Opinion of the European Economic and Social Committee on ‘Promoting sustainable green jobs for the EU energy and climate change package’ (own-initiative opinion)

2011/C 44/18

Rapporteur: Mr IOZIA

On 16 July 2009, the European Economic and Social Committee, acting under Rule 29(2) of its Rules of Procedure, decided to draw up an own-initiative opinion on

Promoting sustainable green jobs for the EU energy and climate change package.

The Section for Transport, Energy, Infrastructure and the Information Society, which was responsible for preparing the Committee's work on the subject, adopted its opinion on 1 June 2010. The rapporteur was Mr Iozia.

At its 464th plenary session, held on 14 and 15 July 2010 (meeting of 14 July), the European Economic and Social Committee adopted the following opinion by 146 votes to four with ten abstentions.

1.   Summary of the opinion

1.1   I want to show that by investing in climate friendly and energy efficient technologies, we gain economically. The opportunities are huge.

Connie Hedegaard, Climate Action Commissioner

1.2   The dawn of the third millennium has seen new questions arise over the future of the planet. Given the risks associated with ongoing climate change, the rise in global energy demand, the relatively imminent depletion of traditional energy sources, and the increasing awareness of the public, who are calling for action to combat and mitigate the adverse effects of greenhouse gas emissions, there is a need to rethink the development model, reduce consumption, and increase the use of alternative and renewable energies that help cut emissions. EU policies should be focused on developing a green, social and competitive Europe.

1.3   The need to bolster security of supply and reduce dependency on politically unstable areas or competitor countries, coupled with a gradual shift in the energy mix towards clean renewable sources, would suggest that the new green economy will be a factor in sustainable development and employment growth and contribute to a new economic, social and environmental equilibrium.

1.4   The purpose of this EESC opinion is to analyse the outlook for sustainable green jobs and identify the instruments most suited to sustaining and promoting them.

1.5   In gauging the effects of these new policies, it is important to bear in mind the balance between the new jobs created and the old jobs that have been abolished – e.g. the so-called black jobs (in coal mines and the construction and maintenance of traditional electricity power stations, etc.). These processes of change must be accompanied by policies aimed at safeguarding income and promoting vocational training and retraining. The new green economy should be experienced by workers and the general public as a great opportunity, incorporate the principles of decent work and be a driver of socially, environmentally and economically sustainable development.

1.6   A European strategy for making the transition to a low-carbon-emission economic and industrial policy should be underpinned by dialogue between governments, the social partners and civil society on economic and industrial change and on investment in the requisite technologies for new and decent green jobs and in new green skills.

1.7   If this strategy is to succeed, national and local authorities, companies and trade unions must be involved in continuous dialogue aimed at monitoring the impact on employment and the labour market. There will be no progress without the involvement of the social partners and organised civil society. The Committee welcomes the creation of a directorate-general for climate action (CLIM), which should coordinate both the internal and external policies of the EU on mitigation and adaptation.

1.8   The Committee considers it vital to set up a permanent consultation mechanism to anticipate the fallout from the socio-economic transition, coordinate the activities of the sector councils, and step up dialogue between the social partners and the public authorities. The environment agency should also be given responsibility for the effective traceability of emissions, covering all levels of production and transport, in line with the LCA method, as governed by the ISO 14 040 standard and defined in the Green Paper COM(2001) 68 and in the communication COM(2003) 302 on Integrated product policy, and as also suggested, at least indirectly, in the EU regulations on EMAS (761/2001/EC) and the Ecolabel (1980/2000/EC).

1.9   The EU has a crucial role to play in promoting green jobs. In terms of investment, it should promote a policy that supports activities and sectors and undertake in tandem with the Member States to frame stable legislation that substantially reduces administrative burdens and always takes due account of SMEs' needs. As regards the labour market, the EU should promote the introduction of specific programmes to support vocational training and, above all, the retraining of workers threatened by industrial change, who risk losing their job or level of income. The Member States should foster energy efficiency, and investment in renewables and research and development using tax incentives for companies and users and the revenue from ETS allowance auctioning. In these times of crisis, there is an urgent need for such a policy.

