 21st century. The challenges on this level are such that solutions cannot be found at national level, but only through close international cooperation and, within the EU. The integrated EU area should be equipped with the political and legal means needed to fulfil this mission.

4.5 An employment strategy of this kind offers medium- and long-term gains in productivity and profitability. Nowadays, it can be based on the wealth of knowledge and know-how already built up in the EU Member States, and on its edge over the world market in the area of green technologies. These assets must be promoted by the EU with guidelines, European funds and – with the agreement of the social partners (in particular, agreements pursuant to article 155 TFEU) – by European legislation paving the way for a shift to a sustainable economy with a labour market characterised by low unemployment and high-quality jobs. A green economy with a high level of research and application of new knowledge should have a positive impact on the labour market by creating more skilled and stable jobs, reducing the risk of precarious employment.

4.6 This impact would also contribute to creating high-quality jobs rather than atypical, even precarious, forms of employment, such as those that have grown up in certain sectors of the services market. Precarious jobs of this kind are not likely to strengthen the knowledge economy which is unquestionably a major pre-condition for a competitive, sustainable economy. On the contrary, the EU needs skilled jobs. This is why the Member States should invest more in their education and continuing training systems. The EESC believes that the current level of public investment in education is completely inadequate, and that it should be part of a coherent life-long learning strategy.

4.7 The concept of competitiveness must be reviewed at European level. The Commission does not go far enough in its communication of 3 March 2010. Investment in new environmental technologies, combined with greater use of existing technologies, requires an effort in the present that will not necessarily boost competitiveness instantly, but may do so in the long term.

4.8 The EU should look again at its understanding of the role that can be played by the public sector in the Member States in promoting new technologies, industrial change and the creation of sustainable jobs. The public sector may possess the capacity for long-term investment in the promotion of promising new technologies that are not yet profitable, while also duly promoting existing effective technologies. It plays an important part in supporting research and, when it comes to making effective use of new green technologies and enhancing existing effective green technologies, its fiscal measures are particularly key. Public authorities should begin by securing the investments that will be most effective in reducing energy consumption and greenhouse gas emissions. The European fund proposed below could contribute here.

4.9 This is why economic, social and environmental progress needs sound and properly qualified public sectors: weakening them by privatising all economic activities would not always be in the general interest. The public sector should be able to make the necessary investment in public infrastructure to serve the European public and industry, wherever possible in partnership with the private sector. Subsidies benefiting select companies should, on the other hand, be avoided so as not to upset the market. The Member States should give preference to tax instruments to facilitate green industrial change.

4.10 Furthermore, the EESC believes that the liberalisation of the energy markets has yet to contribute either to improving the quality of services or reducing prices. There is a very real risk of underinvestment in the energy networks. The regulatory framework for the liberalised markets should be revised in order to achieve effective competition serving European public interests while maintaining security of supply and meeting climate targets.

4.11 The EESC proposes establishing a dedicated European fund to support industrial change and, more specifically, research, development and the application of green technology, be that renewable energy technologies or new technologies enabling an effective reduction in emissions.

4.12 The Committee recalls that the EU will need a solid industrial base and would stress that the socio-economic importance of energy-hungry industrial sectors differs from one European region to the next. This is why industrial change must be a gradual process, enabling transition in a way that avoids negative repercussions for the labour markets of the regions concerned. Energy supply is therefore a strategic question for the future. There must be greater investment in new technologies that enable productivity to be effectively boosted for the same amount of energy used and, at the same time, greenhouse gas emissions to be cut. Jobs in energy-hungry industries may indeed be made more secure by improving their energy performance.

4.13 The EESC recommends that the reform of the common agricultural policy after 2013, which has already been the subject of a well-received own initiative opinion, should secure development commensurate with the importance of agriculture for rural areas of the EU (which represent more than 80 % of its area) and with international commitments taken to support developing countries. The revision process must help to optimise the necessary synergies while boosting other European policies in the area of research, new technologies and industrial modernisation. This applies in particular to those sectors and regions that have been most affected by the current changes, namely those characterised by the presence of energy-hungry industries that must invest in new ecological technologies in order to reduce their emissions, with a view to protecting their jobs.

4.14 The Member States must reach agreement on a financial transactions tax in order to offset the destructive effects of speculation and thereby stabilise the banking sector and, in the euro area, strengthen the common currency. The yield from this tax should be used to reduce the deficits in the Member States' public budgets, giving them the breathing space, for example, to improve their funding of their education systems. Sound public finances and well-qualified labour markets should underpin the transition towards a green European industry.

4.15 An industrial revolution of this kind has societal consequences that will lend themselves to a rationale of sustainability. Industrial changes in the direction of a green economy will require an entirely new understanding of growth. Citizens are at present defined by their capacity to consume. Will we be capable of defining well-being in terms of physical and mental health, democratic and participatory rights, social inclusion (meaning primarily inclusion within the labour market, providing the jobs are of a high quality), energy supply and access to public goods and to services of general interest? It has to be understood that such an approach would reflect a different conception of growth, another way of operating the economy. Amounts measured in GDP are not enough to achieve it. The EESC has already stated its support for a new approach to measuring economic and social progress. It reaffirms its conviction that industrial change and employment will only be compatible with sustainability targets if the EU and the world as a whole agree to see growth differently. The proposal made by the Commission on its 2020 strategy is insufficient.

4.16 The EESC takes the view that it is up to the European institutions to work towards a level playing field at global level so as to avoid relocations, or the dismantling of entire sectors, from having a detrimental impact on jobs and the environment. Europe must take the lead on good practice and also ensure it is applied worldwide, as soon as is reasonably possible, taking care to avoid the adverse effects (amongst others, for the environment) of Europe applying it unilaterally.

4.17 As the institutional voice of European civil society and an important forum for structured dialogue, the EESC is in favour of the democratic participation of the European public in the broader debate. The EU needs a more coherent and binding strategy than the one we currently know as EU 2020; a strategy that will enable a fair, equitable and sustainable transition towards a green economy based on a completely new understanding of growth. The new growth we need in Europe, and also worldwide, will be rooted in sustainability and will be based on quality of life, active participation and health.

Brussels, 15 July 2010. The President of the European Economic and Social Committee Mario SEPI

(1) How flexicurity could be used for restructuring against the backdrop of global development (OJ C 318, 23.12.2009, p. 1).

(2) OJ C 10, 14.1.2004, p. 105, and OJ C 318, 23.12.2006, p. 1.

(3) OJ C 65, 17.3.2006, p. 58.

(4) OJ C 185, 8.8.2006, p. 62.

(5) OJ C 318, 23.12.2006, p. 1.

(6) OJ C 120, 16.5.2008, p. 57.

(7) OJ C 77, 31.3.2009, p. 88.

(8) OJ C 100, 30.4.2009, p. 53.

(9) CESE 647/2010 - NAT/453 (not yet published in the OJ).

(10) OJ C 128, 18.5.2010, p. 3 (ECO/267), and OJ C 100 30.4.2009, p.65 (CCMI/053).

(11) OJ C 128, 18.5.2010 p. 18.

(12) ibidem.