GREENING THE ECONOMY

1. GREENING THE ECONOMY Lidija Horvatić Zagreb, November 3, 2011

2. Why greening? • Taking on the challenge and making the most of opportunities • Labour market implications • ….and some conclusions Contents of the presentation

3. Definitions and assumptions about the greening of jobs must be broad and comprehensive; • Making stark distinctions between „green” and presumably non-green jobs, we miss an opportunity to reflect on how to raise our sights, so that all jobs become greener; • An important interconnection between sectors that policy-makers seem to neglect; • „Green sectors” facilitate adoption of new innovative technologies in the production processes of conventional industries; • Conventional industries enable „green sectors” to develop environmentally friendly products. Whygreening?

4. The focus should be on the wider process of the greening of jobs and the interdependence between sectors must be recognized; that is why we use the expression – „greening”; • A wider perspective on sustainability is needed if Europe is to be successful in the transition; • Transition is towards a low-carbon economy and European companies have to be able to play their part in the transition (many prerequisites need to be fulfilled); • Climate change policies cannot be disconnected from policies in the areas such as employment, social policy, education &training….because action in these areas will be essential to successfully manage the climate change challenge. Why greening….?

5. Takingon the challenge and making the most of opportunities • BUSINESSEUROPE supports the EU’s efforts to fight climate change, BUT: • calls the EU to stick to the 20 % of emission reduction target at this point in time; • calls for the solutions that must include all sectors and regions in the world through multilateral agreements (European companies have reduced emissions considerably but prices are set on international market and this means that if costs for production are significantly higher in Europe than elsewhere due to stricter low-carbon policy , competition will be disturbed, carbon leakage will follow….); • Again stressing the importance of broadening focus away from „green jobs” to „the greening of jobs”; • No useful way to categorize what is a green job and what is not; a pigeonhole approach to combating climate change based on the separation of „green sectors” and „brown sectors”, is doomed to fail.

6. Takingonthechallenge….. • Energy policies aiming to tackle climate change will have an impact on all sectors; • Transparent and predictable policies that take into account the long-term investment cycles of companies and strive to treat companies in different sectors on equal terms are required; • Very important to clarify implementation measures of the Emission Trading Scheme Directive in order to protect EU competitiveness and prevent carbon leakage; • Public sector investments needed in order to increase the competitiveness of European companies (in research, development and demonstration of new technologies); • Increased quality of education in science, technology, engineering and mathematics (STEM) needed; • Very important – the right conditions for innovation, entrepreneurship and production as well as the well-functioning labor markets.

7. Labourmarketimplications • Employment, skills & the role of social partners • Employment • Employment impacts are clearly dependent on a number of prerequisites linked to the functioning of labour markets, i.e. adaptability of companies & workers; • Flexible labour markets are key to reduce adjustment costs related to the transition to an eco-efficient economy (facilitate a smooth adaptation to new markets and new productions process); flexible contractual arrangements help companies to cope with fluctuations in demand and stimulate hiring; • Efficient public employment services; active labour market policies; • Very important – education – training - aimed at increasing workers’ employability, lifelong learning, flexicurity principles need to be implemented ; • Business climate that stimulates growth in a broad range of sectors.

8. Labourmarketimplications • Employment, skills & the role of social partners • b) Skills • The greening of jobs clearly affects the skills required among a broad range of sectors, not just the so-called „green sectors” (examples – car manufacturing sector, service sector); • The growth of the renewable energy sector risks being seriously hampered due to skill shortages (examples according to the survey…); • The STEM skill shortages in Europe strike traditional industries as well, thereby putting the overall greening of the economy at stake (examples according to the survey…); • Very important – improved business skills will also be required, lack of the skills would reduce competitiveness due to higher costs for companies, lower productivity and a slower technological development towards a low-carbon economy.

9. Labourmarketimplications • Employment, skills & the role of social partners • b) Skills • Important – changing demand for skills will apply to all levels not only to highly skilled worker; • The demand for mid-level qualifications (that will be highly affected by the consequences of climate change) will increase significantly over the course of 2010-2020 (an example – construction industry); • The example of construction industry shows the importance of vocational education&training and possibilities to undertake lifelong learning at all levels – adaptability throughout an entire career! • Future skills requirements are difficult to predict (technological development to mitigate and abate the effects of climate change is a long term and continuous process).

10. Labourmarketimplications • Employment, skills & the role of social partners • b) Skills • Close collaboration between higher education institutions and business would help increase the responsiveness of the educational system to the changing labour market needs; • The cooperation between business and education providers needs to start at an even earlier level; • Schools have to encourage pupils to develop STEM profiles; • Workers’ abilities to contribute in the innovation process – the need to equipped the work force with the right skills.

11. Labourmarketimplications • Employment, skills & the role of social partners • c) The role of social partners • Very important role to play related to the labour market implications associated with climate change policies; • Promotion of sustainable economic development by facilitating restructuring and adaptation to change in the social dialogue at the national level; • At the EU level – European social partners are dealing with labour market implications of climate change policies, at sectoral level as well as cross-industry level; • Social Dialogue Work Programme 2009-2010 (BUSINESSEUROPE, ETUC, CEEP and UEAPME); • Social partners have undertaken a study: „Employment impact of climate change policies”.

12. ….and some conclusions… • Challenging agenda, but also potential opportunities related to competitiveness and employment effects; • We can succeed if: • the proper framework conditions will be put in place by policy-makers; • our workforce will be with skills matching real labour market demands; • we’ll have modern labour markets that are flexible and adaptive to change… • Part of the „greening” is adjusting proactively to changing environmental and regulatory realities; • Climate change is a textbook example of the need for „long term” planning and risk management. • An overall greening of jobs, cutting across conventional as well as emerging sectors, has the potential of making a real impact in climate change abatement!

13. Thankyou for yourattention!