1.10   Public procurement has an important role to play; it accounts for over 15 % of EU GDP. Preferential clauses for environmentally sustainable goods and services could encourage the market to accelerate investment in technological innovation.

1.11   The EU as a whole, at both Community and national levels, is still spending too little on research: less than 2 % of GDP, as against 2.6 % in the USA and 4 % in Japan. Europe needs more investment in R&D and such research must be geared towards a low-carbon society.

1.12   The greatest development potential lies in all the traditional activities and jobs that can be greened. Civil society has a fundamental role here. Environmental education for the younger generations, vocational training and communication and information drives aimed at business, workers and the general public are all vital stepping stones on the road to a new green economy. The Committee is actively engaged in supporting these activities through the Pinocchio project.

1.13   The agricultural industry, for its part, could make an extremely important contribution, in terms of transforming production models, developing agroforestry and cultivating biomass. Ongoing efforts to protect the land and the environment mean that agriculture and its organisations could be leading players in a major awareness and information campaign on the advantages of the new green economy.

1.14   Biomass is by far the most important renewable energy source. Data from 2008 clearly show that biogenic energy predominates above all other renewable energies at EU level. In the EU-27, two thirds of primary renewable energy – i.e. 66.1 % of a total of 6 200 PJ – was produced from biomass.

1.15   In these difficult economic times, with limited availability of capital, efforts should be focused on a limited number of priorities, which are crucial to Europe in terms of global competition, environmental protection and safeguarding jobs in the coming years. As far as the Committee is concerned, renewable energy, sustainable transport and low-carbon housing are the priority areas.

1.16   The public sector should give the utmost support to these sectors during the transition phase. Stop-go policies, an unstable and inconsistent legislative framework and red tape are the main barriers to developing activities and quality, decent green jobs.

2.   Introduction

2.1   The energy market

2.1.1   The financial and economic crisis has undoubtedly slowed the growth of activities across the whole new-energy sector.

2.1.2   Oil and gas sector investment plunged in 2009, with investment budgets cut by around 19 %, or over USD 90 billion (2009 IEA World Energy Outlook). Despite the consumption freeze, energy demand is forecast to increase by 40 % by 2030, reaching 16.8 billion tonnes of oil equivalent (toe).

2.1.3   Fossil fuel energy sources will continue to account for over 77 % of the demand increase over the years 2007-2030, with demand for oil set to rise from the current 85 Mb/d (million barrels per day) to 88 Mb/d in 2015 and 105 Mb/d in 2030.

2.1.4   According to the 2009 World Energy Outlook, climate change can be combated and contained, but only if there is a radical overhaul of the energy sector. The report proposes the 450 Scenario which sets out an aggressive timetable of actions needed to limit the long-term concentration of greenhouse gases in the atmosphere to 450 parts per million of carbon-dioxide equivalent and keep the global temperature rise to around 2 °C above pre-industrial levels. To achieve this scenario, says the IEA, fossil-fuel demand would need to peak by 2020 and energy-related carbon dioxide emissions to fall to 26.4 Gt (gigatonnes) in 2030 from 28.8 Gt in 2007.

2.2   Energy efficiency

2.2.1   The EU's energy efficiency programmes have set the target of reducing energy intensity by 3.3 % annually over the period 2005-2020, which should constitute a saving of 860 Mtoe per annum. This is an ambitious objective, which should be subject to binding measures where possible. While substantial investment is required, this should in turn generate considerable savings, estimated by the Commission at some EUR 100 billion annually (Communication from the Commission – Action plan for energy efficiency: realising the potential, COM(2006) 545 final).

2.2.2   In several previous opinions, the Committee has greatly welcomed EU initiatives aimed at rolling out energy efficiency programmes (1). However, it has also noted a lack of similar enthusiasm among the Member States (2). The EESC reiterates that one aspect of green policies often overlooked is their economic benefit. Indeed, the green economy is one of the ways to get out of the world crisis. The emerging green economy is generating new employment opportunities. Commissioner Dimas stated that ‘green investments’ will generate two million jobs in the EU in the next decade. Hence, the ‘green economy’ is not a luxury (3).

2.2.3   The Commission should be prepared to revise the energy efficiency strategy. Progress to date has not delivered the expected benefits. The relative stabilisation of the price of oil, which has gone from the record level of USD 147.27 a barrel of 11 July 2008 to an average for 2009 of USD 53.56 (in 2008 it was USD 91.48) (WTRG Economics) has undoubtedly not favoured investment.

2.2.4   The revision of the directive on the energy efficiency of housing and offices, which will considerably extend the requirement to carry out structural work on new buildings and those to be renovated; the rules on car emissions; and the pending legislation on emissions from light-duty vehicles all demand a considerable effort from industry to reach the emissions targets set. This will translate into a notable gain in energy efficiency and thus a reduction in consumption.

2.2.5   The 2009 EurObserv'ER report (The State of Renewable Energies in Europe, 9th EurObserv’ER report, 2009) analysed the direct employment effects attributable to the various renewable energy technologies, covering 14 EU Member States (Germany, France, Spain, Denmark, Sweden, Italy, Austria, Poland, Finland, the UK, the Netherlands, Slovakia, Slovenia and Luxembourg). In 2008, renewable energy technologies enabled some 660 000 jobs to be created or maintained. Biogenic energy (or more specifically, biomass) accounts for over 42 % of these jobs (approximately 278 000). Investing in biomass creates lasting employment, reduces Europe's energy dependence and considerably improves carbon emission levels.

3.   The economic crisis and green jobs

3.1   The current economic crisis has dealt a heavy blow to public finances. The euro zone's aggregate deficit stood at 6.4 % in 2009 and is estimated by the Commission at 6.9 % for 2010. Severe debt-reduction plans will thus be necessary to restore the deficit to the stability pact criteria within a short timeframe. When it comes to fostering green growth, the Committee would warn against rhetoric and political inaction.

3.2   The funds available to pursue the renewable energy incentive plans and the energy efficiency programmes continue to diminish. Member States should allocate more than the earmarked 50 % of ETS auction revenue to energy efficiency programmes and to investment in renewables, sustainable mobility and transport in general.

3.3   There is a risk that the fight against climate change may be falsely perceived as being limited solely to reducing consumption. Due account should be taken of energy return on investment (EROI); furthermore, the concepts of sustainability and development need to be linked, thus creating a new economy that does not pursue the sustainable recession and ‘manageable’ unemployment that inexorably lead to a decline in people's living standards, without bringing about significant change in the health of the planet.

3.4   Moreover, businesses – particularly SMEs – are facing a severe credit squeeze. With fewer funds available for ordinary activities, investing in renovations, which are often costly and take several years to deliver a return, is almost impossible. Targeted support policies are needed.

3.5   Outlining its views on a recent Commission initiative, the ILO (Duncan Campbell, Director, Department of economic and labour market analysis, ILO) proposed a definition:

Green jobs can be defined as those that reduce environmental footprints:

3.6   According to the ILO – which for several years has been carrying out in-depth sectoral studies in the field of green jobs, in conjunction with international employers' and trade union organisations – the particular sectors that come into play here are:

3.7   Green jobs should generally be characterised by a high level of skill and vocational training.

4.   The key players and good examples

4.1   At an EESC hearing held on 23 March 2010, key figures from various associations made valuable contributions to the debate.

4.2   The president of Confartigianato, Bergamo [general federation of Italian crafts] spoke about green energy week – 16 events aimed at awareness-raising and debate, 80 speakers and hundreds of participants exploring the regulatory and technical issues around energy saving and environmental sustainability. It was an excellent example of the role that trade associations could and should play in disseminating a culture. New energy services were presented, such as the energy information shop providing expert advice to companies; credit support, to support investment, including via the association's credit consortium; and technical training, in cooperation with the engineering faculty at the University of Bergamo.

4.3   The WWF representative, with responsibility for European climate and energy policy, highlighted in his speech the positive impact that the green economy was set to have on employment, as forecast by studies undertaken by his organisation. Environmental organisations were obviously very favourable towards a policy that supported low-carbon or – better still – zero-emission energy sources.

4.4   The speaker from the Polish trade union NSZZ Solidarnosc (chairman of the secretariat for mining and energy sectors) emphasised the risks associated with a policy that excessively penalised black jobs. It was crucial to safeguard employment, through initiatives aimed at creating new jobs to absorb those that would be lost. We should think in terms of the balance between new jobs created and old jobs lost. Considerable attention should also be given to pay: some new green jobs were less well paid and the cost per KW produced from coal was half of that produced from renewable sources. Without appropriate employment support policies, there was a real risk that unemployment would double within a short space of time. Suitable worker-mobility support measures should also be provided for.

4.5   The president of the European Construction Industry Federation highlighted European companies' high level of involvement and interest in supporting the modernising and enhancing the efficiency of housing and public and private work premises. The industry was not seeking specific economic aid, but rather stable legislation guaranteed for a number of years, to enable programming of investment and industrial plans. The construction industry required a steady and sufficient flow of funding that it could rely on, and not short-term subsidies. An appropriate tax policy could help families move towards this kind of investment. Companies were ready to do their bit as regards the vital training of their staff.

4.6   The president of the Architects' Council of Europe (ACE) stressed the need to further develop training on sustainable architecture in Europe, and disseminate a holistic vision of the programming of territorial measures; this would require an overhaul of the profession. In the ACE's view, ambitious goals needed to be set, in agreement with the construction associations, aimed at enhancing the quality and energy efficiency of buildings. The ACE expressed doubts as regards the outcome of public-private partnerships (PPP) in public procurement, based on recent bad experiences.

4.7   The Commission representative highlighted the great potential for job creation: estimated at over one million jobs. The success of the 2nd Geothermal congress had demonstrated possible trends. In Sweden, for example, 33 heat pumps per 1 000 inhabitants had been installed, as against 0.1 in Spain. Red tape was the scourge of renewable energy development. Energy efficiency was the cornerstone of the whole system, particularly in buildings. The green jobs that would be generated from national action plans would be sustainable and competitive.

4.8   The speaker from the Economics and Technology University, Berlin provided a great deal of information and much food for thought; he pointed out the high degree of international competition in the renewable energy market – the USA and China were the major competitors. China and Taiwan now accounted for almost 50 % of solar panel exports.

4.9   The representative of one of the largest Spanish wind turbine companies underlined the strategic importance of his sector, which owed its development to intelligent, bold policies which had encouraged investment and added value to the economy. Future prospects were good, despite the crisis, provided that pro-renewable policies were maintained. During his speech, he quoted President Obama: The nation that leads the clean energy economy will be the nation that leads the global economy (Barack Obama, State of the Union address, 27 January 2010).

4.10   Finally, a senior adviser at ETUC stressed the commitment of the European Trade Union Confederation to supporting policies that promoted and sustained green jobs, which should respect the dignity of workers, their rights and pay levels. A green job should by definition be a decent job. ETUC considered it crucial that transitional policies be put in place to support training and anticipate industrial change.

5.   Outlook

5.1   In the last few years a series of figures have been put forward – varying greatly – in support of the possible employment benefits of green jobs, energy efficiency measures and initiatives to combat climate change. The number of new jobs has been estimated in the hundreds of thousands, but these have been very slow to emerge. Assessing the net increase – i.e. offsetting the jobs that have been lost in the same sector – is very difficult.

5.2   Based on the narrow definition of eco-industries, there are currently 4.6 million green jobs; the figure reaches 8.67 million, or 6 % of the EU-27 workforce, when we take account of activities related to environmental resources, such as forestry or ecotourism. The scale increases greatly if we use a broader definition that includes indirect and ancillary employment, which brings the total employed to 36.4 million, or 17 % of the workforce (GHK et al., 2007). In its recent paper on Employment in Europe 2009, the Commission highlights these differences. Particular growth has been seen in the renewables sector, organic farming and – though still to a modest extent – in activities related to upgrading the building stock.

5.3   The main sectors concerned – Construction

5.3.1   With 16.3 million workers, or some 7.6 % of total employment, construction is Europe's biggest industrial employer. Turnover for 2008 was EUR 1 305 billion, or 10.4 % of GDP. Some 32 million workers are indirectly employed by construction (2009 annual report of the FIEC [European construction industry federation]).

5.3.2   The European construction industry has been actively engaged in projects and initiatives aimed at attaining higher standards of energy efficiency and greater energy savings. Examples include (under FP7) the Sunrise projects on integrating photovoltaics into buildings; Cygnum: the production of pre-insulated timber frames using low-cost recycled materials that give greater accessibility to low-energy housing; and Mobi3con, a 3D operating system for use on construction sites, to prevent errors between design and implementation, which, according to the FIEC (European construction industry federation) should achieve a saving of EUR 6.2 billion.

5.3.3   Despite the serious impact of the financial crisis, which in some countries such as Spain and Ireland has effectively frozen the market, the industry believes that the coming years will see at least 800 000 new jobs for specialised technicians and engineers in programmes to increase the energy efficiency of buildings. In France alone, it is estimated that between 2007 and 2012 the number of jobs in this field will rise from 169 000 to some 320 000 (2008 study by French environment and energy management agency ADEME).

5.3.4   Another sector that is expected to create more jobs is ESCOs (energy service companies). These are companies that implement energy-efficiency measures, taking on the risk and relieving the end customer of the organisational and investment burden. The rise of these companies has been undermined in some countries by large producers fearful of a drastic reduction in consumption (4).

5.3.5   Vocational training and lifelong learning are crucial if industrial change is to be properly managed: the FIEC and the EFBWW (the European Federation of Building and Woodworkers) are actively working together to develop joint initiatives on professional qualifications and cross-border training projects.

5.4   The renewable energy sector

5.4.1   In 2008, the photovoltaic (PV) sector employed 190 000 people (130 000 directly and 60 000 indirectly). With EU-27 market support, the industry envisages creating about 2.2 million jobs by 2030. However, the net employment effect will be limited: assuming a 15 % export share, the net effect for the EU-27 is about 162 000 jobs by 2030 (20 000 in 2010 and 49 000 in 2020) (EPIA - European Photovoltaic Industry Association 2009).

5.4.2   The PV sector requires highly qualified people, for both research and development, and maintenance; architects and engineers will need to give consideration to the integration of these solar panels in historic cityscapes. Europe's cumulative installed capacity has risen from 1 981 MW in 2005, to 9 405 MW in 2008, almost doubling between 2007 and 2008 (EPIA – Global market outlook for photovoltaics until 2013, 2009; A.T. Kearney analysis). Specialised courses are needed to train people for the 50 000 new jobs to be created annually between now and 2030. The existing masters and postgraduate courses devoted to specific training in the use of photovoltaics are still insufficient.

5.4.3   With 64 935 MW of installed capacity by the end of 2008, wind power is the number one source of renewable electricity. The EU wind energy sector directly employed 108 600 people in 2007; including indirect employment, the total comes to 154 000. Wind turbine and component manufacturing accounts for 59 % of the direct employment. The highest concentration of wind energy jobs are in Germany, Spain and Denmark (EWEA – European Wind Energy Association, 2009). The European Wind Energy Association estimates that employment in the sector could more than double by 2020 to reach 330 000.

5.4.4   According to a study carried out in Spain – a country that has invested hugely in alternative energy sources – the number of jobs should rise from 89 001 in 2007 to between 228 000 and 270 000, based on two different reference scenarios (ISTAS - Spanish Trade Union Institute of Labour, Environment and Health; 2009).

5.5   Transport

5.5.1   The automotive and road transport industry employs some 2.2 million people, with a further 9.8 million employed indirectly (ACEA – European Automobile Manufacturers' Association); to this should be added those employed in both public and private transport. The overall total exceeds 16 million when we include employment in rail, shipping, aviation and related services, and road haulage.

5.5.2   The crisis has been very keenly felt in this industry, with a drop in production ranging from 7.6 % in the bus sector, 21.6 % in cars, 48.9 % in minibuses, and 62.6 % in trucks: a veritable collapse in production. The situation is not much better in the other sectors of the transport industry, with a general decline in orders and activities.

5.5.3   More than other industries, transport will be particularly affected by the technological challenges arising from the climate package and the ensuing rules on carbon emissions. The inclusion of air transport in the European emissions certificates (ETS) system will create difficulties for older fleets, whose emissions will incur substantial penalties. Moreover, as already stated by the EESC (5) the application of ETS is far more complicated in the maritime transport than for aviation, and in particular on tramp shipping due to the practicalities of world maritime trade which render ETS calculations very difficult.

5.5.4   A sustained (and desired) increase is expected in both passenger and freight rail business. By 2030, rail is expected to create some 1.2 million jobs in passenger transport and 270 000 jobs in freight transport; this should be seen against a loss of almost 700 000 jobs in road transport (Syndex Etuc Istas research 2007).

5.5.5   Sustainable urban mobility, based on a clear policy in favour of non-motorised transport, such as cycling and walking, will enhance quality of life and make a considerable contribution to cutting carbon emissions.

6.   Positive measures to promote green jobs

6.1   Major intervention by the public and private sectors and by public-private partnerships is crucial to tackling the challenges we face: combining economic growth with significant cuts in harmful emissions and with the possibility of creating more and better jobs.

6.2   The current state of public finances does not suggest much leeway, following the measures taken to support the financial system through its major crisis and the subsequent economic crisis which has reduced tax receipts in all Member States.

6.3   The Committee proposes the introduction of a European sovereign fund – backed by the EIB and by specific funds freed up by the European System of Central Banks and the ECB – for the purpose of reaching the goals on energy efficiency and saving. A European Marshall Plan is also needed, in order to provide a secure response to the financial requirements imposed by the drive to combat climate change.

6.4   The EIB – which, to its merit, is already involved in funding activities aimed at developing renewable energy – could administer the Fund and channel resources through the European banking system.

6.5   Rationalising resources is the biggest problem. It is vital to channel and coordinate resources from the Structural Funds, the European Social Fund and the 7th Framework Programme; this role could be performed by the Commission's new DG Energy.

6.6   Private funding is needed. Public-private partnership initiatives should be encouraged through operational and tax incentives within a stable and reliable reference framework.

6.7   Business and workers' organisations and civil society associations working in this field are well placed to play a major role in disseminating skills, highlighting opportunities, raising awareness and fostering education and training. Civil society should always be involved in these kinds of projects.

6.8   ICT applications have a fundamental role to play in optimising resources. A recent Commission study (The implications of ICT for Energy Consumption (e-Business Watch, Study report no 09/2008, http://www.ebusiness-watch.org/studies/special_topics/2007/documents/Study_09-2008_Energy.pdf)) highlighted the need to exploit the full potential of ICT (6). This could have a very positive impact on the creation of new green jobs.

6.9   In a 2008 opinion on the energy efficiency of buildings (7), the Committee proposed certain policies aimed at facilitating controls on building energy standards, and providing incentives to end users to purchase and install suitable equipment, and carry out insulation renovation work.

6.10   With regard to promoting renewable energy, the Committee would advocate support for R&D, programmes to create a stable, self-sufficient market and supporting companies and end users by means of tax relief and incentives for the production and consumption of renewable energy. These should be long-term programmes, based on the model adopted in Germany, which intends to gradually scale back State intervention and enable businesses and the public to plan their own investments.

6.11   A specific chapter should be dedicated to education and training (8). Education is crucial for spreading knowledge and awareness among future generations; training is a prerequisite for advancing the new technologies designed to increase energy efficiency and combat climate change.

(1)  OJ C 10, 15.1.2008, p. 22–35.

(2)  OJ C 77, 31.3.2009, p. 54–59; OJ C 318, 23.12.2009, p. 39–42.

(3)  OJ C 277, 17.11.2009, p. 20.

(4)  OJ C 77, 31.3.2009, p. 54–59; OJ C 318, 23.12.2009 p. 39-42.

(5)  OJ C 277, 17.11.2009, p. 20.

(6)  OJ C 175, 28.7.2009, p. 87-91.

(7)  OJ C162, 25.6.2008, p. 62-71.

(8)  OJ C 277, 17.11.2009, p. 15-19.